<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
(AMENDMENT NO. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
<TABLE>
<S> <C>
[X] Preliminary Proxy Statement [ ] CONFIDENTIAL, FOR USE OF THE COMMISSION
ONLY (AS PERMITTED BY RULE 14A- 6(E)(2))
[ ] 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)
(NAME OF PERSON(S) FILING PROXY STATEMENT, IF OTHER THAN THE REGISTRANT)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
----------------------------
(2) Aggregate number of securities to which transaction applies:
----------------------------
(3) Per unit price or other underlying value of transaction computed pursuant
to Exchange Act Rule 0-11 (Set forth the amount on which the filing fee is
calculated and state how it was determined):
----------------------------
(4) Proposed maximum aggregate value of transaction:
----------------------------
(5) Total fee paid:
----------------------------
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
-------------------------------------------
(2) Form, Schedule or Registration Statement No.:
---------------------
(3) Filing Party:
----------------------------------------------------
(4) Date Filed:
-------------------------------------------------------
================================================================================
<PAGE> 2
National City Corporation
[LOGO]
------------------
February 26, 1997
Dear Stockholder:
You are invited to attend the Annual Meeting of Stockholders of National City
Corporation, which will be held at National City Bank, 1900 East Ninth Street,
4th Floor, Cleveland, OH 44114, on Monday, April 14, 1997, 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 adoption of the National City Corporation 1997 Stock Option
Plan, the adoption of the National City Corporation 1997 Restricted Stock Plan,
the approval of the proposal to increase the total number of shares of National
City Corporation's authorized capital stock from 355,000,000 to 705,000,000, the
approval of the selection of Ernst & Young LLP as independent auditors for 1997,
and to transact such other business as may properly come before the meeting.
The formal Notice of Annual Meeting and Proxy Statement containing further
information pertinent to the business of the meeting are set forth on the
following pages. Our Annual Report, including financial statements, for the year
1996 was delivered to you previously. We shall report to you at the meeting on
the business and affairs of National City 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 National City Corporation, the mailing address of the
executive offices of the Corporation is: National City Corporation, 1900 East
Ninth Street, Cleveland, Ohio 44114.
Sincerely,
/s/ DAVID A. DABERKO
DAVID A. DABERKO
Chairman and Chief Executive Officer
1
<PAGE> 3
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 National City Bank, 1900 East Ninth Street, 4th Floor, Cleveland, OH 44114,
on Monday, April 14, 1997, 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 adoption of the National City Corporation 1997 Stock Option Plan;
3. The adoption of the National City Corporation 1997 Restricted Stock
Plan;
4. The approval of the proposal to increase the total number of shares
of National City Corporation's authorized capital stock from
355,000,000 to 705,000,000;
5. The approval of the selection of independent auditors for 1997; and
6. The transaction of such other business as may properly come before
the meeting.
Stockholders of record on February 21, 1997, 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 offices of National
City Corporation, 1900 East Ninth Street, Cleveland, Ohio 44114.
All shareholders who are entitled to vote, even if they now plan to attend the
meeting, are requested to execute the enclosed proxy card and return it without
delay in the enclosed postage-paid envelope. You may revoke your proxy at any
time before it is voted by giving written notice to National City. If you attend
the meeting and vote in person, your vote will supersede your proxy.
Please mark, date, and sign the enclosed proxy and return it in the
accompanying envelope.
By Order of the Board of Directors
/s/ DAVID L. ZOELLER
DAVID L. ZOELLER
Secretary
February 26, 1997
3
<PAGE> 4
PROXY STATEMENT
FEBRUARY 26, 1997
SOLICITATION AND REVOCABILITY OF PROXIES
This Proxy Statement is furnished in connection with the solicitation by the
Board of Directors of National City Corporation ("National City") of the
accompanying proxy to be used at the Annual Meeting of Stockholders of National
City (the "Annual Meeting"), and any adjournment thereof, and is being sent on
approximately the date of this Proxy Statement to each of the holders of
National City's Common Stock ("National City Common"). The Annual Meeting will
be held on Monday, April 14, 1997, 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 National City 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 21, 1997,
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 National City
had shares of National City Common outstanding, each of which is
entitled to one vote on all matters to be acted upon at the meeting.
BOARD OF DIRECTORS AND ITS COMMITTEES
The Board of Directors of National City has responsibility for establishing
broad corporate policies and overall performance of National City. However, it
is not involved in the day-to-day operating details of National City's business.
Members of the Board are kept informed of National City's business through
various documents and reports provided by the Chairman and other officers of
National City and by participating in Board and committee meetings. Each
director has access to all books, records, and reports of National City; and
members of management are available at all times to answer their questions.
In 1996, the Board of Directors of National City held five meetings. Average
attendance by directors at those meetings was 91% 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 Messrs. Brandon, Evans, and
Weiss, all of the persons nominated and elected as directors of National City at
National City's 1996 Annual Meeting of Stockholders attended that Annual
Meeting.
The Board of Directors of National City 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, the
Public Policy Committee and the Investment Committee, each of which
5
<PAGE> 5
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.
THE AUDIT COMMITTEE. The Audit Committee is required to meet at least
semiannually and met three times during 1996. The Audit Committee is composed of
directors who are independent of the management of National City and are free of
any relationship that would interfere with their exercise of independent
judgment as committee members. The responsibility for effective auditing of
National City 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 the investment community relating to
corporate accounting and reporting practices of National City, 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 among the directors, the
independent auditors, the general auditor, and the management of National City.
THE COMPENSATION AND ORGANIZATION COMMITTEE. The Compensation and
Organization Committee meets on the call of the Chairman of the Board of
Directors and met six times during 1996. The Compensation and Organization
Committee considers matters relating to compensation policy and compensation of
senior officers of National City 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 National City's 1984
Stock Option Plan, as amended; the 1989 Stock Option Plan; and the 1993 Stock
Option Plan, as amended; the Compensation and Organization Committee is
authorized to grant stock option rights and stock appreciation rights to
officers and employees of National City and its subsidiaries. The Compensation
and Organization Committee also determines participants and establishes the peer
group for the Long-Term Incentive Compensation Plan and the Annual Corporate
Performance Incentive Plan and sets the awards granted pursuant to the
Short-Term Incentive Compensation 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 did not meet during 1996. 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 once during 1996. The Nominating
Committee confers, advises, and recommends with respect to nominations in
filling vacancies on the Board of Directors. Stockholders may submit the name of
a possible nominee to the Chairman, who will arrange for that person to be given
consideration by the Nominating Committee. Further, stockholders may make
nominations from the floor at the Annual Meeting of Stockholders.
6
<PAGE> 6
THE PUBLIC POLICY COMMITTEE. The Public Policy Committee meets on the call of
the Chairman of the Committee and met twice during 1996. The Public Policy
Committee has responsibility to oversee the various policies and programs of
National City as they pertain to its relationships with employees, regulatory
agencies, governments, charitable organizations, and the general public.
THE INVESTMENT COMMITTEE. The Investment Committee meets on the call of the
Chairman of the Board of Directors and met twice during 1996. The Investment
Committee is empowered to oversee investments and interest rate risk management.
COMPENSATION OF DIRECTORS
Members of the Board of Directors of National City who are not officers of
National City, 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 $22,000*. The fee
for attendance at any Board meeting or any committee meeting that is scheduled
for a day other than a day on which there is scheduled a meeting of the full
Board of Directors is $2,000. The fee for attendance at any committee meeting
where such meeting is scheduled on the same day as a scheduled meeting of the
Board of Directors is $1,000. Each of the non-officer chairpersons of committees
of the Board of Directors of National City 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, each non-officer who is first elected or appointed as a member of
the Board is awarded 1,000 shares of National City Common, subject to transfer
restrictions. Furthermore, each year in which a non-officer is reelected or
reappointed as a member of the Board, such individual is to be awarded an
additional 200 shares of National City Common, the transfer of which also is
restricted. The restrictions on such shares of National City Common do not
expire until the earlier of the individual director's death, disability, a
change-in-control or a date nine months after the date of the award.
STOCKHOLDER ACTION
1. ELECTION OF DIRECTORS -- NATIONAL CITY
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 as directors, whose number is eighteen, 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.
- ---------------
* Each individual director who is not an officer of National City 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> 7
The eighteen nominees for election to the Board of Directors are identified on
pages through . All of the nominees are presently directors of National
City. All of the incumbent members of the Board of Directors were elected at the
last Annual Meeting, except for Messrs. Broadhurst, Paul, Roemer and Schuler,
who were appointed to the Board of Directors during 1996. The following material
contains biographical information concerning each nominee, including recent
employment, positions with National City, other directorships, age, and the
number of shares of National City Common beneficially owned, all as of February
14, 1997. Unless otherwise indicated, the nominee has sole voting and investment
power with respect to National City's securities shown to be owned by him.
Options that are exercisable within 60 days of February 14, 1997 are separately
noted (See Beneficial Ownership at page ).
VOTE BY STOCKHOLDERS
The election of directors requires the plurality of the votes of the shares
present in person or represented by proxy at the meeting and entitled to vote on
the election of directors.
NOMINEES FOR ELECTION AS DIRECTORS
[photo] SANDRA HARDEN AUSTIN, Retired as President, Physician
Services, Caremark International, a provider of health care
products and services, during 1996. Executive Vice President
and Chief Operating Officer of University of Chicago Hospitals
from 1990 to 1993. Director of National City since 1990.
Chairperson of the Investment Committee and Member of the
Executive and Audit Committees. Age 49. Shares of National
City Common owned: 2,734.
[photo] CHARLES H. BOWMAN, Retired as Chairman and Chief Executive
Officer of BP America Inc., a diversified petroleum and
natural resources company, during 1996, Managing Director of
BP Australia Limited from 1990 to 1994. Director of National
City since 1994. Chairperson of the Public Policy Committee
and Member of the Executive and Investment Committees. Age 61.
Shares of National City Common owned: 3,200.
8
<PAGE> 8
[photo] EDWARD B. BRANDON, Retired as Chairman of the Board of
National City in 1995. Chairman of the Board and Chief
Executive Officer of National City from 1987 to 1995. Director
of Premier Industrial Corp., RPM, Inc. and The Standard
Products Company. Director of National City since 1986. Member
of the Executive and Nominating Committees. Age 65. Shares of
National City Common owned: 76,305; options exercisable
within 60 days: 376,368.
[photo] 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 National City since
1979. Chairman of the Compensation and Organization Committee,
and Member of the Executive and Nominating Committees. Age 62.
Shares of National City Common owned: 30,400.
[photo] JAMES S. BROADHURST, Chairman and Chief Executive Officer of
Eat'n Park Restaurants, a chain of family restaurants, since
1984. Director of Sheetz, Inc. Director of National City since
1996. Member of the Audit and Compensation and Organization
Committees. Age 53. Shares of National City Common owned:
3,900; options exercisable within 60 days: 6,000.
[photo] DUANE E. 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.
Director of Parker Hannifin Corporation and The
Sherwin-Williams Company. Director of National City since
1995. Member of the Compensation and Organization and Public
Policy Committees. Age: 60. Shares of National City Common
owned: 4,600.
9
<PAGE> 9
[photo] DAVID A. DABERKO, Chairman of the Board and Chief Executive
Officer of National City since 1995. President and Chief
Operating Officer of National City from 1993 to 1995 and
Deputy Chairman of National City from 1987 to 1993. Director
of the Student Loan Marketing Association. Director of
National City since 1988. Chairman of the Executive and
Nominating Committees. Age 51. Shares of National City Common
owned: 136,127; options exercisable within 60 days:
225,088.
[photo] 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 National
City since 1992. Chairperson of the Audit Committee and Member
of the Compensation and Organization Committee. Age 60. Shares
of National City Common owned: 6,316.
[photo] OTTO N. FRENZEL III, Retired as Chairman of National City Bank
of Indiana in 1995. Chairman of National City Bank of Indiana,
a wholly owned subsidiary of National City, from 1992 to 1995.
Chairman and Chief Executive Officer of Merchants National
Corporation from 1979 to 1992. Director of American United
Life Insurance Company; Baldwin & Lyons, Inc.; Indiana Energy,
Inc.; IPALCO Enterprises, Inc; and IWC Resources Corp.
Director of National City since 1992. Member of the Executive
and Nominating Committees. Age 66. Shares of National City
Common owned: 1,428,470; options exercisable within 60
days: 11,000. Mr. Frenzel shares voting and investment powers
as to an additional 153,650 shares of National City Common.
[photo] BERNADINE P. HEALY, M.D., Professor of Medicine and Dean of
Ohio State University College of Medicine since 1995. Sr.
Policy Advisor, The Cleveland Clinic Foundation from 1994 to
1995. Past Director of the National Institutes of Health from
1991 to 1993. Director of Medtronic Inc. and Invacare
Corporation. Director of National City since 1995. Previously
a Director from 1989 to 1990. Member of the Public Policy and
Investment Committees. Age 52. Shares of National City Common
owned: 4,329.
10
<PAGE> 10
[photo] JOSEPH H. LEMIEUX, Chairman and Chief Executive Officer of
Owens-Illinois, Inc., a manufacturer of packaging products,
since 1990. Director of Owens-Illinois, Inc.; Health Care and
Retirement Corporation; Libbey Inc.; and Consol Limited
(Johannesburg Exchange). Director of National City since 1988.
Member of the Executive and Compensation and Organization
Committees. Age 65. Shares of National City Common owned:
3,156.
[photo] W. BRUCE LUNSFORD, Chairman of the Board, President and Chief
Executive Officer of Vencor, Inc., a diversified healthcare
provider, since 1985. Director of Vencor, Inc.; Churchill
Downs, Incorporated; and Res-Care, Inc. Director of National
City since 1995. Member of the Audit and Public Policy
Committees. Age 49. Shares of National City Common owned:
15,200.
[photo] ROBERT A. PAUL, President and Chief Executive Officer of
Ampco-Pittsburgh Corporation, a manufacturer of engineered
equipment and steel products, since 1994. President and Chief
Operating Officer from 1979-1994. Executive Vice President and
Director of the Louis Berkman Company. Director of National
City since 1996. Member of the Investment Committee. Age 59.
Shares of National City Common owned: 867,600.
[photo] WILLIAM R. ROBERTSON, President of National City since 1995.
Deputy Chairman of National City from 1987 to 1995. Director
of Capitol American Financial Corporation. Director of
National City since 1988. Member of the Investment Committee.
Age 55. Shares of National City Common owned: 158,125; Mr.
Robertson shares voting and investment powers as to an
additional 10,000 shares; options exercisable within 60 days:
108,097.
11
<PAGE> 11
[photo] WILLIAM F. ROEMER, Retired as Chairman of the Board and Chief
Executive Officer of Integra Financial Corporation, a
diversified financial services corporation, during 1996 after
the merger of Integra Financial Corporation with and into
National City. Served as Chairman and Chief Executive Officer
of Integra Financial Corporation since 1991 and President and
Chief Executive Officer since 1989. Director of National City
since 1996. Member of the Executive and Nominating Committees.
Age 63. Shares of National City Common owned: 41,022; options
exercisable within 60 days: 458,446.
[photo] MICHAEL A. SCHULER, Chairman of the Board, President and Chief
Executive Officer of Zippo Manufacturing Company, a
manufacturer of lighters and metal products, since 1986.
Director of Zippo Manufacturing Company and W.R. Case & Sons
Cutlery Company. Director of National City since 1996. Member
of the Audit and Public Policy Committees. Age 47. Shares of
National City Common owned: 6,000; options exercisable within
60 days: 2,600.
[photo] STEPHEN A. STITLE, Chairman of the Board of National City Bank
of Indiana since 1996. Vice President, Corporate Affairs of
Eli Lilly and Company, a pharmaceutical company, from 1993 to
1995; Vice President of Human Resources of Eli Lilly and
Company from 1987 to 1993. Director of National City since
1992. Member of the Public Policy and Investment Committees.
Age 51. Shares of National City Common owned: 33,617.
[photo] 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
National City since 1992. Member of the Executive, Audit, and
Nominating Committees. Age 56. Shares of National City Common
owned: 6,600.
THE BOARD OF DIRECTORS OF NATIONAL CITY RECOMMENDS A VOTE FOR THE SLATE OF
DIRECTOR NOMINEES.
12
<PAGE> 12
BENEFICIAL OWNERSHIP
As of February 14, 1997, National City had one class of equity security
outstanding, National City Common par value $4.00.
Beneficial ownership of National City's outstanding equity security, 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 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
National City's equity securities.
As of February 14, 1997, to the knowledge of National City, no person or firm
other than National City beneficially owned more than 5% of National City Common
outstanding on that date. As of February 14, 1997, no individual director,
nominee, or officer beneficially owned more than 5% of National City Common
outstanding. For purpose of this disclosure, the amount of outstanding National
City Common is the aggregate number of shares of National City Common actually
outstanding on such date plus an amount equal to the aggregate amount of
National City Common which could be issued upon the exercise of stock options by
such person or firm at that date. Beneficial ownership of National City Common
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 February 14, 1997, to National City's knowledge only National City
beneficially owned more than 5% of the outstanding National City Common.
National City owns shares of National City Common which constituted
% of the outstanding National City Common on that date. These shares are
held in various fiduciary capacities through National City's wholly owned
banking subsidiaries, primarily National City Bank, National City Bank of
Columbus, National City Bank of Kentucky, National City Bank of Indiana and
National City Bank of Pennsylvania. Of the shares of National City
Common as to which National City, through its subsidiaries, has voting
authority, it has sole voting authority as to of those shares and
shared voting authority as to the remainder. Of the shares as to
which National City, through its subsidiaries, has investment authority, it has
sole investment authority as to of those shares and shared
investment authority as to the remainder. Included in the aggregate number of
shares held as to which National City has sole voting and investment authorities
are shares that are held under the National City Non-Contributory
Retirement Trust.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Under federal securities law, National City's directors, certain officers, and
persons holding more than 10% of any class of National City's equity securities
are required to report, within specified monthly and annual due dates, their
initial ownership in any class of National City's equity securities and all
subsequent acquisitions, dispositions or other transfers of interest in such
securities, if and to
13
<PAGE> 13
the extent reportable events occur that require reporting by such due dates.
National City 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 National City's knowledge, based
solely on the review of copies of reports furnished to National City 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, 1996, all of National City's
directors and officers satisfied such filing requirements in full with the
exception of one late filing.
Mr. Charles H. Bowman filed one late report related to a market purchase of
shares of National City Common.
OWNERSHIP GUIDELINES
National City's Board of Directors established stock ownership guidelines for
directors at its February 26, 1996 meeting. The guidelines recommend that each
director beneficially own 6,000 shares of National City Common.
The following table sets forth the beneficial security ownership of (a) each
director and nominee of National City; (b) the chief executive officer and the
four other most highly compensated executive officers of National City; and (c)
all directors and executive officers of National City as a Group, as of February
14, 1997 (including shares that such individuals could have acquired by the
exercise of options within 60 days):
14
<PAGE> 14
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------
BENEFICIAL SECURITY OWNERSHIP OF MANAGEMENT
AMOUNT OF
SHARES PERCENT SHARE EQUIVALENT TOTAL SHARES &
BENEFICIALLY OF HELD IN DEFERRED SHARE EQUIVALENTS
TITLE OF CLASS NAME OF BENEFICIAL OWNER OWNED CLASS COMPENSATION PLANS BENEFICIALLY HELD
- ------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Common Stock Sandra Harden Austin 2,734 * 4,337 7,071
Common Stock Charles H. Bowman 3,200 * 2,808 6,008
Common Stock Edward B. Brandon 452,673 * -- 452,673
Common Stock John G. Breen 30,400 * -- 30,400
Common Stock James S. Broadhurst 9,900 * -- 9,900
Common Stock Duane E. Collins 4,600 * 2,081 6,681
Common Stock David A. Daberko 361,215 * 1,453 362,668
Common Stock Vincent A. DiGirolamo 157,869 * 4,455 162,324
Common Stock Daniel E. Evans 6,316 * -- 6,316
Common Stock Otto N. Frenzel III 1,593,120 % 237 1,593,357
Common Stock Bernadine P. Healy, M.D. 4,329 * -- 4,329
Common Stock Joseph H. Lemieux 3,156 * 13,941 17,097
Common Stock W. Bruce Lunsford 15,200 * -- 15,200
Common Stock William E. MacDonald 134,593 * -- 134,593
Common Stock A. Stevens Miles 152,032 * -- 152,032
Common Stock Robert A. Paul 867,600 * 5,802 873,402
Common Stock William R. Robertson 276,222 * -- 276,222
Common Stock William F. Roemer 499,468 * 810 500,278
Common Stock Michael A. Schuler 8,600 * -- 8,600
Common Stock Robert G. Siefers 75,084 * 2,377 77,461
Common Stock Stephen A. Stitle 33,617 * 1,067 34,684
Common Stock Morry Weiss 6,600 * -- 6,600
Common Stock Directors and Executive %
Officers of National City
as a Group
- ------------------------------------------------------------------------------------------------------------------------
</TABLE>
* The percent of National City Common beneficially owned is less than 1%.
2. PROPOSAL TO ADOPT THE NATIONAL CITY 1997 STOCK OPTION PLAN.
At the Annual Meeting of Stockholders there will be presented for stockholder
approval the National City Corporation 1997 Stock Option Plan (the "Plan") which
was adopted by the Board of Directors at its meeting on February 24, 1997,
subject to the approval of National City's stockholders. The purpose of the Plan
is to provide employment incentives and to encourage capital accumulation and
stock ownership to officers and other key employees of National City or any of
its subsidiaries.
The Plan will be administered by the Board of Directors of National City which
may from time to time delegate all or any part of its authority under this Plan
to a Compensation and Organization Committee, a subcommittee of the Compensation
and Organization Committee, or any other committee of the Board of Directors
(the "Committee"). 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.
15
<PAGE> 15
ELIGIBILITY AND PARTICIPATION
Eligibility for participation in the Plan will be limited to those officers
(including officers who are members of the Board of Directors) and other key
employees of National City or of any of its subsidiaries who are materially
responsible for the management, growth, and overall success of National City, as
determined by the Board of Directors.
SHARES AVAILABLE UNDER THE PLAN
The shares of National City Common subject to the Plan may be treasury shares
or shares of original issue or a combination of the foregoing. The maximum
number of shares of National City Common which may be sold upon the exercise of
option rights granted pursuant to this Plan, shall be 15,000,000 shares of
National City Common.
GRANTS OF OPTION RIGHTS
The Board of Directors may, from time to time and upon such terms and
conditions as it may determine, authorize the granting of option rights. Each
such grant may utilize any or all of the authorizations and shall be subject to
all of the limitations contained in the Plan. These pertain to number of shares,
option price, successive grants, aggregate number of option rights, aggregate
fair market value limitations, and qualification under particular provisions of
the 1986 Internal Revenue Code (the "Code").
No option right shall be exercisable more than 10 years from the date of
grant. Upon exercise, the option price shall be payable in cash, or by the
transfer to National City by the optionee of shares of National City Common with
a value equal to the total option price, or by a combination of such methods of
payment.
Successive grants may be made to the same eligible employee whether or not any
option rights previously granted to such eligible employee remain unexercised.
No eligible employee may, however, be granted under this plan, in the aggregate,
more than 3,000,000 option rights or appreciation rights, subject to adjustment
pursuant to the Plan over any ten year period.
Each grant shall be evidenced by an agreement executed on behalf of National
City by any officer designated by the Board of Directors for this purpose and
delivered to and accepted by the eligible employee and shall contain such terms
and provisions, consistent with this Plan, as the Board of Directors may
approve.
ADDITIONAL OPTION
The Board of Directors may, at or after the date of grant of option rights,
grant additional options. Additional options may be granted with respect to any
outstanding option. If an optionee exercises an outstanding option that has an
additional option feature by transferring already owned shares of National City
Common and/or when shares of National City Common are tendered or relinquished
as payment of the amount to be withheld under applicable federal, state and
local income tax laws in
16
<PAGE> 16
connection with the exercise of an option, the optionee shall automatically be
granted an additional option.
The additional option shall cover the number of shares of National City
Common, equal to the sum of the number of shares of National City Common
delivered as consideration upon the exercise of the previously granted
outstanding option to which such additional option feature relates, and the
number of shares of National City Common tendered or relinquished as payment of
the amount to be withheld under applicable federal, state and local income tax
laws, in connection with the exercise of the option to which such additional
option feature relates.
The additional option will not have an additional option feature unless the
Board of Directors directs otherwise. The additional option, option price shall
be 100% of the market value per share on the date the employee delivers shares
of National City Common to exercise the option that has the additional option
feature and/or delivers or forfeits shares of National City Common in payment of
income tax withholding on the exercise of an option that has the additional
option feature. The additional option shall have the same termination date and
other termination provisions as the underlying option that had the additional
option feature.
GRANTS OF APPRECIATION RIGHTS
The Board of Directors may from time to time authorize the granting of
appreciation rights in respect of any or all of the option rights under any
outstanding option to the optionee thereunder. An appreciation right shall be a
right of the optionee to receive from National City an amount which shall be
determined by the Board of Directors and shall be expressed as a percentage of
the spread at the time of exercise. To the extent such optionee elects to
exercise such appreciation right instead of the related option right, the
related option right shall be canceled, and vice versa. Each such grant may
utilize any or all of the authorizations and shall be subject to all of the
limitations contained in the Plan which pertain to exercise the amount payable
on exercise in cash, or in shares of National City Common or in any combination
thereof, the maximum number of shares of National City Common deliverable upon
exercise, waiting periods and shall be evidenced by an executed agreement.
TRANSFERABILITY
Except as provided for by the Board of Directors, no option right, including
any related appreciation right, shall be transferable by an optionee other than
by will or the laws of decent and distribution. Unless the Board of Directors
otherwise directs, Option rights and appreciation rights shall be exerciseable
during the optionee's lifetime only by the optionee or by the optionee's
guardian or legal representative.
ADJUSTMENTS
The Board of Directors may make or provide for such adjustments in the maximum
numbers of shares of National City Common, in the numbers of shares of National
City Common covered by option rights and appreciation rights granted hereunder,
and in the prices per share applicable under such option rights and appreciation
rights, as the Board of Directors in its sole discretion, exercised in
17
<PAGE> 17
good faith, may determine is equitably required to prevent dilution or
enlargement of the rights of the optionees that otherwise would result from any
stock dividend, stock split, combination of shares, recapitalization, or other
change in the capital structure of National City, merger, consolidation, spin-
off, reorganization, partial or complete liquidation, issuance of rights or
warrants to purchase securities, or other corporate transaction or event having
an effect similar to any of the foregoing.
FRACTIONAL SHARES
National City will not be required to issue any fractional share of National
City Common pursuant to this Plan. The Board of Directors may provide for the
elimination of fractions or for the settlement of fractions in cash.
ADMINISTRATION OF THE PLAN
The Plan shall be administered by the Board of Directors, which may from time
to time delegate all or any part of its authority under this Plan to the
Committee comprising not less than three disinterested Directors appointed by
the Board of Directors. To the extent of such delegation, references herein to
the "Board of Directors" shall include the Committee.
The interpretation and construction by the Board of Directors of any provision
of this Plan, or of any agreement evidencing the grant of option rights or
appreciation rights, and any determination by the Board of Directors pursuant to
any provision of this Plan or of any such agreement shall be final and
conclusive. No member of the Board of Directors shall be liable for any such
action or determination made in good faith.
AMENDMENTS, ETC.
The Plan may be amended from time to time by the Board of Directors but
without further approval by the stockholders of National City, no such amendment
shall increase the maximum numbers of shares of National City Common or change
the definition of eligible employees or materially increase the benefits
accruing to optionees hereunder.
The Board of Directors shall not, without the further approval of stockholders
of National City, authorize the amendment of any outstanding option right to
reduce the option price except in conjunction with the adjustments as discussed
above. No option rights shall be canceled and replaced with awards having a
lower option price other than pursuant to the award of an additional option as
discussed above, without the further approval of the stockholders of National
City.
The Board of Directors may at any time amend, suspend, or terminate any
agreement evidencing appreciation rights granted under this Plan; in the case of
an amendment, the amended appreciation right shall conform to the provisions of
this Plan. The Board of Directors may in its discretion accelerate the time at
which option or appreciation rights may be exercised.
18
<PAGE> 18
ASSUMPTIONS
In the event that a corporation is merged into National City, and National
City is the survivor of such merger, the Board of Directors may elect, in its
sole discretion, to assume under this Plan any or all outstanding options
granted by such corporation to its officers and employees under any stock option
plan adopted by it prior to such merger. Such assumptions shall be on such terms
and conditions as the Board of Directors may determine in its sole discretion,
provided that the options as assumed do not provide or contain any terms,
conditions, or rights which an option right may not provide or contain
hereunder.
GENERAL
The closing price of National City Common as reported by The Wall Street
Journal for February 21, 1997 was $ per share.
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 benefits and amounts
that were actually received under the National City Corporation Amended and
Restated 1993 Stock Option Plan by the participants during the Corporation's
last completed fiscal year ended December 31, 1993.
1996 BENEFITS UNDER THE
NATIONAL CITY CORPORATION AMENDED AND RESTATED
1993 STOCK OPTION PLAN
<TABLE>
<CAPTION>
NAME AND POSITION NUMBER OF UNITS(1)
--------------------------------------------------------- ------------------
<S> <C>
David A. Daberko......................................... 382,607
William R. Robertson..................................... 276,713
Vincent A. DiGirolamo.................................... 156,859
Robert G. Siefers........................................ 149,410
William E. MacDonald..................................... 136,669
Executive Group.......................................... 803,751
Non-Executive Director Group............................. 0
Non-Executive Officer Employee Group..................... 3,271,252
</TABLE>
APPROVAL BY STOCKHOLDERS
The proposal requires for its adoption the affirmative vote of the majority of
shares of National City Common present in person or represented by proxy at the
meeting and entitled to vote on the subject matter.
THE BOARD OF DIRECTORS OF NATIONAL CITY RECOMMENDS A VOTE FOR THIS PROPOSAL.
19
<PAGE> 19
3. PROPOSAL TO ADOPT THE NATIONAL CITY CORPORATION
1997 RESTRICTED STOCK PLAN.
At the Annual Meeting of Stockholders there will be presented for stockholder
approval the 1997 National City Corporation Restricted Stock Plan (the "1997
Plan") which was adopted by the Board of Directors at its Meeting on February
24, 1997, subject to the approval of National City's stockholders. The 1997 Plan
is a new compensation plan and is similar to the National City Corporation
Amended and Second Restated 1991 Restricted Stock Plan. The purpose of the 1997
Plan is to maximize the returns to the stockholders and to promote the long-term
profitability and success of National City by providing equity interests and
equity-based incentives in National City to key employees and members of the
Board of Directors of National City and by providing alternate means of
compensation.
Generally, the 1997 Plan provides for the granting of shares of National City
Common to a recipient and restricting that recipient's rights of transfer of the
shares for a specific period of time ("Restricted Stock"). During that
restricted period, those shares are subject to substantial risk of forfeiture.
To the extent the recipient forfeits his interest in the stock, he or she will
have no rights in the shares forfeited.
The 1997 Plan will be administered by the Committee. All directors will
participate in the 1997 Plan.
The complete text of the 1997 Plan appears as Exhibit B to this Proxy
Statement. While the main features of the 1997 Plan are summarized below, such
summaries are in all respects subject to the complete text of the 1997 Plan set
forth in Exhibit B.
TYPE AND AMOUNT OF STOCK GRANTS
The total amount of National City Common which may be awarded under the 1997
Plan is 1,500,000 shares, of which no more than 225,000 shares may be awarded in
the aggregate to any one individual. Restricted Stock may consist, in whole or
in part, of authorized and unissued shares or treasury shares. If any employee
or director who has been awarded any Restricted Stock pursuant to the 1997 Plan
("Participant") forfeits his interest in any shares of National City Common
awarded under the 1997 Plan, such National City Common shall again be available
for distribution in connection with future awards under the 1997 Plan.
ELIGIBILITY
Under the 1997 Plan, awards of Restricted Stock may be made to any regular
employee of the Corporation or any of its subsidiaries (including employees who
are members of the Board of Directors), directors of National City's
subsidiaries (collectively "Participant Awards") and to the Directors of the
Corporation who are not employees of the Corporation or its subsidiaries
("Director Awards").
20
<PAGE> 20
TERMS OF AWARDS
1. Participant Awards
The 1997 Plan contemplates that the Committee may award Restricted Stock to
the employees of National City and National City's subsidiaries subject to the
following restrictions:
(1) All awards are to be made subject to transfer restrictions which are set
by the Committee.
(2) All awards of Stock shall be subject to an award agreement entered into
between National City and the participant receiving the award. Such agreements
may differ from participant to participant and from award to award.
(3) Any Participant Award made pursuant to the 1997 Plan may or may not
contain any additional conditions the Committee deems appropriate.
2. Director Awards:
Unless modified by the full Board of Directors, each individual who is first
elected or appointed to the office of Director will be awarded one thousand
(1,000) shares of Restricted Stock subject to transfer restrictions. In
addition, each year in which the individual is reelected or reappointed a
Director of National City, such individual shall be granted an additional award
of two hundred (200) shares of Restricted Stock, the transfer of which is also
restricted. These awards will not be made, however, as long as awards of
Restricted Stock are being made to Directors under the National City Corporation
Amended and Second Restated 1991 Restricted Stock Plan. An award agreement shall
be entered into between each Director and National City for each award made to
the Director. The 1997 Plan restrictions shall fully expire upon the earlier of
the individual Director's death or disability, a change in control of National
City, or a date nine months after the date of the award. If a Director shall
leave the Board of Directors of National City for any reason other than
enumerated above, such Director's interest in the stock subject to an award
agreement(s) shall be forfeited.
3. Awards to Employees or Directors:
No grants or awards of Restricted Stock shall be made pursuant to the 1997
Plan after ten (10) years from the date the 1997 Plan becomes effective.
All Restricted Stock awarded to employees and directors pursuant to the 1997
Plan will be held in escrow until such time as the restrictions set forth in the
award agreement are met. If the restrictions have lapsed, the Restricted Stock
will be exchanged for National City Common and shall be removed from escrow and
given to the employee or director. If the restrictions are not met, the
Restricted Stock shall be forfeited. During the period of time during which any
restrictions remain outstanding on the Restricted Stock, awards may not be,
voluntarily or involuntarily, sold, assigned, encumbered, pledged or otherwise
transferred other than by will or the laws of descent and distribution.
In the event of a change in control of National City, the 1997 Plan provides
that all 1997 Plan restrictions shall lapse and that National City will cause
all outstanding Restricted Stock awarded
21
<PAGE> 21
under the 1997 Plan to be exchanged for National City Common free of 1997 Plan
restrictions. The 1997 Plan defines a change in control.
ADJUSTMENTS
The Committee may make or provide for such adjustments in the aggregate number
of shares of National City Common and, if necessary, the kind of securities for
issuance under the 1997 Plan, and in the number of shares subject to outstanding
awards granted under the 1997 Plan in the aggregate or to any participant and in
the number of shares which may be awarded to any one individual as the
Committee, in its sole discretion may determine is equitably required to prevent
dilution or enlargement of rights of participants that would otherwise result
from any stock dividend, stock split, combination of shares, recapitalization,
or other change in the capital structure of National City, merger,
consolidation, spin-off, reorganization, partial or complete liquidation,
issuance of rights or warrants to purchase securities, or other corporate
transaction or event having an effect similar to any of the foregoing.
AMENDMENTS
The plan may be amended from time to time by the Committee but without further
approval by the stockholders of National City. No amendment may be made that
would increase the maximum number of shares to be granted under the 1997 Plan or
extend the term during which awards of restricted stock may be granted under the
1997 Plan.
FRACTIONAL SHARES
National City will not be required to issue any fractional share of National
City Common pursuant to this Plan. The Committee may provide for the elimination
of fractions or for the settlement of fractions for cash.
FEDERAL TAX CONSEQUENCES
The award of Restricted Stock pursuant to the 1997 Plan to an employee or
director will not result in any taxable income to them at the time of the award,
unless the employee or director so elects. Unless the employee or director
elected to recognize the income at the time of the award, the employee or
director will recognize income for tax purposes at the time the restrictions on
the Restricted Stock lapse. The amount of income to be recognized by the
employee or director is the fair market value of National City Common at the
time the restrictions lapse or at the time of the award, if the employee or
director has elected to recognize the income at that time.
Any dividends received by the Participants as a result of Restricted Stock
will be treated as ordinary earned income, until such time as the restrictions
lapse and as dividend income after the restrictions have lapsed.
The amount of income included in the employee's or director's taxable earned
income, resulting from the award of Restricted Stock and the lapsing of the
restrictions, will measure the amount of the deduction to which National City is
entitled.
22
<PAGE> 22
The tax basis of an employee or director in the stock awarded pursuant to the
1997 Plan will be the fair market value of the stock at the time the
restrictions lapse or at the time of the award, if the employee or director
elected to recognize the income at such time.
GENERAL
The closing price of National City Common as reported by The Wall Street
Journal for February 21, 1997 was $ per share.
The maximum number of shares of National City Common that may be awarded under
the 1997 Plan, the maximum number that may be awarded to any one participant,
and the number of shares of National City Common subject to an award agreement,
may be adjusted to reflect stock splits, combinations of shares,
recapitalization, mergers, consolidations, spin-offs, reorganizations,
liquidations, issuance of rights, and similar events.
The 1997 Plan may be amended by the Board of Directors from time to time
without the approval of the holders of a majority of outstanding voting stock of
National City, so long as no such amendment may (1) increase the maximum number
of shares to be granted under the 1997 Plan, either in aggregate or
individually, except in connection with the above described adjustment; (2)
amend the restrictions which are specifically applicable to awards of Restricted
Stock to directors; or (3) extend the term during which awards may be granted
under the 1997 Plan.
PLAN BENEFITS
It is not possible to determine future awards that will be received by
participants in the 1997 Plan. Set forth in the following table are benefits and
amounts that were actually received by or allocated under the National City
Corporation Amended and Second Restated 1991 Restricted Stock Plan to the
participants during the last completed fiscal year ended December 31, 1996.
1996 BENEFITS UNDER THE NATIONAL CITY CORPORATION AMENDED AND SECOND RESTATED
1991 RESTRICTED STOCK PLAN
<TABLE>
<CAPTION>
NAME AND POSITION DOLLAR VALUE($) NUMBER OF UNITS(1)
- ------------------------------------------------------- --------------- ------------------
<S> <C> <C>
David A. Daberko....................................... $ 783,203 17,453
William R. Robertson................................... 621,519 13,850
Vincent A. DiGirolamo.................................. 406,119 9,050
Robert G. Siefers...................................... 343,294 7,650
William E. MacDonald................................... 267,006 5,950
Executive Group........................................ 3,024,710 67,403
Non-Executive Director Group........................... 287,200 6,400
Non-Executive Officer Employee Group................... 4,683,918 104,377
</TABLE>
VOTE BY STOCKHOLDERS
The proposal requires for its adoption the affirmative vote of the majority of
shares of National City Common present in person or represented by proxy at the
meeting and entitled to vote on the subject matter.
THE BOARD OF DIRECTORS OF NATIONAL CITY RECOMMENDS A VOTE FOR THIS PROPOSAL.
23
<PAGE> 23
4. PROPOSAL TO INCREASE THE TOTAL NUMBER OF SHARES OF NATIONAL CITY
CORPORATION'S AUTHORIZED CAPITAL STOCK FROM 355,000,000 TO 705,000,000.
APPROVAL OF INCREASE OF AUTHORIZED CAPITAL STOCK
Article Fourth of National City's Restated Certificate of Incorporation
presently authorizes the issuance of 355,000,000 shares of capital stock,
comprising 350,000,000 shares of National City Common, par value of $4.00 per
share, and 5,000,000 shares of National City Preferred Stock without par value
("Preferred Stock"). On February 21, 1997, shares of National
City Common were issued and outstanding, shares of National City
Common were reserved for issuance in connection with employee stock options
previously granted, shares of National City Common were available
for future grants of employee stock options, shares of National
City Common were available for issuance pursuant to the Amended and Restated
Dividend Reinvestment and Stock Purchase Plan, and shares of
National City Common were available for issuance pursuant to the Amended and
Second Restated 1991 Restricted Stock Plan. Consequently, authorized
shares of National City Common remain available for future issuance.
On February 24, 1997, National City's Board of Directors adopted a resolution
approving a proposed amendment to National City's Restated Certificate of
Incorporation to increase the number of shares of capital stock which National
City is authorized to issue from 355,000,000 to 705,000,000. The proposed
amendment to National City's Restated Certificate of Incorporation would
increase the number of shares of National City Common which National City is
authorized to issue from 350,000,000 to 700,000,000 of National City Common,
leaving the number of shares of Preferred Stock which National City is
authorized to issue at 5,000,000. The resolution directed that the proposed
amendment be considered at the Annual Meeting.
The Board of Directors believes it is advisable to have additional shares of
National City Common available for future issuance in connection with possible
acquisitions, equity financing requirements, payments of stock dividends or
other stock distributions, employee stock incentive programs, dividend
reinvestment programs, or other general corporation purposes. Except for
existing employee stock options, the Amended and Second Restated 1991 Restricted
Stock Plan, the Dividend Reinvestment and Stock Purchase Plan referred to above,
and the proposals pertaining to the National City Corporation 1997 Stock Option
Plan and the National City Corporation 1997 Restricted Stock Plan, National City
has no present plans, arrangements or understandings which would require the
issuance of any shares of National City Common.
Except for the increase in the number of authorized shares of National City
Common, the proposed amendment does not amend any other provision of National
City's Restated Certificate of Incorporation. No stockholder of National City
has any preemptive rights and, if the proposed amendment is approved by the
stockholders, shares of National City Common and Preferred Stock may be issued
on such terms and conditions as the Board of Directors may determine without
first offering such shares to stockholders and without further authorization
from the stockholders, unless
24
<PAGE> 24
otherwise required by applicable law. National City's Restated Certificate of
Incorporation would continue to provide that the Board of Directors is
authorized, within the limitations and restrictions stated in the Restated
Certificate of Incorporation, at the time of issuance to fix the preferences,
voting rights, dividend rights, dividend rate, conversion rights, if any, rights
and terms of redemption, liquidation preferences, and other rights and
restrictions of the shares of Preferred Stock or any series thereof, and to
divide such shares into one or more series and fix the number of shares
constituting each series. The dividend and liquidation rights of the National
City Common will be subject to the rights of any preferred stock.
To effect the increase in the authorized number of shares of capital stock of
National City, it is proposed that the first paragraph of Article FOURTH of the
Restated Certificate of Incorporation be amended to read in its entirety as is
provided in Exhibit C.
VOTE BY STOCKHOLDERS
Approval of the proposal to increase the number of authorized shares of
capital stock requires the favorable vote of the holders of shares representing
a majority of the issued and outstanding National City Common.
THE BOARD OF DIRECTORS OF NATIONAL CITY RECOMMENDS A VOTE FOR THIS PROPOSAL.
5. SELECTION OF INDEPENDENT AUDITORS -- NATIONAL CITY.
The Board of Directors of National City believes it appropriate to submit for
action by the stockholders of National City the approval of the selection of
Ernst & Young LLP, independent auditors, as auditors for National City for the
year 1997. This firm and its predecessors have served as independent auditors
for National City since its inception in 1973. In the opinion of the Board of
Directors of National City, the reputation, qualifications, and experience of
the firm make appropriate its reappointment for 1997. A representative of the
firm is expected to be present at the Annual Meeting of Stockholders of National
City with the opportunity to make a statement if such representative desires to
do so and is expected to be available to respond to appropriate questions. The
affirmative vote of the majority of shares present in person or represented by
proxy at the meeting and entitled to vote is required to approve the selection
of Ernst & Young LLP as auditors for National City for the year 1997.
VOTE BY STOCKHOLDERS
The proposal requires for its adoption the affirmative vote of the majority of
shares of National City Common present in person or represented by proxy at the
meeting and entitled to vote on the subject matter.
THE BOARD OF DIRECTORS OF NATIONAL CITY RECOMMENDS A VOTE FOR THIS PROPOSAL.
25
<PAGE> 25
REPORT OF COMPENSATION AND ORGANIZATION COMMITTEE
National City 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 performance-based compensation programs for executives. National
City 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.
COMPENSATION PHILOSOPHY
National City is committed to aligning compensation strategies with overall
business objectives. The performance of National City's employees is key in
delivering the types of products and services that will enable National City to
be the premier diversified financial services company in the Midwest.
National City's compensation philosophy is built on four integral components
that form the basis of National City's FOCUS ON PERFORMANCE programs:
- Implement strategies that differentiate and focus on employee performance.
- Tailor compensation programs to reflect unit and organizational priorities.
- Compensate employees based on their contributions to the achievement of
National City's goals and objectives.
- Provide and support opportunities for equity ownership.
National City will structure its compensation plans to reward individuals
based on their contributions to individual, unit, and corporate objectives.
Compensation strategies that support and are aligned with business objectives
will be pursued. National City's compensation philosophy recognizes the need for
diversification in pay practices. Variable pay opportunities provided through
incentive plans and performance bonus programs are important vehicles for
rewarding individual employee contributions. National City's Focus on
Performance programs are the foundation of achieving individual goals and
National City's financial objectives.
EXECUTIVE COMPENSATION PRINCIPLES
National City's compensation programs are designed to encourage and reward
performance. The executive compensation package is competitive and comparable to
the levels of compensation offered by National City's peer group companies.
Because building the bottom line is critical to National City's success,
compensation is focused on performance that generates revenue -- directly
through the business line and through increased efficiency as a result of staff
unit contributions. The attainment of National City's goals and objectives
contribute to the maximization of stockholder value and create enhanced
compensation opportunities for participating executives.
26
<PAGE> 26
National City's executive compensation programs place a significant portion of
an executive's compensation at risk based upon performance. Rewards are based on
the attainment of both long-term and short-term strategic objectives. Cash-based
and equity-based instruments are used to provide alignment between executive
rewards and the achievement of individual, unit, and corporate objectives.
National City believes that it is in the best interest of stockholders to
retain as much flexibility as possible, now and in the future, with respect to
the design and administration of the written compensation plans that determine
cash-based and equity-based compensation for executive officers. National City
does, however, recognize the constraints imposed on this flexibility by Section
162(m) of the Internal Revenue Code, which disallows a tax deduction for
non-exempted compensation it pays in excess of $1,000,000 to key executives.
National City's compensation plans are currently structured in such a manner
that it is unlikely that non-exempted compensation paid to any executive officer
in any year will exceed the limitation for deduction by National City
established by Section 162(m).
COMMITMENT TO EMPLOYEE EQUITY OWNERSHIP
National City is committed to ensuring that stockholders and employee owners
share long-term interests. A focus on increasing employee equity ownership
strengthens the link between executive rewards and long-term corporate
performance. This focus is demonstrated by the implementation of stock ownership
guidelines. In addition, several programs are in place to provide more
opportunities for executives to increase their level of equity interests. For
example, executives can receive part of their short-term bonus in the form of
restricted stock and the use of additional options encourages employees to
exercise their stock options earlier than they would have otherwise and hold the
shares arising from the exercise.
STOCK OWNERSHIP GUIDELINES
In 1996, National City adopted stock ownership guidelines for its executives.
Equity ownership is a vital component of National City's total compensation
strategy, which is based on corporate performance and shareholder interests.
Ownership guidelines were determined based on a multiple of the base salary mid
range and converted to a fixed number of shares. Guidelines for the chief
executive officer and president were determined by market median compensation
data. The guidelines are applicable to all executives participating in the
National City Corporation Long-Term Incentive Compensation Plan for Senior
Officers and certain other executive officers of National City or its major
subsidiaries. Ownership guidelines are currently in place for 55 executives.
27
<PAGE> 27
- --------------------------------------------------------------------------------
STOCK OWNERSHIP GUIDELINES FOR THE NAMED EXECUTIVES
<TABLE>
<S> <C> <C>
David A. Daberko 5.5 X Market Median Salary 59,459 Shares
William R. Robertson 5.5 X Market Median Salary 59,459 Shares
Vincent A. DiGirolamo 3.5 X Multiple of Mid Range 37,838 Shares
Robert G. Siefers 3.5 X Multiple of Mid Range 26,014 Shares
William E. MacDonald 3.5 X Multiple of Mid Range 26,014 Shares
</TABLE>
- --------------------------------------------------------------------------------
The executives have until 1999 to meet the stock ownership guidelines. Both
direct and indirect forms of ownership are recognized in achieving the
guidelines. Direct ownership will be in the form of shares of National City
Common owned. Indirect ownership includes deferred compensation invested in the
phantom National City Common and 401(k) funds invested in the National City
Corporation Common Stock Fund.
DIRECTOR EQUITY OWNERSHIP
In addition to the stock ownership guidelines for employees, National City has
adopted stock ownership guidelines for its Board of Directors. Increased equity
ownership for directors strengthens the linkage to long-term stockholder
interests. The Board established stock ownership guidelines in 1996. The
guidelines recommend that each director beneficially own 6,000 shares of
National City Common. Both direct and indirect National City equity ownership
will be considered as owned shares for the purpose of the guideline. Direct
ownership includes National City Common and Restricted Stock. Indirect ownership
includes deferred compensation invested in the form of phantom National City
Common.
EQUITY-BASED REWARDS
Stock Options are an important component of total compensation and provide a
long-term incentive to participants to align performance with stockholder
interests. Each organizational unit is allocated a pool of options for
distribution based on unit performance. Stock options are awarded to employees
based on their contribution to the performance of the unit. Broad guidelines are
used to award the stock options, with above-average awards linked to
above-average unit and individual performance and long-term potential.
The National City Corporation Amended and Restated 1993 Stock Option Plan
provides for an additional stock option grant (an "Additional Option") when the
employee has used previously owned National City Common to pay the exercise
price of an original option grant (a swap transaction). The additional option
feature typically encourages an employee to exercise the option grant earlier
than if the feature were not present, thereby increasing the employee's level of
equity ownership. Each Additional Option's termination date is the same as the
termination date of the option that originally had the additional option
feature. Its option price is the market price at the time of the exercise of the
original option. An Additional Option is NOT provided upon exercise of an
Additional Option. This
28
<PAGE> 28
program was implemented when the stock ownership guidelines were established and
supports National City's focus on increased equity ownership.
CASH-BASED REWARDS
National City believes that cash compensation should be driven by the
attainment of aggressive business goals. These goals are based on annual and
three-year plan cycles. Performance is assessed in terms of achievement of
internal business goals as well as financial achievements compared to those of
the peer group. Above-average cash compensation can only be attained by
achieving an above-average ranking against National City's peer group and the
attainment of the aggressive business goals.
National City establishes a salary range for each executive officer that is
determined by an evaluation of job criteria. This internally driven process is
then validated by market comparisons at peer group companies. National City's
objective is to provide base compensation at market median and to provide total
cash compensation opportunities above the market median when there is above-
average performance. Executive salaries can vary within National City's range
structure based on performance, experience, and long-term potential.
THE NATIONAL CITY CORPORATION ANNUAL CORPORATE PERFORMANCE INCENTIVE PLAN, as
amended January 1, 1996, rewards performance relative to peer group performance
based on four factors: growth in earnings per share (33% weight), return on
assets (17%), overhead ratio (17%), and return on equity (33%). Awards are paid
based on National City's performance over the year as well as the employee's
individual award category. Awards under this plan are a percentage of base pay
and can range from 0% to 76.5% for the chief executive officer, 0% to 60% for
the president and vice chairman and 0% to 42% for all other executive officers
of National City or its major subsidiaries. For 1996 National City ranked 6th
out of 16 banks in the peer group. The award payment for 1996 was equal to 75%
of the maximum award.
THE NATIONAL CITY CORPORATION SHORT-TERM INCENTIVE COMPENSATION PLAN FOR
SENIOR OFFICERS allows for rewards to be based on bottom-line performance of the
line or staff unit and the achievement of individual performance goals. Award
pools are funded based on unit performance. Individual awards are distributed
within each unit based on the funding level of the pool and the individual's
contributions toward the unit's performance. Awards under this plan are a
percent of base pay and can range from 0% to 53.5% for the chief executive
officer, 0% to 50% for the president and vice chairman and 0% to 48% for any
executive officer of National City or its major subsidiaries.
THE NATIONAL CITY CORPORATION LONG-TERM INCENTIVE COMPENSATION PLAN FOR SENIOR
OFFICERS is designed to maximize returns to stockholders by linking the
compensation of key executives to the overall profitability and success of
National City. Awards are based on National City's ranking relative to a peer
group currently comprised of 16 super-regional banks. The ranking is determined
by the increase in total stockholder return over a three-year plan cycle. Awards
are paid at the completion of each plan cycle. Awards under this plan can range
from 0% to 100% for the chief executive officer, 0% to 80% for the president and
vice chairman, and 0% to 60% for any executive officer of National City or its
major subsidiaries. The incentive award is computed based on the executive's
average annual
29
<PAGE> 29
salary during each plan cycle. National City ranked 7th out of 16 banks in the
peer group total return to shareholders for the 1994-1996 plan cycle. The payout
was equal to 70% of the maximum award.
PEER GROUP BANKS
The peer group companies are selected by the Compensation and Organization
Committee. They are all included in the Keefe, Bruyette & Woods, Inc. 50 Bank
Total Return Index ("KBW 50") used in the performance chart on page and, as a
group, have outperformed the KBW 50 over time. National City believes it is
important that the peer group it compares itself to consists of the better
performing banks.
SUMMARY
National City's compensation programs serve to closely align an individual's
compensation opportunities with the impact of the individual's contributions on
the overall performance of National City. Both cash-based and equity-based
vehicles are used to reward performance that is measured annually and over a
three-year period. Achievement of National City's business goals and performance
relative to peer group performance are used as measurement criteria. National
City will continue to build on programs that tie total compensation to National
City's success.
THE COMPENSATION AND ORGANIZATION COMMITTEE'S
REVIEW OF CEO COMPENSATION
National City's executive compensation program is based on corporate and
individual performance and places a significant portion of an executive's
compensation at risk if pre-established 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 shareholder value.
Mr. Daberko served as president and chief operating officer of National City
from 1993 until July of 1995, when he was named chief executive officer. Mr.
Daberko has been an employee of National City for 28 years. In 1994, Mr.
Daberko's total cash compensation was 56% higher than his 1993 total cash
compensation. In 1995 his total cash compensation was 4% higher than in 1994. In
1996 Mr. Daberko's total cash compensation was . These fluctuations in
compensation are primarily attributable to variations in performance-based
incentive awards and Mr. Daberko's change in position.
During 1996, Mr. Daberko's salary was adjusted reflective of his performance
and the relationship of his earning opportunities to that of other CEO's at peer
companies. His base salary at the end of 1996 was $642,000.
Long-Term Plan awards are based solely on the change in total stockholder
return as compared to the change in total stockholder return of a selected peer
group of financial institutions for a three-year period. Based on National
City's relative performance during the 1994-1996 time period, Mr. Daberko's
award in 1996 was $325,207.
Mr. Daberko's Short-Term Plan goals for 1996 were based upon improving
corporate earnings, maintaining credit quality, completing the integration of
Integra Financial Corporation, leading a transition to a sales and marketing
culture, refocusing National City on its core businesses, and putting in place
programs that help identify and develop National City's future leaders. During
1996,
30
<PAGE> 30
all short term goals were met and most were significantly exceeded. After
reviewing Mr. Daberko's performance as compared to these pre-established
individual goals the Committee awarded Mr. Daberko under the Short
Term Plan. Mr. Daberko has elected to receive his bonus in the form of
restricted stock ( shares), further linking his interests to the
performance of National City.
The Annual Corporate Performance Plan awards are determined by comparing
National City's relative performance against a selected peer group of financial
institutions based on pre-selected key financial indices. Mr. Daberko's Annual
Corporate Performance Plan award was $368,347.
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.
National City places significant value and importance on stock ownership by
senior management. Based on Mr. Daberko's performance and in recognition of his
relatively recent move to the position of chief executive officer, Mr. Daberko
received options in 1996 to purchase 300,000 shares of National City Common with
an exercise price of $34.75 per share (the market value of National City Common
on the day of grant, July 22, 1996). The option award was competitive with
option awards made to chief executive officers of the peer group companies. The
Committee does not consider the number of options held by Mr. Daberko in making
this award, except for assuring the Option Plan's limits are not exceeded. In
addition, Mr. Daberko received Additional Option stock options during 1996 by
surrendering previously-owned shares of National City Common to exercise stock
options with the Additional Options feature. These Additional Options have an
exercise price equal to the market price at the time of the exercise of the
original option.
National City uses Restricted Stock to offset projected benefits under the
Supplemental Executive Retirement Plan in which Mr. Daberko participates. During
1996, assumptions used in the calculation of the offset were modified, resulting
in one-time grants to participants that are larger than in previous years. The
modified assumptions do not affect the level of benefit that will ultimately be
received by the participant. In 1996, Mr. Daberko received 9,850 shares of
Restricted Stock for this purpose.
During 1996, National City's fully diluted net income per common share was
$3.27, up from $2.64 in 1995 (restated to include results of Integra Financial
Corporation). The share price of National City Common rose to $44.875 from
$33.125 and dividends paid were increased to $1.47 per share from $1.30. The
performance-based reward programs in which Mr. Daberko participates are designed
to provide levels of equity-based and cash-based rewards that are aligned with
the performance of National City. Mr. Daberko's compensation and the performance
of National City during 1996 have demonstrated the existence of this alignment.
COMPENSATION AND ORGANIZATION COMMITTEE
John G. Breen, Chairman
James S. Broadhurst
Duane E. Collins
Daniel E. Evans
Joseph H. Lemieux
31
<PAGE> 31
STOCKHOLDER RETURN PERFORMANCE
Set forth below is a line graph comparing the five-year cumulative total
return of National City Common, assuming reinvestment of dividends, with that of
the Standard & Poor's 500 ("S&P 500") and the 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.
5 YEAR TOTAL RETURN
12/91 - 12/96
NATIONAL CITY VS. KBW 50 AND S&P 500
<TABLE>
<CAPTION>
MEASUREMENT PERIOD
(FISCAL YEAR COVERED) NATIONAL CITY S&P 500 KBW 50
<S> <C> <C> <C>
1991 100.0 100.0 100.0
1992 139.1 107.6 127.4
1993 143.2 118.4 134.5
1994 158.1 119.8 127.4
1995 211.7 164.7 204.4
1996 298.4 202.4 289.1
</TABLE>
SUMMARY
National City's compensation programs serve to closely align an individual's
compensation opportunities with the impact of the individual's contributions on
the overall performance of National City. Both cash-based and equity-based
vehicles are used to reward performance that is measured annually and over a
three-year period. Achievement of National City's business goals and
32
<PAGE> 32
performance relative to peer group performance are used as measurement criteria.
National City will continue to build on programs that tie total compensation to
National City's success.
REVIEW OF COMPANY PERFORMANCE
National City's net income in 1996 was $737 million, compared to $591 million
in 1995, after restating 1995 to reflect the pooling-of-interests transaction
with Integra Financial Corporation which became effective May 3, 1996. Net
income per share increased 24% to $3.27, from $2.64 in 1995. Both net income and
earnings per share were record results for National City. The higher earnings
reflect solid net interest income, growing noninterest income and demonstrated
expense management.
Return on average common equity, a key performance measure, was 17.69% in
1996, up from 16.18% in 1995. Return on average assets was 1.51% in 1996,
compared to 1.23% in 1995.
The combination of a solid capital base and strong earnings has enabled
National City to deliver excellent returns on stockholders' investments. Total
return of National City Common, assuming reinvestment of dividends, has
outperformed the S&P 500 over the past 20 years -- an average annual return of
16.0% per year, versus 14.5% for the S&P 500. The quarterly dividend was
increased in December 1996 to $.41 per share, continuing the pattern of
semi-annual dividend increases.
33
<PAGE> 33
REMUNERATION OF EXECUTIVE OFFICERS
AND TRANSACTIONS WITH MANAGEMENT -- NATIONAL CITY
EXECUTIVE COMPENSATION
(a) COMPENSATION. The following table sets forth, together with certain other
information, the compensation earned during the fiscal year ended December 31,
1996 by (i) David A. Daberko, the chief executive officer and (ii) the four
other most highly compensated executive officers of National City and its
subsidiaries.
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
SUMMARY COMPENSATION TABLE
LONG-TERM COMPENSATION
----------------------------------------
AWARDS
ANNUAL COMPENSATION -------------------------
------------------------------------------- RESTRICTED SECURITIES PAYOUTS ALL
OTHER STOCK UNDERLYING ---------- OTHER
NAME AND PRINCIPAL BONUS ANNUAL AWARD(S) OPTIONS/ LTIP COMP
POSITION YEAR SALARY($) ($)(1) COMP($) ($)(2) SARS(#) PAYOUTS($) ($)(3)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
- ----------------------------
D. A. Daberko 1996 $598,000 $368,348 $0 $783,203 382,607 $325,207 $ 74,776
Chairman of the Board 1995 $499,375 $300,400 $0 $ 55,269 75,000 $260,910 $ 66,678
and Chief Executive Officer 1994 $442,083 $263,352 $0 $ 75,700 45,000 $310,333 $ 54,516
W. R. Robertson 1996 $465,833 $376,000 $0 $621,519 276,713 $247,660 $ 61,064
President 1995 $441,333 $243,860 $0 $ 79,169 50,000 $235,293 $ 56,198
1994 $419,583 $243,352 $0 $ 71,550 32,000 $304,633 $ 51,342
V. A. DiGirolamo 1996 $366,667 $308,750 $0 $406,119 156,859 $125,627 $ 40,704
Vice Chairman 1995 $276,833 $168,350 $0 $ 76,181 30,000 $107,893 $ 34,748
1994 $253,833 $138,640 $0 $ 37,100 20,000 $135,787 $ 31,415
R. G. Siefers 1996 $246,667 $383,750 $0 $343,294 149,410 $ 95,433 $ 29,883
Executive Vice President 1995 $226,667 $122,820 $0 $ 19,875 17,500 $ 88,667 $ 22,305
and Chief Financial Officer 1994 $209,333 $114,450 $0 $ 7,763 15,500 $113,050 $ 17,249
W. E. MacDonald 1996 $282,500 $ 89,775 $0 $267,006 136,669 $105,817 $ 32,530
Executive Vice President 1995 $246,667 $144,720 $0 $ 26,500 20,000 $ 95,317 $ 28,093
1994 $226,667 $127,450 $0 $ 11,644 19,500 $118,750 $ 23,714
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) The National City Corporation Short Term Incentive Plan for Senior Officers
and the National City Corporation Annual Corporate Performance Plan awards
include both cash and deferred awards. The objectives used in determining
awards and their relative weights under the Short-Term Plan and the Annual
Corporate Performance Plan are set forth on pages and . Based on the
National City objectives and their weights, the payout under the Annual
Corporate Performance Plan for 1996 was 75% of the maximum.
(2) Restricted Stock was granted to offset projected Supplemental Executive
Retirement Plan benefits (see page ). In addition, D. A. Daberko and W. E.
MacDonald elected to receive a portion of their Short-Term Incentive
Compensation Plan award in the form of Restricted Stock (see page ), and
Mr. Siefers was granted a special one time award for his performance on a
special project over the past three years. D. A. Daberko has, in the
aggregate, 29,003 shares of Restricted Stock having a total value as of
12/31/96 of $1,301,523. W. R. Robertson has, in the aggregate, 32,900 shares
of Restricted Stock having a total value as of 12/31/96 of $1,476,388. V. A.
DiGirolamo has, in the aggregate, 19,300 shares of Restricted Stock having a
total value as of 12/31/96 of $866,088. R. G. Siefers has, in the aggregate,
10,250 shares of Restricted Stock having a total value as of 12/31/96 of
$459,969. W. E. MacDonald has, in the aggregate, 8,800 shares of Restricted
Stock having a total value as of 12/31/96 of $394,915. The named executive
officers receive dividends on their Restricted Stock at the same rate and
frequency as all stockholders.
34
<PAGE> 34
(3) All Other Compensation includes the Executive Savings Plan (see page ) and
the Savings and Investment Plan (see page ) matching and profit-sharing
components together with premiums paid by National City in connection with
split dollar insurance contracts, but does not include retirement accruals
as these are not calculable. For the year 1996, each of the named executive
officers were credited with the following matching and profit-sharing amount
under the Savings and Investment Plan: D. A. Daberko, $9,259; W. R.
Robertson, $9,209; V. A. DiGirolamo, $9,154; R. G. Siefers, $9,106; W. E.
MacDonald, $9,021. The named executive officers were credited with the
following match and profit-sharing amount under the Executive Savings Plan
during the year 1996: D. A. Daberko, $40,617; W. R. Robertson, $31,737; V.
A. DiGirolamo, $20,252; R. G. Siefers, $12,294; W. E. MacDonald, $14,971.
All other compensation also includes the following amounts equal to the full
dollar value of the remainder of the premiums paid by National City in
connection with life insurance policies issued pursuant to the Split Dollar
Life Insurance Agreements between National City and the following Named
Executive Officers during 1996, respectively, as applicable: D. A. Daberko
$24,901; W. R. Robertson $20,119; V. A. DiGirolamo $11,297; R. G. Siefers
$8,483; W. E. MacDonald $8,538. The premiums paid by National City in
connection with the life insurance policies issued pursuant to such Split
Dollar Life Insurance Agreements, set forth in the preceding sentence,
generally will be recovered in full by National City upon the cancellation
or purchase by a Named Executive Officer of any such life insurance policy
or the payment of any death benefits under any such life insurance policy.
35
<PAGE> 35
- --------------------------------------------------------------------------------
(b) OPTIONS. The following table provides information on options granted in
fiscal year 1996 to the Named Executive Officers.
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------
OPTION/SAR GRANTS IN LAST FISCAL YEAR
INDIVIDUAL GRANTS
---------------------------------------------------------------
NUMBER OF % OF TOTAL
SECURITIES OPTIONS/SARS
UNDERLYING GRANTED TO EXERCISE OR GRANT DATE
OPTIONS/SARS EMPLOYEES IN BASE PRICE EXPIRATION PRESENT
NAME GRANTED(#) FISCAL YEAR(3) ($/SH) DATE VALUE($)(4)
<S> <C> <C> <C> <C> <C>
- -------------------------------------------------------------------------------------------------------------
D. A. Daberko........ 9,186(1) 0.22 % $ 36.875 7/20/97 $ 27,834
10,833(1) 0.26 % 36.875 7/29/98 46,582
18,436(1) 0.45 % 36.875 7/14/99 95,683
22,327(1) 0.54 % 36.875 6/28/00 130,166
21,825(1) 0.53 % 36.875 6/27/01 127,240
300,000(2) 7.31 % 34.750 7/22/06 1,650,000
W. R. Robertson...... 5,200(1) 0.13 % 35.250 7/14/99 26,052
22,144(1) 0.54 % 35.250 6/28/00 123,564
21,615(1) 0.53 % 35.250 6/27/01 120,612
7,648(1) 0.19 % 35.125 7/14/99 38,011
20,700(1) 0.50 % 35.125 6/24/02 115,092
150,000(2) 3.65 % 34.750 7/22/06 825,000
26,651(1) 0.65 % 45.750 6/23/03 184,425
22,755(1) 0.55 % 45.750 7/6/04 157,465
V. A. DiGirolamo..... 1,012(1) 0.02 % 34.625 6/28/00 5,546
5,847(1) 0.14 % 34.625 6/27/01 32,042
150,000(2) 3.65 % 34.750 7/22/06 825,000
R. G. Siefers........ 5,164(1) 0.13 % 35.125 6/24/02 28,712
6,734(1) 0.16 % 35.125 6/23/03 37,441
5,092(1) 0.12 % 35.125 7/6/04 28,312
125,000(2) 3.05 % 34.750 7/22/06 687,500
4,941(1) 0.12 % 38.875 7/6/04 30,387
2,479(1) 0.06 % 38.875 6/14/05 15,246
W. E. MacDonald...... 1,487(1) 0.04 % 35.125 6/28/00 8,268
4,314(1) 0.11 % 35.125 6/27/01 23,986
9,339(1) 0.23 % 35.125 6/24/02 51,925
10,252(1) 0.25 % 35.125 6/23/03 57,001
6,909(1) 0.17 % 35.125 7/6/04 38,414
4,368(1) 0.11 % 35.125 6/14/05 24,286
100,000(2) 2.44 % 34.750 7/22/06 550,000
- -------------------------------------------------------------------------------------------------------------
<FN>
(1) Options are Additional Options as defined in the Amended and Restated
National City Corporation 1993 Stock Option Plan ("Additional Options").
Additional Options are granted at the market price of National City Common
on the date of grant and become exercisable 6 months after the date of
grant. They have a contractual term equal to the remaining term of the
original option.
(2) Options are non-qualified stock options. One-third of the options become
exercisable annually beginning two years from the date of grant and all have
a contractual term of 10 years. Additional Option rights are attached to
each option and Additional Options will be granted upon exercise, subject to
certain provisions, if the exercise price or the related tax obligation is
paid using shares of National City Common owned by the optionee.
(3) National City granted options representing 4,105,003 shares to employees
during 1996.
</TABLE>
36
<PAGE> 36
(4) In accordance with Securities and Exchange Commission rules, the
Black-Scholes pricing model was used to estimate the Grant Date Present
Value. The values indicated were calculated using the following assumptions:
(i) an expected volatility of .191, (ii) an expected dividend yield of
3.80%, (iii) the risk-free interest rate at the date of grant based upon a
term equal to the expected life of the option (from 5.56% to 6.02%), (iv) an
expected option life equal to the anticipated period of time from date of
grant to exercise (from 1.5 years to 3.9 years), and (v) no discounts for
non-transferability or risk of forfeiture. The estimated values have been
included solely for purposes of disclosure in accordance with the rules of
the Securities and Exchange Commission and represent theoretical values. The
actual value, if any, an executive may realize will depend upon the increase
in the market price of National City Common through the date of exercise.
Such an increase would benefit all stockholders.
- --------------------------------------------------------------------------------
The following table sets forth the stock options exercised by each of the
Named Executive Officers during the calendar year 1996 and the December 31, 1996
value of all unexercised options held by the named executive officers.
- --------------------------------------------------------------------------------
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR AND
FY-END OPTION/SAR VALUES
<TABLE>
<CAPTION>
NUMBER OF
SECURITIES VALUE OF
UNDERLYING UNEXERCISED
UNEXERCISED IN-THE-MONEY
OPTIONS/SARS OPTIONS/SARS
AT 12/31/96 AT 12/31/96(2)
SHARES ------------- ---------------
ACQUIRED ON VALUE EXERCISABLE/ EXERCISABLE/
NAME EXERCISE(#) REALIZED($)(1) UNEXERCISABLE UNEXERCISABLE
<S> <C> <C> <C> <C>
- -----------------------------------------------------------------------------------------
D. A. Daberko........ 115,186 $2,248,149 142,481 $ 2,663,580
420,108 $ 4,260,871
W. R. Robertson...... 171,699 $3,124,112 108,097 $ 1,231,037
224,407 $ 1,892,515
V. A. DiGirolamo..... 17,568 $ 359,192 99,490 $ 2,042,617
165,001 $ 1,742,515
R. G. Siefers........ 35,517 $ 402,595 28,722 $ 364,406
141,171 $ 1,441,410
W. E. MacDonald...... 54,355 $ 777,700 79,213 $ 1,297,809
110,001 $ 1,162,515
- -----------------------------------------------------------------------------------------
<FN>
(1) The "Value Realized" is equal to the difference between the option exercise
price and the fair market value of National City Common on the date of
exercise.
(2) The "Value of Unexercised In-The-Money Options/SARs at 12/31/96" is equal to
the difference between the option/SAR exercise price and National City
Common's closing price on December 31, 1996 of $44.875.
- -----------------------------------------------------------------------------------------
</TABLE>
37
<PAGE> 37
The following table provides information on the awards of long-term incentive
plan participation during the year 1996.
LONG-TERM INCENTIVE PLANS -- AWARDS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
ESTIMATED FUTURE PAYOUTS UNDER
PERFORMANCE NON-STOCK
NUMBER OF OR OTHER PRICE-BASED PLANS(3)
SHARES, UNITS PERIOD UNTIL -----------------------------------
OR OTHER MATURATION OR THRESHOLD TARGET MAXIMUM
NAME RIGHTS(#)(1) PAYOUT(2) ($) ($) ($)
<S> <C> <C> <C> <C> <C>
- -----------------------------------------------------------------------------------------------------------
D. A. Daberko........ N/A December 31, 1999 $98,973 $329,909 $659,818
W. R. Robertson...... N/A December 31, 1999 61,679 205,596 513,989
V. A. DiGirolamo..... N/A December 31, 1999 48,549 161,828 404,571
R. G. Siefers........ N/A December 31, 1999 24,495 81,650 272,166
W. E. MacDonald...... N/A December 31, 1999 28,053 93,511 311,703
<FN>
- -----------------------------------------------------------------------------------------------------------
(1) The National City Long-Term Incentive Plan for Senior Officers ("LTIP")
grants cash awards based on a percentage of the individual's base pay. No
shares or other rights are granted. (See page )
(2) The LTIP is based on a three-year cycle starting 1/1/97 and ending 12/31/99.
Messrs. Daberko, Robertson, DiGirolamo, MacDonald and Siefers were each
awarded the opportunity to participate in the next three-year cycle. Payouts
occur only at the end of the cycle. (See page )
(3) The payout is based on National City'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 )
- -----------------------------------------------------------------------------------------------------------
</TABLE>
The value of benefits paid or furnished by National City in 1996 to executive
officers, other than those included in the preceding table, are less than the
amounts required to be disclosed pursuant to the Exchange Act.
DESCRIPTION OF NATIONAL CITY'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 National City and its adopting subsidiaries may participate in the
Savings Plan by directing their employers to make Before-Tax 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 ("Matching
Employer Contributions") in an amount equal to the Matching Employer
Contribution percentage then in effect (the Matching Employer Contribution
percentage is currently an amount equal to 100%
38
<PAGE> 38
of the first 3% of the employee's pay contributed as a Before-Tax Contribution,
plus 50% of the next 4% of the employee's pay similarly contributed as a
Before-Tax Contribution, with no further Matching Employer Contribution for any
additional pay contributed as a Before-Tax Contribution). Amounts contributed
pursuant to the Savings Plan may be invested in certain investment choices.
Before-Tax Contributions and Matching Employer Contributions are fully vested at
all times.
The Savings Plan has a profit-sharing feature based upon National City'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
Matching Employer Contributions described above. The additional amount of this
profit-sharing contribution in any year depends on National City'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 Before-Tax Contributions for the year if National City's ROE is
equal to or greater than 18.5%. In 1996, National City's ROE was 17.69%, which
resulted in National City contributing 40 cents for each $1.00 of an
individual's Before-Tax Contribution as a profit-sharing contribution for the
year 1996.
EXECUTIVE PLAN. Effective January 1, 1989, National City 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
Before-Tax Contributions and the attendant Matching Employer Contributions which
by reason of an individual's annual compensation would not be otherwise allowed
because of the annual maximum limit of the Code or because of the application,
under the 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 Before-Tax
Contributions and Matching Employer Contributions.
Participants in the Executive Plan are limited to those key officers of
National City or its subsidiaries who may be designated from time to time by the
Committee of the Board of Directors. The benefits of the Executive Plan are
without regard to any limitation imposed by the 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 National City. Portions of
such benefits are subject to certain provisions for forfeiture as set forth in
the Executive Plan.
Directors of National City or its subsidiaries who are not also employees of
National City 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 (the
"Long-Term Plan") for Senior Officers focuses upon providing superior returns to
stockholders of National City and measures National City'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
National City Common. The measurement over a three-year period is intended to
focus on the long-term performance of National City linking senior management's
compensation to the total returns experienced by the stockholders during the
period.
39
<PAGE> 39
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 National City 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 Committee.
The banking companies in the peer group at this time are all included in the KBW
50 used in the performance chart on page and, as a group, outperform the KBW
50 over time. National City 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 National City and
are subject to payment upon the recipient's termination of employment with
National City 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 National City, 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, National City'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 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 National
City would no longer be in the same position to guide the affairs of National
City 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 National City or its subsidiaries who are not also employees of
National City or its subsidiaries are not eligible to participate in the
Long-Term Plan.
SHORT-TERM COMPENSATION PLAN. The National City Short-Term Incentive
Compensation 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 National City, or to
other officers of National City or its subsidiaries as may be designated from
time to time by the 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 53.5% 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.
40
<PAGE> 40
Amounts awarded under the Short-Term Plan may be in cash, in unfunded future
benefits, in Restricted Stock or a combination thereof. With the exception of a
cash award, awards are not funded, but simply remain contractual liabilities of
National City and are subject to payment upon the recipient's termination of
employment with National City and 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 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 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.
ANNUAL CORPORATE PERFORMANCE PLAN. The National City Annual Corporate
Performance Incentive Plan (the "Annual Performance Plan") focuses on the annual
operating results achieved by National City. Under this plan, awards can be
granted to any senior officer of National City, or to other officers of National
City or its subsidiaries as may be designated from time to time by the
Committee. National City'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 used in the
performance chart on page and, as a group, outperform the KBW 50 over time.
National City 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 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 National
City and are subject to payment upon the recipient's termination of employment
with National City 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 National City or its subsidiaries who are not also employees of
National City or its subsidiaries are not eligible to receive benefits.
STOCK OPTION PLANS. National City has in effect the 1984 Stock Option Plan, as
amended; the 1989 Stock Option Plan; and the 1993 Stock Option Plan, as amended
and restated. Each of the three
41
<PAGE> 41
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 National City Common, the options being either
non-qualified options or options that are intended to qualify as Incentive Stock
Options under Section 422 of the 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
National City 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 National City or its subsidiaries who are not also employees of
National City or its subsidiaries are not eligible to receive options under the
Stock Option Plans.
RESTRICTED STOCK PLAN. National City 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 National City by providing equity interests and equity-based
incentives in National City to key employees and members of the Board of
Directors of National City.
The Restricted Stock Plan is administered by the Committee of the Board of
Directors of National City.
Restricted Stock is granted to executive officers for two purposes the first
of which is to offset 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. The second is to
deliver all or part of their Short-Term Incentive Compensation Plan award. In
this case restrictions lapse after one year.
Other employees, who do not receive stock option grants and who have been
identified by their managers as high potential employees, may be 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
National City Common ("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 National City
(including employees who are members of the Board of Directors) or any of its
subsidiaries ("Employee Awards") and to the directors of National City who are
not employees of National City or its subsidiaries ("Director Awards").
42
<PAGE> 42
The Restricted Stock Plan contemplates that the Committee may award Restricted
Stock to the employees of National City and National City's subsidiaries subject
to the following restrictions: (a) all awards are to be made subject to transfer
restrictions which are set by the Committee; 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 National City
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 National City, each individual
who was elected to the Board of Directors of National City 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 Directors 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 reelected or
reappointed as a director of National City, 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 National
City (as defined in the Restricted Stock Plan), all Restricted Stock Plan
restrictions will lapse and be of no further force or effect and that National
City shall cause all outstanding Restricted Stock held under the Restricted
Stock Plan to be exchanged for shares of National City Common 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 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 recognizes that, as is the case at most
companies, the possibility of a change in control exists. Accordingly, National
City 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 National City by
entering into severance pay agreements with certain Executives of National City.
The severance agreements were entered into upon the recommendation of the
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
National City, a subsidiary, or a successor to National City 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 National City 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
43
<PAGE> 43
control, (ii) death, or (iii) attainment of age sixty-five and upon the
occurrence of one or more certain additional events. For twenty Executives, the
severance agreements also provide that in the event of a change in control, the
Executive may terminate his employment with National City 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 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 during the three calendar years immediately preceding the year in
which the change in control occurs. For thirty-six months following the
termination, National City 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 National City for the purpose of determining service credits and benefits
due and payable under National City's various retirement benefit plans.
National City 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 Code. The Retirement Plan presently
covers all regular employees of National City and those subsidiaries of National
City that have adopted the Retirement Plan when 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
Earnings 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 Earnings 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.
44
<PAGE> 44
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.
National City adopted a supplemental retirement plan ("Supplemental Plan") to
supplement the pension payments under the Retirement Plan for those certain
senior officers of National City and its subsidiaries who may be designated from
time to time by the Committee. Payments under the Supplemental Plan are paid
from the general revenues of National City 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 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, Long-Term Plan and the Annual Performance 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 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.
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 reduced in accordance with a formula
dependent upon the individual's age and years of service with National City at
the time such benefits commence, subject, however, to such reduction being
waived by that Committee.
In the event of a change in control of National City, the Supplemental Plan
provides for the vesting of all accrued benefits.
GRANTOR TRUST
The Board of Directors has authorized the establishment of a trust to hold
assets for the payment of benefits for unfunded deferred compensation for
executives under the Short-Term Plan, the Long-Term Plan, the Supplemental Plan,
the Executive Plan, and the split dollar life insurance agreements.
45
<PAGE> 45
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------------
PENSION PLAN TABLE
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> <C>
- ---------------------------------------------------------------------------------------------------------------------
$ 25,000 $ 3,125 $ 4,687 $ 6,250 $ 7,812 $ 9,375 $ 10,937
50,000 7,373 11,060 14,747 18,434 22,120 25,807
100,000 16,124 24,185 32,248 40,310 48,371 56,433
200,000 33,623 50,435 67,247 84,059 100,870 117,682
400,000 68,624 102,936 137,248 171,560 205,871 240,183
600,000 103,624 155,436 207,248 259,059 310,873 362,685
800,000 138,623 207,935 277,247 346,559 415,870 485,182
1,000,000 173,624 260,436 347,248 434,060 520,871 607,683
1,200,000 208,624 312,936 417,248 521,561 625,873 730,185
- ---------------------------------------------------------------------------------------------------------------------
</TABLE>
Retirement benefits above the annual compensation limit are paid to those
officers who are participating through a nonqualified Supplemental Executive
Retirement Plan. The Social Security Taxable Wage Base (as defined in the
Retirement Plan) and the annual compensation limit taken into account during any
Plan Year are the Social Security Taxable Wage Base and annual compensation
limit in effect at the beginning of such Plan Year. For example, the 1997 Social
Security Taxable Wage Base and the $160,000 annual compensation limit for 1997
will not be applied until the Plan Year beginning October 1, 1997 and ending
September 31, 1998. "Plan Year" under and as defined in the Retirement Plan is
the 12 month period of time from the first day of October to the last day of
September, annually.
- --------------------------------------------------------------------------------
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 Summary Compensation Table would be: David A.
Daberko, 35 years; William R. Robertson, 35 years; Vincent A. DiGirolamo, 35
years; Robert G. Siefers, 35 years, and William E. MacDonald, 35 years.
NATIONAL CITY STOCKHOLDER PROPOSALS
Holders of National City Common who wish to make a proposal to be included in
National City's Proxy Statement and Proxy for National City's 1998 Annual
Meeting of Stockholders which, unless changed, is scheduled to be held on April
27, 1998, in Pittsburgh, Pennsylvania must cause such proposal to be received by
National City at its principal office not later than October 29, 1997. Each
proposal submitted should be accompanied by the name and address of the
stockholder submitting the proposal, the number of shares of National City
Common 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 or her intention
to appear at National City's 1998 Annual Meeting, either in person or by
representative, to present the proposal. The proxy rules of the Commission
govern the content and form of stockholder proposals and the
46
<PAGE> 46
minimum stockholding requirement. All proposals must be a proper subject for
action at National City's 1998 Annual Meeting of Stockholders.
TRANSACTIONS WITH MANAGEMENT
Certain of National City's directors, executive officers, and associates of
directors or executive officers were customers of or had various transactions
with National City and its subsidiaries in the ordinary course of business in
1996. 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 National City and its subsidiaries allow National
City 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.
VOTING
A quorum is required for the transaction of business by stockholders at the
meeting. The election of directors requires the plurality of the votes of the
shares present in person or represented by proxy at the meeting and entitled to
vote on the election of directors. The adoption of the National City Corporation
1997 Stock Option Plan, the adoption of the National City Corporation 1997
Restricted Stock Plan and the approval of the selection of Ernst & Young LLP as
independent auditors for 1997, require the affirmative vote of the holders of a
majority of the shares which are present in person or represented by proxy and
entitled to vote at the 1997 Annual Meeting. The approval of the proposal to
increase the total number of shares of National City Corporation's authorized
capital stock from 355,000,000 to 705,000,000 requires the favorable vote of the
holders of shares representing a majority of the issued and outstanding National
City Common. 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 the 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 adoption of the National
City Corporation 1997 Stock Option Plan, the adoption of the National City
Corporation 1997 Restricted Stock Plan, and the selection of independent
auditors. Shares not voted on proxies returned by brokers will have the same
effect as a vote against the proposal to increase the total number of shares of
National City Corporation's authorized capital stock from 355,000,000 to
705,000,000 since such shares are not voted in favor of the proposal and the
proposal requires an affirmative vote by a majority of the shares outstanding.
47
<PAGE> 47
GENERAL
The costs of solicitation of proxies will be borne by National City. 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 National City or
its subsidiaries, acting on its behalf, may solicit proxies personally or by
telephone or wire. National City has retained Corporate Investor Communications,
Inc. ("CIC") to assist in such solicitation. The fee of CIC is estimated not to
exceed $6,500.00, plus reasonable out-of-pocket costs and expenses. National
City 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 National City subsidiaries acting
through their nominees or acting as a fiduciary.
Management of National City 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
February 26, 1997
48
<PAGE> 48
Notice of Annual Meeting
and
Proxy Statement
Annual Meeting of Stockholders
to be held on
April 14, 1997
National City Corporation
[LOGO]
1900 East Ninth Street
Cleveland, Ohio 44114-3484
<PAGE> 49
EXHIBIT A
NATIONAL CITY CORPORATION
1997 STOCK OPTION PLAN
1. PURPOSES. The purposes of this 1997 Stock Option Plan are to provide
employment incentives and to encourage capital accumulation and stock ownership
by Eligible Employees of National City Corporation ("National City") or any of
its Subsidiaries, and to provide to designated Optionees under stock options
heretofore or hereafter granted pursuant to any stock option plan of National
City or any of its Subsidiaries an alternative method of realizing the benefits
provided by such stock options.
2. DEFINITIONS. As used in this Plan,
(a) "Additional Option" means an Option Right granted to an Optionee to
purchase a number of shares of Common Stock equal to the number of shares of
already owned Common Stock relinquished by the Optionee as payment of the
exercise price upon exercise of an Option Right and/or the number of shares of
Common Stock tendered or relinquished as payment of the amount to be withheld
under applicable federal, state and local income tax laws in connection with the
exercise of an option as described in Section 5.
(b) "Additional Option Feature" means a feature of an Option that provides for
the automatic grant of an Additional Option in accordance with the provisions
described in Section 5.
(c) The term "Appreciation Right" means a right granted pursuant to Paragraph
5 of this Plan.
(d) The term "Board of Directors" means the Board of Directors of National
City.
(e) The term "Committee" means the Committee provided for in Paragraph 10(a)
of this Plan.
(f) The term "Common Stock" means Common Stock, par value $4 per share, of
National City or any security into which such Common Stock may be changed by
reason of any transaction or event of the type described in Paragraph 7 of this
Plan.
(g) The term "Eligible Employees" means persons who are at the time the
officers (including officers who are members of the Board of Directors) and
other key employees of National City or of any of its Subsidiaries.
(h) The term "Internal Revenue Code" means the Internal Revenue Code of 1986,
as amended from time to time.
(i) The term "Incentive Stock Option" means an Option Right granted by
National City to an Eligible Employee, which Option Right is intended to qualify
as an "Incentive Stock Option" as that term is used in Section 422 of the
Internal Revenue Code.
(j) The term "Market Value per Share" means, at any date, the closing price,
per share, of the shares of Common Stock, on the New York Stock Exchange on that
date as reported by the Wall Street Journal (Midwest Edition) or, if the Common
Stock shall be primarily traded in another
A-1
<PAGE> 50
market, as determined in a manner specified by the Board of Directors using
quotations in such other market.
(k) The term "Optionee" shall mean the optionee named in an agreement
evidencing an Outstanding Option.
(l) The term "Option Right" means the right to purchase a share of Common
Stock upon exercise of an Outstanding Option.
(m) The term "Outstanding Option" means, at any time, an option to purchase
shares of Common Stock granted by National City or any of its Subsidiaries
pursuant to this Plan or any other stock option plan of National City or any
such Subsidiary now or hereafter in effect, or pursuant to any stock option plan
of any corporation which is merged into National City and where National City
has by action of its Board of Directors, assumed the obligations of such
corporation under such stock option plan, all whether or not such option is at
the time exercisable, to the extent that such option at such time has not been
exercised and has not terminated.
(n) The term "Spread" means the excess of the Market Value per Share of Common
Stock on the date when an Appreciation Right is exercised over the option price
provided for in the related Option Right.
(o) The term "Subsidiary" shall mean any corporation in which at the time
National City owns or controls, directly or indirectly, not less than 50% of the
total combined voting power represented by all classes of stock issued by such
corporation.
3. SHARES AVAILABLE UNDER PLAN.
(a) The shares of Common Stock which may be made the subject of Option Rights
and Appreciation Rights pursuant to this Plan may be treasury shares or shares
of original issue or a combination of the foregoing.
(b) Subject to adjustments in accordance with Paragraph 8 of this Plan, the
maximum number of shares of Common Stock which may be sold upon the exercise of
Option Rights granted pursuant to this Plan shall be 15,000,000 shares of Common
Stock which are made available for sale by virtue of this Plan. For purposes of
determining the number of shares that may be sold under the Plan, such number
shall increase by the number of shares surrendered by an optionee or
relinquished to National City (a) in connection with the exercise of an Option
Right or (b) in payment of federal, state and local income tax withholding
liabilities upon exercise of an Option Right.
(c) Subject to adjustments in accordance with Paragraph 8 of this Plan, the
maximum number of shares of Common Stock which may be delivered upon the
exercise of Appreciation Rights granted pursuant to this Plan shall not exceed
15,000,000.
(d) Shares covered by Option Rights cancelled upon exercise of Appreciation
Rights shall not be available for the granting of further Option Rights under
this Plan or under any other stock option plan of National City or of any of its
Subsidiaries, anything in this Plan or such other stock option plan to the
contrary notwithstanding.
A-2
<PAGE> 51
4. GRANTS OF OPTION RIGHTS. The Board of Directors may, from time to time and
upon such terms and conditions as it may determine, authorize the granting to
Eligible Employees of Option Rights. Each such grant may utilize any or all of
the authorizations, and shall be subject to all of the limitations, contained in
the following provisions:
(a) Each grant shall specify the number of shares of Common Stock to which it
pertains.
(b) Each grant shall specify an option price per share not less than the
Market Value per Share on the date of grant.
(c) Successive grants may be made to the same Eligible Employee whether or not
any Option Rights previously granted to such Eligible Employee remain
unexercised. No Eligible Employee may, however, be granted under this plan, in
the aggregate, more than 3,000,000 Option Rights or Appreciation Rights, subject
to adjustment pursuant to Paragraph 8 of this Plan over any ten year period.
(d) Option Rights granted under this Plan may be (i) options which are
intended to qualify under particular provisions of the Internal Revenue Code, as
in effect from time to time, (ii) options which are not intended so to qualify,
or (iii) combinations of the foregoing.
(e) The date of grant of each Option Right shall be the date of its
authorization by the Board of Directors, except that the date of grant of an
Additional Option shall be the date of exercise of the underlying Option Right.
No Option Right shall be exercisable more than 10 years from such date of grant.
(f) Upon exercise of an Option Right, the option price shall be payable (i) in
cash, (ii) by the transfer to National City by the Optionee of shares of Common
Stock with a value (Market Value per Share times the number of shares) equal to
the total option price, or (iii) by a combination of such methods of payment.
(g) Each grant of Option Rights shall be evidenced by an agreement executed on
behalf of National City by any officer designated by the Board of Directors for
this purpose and delivered to and accepted by the Eligible Employee and shall
contain such terms and provisions, consistent with this Plan, as the Board of
Directors may approve.
(h) No Option Rights, intended to be an Incentive Stock Option, shall be
granted hereunder to any Optionee which would allow the aggregate fair market
(determined at the time the Option Rights are granted) of the stock subject of
Option Rights, including the Incentive Stock Option in question, which such
Optionee may exercise for the first time during any calendar year, to exceed
$100,000. If National City shall ever be deemed to have a "parent," as such term
is used in Section 422A of the Internal Revenue Code, as amended, then Option
Rights intended to be Incentive Stock Options, granted under such parent's Stock
Option plans, shall be included in the definition of Option Rights for the
purpose of determining the $100,000 limitation.
5. ADDITIONAL OPTION.
(a) The Board of Directors may, at or after the date of grant of Option
Rights, grant Additional Options. Additional Options may be granted with respect
to any Outstanding Option.
A-3
<PAGE> 52
(b) If an Optionee exercises an Outstanding Option that has an Additional
Option Feature by transferring already owned shares of Common Stock and/or when
shares of Common Stock are tendered or relinquished as payment of the amount to
be withheld under applicable federal, state and local income tax laws (at
withholding rates not to exceed the Optionee's applicable marginal tax rates) in
connection with the exercise of an option, the Optionee shall automatically be
granted an Additional Option. The Additional Option shall be subject to the
following provisions:
(1) The Additional Option shall cover the number of shares of Common Stock
equal to the sum of (A) the number of shares of Common Stock delivered as
consideration upon the exercise of the previously granted Outstanding Option to
which such Additional Option Feature relates and (B) the number of shares of
Common Stock tendered or relinquished as payment of the amount to be withheld
under applicable federal, state and local income tax laws in connection with the
exercise of the option to which such Additional Option Feature relates;
(2) The Additional Option will not have an Additional Option Feature unless
the Board of Directors directs otherwise;
(3) The Additional Option option price shall be 100% of the Market Value per
Share on the date the employee delivers shares of Common Stock to exercise the
Option that has the Additional Option Feature and/or delivers or forfeits shares
of Common Stock in payment of income tax withholding on the exercise of an
Option that has the Additional Option Feature;
(4) The Additional Option shall have the same termination date and other
termination provisions as the underlying Option that had the Additional Option
Feature.
6. GRANTS OF APPRECIATION RIGHTS. The Board of Directors may from time to time
authorize the granting of Appreciation Rights in respect of any or all of the
Option Rights under any Outstanding Option (including Options Rights
simultaneously granted) to the Optionee thereunder. An Appreciation Right shall
be a right in the Optionee to receive from National City an amount which shall
be determined by the Board of Directors and shall be expressed as a percentage
of the Spread (not exceeding 100%) at the time of exercise. To the extent such
Optionee elects to exercise such Appreciation Right instead of the related
Option Right, the related Option Right shall be cancelled, and vice versa. Each
such grant may utilize any or all of the authorizations, and shall be subject to
all of the limitations, contained in the following provisions:
(a) Any grant may permit the exercise of an Appreciation Right with respect to
the value of shares of Common Stock covered by the related Option Rights.
(b) Any grant may specify that the amount payable on exercise of an
Appreciation Right may be paid by National City in cash, in shares of Common
Stock or in any combination thereof, and may either grant to the Optionee or
retain in the Board of Directors the right to elect among those alternatives.
(c) Each grant shall provide that the maximum number of shares of Common Stock
deliverable upon exercise of an Appreciation Right may not exceed the number of
shares of Common Stock purchasable upon exercise of the related Option Rights.
A-4
<PAGE> 53
(d) Any grant may specify waiting periods before exercise and permissible
exercise dates or periods. No Appreciation Right shall be exercisable except at
a time when the related Option Right is also exercisable.
(e) Each grant of an Appreciation Right shall be evidenced by an agreement
executed on behalf of National City by any officer designated by the Board of
Directors for this purpose and delivered to and accepted by the Optionee, which
agreement shall describe such Appreciation Right, identify the related Option
Rights, state that such Appreciation Right is subject to all the terms and
conditions of this Plan, including the right of the Board of Directors to amend,
suspend or terminate such Appreciation Right as set forth in Paragraph 11(c) of
this Plan, and contain such other terms and provisions, consistent with this
Plan, as the Board of Directors may approve.
7. TRANSFERABILITY. Except as otherwise provided for by the Board of
Directors, no Option Right including any related Appreciation Right shall be
transferable by an Optionee other than by will or the laws of descent and
distribution. Unless the Board of Directors directs otherwise, Option Rights and
Appreciation Rights shall be exercisable during the Optionee's lifetime only by
the Optionee or by the Optionee's guardian or legal representative.
8. ADJUSTMENTS. The Board of Directors may make or provide for such
adjustments in the maximum numbers and kind of shares of Common Stock specified
in Paragraphs 3(b) and (c) and 4(c) of this Plan, in the numbers and kind of
shares of Common Stock covered by Option Rights and Appreciation Rights granted
hereunder, and in the prices per share applicable under such Option Rights and
Appreciation Rights, as such Board in its sole discretion, exercised in good
faith, may determine is equitably required to prevent dilution or enlargement of
the rights of Optionees that otherwise would result from any stock dividend,
stock split, combination of shares, recapitalization or other change in the
capital structure of National City, merger, consolidation, spin-off,
reorganization, partial or complete liquidation, issuance of rights or warrants
to purchase securities, or other corporate transaction or event having an effect
similar to any of the foregoing.
9. FRACTIONAL SHARES. National City shall not be required to issue any
fractional share of Common Stock pursuant to this Plan. The Board of Directors
may provide for the elimination of fractions or for the settlement of fractions
in cash.
10. ADMINISTRATION OF THE PLAN.
(a) This Plan shall be administered by the Board of Directors, which may from
time to time delegate all or any part of its authority under this Plan to a
Compensation and Organization Committee of the Board of Directors of not less
than three Directors appointed by the Board of Directors. To the extent of such
delegation, references herein to the "Board of Directors" shall include the
Compensation and Organization Committee.
(b) The interpretation and construction by the Board of Directors of any
provision of this Plan or of any agreement evidencing the grant of Option Rights
or Appreciation Rights and any determination by the Board of Directors pursuant
to any provision of this Plan or of any such agreement shall be final and
conclusive. No member of the Board of Directors shall be liable for any such
action or determination made in good faith.
A-5
<PAGE> 54
11. AMENDMENTS, ETC.
(a) This Plan may be amended from time to time by the Board of Directors but
without further approval by the stockholders of National City no such amendment
shall (i) increase the maximum numbers of shares of Common Stock specified in
Paragraphs 3(b) and (c) and 4(c) of this Plan (except that adjustments
authorized by Paragraph 8 of this Plan shall not be limited by this provision),
(ii) change the definition of "Eligible Employees", or (iii) materially increase
the benefits accruing to Optionees hereunder.
(b) Except as provided in section 8 of the Plan, the Committee shall not,
without the further approval of stockholders of National City, authorize the
amendment of any outstanding Option Right to reduce the option price.
Furthermore, no Option Rights shall be cancelled and replaced with awards having
a lower option price (except as provided by sections 5 and 8 of this Plan)
without the further approval of the stockholders of National City.
(c) The Board of Directors may at any time amend, suspend or terminate any
agreement evidencing Appreciation Rights granted under this Plan; in the case of
an amendment, the amended Appreciation Right shall conform to the provisions of
this Plan.
(d) In the case of any Option or Appreciation Right not immediately
exercisable in full, the Board of Directors in its discretion may accelerate the
time at which Option or Appreciation Rights may be exercised.
12. ASSUMPTIONS.
(a) In the event that a corporation is merged into National City, and National
City is the survivor of such merger, the Board of Directors may elect, in its
sole discretion, to assume under this Plan any or all outstanding options
granted by such corporation to its officers and employees under any stock option
plan adopted by it prior to such merger. Such assumptions shall be on such terms
and conditions as the Board of Directors may determine in its sole discretion,
provided, however, that the options as assumed do not provide or contain any
terms, conditions or rights which an Option Right may not provide or contain
under Sections 2 through 10 hereunder.
13. MISCELLANEOUS.
(a) All expenses and costs in connection with the operation of the Plan shall
be borne by National City.
(b) This Plan shall be construed in accordance with and governed by the
internal substantive laws of the State of Delaware.
(c) This Plan shall be binding upon and inure to the benefit of National City,
its successors and assigns and each Participant and his or her beneficiaries,
heirs, executors, administrators and legal representatives.
A-6
<PAGE> 55
EXHIBIT B
NATIONAL CITY CORPORATION
1997 RESTRICTED STOCK PLAN
ARTICLE 1.
ESTABLISHMENT AND PURPOSE OF PLAN
1.1 ESTABLISHMENT OF THE PLAN. National City Corporation hereby establishes
the National City Corporation 1997 Restricted Stock Plan (herein referred to as
the "Plan"). The Plan shall become effective upon the later of (i) when approved
by the stockholders of National City and (ii) when adopted by the Board of
Directors of National City, and shall remain in effect as provided.
1.2 PURPOSE. The purpose of the Plan is to maximize the returns to the
stockholders and promote the long-term profitability and success of National
City by providing equity interests and equity based incentives in National City
to key employees and members of the boards of directors of National City and its
subsidiaries and by providing alternate means of compensation.
1.3 OPERATION OF THE PLAN. The Plan shall be administered by the Committee.
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 Person who is approved by the
Committee for participation in the Plan.
(b) "Award" means the grant to a Participant of a certain number of shares of
Restricted Stock.
(c) "Award Agreement" means the written agreement between the Participant and
National City relating to the Award of Restricted Stock to the Participant.
(d) "Board" means the Board of Directors of National City.
(e) "Change in Control" shall have the meaning set forth in Section 9.2.
(f) "Code" means the Internal Revenue Code of 1986, as amended from time to
time, and any successor thereto.
(g) "Committee" means the Compensation and Organization Committee of the
Board, a subcommittee of the Compensation and Organization Committee, or another
committee of Directors of National City appointed by the Board to serve as the
committee responsible for administering of the Plan.
B-1
<PAGE> 56
(h) "Common Stock" means the Common Stock, $4.00 par value per share, of
National City or any other securities into which the Common Stock may be
converted or for which they may be exchanged as contemplated by Section 3.3.
(i) "Director" means an elected or appointed member of the Board of Directors
of National City, but does not include any honorary member of the Board of
Directors of National City or other person not entitled as a matter of law to
vote and otherwise participate in regular meetings of the Board of Directors of
National City.
(j) "Director Year" means a period of time commencing on the date of the
Corporation's Annual Meeting of Stockholders for any fiscal year of National
City and ending on the day before National City's Annual Meeting of Stockholders
for its next immediately ensuing fiscal year.
(k) "Disability" means, as to a specific Participant, permanent disability as
defined in the provisions of the Award Agreement relating to that Participant.
(l) "Early Retirement" means, as to a specific Participant, early retirement
as defined in the provisions of the Award Agreement relating to that
Participant.
(m) "Eligible Person" means an Employee or a Subsidiary Director.
(n) "Employee" means an individual employed by National City or any
Subsidiary. A member of the Board of Directors of National City who is not
otherwise an Employee shall not be deemed an Employee of National City for
purposes of this Plan.
(o) "Exchange Act" means the Securities Exchange Act of 1934, as amended, and
the rules and regulations of the Securities and Exchange Commission promulgated
thereunder, all as in effect from time to time.
(p) "Fair Market Value" means, as of any given date and unless otherwise
determined by the Committee, the closing price, per share, of the shares of
Common Stock on the New York Stock Exchange on that date, as reported by the
Wall Street Journal.
(q) "National City" means National City Corporation, a Delaware Corporation,
or any successor.
(r) "Normal Retirement" means, as to a specific Participant, normal retirement
as defined in the provisions of the Award Agreement relating to that
Participant.
(s) "Participant" means and includes all persons who are then registered
owners of Restricted Stock.
(t) "Plan Restrictions" means the restrictions set forth in Article 5 or 6
hereof on any transfer of Common Stock, or any interest therein, which is the
subject of an Award granted hereunder.
(u) "Restricted Period" means that period of time, as determined pursuant to
the Plan, during which the Common Stock subject of an Award is not transferable
by reason of Plan Restrictions.
(v) "Restricted Stock" means shares of Common Stock the transfer or alienation
of which are restricted by reason of Plan Restrictions.
B-2
<PAGE> 57
(w) "Retirement" means: with respect to Employees, Normal Retirement or Early
retirement as defined hereby; with respect to Subsidiary Directors, as defined
in the provisions of the Award Agreement relating to each Subsidiary Director;
and with respect to Directors who are not employees of National City or its
subsidiaries, that point in time when a director is no longer eligible to stand
for reelection as a Director pursuant to Article III of National City's First
Restatement of By-Laws.
(x) "Subsidiary" means any corporation (other than National City) in an
unbroken chain of corporations beginning with National City if each of the
corporations (other than the last corporation in the unbroken chain) owns stock
possessing 50% or more of the total combined voting power of all classes of
stock in one or more of the other corporations in the chain.
(y) "Subsidiary Director" means an elected or appointed member of the board of
directors of any Subsidiary, but does not include any person who is an Employee
or a Director.
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.
STOCK SUBJECT TO PLAN
3.1 AUTHORIZED AMOUNT. Subject to adjustment as provided by this Plan, the
total number of shares of Common Stock reserved and available for distribution
under the Plan shall be one million five hundred thousand (1,500,000) shares of
Common Stock. Such shares may consist, in whole or in part, of authorized and
unissued shares or treasury shares.
3.2 EFFECT OF FORFEITURES. If any Participant forfeits any shares of
Restricted Stock that are subject to any Award granted hereunder, or any such
Award otherwise terminates with respect to any shares of Restricted Stock
thereunder without the Plan Restrictions being terminated, such shares shall
again be available for distribution in connection with future Awards under the
Plan.
3.3 ADJUSTMENTS. In event of any stock dividend, stock split, combination of
shares, recapitalization or other change in capital structure of National City,
merger, consolidation, spinoff, reorganization, partial or complete liquidation,
issuance of rights or warrants to purchase securities, or any other corporate
transaction or event having an effect similar to any of the foregoing, the
Committee may make such substitution or adjustment in the aggregate number of
shares of Common Stock and, if necessary, in the kind of securities reserved for
issuance under the Plan, and in the number of shares subject of outstanding
Awards granted under the Plan in the aggregate or to any Participant and in the
number of shares specified in Section 4.2 hereof, all as may be determined to be
appropriate by the Committee, acting in its sole discretion, provided that the
number of shares subject to any Award shall always be a whole number.
3.4 FRACTIONAL SHARES. National City shall not be required to issue any
fractional share of Common Stock pursuant to this Plan. The Committee may
provide for the elimination of fractions or the settlement of fractions in cash.
B-3
<PAGE> 58
ARTICLE 4.
ELIGIBILITY AND PARTICIPATION
4.1 ELIGIBILITY. The Committee shall, from time to time, determine those
Eligible Persons who are to receive Awards hereunder. Except as set forth in
Article 5 hereof, individuals who are appointed or elected as a Director but who
are not otherwise an Employee shall only be eligible to receive Awards pursuant
to Article 5 of the Plan.
4.2 LIMITATION. No Participant shall have granted to him or to her, or on his
or on her behalf, in one or more Awards, more than two hundred twenty-five
thousand (225,000) shares of Common Stock in the aggregate under this Plan.
4.3 TERMINATION. If a Participant ceases to be an Eligible Person during a
Restricted Period, the Award Agreement shall provide the extent to which the
Plan Restrictions on the Restricted Stock, or any portion thereof, subject of
such Award Agreement shall lapse or whether all or any portion of such
Restricted Stock shall be forfeited. Restricted Stock which is forfeited shall
be returned to National City from the escrow established under Section 6.9, and
the Participant shall have no further interest in such stock.
ARTICLE 5.
DIRECTORS
5.1 DIRECTOR ELIGIBILITY. Annually, during each Director Year, each Director
who is not then an Employee of National City or any Subsidiary shall be entitled
to an Award as provided by this Article 5, provided that no Director shall be
entitled to any Award if (i) there are not a sufficient number of shares of
Common Stock hereunder to make a full Award to Directors in such Director Year,
(ii) if the Plan has been terminated or (iii) if the Committee determines to
terminate Director Awards.
5.2 AMOUNT OF AWARD. Unless otherwise determined by the full Board from time
to time, in the Director Year in which the Director is first elected or
appointed as a Director, the Director shall be granted an Award of one thousand
(1,000) shares of Restricted Stock. In each following Director Year when the
individual is re-elected or re-appointed a Director of National City, such
Director shall be granted an Award of two hundred (200) shares of Restricted
Stock.
5.3 OFFSET. Any director award provided for under Section 5.2 of this Plan
shall be reduced by the number of shares of Restricted Stock awarded to such
Director pursuant to the National City Corporation Amended and Second Restated
1991 Restricted Stock Plan as such plan may be amended from time to time.
5.4 GRANT OF AWARDS. Awards to Directors shall be granted in accordance with
Sections 5.1 and 5.2 hereof, and the date of any Award shall be the actual date
of election or appointment, as the case may be, of the grantee as a Director. No
Award Agreement with a Director shall grant to that Director any benefits not
expressly provided by this Article 5, nor shall it limit the Director's rights
to receive dividends on or to vote the Restricted Stock subject of that Award
Agreement. The number of
B-4
<PAGE> 59
shares awarded in any future grants under this section 5.3 shall be adjusted by
the Committee as equitably required to prevent dilution or enlargement of the
award to Directors that otherwise would result from any stock dividend, stock
split, combination of shares, recapitalization or other change in the capital
structure of National City, merger, consolidation, spin-off, reorganization,
partial or complete liquidation, issuance of rights or warrants to purchase
securities, or any other corporate transaction or event having an effect similar
to any of the foregoing.
5.5 TERM OF RESTRICTIONS.
(a) The Restricted Period, with respect to the Plan Restrictions on any Award
to a Director under this Article 5, shall terminate, and the Plan Restrictions
on all Restricted Stock shall fully expire, on the earlier of (i) such
Director's death, (ii) such Director's Disability, (iii) a Change in Control or
(iv) a date nine months after the date of the award.
(b) If a Director shall resign, or otherwise no longer be a member of the
Board for reasons other than those set forth in subsection 5.4(a) of this Plan,
then the director's interest in all shares of Restricted Stock previously
awarded to him under this Article 5 shall be terminated and such Restricted
Stock shall be forfeited and returned to National City.
ARTICLE 6.
AWARDS
6.1 GENERAL. The Committee shall, from time to time, designate those Eligible
Persons to be granted Awards under the Plan, the number of shares of Restricted
Stock to be granted in an Award to an Eligible Person, the terms upon which the
Plan Restrictions on any Restricted Stock shall lapse and the Restricted Stock
will become freely transferable, and such other conditions as the Committee may
deem appropriate. Not all grants of Awards need to be on the same terms and
conditions even though granted at the same time, and the terms of Award
Agreements may vary from time to time and from Participant to Participant,
depending upon the purpose of the Award; provided, however, all Awards shall be
subject of the provisions of Section 6.4 hereof.
6.2 LIMITATION.
(a) Except as expressly provided by Article 5 with respect to Awards to
Directors, the Plan Restrictions established by Section 6.4 hereof on any Award
may be of any length of time as determined by the Committee.
(b) No grants of Awards under the Plan may be made after ten (10) years from
the date the Plan becomes effective.
6.3 ADDITIONAL RESTRICTIONS. Restricted Stock Awards shall be expressly
subject to the terms and conditions of this Article 6, but the Committee may
establish additional restrictions on the transfer of the Common Stock subject of
any Award.
6.4 PLAN RESTRICTIONS. During the Restricted Period for any Award, a
Participant may not, voluntarily or involuntarily, sell, assign, encumber,
pledge or otherwise transfer any shares of
B-5
<PAGE> 60
Restricted Stock subject of the Award, or any interest therein, otherwise than
by will or the law of descent and distribution. Any attempted sale, assignment,
encumbrance, pledge or other transfer of the Restricted Stock or any interest
therein, in derogation of these restrictions shall result in a forfeiture to
National City of all Restricted Stock subject to such attempted transfer.
6.5 STOCKHOLDER RIGHTS. All Restricted Stock shall be registered in the
stockholder records of National City in the name of the Participant to whom the
Award was made. Except for Plan Restrictions, and except for any additional
restrictions contained in the Award Agreement including any assignment of rights
to dividends payable from time to time on the Restricted Stock (cash or
property), the Participant shall have all rights of a holder of Common Stock.
6.6 AWARD AGREEMENT. Each Participant granted an Award of Restricted Stock
shall enter into an Award Agreement with National City in a form specified by
the Committee, agreeing to the terms and conditions of the Award and such other
matters as the Committee shall in its sole discretion determine, including any
additional conditions of forfeiture. The execution and delivery of the Award
Agreement by the grantee of the Award shall be a condition precedent to the
registration in the name of the grantee of the Restricted Stock subject to the
Award. A failure to execute and deliver the Award Agreement within sixty (60)
days after the grant of an Award may terminate the Award upon the determination
of the Committee. The Award Agreement may, but need not, allow the Plan
Restrictions to lapse serially or in total over any period of time as selected
by the Committee. If any Participant forfeits any shares of Restricted Stock
that are subject to any Award, or any such award otherwise terminates with
respect to any shares of Restricted Stock thereunder without the Plan
Restrictions being terminated, the Participant shall have no further interest in
such Restricted Stock, if any.
6.7 LEGEND. Each certificate issued in respect of Restricted Stock awarded
under the Plan shall be registered in the name of the Participant, shall be
deposited with National City pursuant to Section 6.9 hereof together with a
stock power endorsed in blank and signed by the Participant and shall bear the
following (or a similar) legend:
"The transferability of this certificate and the shares of stock
represented hereby are subject to the terms and conditions (including
forfeiture) contained in the National City Corporation 1997 Restricted
Stock Plan and in an Agreement entered into between the registered owner
hereof and National City Corporation."
6.8 LAPSE OF RESTRICTIONS. When the Plan Restrictions imposed by this Article
6 expire or have otherwise been satisfied with respect to one or more shares of
Restricted Stock, subject to Section 11.2 hereof, the Corporation shall deliver
to the Participant (or his legal representative, beneficiary or heir) within
sixty (60) days thereafter Common Stock without the Legend referred to in
Section 6.7 hereof and free of Plan Restrictions. The number of shares of Common
Stock to be released shall be the same number as to which the Plan Restrictions
have lapsed. At that time, the Award Agreement referred to in Section 6.6 as it
relates to such shares of Common Stock delivered to the Participant shall be
terminated.
6.9 ESCROW. Certificates representing shares of Restricted Stock which are the
subject of an Award shall be physically held by National City, or its nominee,
during the Restricted Period. Upon the
B-6
<PAGE> 61
termination of the Restricted Period, National City shall cause the certificate
representing the shares of Common Stock subject of the Award to be reissued. If
the Plan Restrictions have been satisfied as to any shares of Restricted Stock,
such shares shall be removed from escrow and delivered to National City for
reissuance and delivery of Common Stock in the name of the Participant in
accordance with Section 6.8. If any shares of Restricted Stock are to be
forfeited, such shares shall be delivered to National City for reissuance in the
name of National City.
ARTICLE 7.
RIGHTS OF PARTICIPANTS
7.1 EMPLOYMENT. Nothing in this Plan shall interfere with or limit in any way
the right of National City to terminate a Participant's employment at any time
with National City or any Subsidiary nor confer upon any Participant any right
to continue in the employ of National City.
7.2 RESTRICTIONS ON ASSIGNMENTS. The interest of a Participant or his or her
beneficiary under this Plan may not be sold, assigned, encumbered or transferred
in any manner, either voluntarily or involuntarily, and any attempt to 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 8.
ADMINISTRATION
8.1 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. Except as expressly provided by
Article 5 hereof, 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 National City, and 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's interpretation of this Plan or of any term of an Award granted
pursuant thereto shall be final and binding on all Participants.
The Committee shall have the authority to establish, adopt or revise such
rules or regulations relating to the Plan as it may deem necessary or advisable
for the administration of the Plan. The Committee may elect to defer the
effective date of the Plan or the granting of any Award or the lapsing of any
Plan Restrictions, if the Committee determines that such actions may be
necessary to be in compliance with any State or Federal statute, regulatory
authority or judicial order.
The Committee shall have full power and authority to interpret, construe and
administer the Plan and all Awards Agreements and its interpretations and
construction hereof, and actions hereunder,
B-7
<PAGE> 62
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 or any Award Agreement unless attributable to his or
her own willful misconduct or lack of good faith.
8.2 MEMBERSHIP. No member of the Committee shall be an Employee of National
City or of any of its subsidiaries.
ARTICLE 9.
CHANGE IN CONTROL
9.1 TREATMENT OF AWARDS. In the event of a change in Control all Plan
Restrictions shall lapse and be of no further force or effect and National City
shall cause all outstanding Restricted Stock to be exchanged for Common Stock
free of the legend set forth in Section 6.7 and of the Plan Restrictions.
9.2 DEFINITION OF CHANGE IN CONTROL. Change in Control shall mean the
occurrence of any of the following events:
(a) National City 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
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) National City 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 Voting Stock;
(d) National City files a report or proxy statement with the Securities and
Exchange Commission pursuant to the Securities Exchange Act of 1934, as amended,
disclosing in response to Form 8-K or
B-8
<PAGE> 63
Schedule 14A (or any successor schedule, form or report item therein) that a
change in control of National City 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 such period constitute the Directors 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 National City's stockholders, by a vote of at least two-thirds of
the Directors (or a committee thereof) then still in office who were Directors
at the beginning of any such period will be deemed to have been a Director 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) National City, (2) an entity in which National
City 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 National City 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 National City reports that a change in control of
National City has occurred or will occur in the future by reason of such
beneficial ownership.
9.3 EFFECTIVE DATE OF CHANGE IN CONTROL. Notwithstanding the foregoing, in the
event a Change in Control ultimately results from discussions or negotiations
involving National City 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 or Change in Control
shall be Implementation Date of such Change in Control.
9.4 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 9.2.
ARTICLE 10.
AMENDMENT OR TERMINATION
10.1 AMENDMENT. The Committee may amend any provision of this Plan or any
agreement thereunder at any time; provided, however, that without the approval
of the stockholders of National City, no amendment may be made that would
increase the maximum number of shares to be granted under the Plan either in
aggregate or individually (except that adjustments authorized by Paragraph 3.3
of this Plan shall not be limited by this provision), or extend the term during
which Awards may be granted under the Plan. The Board shall also have the right
to terminate the Plan or Article 5 hereof at any time. If the Plan is
terminated, Awards previously made shall nevertheless continue in accordance
with the provisions of the Plan and Award Agreement as in effect prior to the
Plan's termination.
B-9
<PAGE> 64
10.2 OMISSION. The Committee may for any period of time refrain from
designating any Participants or may refrain from making any Awards, but such
action shall not be deemed a termination of the Plan. No employee shall have any
claim or right to be granted Awards under the Plan.
ARTICLE 11.
MISCELLANEOUS
11.1 EXPENSE. All expenses and costs in connection with the operation of the
Plan shall be borne by National City.
11.2 WITHHOLDING TAXES. National City shall be entitled to take appropriate
measures to withhold from the shares of Common Stock becoming free of Plan
Restrictions or to otherwise obtain from the Participant sufficient sums for the
amount National City deems necessary to satisfy any applicable Federal, state
and local income tax withholding obligations or to make other appropriate
arrangements with Participants to satisfy such obligations.
11.3 LAWS GOVERNING. This Plan shall be construed in accordance with and
governed by the laws of the State of Delaware.
11.4 PLAN BINDING NATIONAL CITY, EMPLOYEES AND THEIR SUCCESSORS. This Plan
shall be binding upon and inure to the benefit of National City, its successors
and assigns and each Participant and his or her beneficiaries, heirs, executors,
administrators and legal representatives.
B-10
<PAGE> 65
EXHIBIT C
PROPOSED AMENDMENT TO NATIONAL CITY'S
RESTATED CERTIFICATE OF INCORPORATION
INCREASING THE NUMBER OF AUTHORIZED
SHARES OF COMMON STOCK
PROPOSAL 4
RESOLVED, that the Restated Certificate of Incorporation of National City
Corporation, a Delaware Corporation, shall be, and it hereby is, amended by
deleting all of the present first paragraph under Article FOURTH thereof and by
inserting, in lieu thereof, a new first paragraph to Article FOURTH, providing
in its entirety as follows:
FOURTH: The Corporation is authorized to issue a total of seven hundred
five million (705,000,000) shares of all classes of stock. Of such total
number of authorized shares of stock, seven hundred million (700,000,000)
shares are Common Stock, par value $4.00 per share, and five million
(5,000,000) shares are Preferred Stock without par value.
C-1
<PAGE> 66
- --------------------------------------------------------------------------------
P
R [logo]
O National City Corporation
X
Y
PROXY SOLICITED ON BEHALF OF THE
BOARD OF DIRECTORS FOR APRIL 14, 1997
ANNUAL MEETING
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 National City which the undersigned is
entitled to vote at the Annual Meeting of Stockholders of National
City to be held on April 14, 1997 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:
1. THE ELECTION OF DIRECTORS
FOR all nominees listed below [ ] WITHHOLD AUTHORITY [ ]
(except as otherwise marked below) to vote for all nominees
listed below
S. H. Austin, C. H. Bowman, E. B. Brandon, J. G. Breen, J. S.
Broadhurst, D. E. Collins, D. A. Daberko, D. E. Evans, O. N.
Frenzel, B. F. Healy, J. H. Lemieux, W. B. Lundsford, R. A. Paul,
W. F. Roemer, W. R. Robertson, M. A. Schuler, S. A. Stitle and M.
Weiss.
(Instructions: to withhold authority to vote for any individual
nominee, strike a line through that nominee's name.)
2. ADOPT THE NATIONAL CITY CORPORATION 1997 STOCK OPTION PLAN
[ ] FOR [ ] AGAINST [ ] ABSTAIN
3. ADOPT THE NATIONAL CITY CORPORATION 1997 RESTRICTED STOCK PLAN
[ ] FOR [ ] AGAINST [ ] ABSTAIN
(Continued, and to be signed, on the reverse side.)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Proxy No. (Continued from reverse side.) Shares
4. APPROVE THE INCREASE IN THE NUMBER OF SHARES OF AUTHORIZED CAPITAL
STOCK
[ ] FOR [ ] AGAINST [ ] ABSTAIN
5. 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 ADOPTION OF THE NATIONAL CITY
CORPORATION 1997 STOCK OPTION PLAN, FOR THE ADOPTION OF THE NATIONAL
CITY CORPORATION 1997 RESTRICTED STOCK PLAN, FOR THE APPROVAL OF THE
INCREASE IN THE NUMBER OF SHARES OF AUTHORIZED CAPITAL STOCK AND FOR
THE SELECTION OF ERNST & YOUNG LLP.
Dated , 1997
----------------------------
----------------------------
(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.
- --------------------------------------------------------------------------------
