<PAGE>
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [_]
Check the appropriate box:
[_] Preliminary Proxy Statement [_] CONFIDENTIAL, FOR USE OF THE
COMMISSION ONLY (AS PERMITTED BY
RULE 14A-6(E)(2))
[X] Definitive Proxy Statement
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to Section 240.14a-11(c) or Section 240.14a-12
First Chicago NBD 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:
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(2) Aggregate number of securities to which transaction applies:
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(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which
the filing fee is calculated and state how it was determined):
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(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid:
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[_] 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:
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(2) Form, Schedule or Registration Statement No.:
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(3) Filing Party:
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(4) Date Filed:
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Notes:
<PAGE>
[LETTERHEAD OF FIRST CHICAGO NBD CORPORATION]
March 27, 1998
To Our Stockholders:
We are pleased to invite you to attend the Annual Meeting of
Stockholders of First Chicago NBD Corporation, which will be held at 9:30
a.m., Eastern Daylight Time, Friday, May 8, 1998, in the Auditorium
located on the Staff Floor of NBD Bank, 611 Woodward Avenue, Detroit,
Michigan.
Matters scheduled for consideration at this Meeting are the election of
six Class III directors and ratification of the appointment of Arthur
Andersen LLP as independent public accountants for the Corporation for
1998. In addition, one stockholder proposal will be acted upon if
properly presented at the Meeting. The Meeting will also provide an
opportunity to review with you the business and affairs of the Corporation
and its subsidiaries during 1997 and give you a chance to meet your
directors.
Whether you plan to attend or not, please date, sign and return the
proxy card in the accompanying envelope. In the alternative, you may vote
your shares by telephone or via the Internet. Instructions are included
with the proxy card. Your vote is important no matter how many shares you
own. If you do attend the Meeting and desire to vote in person, you may
do so even though you have previously submitted your proxy.
We look forward to seeing you at the Meeting.
Sincerely,
Verne G. Istock
Chairman, President and
Chief Executive Officer
<PAGE>
[LETTERHEAD OF FIRST CHICAGO NBD CORPORATION]
NOTICE OF ANNUAL MEETING
OF STOCKHOLDERS
MAY 8, 1998
To Our Stockholders:
The Annual Meeting of Stockholders of First Chicago NBD Corporation
will be held on Friday, May 8, 1998, at 9:30 a.m., Eastern Daylight
Time, in the Auditorium located on the Staff Floor of NBD Bank, 611
Woodward Avenue, Detroit, Michigan, for the purpose of considering and
voting upon:
1. The election of six Class III directors for a term of three
years;
2. The ratification of the appointment of Arthur Andersen LLP as
independent public accountants for the Corporation for 1998;
3. One stockholder proposal, if properly presented at the Meeting,
which is described in the accompanying proxy statement; and
4. Such other business as may properly come before the Meeting or
any adjournments thereof.
The record date for determining stockholders entitled to notice of,
and to vote at, the Meeting is the close of business March 11, 1998.
By order of the Board of Directors,
Sherman I. Goldberg
Secretary
March 27, 1998
PLEASE COMPLETE, SIGN AND RETURN THE ENCLOSED FORM
OF PROXY IN THE ENVELOPE PROVIDED FOR THAT PURPOSE.
<PAGE>
[LETTERHEAD OF FIRST CHICAGO NBD CORPORATION]
PROXY STATEMENT
FOR
ANNUAL MEETING TO BE HELD MAY 8, 1998
This proxy statement is furnished in connection with the solicitation on
behalf of the Board of Directors of First Chicago NBD Corporation (the
"Corporation") of proxies for use at the Annual Meeting of Stockholders (the
"Annual Meeting") of the Corporation to be held at 9:30 a.m., Eastern Daylight
Time, on Friday, May 8, 1998, and at any adjournments thereof.
The Board of Directors has fixed the close of business on March 11, 1998, as
the record date for determining stockholders entitled to notice of, and to
vote at, the Annual Meeting. On the record date, the Corporation had
outstanding and entitled to vote 286,832,429 shares of Common Stock (exclusive
of 32,676,677 shares of treasury stock, which will not be voted). Each share
of Common Stock entitles the holder to one vote. The presence, in person or by
proxy, of the holders of a majority of the shares of Common Stock entitled to
vote at the Annual Meeting shall constitute a quorum.
Directors will be elected by a plurality of the votes cast at the Annual
Meeting; therefore, the six nominees who receive the largest number of votes
cast will be elected as directors. Shares represented by proxies marked to
withhold authority to vote with respect to any nominee will be counted for
purposes of establishing a quorum, but will have no effect on the election of
that nominee. An affirmative vote of a majority of the shares present in
person or by proxy and entitled to vote at the Annual Meeting is required for
approval of the other matters to be presented. Shares represented by proxies
which are marked "abstain" on such matters will be counted as shares present
for purposes of determining the presence of a quorum; such shares will also be
treated as shares present and entitled to vote, which will have the same
effect as a vote against such matters. Proxies relating to "street name"
shares which are not voted by brokers on all matters presented will be treated
as shares present for purposes of determining the presence of a quorum, but
will not be treated as shares represented at the Annual Meeting as to any
matter not voted upon by the broker.
The proxy statement, form of proxy and the Corporation's Annual Report for
1997 were mailed to each stockholder commencing on or about March 30, 1998.
The principal executive offices of the Corporation are located at One First
National Plaza, Chicago, Illinois 60670.
The Corporation is the surviving corporation resulting from the merger (the
"Merger") of First Chicago Corporation ("First Chicago") with and into NBD
Bancorp, Inc. ("NBD") pursuant to an Agreement and Plan of Merger between
First Chicago and NBD dated July 11, 1995, as amended (the "Merger
Agreement"). The Merger became effective on December 1, 1995.
ELECTION OF DIRECTORS
The Board of Directors is divided into three classes with each class elected
for a three-year term. At each annual meeting of stockholders, a class of
directors will be elected to succeed the class of directors whose term of
office expires at that annual meeting.
Presently, the Board of Directors has fixed the number of directors
constituting the entire Board at twenty and intends to reduce the number of
directors constituting the Board to nineteen as of the date of the Annual
Meeting. At the Annual Meeting, six Class III directors are proposed to be
elected to hold office until the annual meeting of stockholders in 2001 and
until their successors are elected and have qualified.
<PAGE>
It is intended that shares represented by proxies solicited on behalf of the
Board of Directors will be voted for the nominees listed below. In the event
that any nominee is unable or declines to serve, an event which is not
anticipated, proxies may be voted at the Annual Meeting for another person in
place of such nominee, or the number of directors constituting the entire
Board may be reduced.
The name, principal occupation, period of service as a director, certain
biographical information and Board committee memberships of each current
director and nominee are provided below. The nominees for Class III directors
are Terence E. Adderley, James K. Baker, James S. Crown, Thomas H. Jeffs II,
Richard A. Manoogian and Richard L. Thomas. Earl L. Neal, who is currently a
Class III director, is retiring from the Board and will not stand for re-
election. Each of the nominees is presently serving as a director of the
Corporation.
CLASS III DIRECTOR NOMINEES--TERM TO EXPIRE 2001
Terence E. Adderley
Mr. Adderley, 64, is Chairman, President and Chief Executive Officer of
Kelly Services, Inc., an international staffing services company. He has held
the positions of President and Chief Executive Officer since 1967, and was
elected Chairman in 1998. In addition to Kelly Services, Inc., Mr. Adderley is
a director of The Detroit Edison Company and DTE Energy Company. He has been a
director of the Corporation since 1985 and serves on the Risk Management
Committee.
James K. Baker
Mr. Baker, 66, is Vice Chairman of Arvin Industries, Inc., a supplier of
parts for the automobile industry. He has announced his retirement from Arvin
Industries, Inc., effective in April 1998. He has held a number of executive
positions in the company, having been elected President and Chief Executive
Officer in 1981 and Chairman in 1986. In addition to Arvin Industries, Inc.,
Mr. Baker is a director of Amcast Industrial Corporation, CINergy Corp., The
GEON Company and Tokheim Corp. He has been a director of the Corporation since
1992 and is a member of the Employee and Public Responsibility Committee and
the Organization, Compensation and Nominating Committee.
James S. Crown
Mr. Crown, 44, is a General Partner of Henry Crown and Company (Not
Incorporated), a diversified investment company, a position he has held since
1985. In addition, Mr. Crown is a director of General Dynamics Corporation and
Sara Lee Corporation. Mr. Crown became a director of First Chicago in 1991 and
has been a director of the Corporation since December 1995. He is a member of
the Employee and Public Responsibility Committee and the Organization,
Compensation and Nominating Committee.
Thomas H. Jeffs II
Mr. Jeffs, 59, has been Vice Chairman of the Board of the Corporation since
1985. He has been President, Chief Operating Officer and a director of NBD
Bank (Michigan) since 1994. Prior to that time, Mr. Jeffs, who joined NBD Bank
(Michigan) in 1962, served in a number of executive positions in the
Corporation and its subsidiaries. Mr. Jeffs also is Vice Chairman and a
director of The First National Bank of Chicago. In addition, he is a director
of Intermet Corporation and MCN Energy Group Inc. Mr. Jeffs has been a
director of the Corporation since 1985 and is a member of the Executive
Committee.
Richard A. Manoogian
Mr. Manoogian, 61, is Chairman and Chief Executive Officer of Masco
Corporation, a diversified manufacturer, a position he has held since 1985.
Prior to that time, he held a number of other executive positions within the
company. In addition, Mr. Manoogian serves as the Chairman, Chief Executive
Officer and a director of MascoTech, Inc. He has been a director of the
Corporation since 1978 and is a member of the Organization, Compensation and
Nominating Committee.
Richard L. Thomas
Mr. Thomas, 67, retired as Chairman of the Corporation in May 1996 after
having served as Chairman of First Chicago and The First National Bank of
Chicago since 1992 and of the Corporation since the Merger. Mr.
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Thomas served as President of First Chicago from 1974 to 1993 and of The First
National Bank of Chicago from 1975 to 1993. Mr. Thomas is a director of CNA
Financial Corporation, IMC Global Inc., The PMI Group, Inc., The SABRE Group
Holdings, Inc., Sara Lee Corporation and Scotsman Industries, Inc. Mr. Thomas
became a director of First Chicago in 1973 and has been a director of the
Corporation since December 1995. He is a member of the Risk Management
Committee.
CLASS III DIRECTOR--TERM EXPIRES 1998
Earl L. Neal
Mr. Neal, 69, has been an attorney with Earl L. Neal & Associates, a law
firm, since 1955. Mr. Neal is a director of Peoples Energy Corporation,
Lincoln National Corporation, Chicago Title and Trust Company and Chicago
Title Insurance Company. Mr. Neal became a director of First Chicago in 1988
and has been a director of the Corporation since December 1995. He is a member
of the Audit Committee and the Employee and Public Responsibility Committee.
CLASS I DIRECTORS--TERM EXPIRES 1999
Dr. Maureen A. Fay, O.P.
Dr. Fay, 63, is President of the University of Detroit Mercy. She has held
that position since 1990, and was President of its predecessor, Mercy College
of Detroit, from 1983 through 1990. She is a director of Kelly Services, Inc.
Dr. Fay has been a director of the Corporation since 1985, and serves on the
Employee and Public Responsibility Committee and the Organization,
Compensation and Nominating Committee.
Charles T. Fisher III
Mr. Fisher, 68, retired as Chairman and President of NBD in 1993. Mr. Fisher
had served as Chairman, President and Chief Executive Officer since 1982, and
he held a number of executive positions at NBD and NBD Bank (Michigan) prior
to that time. Mr. Fisher is a director of AMR Corporation, American Airlines,
Inc., General Motors Corporation and Hughes Electronics Corporation. He has
been a director of the Corporation since 1972 and serves as a member of the
Employee and Public Responsibility Committee and the Risk Management
Committee.
William G. Lowrie
Mr. Lowrie, 54, is President of Amoco Corporation, a diversified
international petroleum company. He has held this position since January 1996.
Mr. Lowrie was named President of Amoco Oil Company in 1990, President of
Amoco Production Company in 1992 and Executive Vice President, Exploration and
Production Sector, of Amoco Corporation in 1994. He has been a director of The
First National Bank of Chicago since 1995 and a director of the Corporation
since May 1997. He is a member of the Audit Committee.
William T. McCormick, Jr.
Mr. McCormick, 53, is Chairman and Chief Executive Officer of CMS Energy
Corporation, a diversified energy company, a position he has held since 1988.
He is also Chairman of its principal subsidiary, Consumers Energy. In addition
to CMS Energy Corporation and Consumers Energy, Mr. McCormick is a director of
Rockwell International Corporation and Schlumberger Limited. He has been a
director of the Corporation since 1985 and is a member of the Executive
Committee and the Risk Management Committee, of which he is Chairperson.
James J. O'Connor
Mr. O'Connor, 61, retired as Chairman and Chief Executive Officer of Unicom
Corporation, a producer, distributor and seller of electric energy, in March
1998. He had held this position since Unicom Corporation was formed in 1994.
In addition, he served as Chairman and Chief Executive Officer of Commonwealth
Edison Company, Unicom Corporation's principal subsidiary, from 1980 to March
1998 and served in other executive
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<PAGE>
positions prior to 1980. Mr. O'Connor is a director of Corning Incorporated,
Tribune Company and UAL Corporation. Mr. O'Connor became a director of First
Chicago in 1987 and has been a director of the Corporation since December
1995. He is a member of the Executive Committee and the Organization,
Compensation and Nominating Committee, of which he is Chairperson.
John W. Rogers, Jr.
Mr. Rogers, 39, is Chairman, President and founder of Ariel Capital
Management, Inc., an institutional money management firm. Mr. Rogers is a
director of Aon Corporation. He has been a director of the Corporation since
February 1998 and is a member of the Employee and Public Responsibility
Committee and the Risk Management Committee.
David J. Vitale
Mr. Vitale, 51, has been Vice Chairman of the Board of the Corporation and
President of The First National Bank of Chicago since December 1995. Mr.
Vitale joined The First National Bank of Chicago in 1968, was named Executive
Vice President of First Chicago in 1986 and became Vice Chairman of the Board
of First Chicago in 1993. In addition, he is a director of The First National
Bank of Chicago. Mr. Vitale became a director of First Chicago in 1992 and has
been a director of the Corporation since December 1995. He is a member of the
Executive Committee.
CLASS II DIRECTORS--TERM EXPIRES 2000
John H. Bryan
Mr. Bryan, 61, is Chairman of the Board and Chief Executive Officer of Sara
Lee Corporation, a global packaged food and consumer products company, and has
held that position since 1976. In addition to Sara Lee Corporation, Mr. Bryan
is a director of Amoco Corporation and General Motors Corporation. Mr. Bryan
became a director of First Chicago in 1982 and has been a director of the
Corporation since December 1995. He is a member of the Risk Management
Committee.
Siegfried Buschmann
Mr. Buschmann, 60, is Chairman and Chief Executive Officer of The Budd
Company, a producer of automotive parts and assemblies and a subsidiary of
Thyssen AG, and has held that position since 1989. He also serves as President
of Thyssen Holding Corporation and as Chief Executive Officer of Thyssen Budd
Automotive GmbH. He is a director of both The Budd Company and Thyssen Holding
Corporation. Mr. Buschmann has been a director of the Corporation since 1991
and is a member of the Audit Committee.
Verne G. Istock
Mr. Istock, 57, is Chairman, President and Chief Executive Officer of the
Corporation. He was named Chairman in May 1996 and has served as President and
Chief Executive Officer since December 1995. Mr. Istock also serves as
Chairman, Chief Executive Officer and a director of The First National Bank of
Chicago and NBD Bank (Michigan). Mr. Istock, who joined NBD Bank (Michigan) in
1963, served as Vice Chairman of the Corporation and NBD Bank (Michigan) from
1985 to 1994, and served as Chairman and Chief Executive Officer of the
Corporation from 1994 until December 1995. Mr. Istock also is a director of
Kelly Services, Inc., and Masco Corporation. He has been a director of the
Corporation since 1985 and is a member of the Executive Committee, of which he
is Chairperson.
Andrew J. McKenna
Mr. McKenna, 68, is the Chairman and Chief Executive Officer of Schwarz, a
printer, converter and distributor of packaging materials. He has held those
positions since 1964 and has also served as President. In addition to Schwarz,
Mr. McKenna is a director of Aon Corporation, Dean Foods Company, McDonald's
Corporation, Skyline Corporation and Tribune Company. Mr. McKenna has been a
director of The First National
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<PAGE>
Bank of Chicago since 1993 and served as a director of First Chicago from 1993
until the Merger. He has been a director of the Corporation since May 1997 and
is a member of the Audit Committee.
Thomas E. Reilly, Jr.
Mr. Reilly, 58, is Chairman and Chief Executive Officer of Reilly
Industries, Inc., a synthetic chemical manufacturer. He has held that position
since 1990, and prior to that time held other executive positions within the
company. In addition to Reilly Industries, Inc., Mr. Reilly is a director of
Herff Jones, Inc. and Lilly Industries, Inc. He has been a director of the
Corporation since 1995 and serves on the Executive Committee and the Audit
Committee, of which he is Chairperson.
Adele Simmons
Ms. Simmons, 56, is President of The John D. and Catherine T. MacArthur
Foundation, a philanthropic foundation, and has held that position since 1989.
In addition, Ms. Simmons is a director of Marsh & McLennan Companies, Inc. Ms.
Simmons became a director of First Chicago in 1990 and has been a director of
the Corporation since December 1995. She serves on the Organization,
Compensation and Nominating Committee, the Executive Committee, and the
Employee and Public Responsibility Committee, of which she is Chairperson.
COMMITTEES OF THE BOARD OF DIRECTORS
It is the primary responsibility of the Board of Directors of the
Corporation to oversee the management of the business of the Corporation and
its subsidiaries. To assist in carrying out its responsibilities, the Board of
Directors has established five standing committees which are described below.
AUDIT COMMITTEE
The members of the Audit Committee of the Corporation are Siegfried
Buschmann, William G. Lowrie, Andrew J. McKenna, Earl L. Neal and Thomas E.
Reilly, Jr., who serves as Chairperson. The Audit Committee met five times in
1997.
Included among the functions performed by the Audit Committee are (i)
appointment of the Corporation's independent public accountants; (ii) review
of the plan and results of the independent public accountants' auditing
engagement; (iii) approval of the professional services provided by the
independent public accountants and related fees and consideration of the
possible effect the performance and fees would have on the independence of the
accountants; (iv) review of the plan and findings with respect to the internal
audit, credit review and market risk oversight functions; (v) review of the
representations of management and the findings of the independent public
accountants and the internal auditors as to the adequacy of the Corporation's
system of internal accounting controls in order to obtain reasonable assurance
that the Corporation's annual and quarterly financial reports are prepared in
accordance with generally accepted accounting principles and are free from
material fraud or error; (vi) review of the assessment of management regarding
compliance by subsidiary banks with laws and regulations designated by bank
regulatory agencies as essential for safety and soundness; (vii) review of the
expenses of the inside directors; (viii) approval of the selection and
discharge of the Corporation's General Auditor; and (ix) review of reports of
examinations by regulatory agencies relating to the Corporation and its
subsidiaries.
EMPLOYEE AND PUBLIC RESPONSIBILITY COMMITTEE
The members of the Employee and Public Responsibility Committee of the
Corporation are James K. Baker, James S. Crown, Maureen A. Fay, Charles T.
Fisher III, Earl L. Neal, John W. Rogers, Jr. and Adele Simmons, who serves as
Chairperson. The Employee and Public Responsibility Committee met two times in
1997. The Employee and Public Responsibility Committee has responsibility and
authority for matters relating to the Corporation's and its subsidiaries'
charitable contributions; diversity, affirmative action, leadership
development and equal employment opportunity policies and procedures;
practices in handling customer inquiries and complaints; compliance with the
Community Reinvestment Act, fair lending laws and applicable consumer-related
laws; neighborhood and social initiatives; and current and emerging public
policy issues.
5
<PAGE>
EXECUTIVE COMMITTEE
The members of the Executive Committee of the Corporation are Thomas H.
Jeffs II, William T. McCormick, Jr., James J. O'Connor, Thomas E. Reilly, Jr.,
Adele Simmons, David J. Vitale and Verne G. Istock, who serves as Chairperson.
The Executive Committee met two times in 1997. The Executive Committee
exercises all the powers of the Board of Directors in the management of the
business and affairs of the Corporation while the Board of Directors is not in
session.
RISK MANAGEMENT COMMITTEE
The members of the Risk Management Committee of the Corporation are Terence
E. Adderley, John H. Bryan, Charles T. Fisher III, John W. Rogers, Jr.,
Richard L. Thomas and William T. McCormick, Jr., who serves as Chairperson.
The Risk Management Committee met three times in 1997. The Risk Management
Committee has responsibility and authority for reviewing, advising on,
approving where appropriate and providing guidance with respect to risk
management, financial securities transactions and capital actions, and
financial planning and performance.
ORGANIZATION, COMPENSATION AND NOMINATING COMMITTEE
Committee Interlocks and Insider Participation
The Organization, Compensation and Nominating Committee met five times in
1997. The members of the Organization, Compensation and Nominating Committee
of the Corporation are James K. Baker, James S. Crown, Maureen A. Fay, Richard
A. Manoogian, Adele Simmons and James J. O'Connor, who serves as Chairperson.
All of the members of the Organization, Compensation and Nominating
Committee, or their associates, were customers of, or had transactions with,
the Corporation or the Corporation's banking or other subsidiaries in the
ordinary course of business during 1997. Additional transactions may be
expected to take place in the future. All outstanding loans to the directors
and their associates, commitments and sales, purchases and placements of
investment securities and other financial instruments included in such
transactions were made in the ordinary course of business, on substantially
the same terms, including interest rates and collateral, where applicable, as
those prevailing at the time for comparable transactions with other persons,
and did not involve more than normal risk of collectibility or present other
unfavorable features.
Committee Responsibilities and Authorities
Included among the functions related to human resources management and
compensation performed by the Organization, Compensation and Nominating
Committee are (i) ensuring the effectiveness of senior management and
appropriate management continuity; (ii) ensuring the reasonableness and
appropriateness of senior management compensation arrangements and levels;
(iii) overseeing senior management officer titling; (iv) reviewing the
succession plan for the office of Chairman; (v) reviewing plans to be followed
should the Chairman or the Chief Executive Officer be absent or disabled; (vi)
monitoring the overall soundness and effectiveness of the Corporation's
compensation and benefit programs at all levels; and (vii) providing advice
and counsel regarding the Corporation's human resources strategy and key human
resources practices and issues.
Regarding formal authorities for compensation matters, the Corporation's
Board of Directors approves, upon recommendation of the Committee, (i) the
adoption and amendment of stock-based incentive plans (subject to stockholder
approval where required); (ii) the adoption and amendment of all significant
compensation plans (subject to stockholder approval where required); (iii) all
compensation actions, including employment and separation arrangements, for
officers at or above the level of vice chairman; and (iv) all stock based
compensation for executive vice presidents.
The Board of Directors has delegated authority to the Committee to approve
(i) the terms and conditions of stock-based grants; (ii) the total number of
available shares to be used each year in stock-based plans; (iii) funding for
senior management annual incentive awards; and (iv) all salaries or annual
incentive awards of $200,000 or more, except awards for vice chairmen and
above.
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<PAGE>
Additionally, the Committee is responsible for (i) proposing new directors;
(ii) reviewing the performance of the Board of Directors; (iii) providing
counsel regarding the organization of the Board of Directors and its committee
structure, committee charters, and membership; and (iv) overseeing director
compensation arrangements.
The Organization, Compensation and Nominating Committee will consider
candidates for nominees for election as directors of the Corporation submitted
by stockholders. Any stockholder who wishes to have the Committee consider a
candidate should submit the name of the candidate, along with any biographical
or other relevant information the stockholder wishes the Committee to consider,
to the Secretary of the Corporation at the address appearing on the first page
of this proxy statement.
DIRECTOR MEETING ATTENDANCE AND FEE ARRANGEMENTS
The Board of Directors of the Corporation held ten meetings in 1997. Each
director attended 75% or more of the total number of meetings held during 1997
by the Board of Directors of the Corporation or Committees thereof on which the
director served, except for Mr. Buschmann, who attended 73% of the meetings.
Each non-officer director of the Corporation receives an annual cash retainer
of $50,000. In addition, each non-officer director receives an annual grant of
shares of the Corporation's Common Stock equal in value to one-half of the
director's annual cash retainer. The Chairperson of each Committee receives an
additional annual cash retainer of $5,000. William T. McCormick, James J.
O'Connor, Thomas E. Reilly and Adele Simmons are the current Committee
Chairpersons receiving the additional annual cash retainer. No additional fees
are paid to directors for attending Board or Committee meetings. Non-officer
directors may elect each year to have their annual cash retainer paid in any
combination of the following: (i) cash paid on a quarterly basis; (ii) deferral
of payment pursuant to the Corporation's Plan for Deferring the Payment of
Directors' Fees (the "Director Deferral Plan"); or (iii) pursuant to the
Director Stock Plan: (a) an outright grant of shares of the Corporation's
Common Stock; (b) stock options, with three options issued for every share of
Common Stock that could be granted; and (c) stock units. Amounts deferred into
the Director Deferral Plan earn a return equivalent to the rate of return on
one or more of the investment funds in the Corporation's Savings and Investment
Plan. Officers of the Corporation and its subsidiaries did not receive an
annual retainer, meeting fees, shares of Common Stock, or other compensation
for service as directors of the Corporation or on Committees of the Board.
BENEFICIAL OWNERSHIP OF THE CORPORATION'S COMMON STOCK
Generally, under the rules of the Securities and Exchange Commission (the
"Commission"), a person is deemed to be the beneficial owner of a security with
respect to which such person, through any contract, arrangement, understanding,
relationship or otherwise, has or shares voting power (which includes power to
vote, or direct the voting of, such security) or investment power (which
includes power to dispose of, or direct the disposition of, such security). In
addition, a person is deemed to be the beneficial owner of a security if he or
she has the right to acquire such voting power or investment power over the
security within sixty days, for example, through the exercise of a stock
option.
The following table shows the beneficial ownership of the Corporation's
Common Stock as of December 31, 1997 by (i) each director, (ii) each nominee
for election, (iii) each executive officer named in the Summary Compensation
Table on page 14, and (iv) all directors and executive officers as a group.
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<TABLE>
<CAPTION>
AMOUNT AND
NATURE OF
BENEFICIAL PERCENT
OWNERSHIP OF CLASS
AS OF (IF 1%
DECEMBER 31, OR
NAME 1997 GREATER)
- ---- ------------ --------
<S> <C> <C>
Terence E. Adderley... 10,401 -- %
James K. Baker........ 7,148 --
John H. Bryan......... 7,765 --
Siegfried Buschmann... 2,305 --
James S. Crown........ 5,815,952(a) 2.01
Maureen A. Fay........ 2,639 --
Charles T. Fisher
III.................. 180,481(b) --
Verne G. Istock....... 371,006(c)(d) --
Thomas H. Jeffs II.... 258,658(c) --
William G. Lowrie..... 1,973 --
Richard A. Manoogian.. 9,052 --
Scott P. Marks, Jr.... 209,811(c) --
</TABLE>
<TABLE>
<CAPTION>
AMOUNT AND
NATURE OF
BENEFICIAL PERCENT
OWNERSHIP OF CLASS
AS OF (IF 1%
DECEMBER 31, OR
NAME 1997 GREATER)
- ---- ------------ --------
<S> <C> <C>
William T. McCormick,
Jr.................. 12,302 -- %
Andrew J. McKenna.... 30,577(e) --
Earl L. Neal......... 6,860 --
James J. O'Connor.... 9,396(f) --
Andrew J. Paine, Jr.. 131,105(c)(g) --
Thomas E. Reilly,
Jr.................. 134,059(h) --
John W. Rogers, Jr... 1,000(i) --
Adele Simmons........ 6,498 --
Richard L. Thomas.... 1,257,588(j) --
David J. Vitale...... 552,000(c) --
All Directors and Ex-
ecutive Officers as
a Group (k)(l)...... 10,517,374(c) 3.64
</TABLE>
- -------
(a) The number of shares of Common Stock shown as beneficially owned by James
S. Crown includes 6,402 shares subject to options held by Mr. Crown which
were exercisable as of March 1, 1998; 2,815,102 shares owned by The Crown
Fund, of which he is a partner; 409,431 shares owned by Henry Crown and
Company (Not Incorporated), of which Mr. Crown is a partner; 707,385
shares owned by Areljay, L.P., of which a corporation, of which Mr. Crown
is a director, officer and shareholder, and a trust, of which Mr. Crown is
a beneficiary, are partners; 482,321 shares owned by Arie and Ida Crown
Memorial, of which Mr. Crown is a director; and 936,926 shares owned by
Pines Trailer Limited Partnership, of which a corporation, of which Mr.
Crown is a shareholder, and a partnership, of which Mr. Crown is a
partner, are partners. Also included are 238,812 shares beneficially owned
by trusts of which Mr. Crown is a beneficiary and 169,715 shares
beneficially owned by trusts of which Mr. Crown is a co-trustee. Mr.
Crown's spouse owns beneficially 2,707 shares, and trusts of which Mr.
Crown's children are beneficiaries own beneficially 9,439 shares. Mr.
Crown disclaims beneficial ownership of the shares held by the various
persons and entities described above.
(b) This figure includes 30,039 shares held in a trust of which Mr. Fisher is
co-trustee; and 39,331 shares, of which Mr. Fisher disclaims beneficial
ownership, held in trust for Mr. Fisher's spouse.
(c) As set forth in the following table, for Messrs. Istock, Jeffs, Marks,
Vitale and Paine and all directors and executive officers as a group, the
share amounts include any shares subject to options held by such persons
as of December 31, 1997, that were exercisable as of March 1, 1998, and
also include any shares held pursuant to the Corporation's 401(k) plan as
of December 31, 1997. Shares held pursuant to the 401(k) plan as of
February 28, 1998 will be subject to the voting direction of such persons
at the Annual Meeting.
<TABLE>
<CAPTION>
ALL DIRECTORS
ANDREW J. AND EXECUTIVE
VERNE G. THOMAS H. SCOTT P. DAVID J. PAINE, OFFICERS AS
ISTOCK JEFFS II MARKS, JR. VITALE JR. A GROUP
-------- --------- ---------- -------- --------- -------------
<S> <C> <C> <C> <C> <C> <C>
Shares Subject to Op-
tions Exercisable as
of March 1, 1998..... 103,837 65,884 47,984 282,367 43,892 2,041,044
Shares Held pursuant
to 401(k) plan....... 0 0 198 10,653 0 34,311
</TABLE>
(d) This figure includes 1,410 shares, of which Mr. Istock disclaims
beneficial ownership, held by Mr. Istock's spouse.
(e) This figure includes 3,204 shares subject to options held by Mr. McKenna
that were exercisable as of March 1, 1998, and 9,840 shares, of which Mr.
McKenna disclaims beneficial ownership, owned by Mr. McKenna's spouse.
(f) This figure includes 840 shares subject to options held by Mr. O'Connor
that were exercisable as of March 1, 1998.
(g) This figure includes 2,634 shares, of which Mr. Paine disclaims beneficial
ownership, held by Mr. Paine's spouse.
(h) This figure includes 3,522 shares subject to options held by Mr. Reilly
that were exercisable as of March 1, 1998; 119,408 shares held in trusts
of which Mr. Reilly is co-trustee; 596 shares held by Mr. Reilly's spouse;
and 1,294 shares, of which Mr. Reilly disclaims beneficial ownership, held
by Mr. Reilly's spouse as custodian for an adult child.
(i) This figure represents shares owned as of February 13, 1998.
8
<PAGE>
(j) This figure includes 827,289 shares subject to options held by Mr. Thomas
that were exercisable as of March 1, 1998; 1,161 shares held by a limited
partnership in which Mr. Thomas and his spouse are general and limited
partners; 30,932 shares held in trusts of which Mr. Thomas is trustee; and
10,081 shares held by a family foundation of which Mr. Thomas is a trustee.
(k) For purposes of this table, the term "executive officers" includes all
persons who were executive officers of the Corporation on December 31,
1997.
(l) In addition to shares described in other footnotes to this table, this
figure includes 5,400 shares held by an executive officer in a fiduciary
capacity for the benefit of family members; the executive officer disclaims
beneficial ownership of these shares.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 requires each of the
Corporation's directors and officers, and each beneficial owner of more than
ten percent of a registered class of the Corporation's equity securities, to
file with the Commission an initial report of the person's beneficial ownership
of the Corporation's equity securities and subsequent reports regarding changes
in such ownership. To the best of the Corporation's knowledge, each person who
was so subject to Section 16(a) with respect to the Corporation at any time
during 1997, other than Mr. Richard L. Thomas, filed, on a timely basis, all
reports required for the year pursuant to Section 16(a). In June 1997, Mr.
Thomas, a director of the Corporation, disposed of shares of Common Stock in a
private sale. Due to a miscommunication between Mr. Thomas and the investment
adviser involved in this transaction, the requisite Form 4 was inadvertently
filed late. To the best of the Corporation's knowledge, Mr. Thomas's June 1997
Form 4 was his only late report, and the transaction described herein was his
only transaction not reported on a timely basis, for 1997.
In addition, the Corporation recently has learned of several transactions
that occurred in 1996, but were not timely reported pursuant to Section 16(a).
James S. Crown, a director of the Corporation, acquired stock units pursuant to
the Corporation's Director Stock Plan in three separate transactions. W.G.
Jurgensen, an officer of the Corporation, gave shares of Common Stock to his
spouse and, in a separate transaction, disposed of shares of Common Stock as a
result of an intra-plan transfer in his 401(k) account. Mr. Crown and Mr.
Jurgensen have amended their respective Forms 5 for 1996 to report these
transactions, and, to the best of the Corporation's knowledge, these
transactions were Mr. Crown's and Mr. Jurgensen's only transactions not
reported on a timely basis for 1996.
ORGANIZATION, COMPENSATION AND NOMINATING
COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The Organization, Compensation and Nominating Committee has established a
compensation program designed to enable the Corporation to attract, motivate
and retain quality executive management talent necessary to lead the
Corporation, attain its business objectives and maximize stockholder value. The
compensation program approved by the Committee consists of three primary
components: base salary, annual cash bonuses and long-term, stock-based
incentives.
PERFORMANCE CRITERIA AND COMPETITIVE POSTURE
The Committee, for the purposes of assessing competitive trends as well as
setting performance goals and measuring relative performance, has identified a
"peer group" of banking organizations. For 1997, the peer group was defined as
the top twenty-five banking organizations, ranked by assets at December 31,
1997. The Committee intends to review the peer group annually and make
adjustments, as necessary, to ensure that the Corporation's performance targets
and competitive posture are based on the most appropriate comparisons.
The Committee establishes base salaries and target awards for bonuses and
long-term incentives based on trends and practices within these peer
organizations as well as on information provided by third-party consultants and
special compensation surveys. Base salaries are targeted to reflect median pay
levels in similar organizations. Target awards for bonuses and long-term
incentives are set at or above competitive medians; however, actual awards are
contingent upon attainment of objective results measured against established
goals or performance relative to the peer group.
9
<PAGE>
BASE SALARIES
Base salaries for executives, including the chief executive officer, reflect
competitive practices within peer organizations for positions with similar
roles or responsibilities. Increases to base salaries reflect individual
performance as well as changes in position or responsibility. The overall rate
of annual increase for executive officer salaries is intended to be consistent
with and reflect competitive trends in the industry. All base salary increases
for executive officers are reviewed and approved by the Committee.
ANNUAL BONUSES
The Senior Management Annual Incentive Plan ("the Bonus Plan") was approved
by stockholders at the Annual Meeting in May 1996. The Bonus Plan establishes
a planned bonus funding level ("bonus pool") based on the aggregate of target
cash incentive awards for all participants. The target awards are based on
competitive practices. The Committee establishes performance goals and sets
minimum or threshold levels of performance each year. Actual or final pool
funding is adjusted based on objective performance results measured against
two standards: earnings per share ("EPS") compared to a pre-determined target
and return on equity ("ROE") compared to the average ROE of the peer group.
For 1997, EPS results exceeded target, and ROE was above the median of the
peer group, resulting in an upward adjustment to the bonus pool based on the
formula established by the Committee.
Pursuant to the terms of the Bonus Plan, the Committee certified results
against performance objectives and the peer group and approved the final bonus
pool funding. Within the approved bonus pool, individual bonus awards
reflected the Committee's subjective assessment of the performance of the
executive relative to his or her specific financial goals and subjective
strategic or organizational objectives.
LONG-TERM INCENTIVES
The Stock Performance Plan ("the Stock Plan") was also approved by
stockholders at the Annual Meeting in May 1996. The Stock Plan is intended to
reward executives for business results and to associate their interests with
those of stockholders. Under the Stock Plan, the Committee provides long-term
incentive awards in the form of stock options, performance shares and
restricted shares. Target long-term award levels are based on competitive
practices within the peer group and the financial industry in general, with
different award levels established for each level of management. Typically,
higher level executives receive performance shares and options; less senior
managers and professionals receive restricted shares and options. Restricted
share awards are generally four-year awards subject only to continued
employment. During the restricted period, recipients receive cash dividends
and exercise voting rights on the restricted shares.
Performance shares are shares of Common Stock contingently granted and
earned by the achievement of certain financial goals. The performance shares
awarded in 1997 provide for a four-year performance period commencing January
1, 1997. At the end of such period, the performance shares awarded will be
earned by an individual in a stated percentage of the award ranging from 0% to
150% of the original share award. The percentage earned will be determined
based on the Corporation's relative performance on two measures: ROE and total
shareholder return ("TSR") compared with that of the peer banking institutions
for each year averaged for the four years in the performance period. During
the performance period, dividends on the performance shares are payable in
cash to the award recipient, who is also entitled to vote such shares.
Stock options granted are non-qualified options with a ten year term. The
exercise price of the options is the fair market value of the Common Stock on
the date of grant. Options vest in three equal installments at the end of the
first, second and third years of the ten-year term, subject to continued
employment. To encourage early exercise of options and thus increase long-term
ownership, the Committee approved a restorative option feature enabling option
recipients, upon exercise of an option, to purchase shares by exchanging
currently owned shares of Common Stock and to receive a restorative option
equal to the number of shares used for the option purchase. The exercise price
for restorative options is the fair market value of the Common Stock on the
date of the restorative grant. Restorative options may be exercised six months
from the date of grant through the end of the original ten-year term, subject
to continued employment. The opportunity to receive a restorative option is
limited to one restorative grant per year attributable to any single, original
stock option grant.
10
<PAGE>
CONVERSION OF PERFORMANCE SHARES FROM PREDECESSOR PLANS
Prior to 1996, both First Chicago and NBD awarded performance shares to
selected executive officers. Both programs had established performance-based
standards and performance terms consistent with the requirements of Section
162(m) of the Internal Revenue Code of 1986, as amended (the "Internal Revenue
Code") to assure deductibility for Federal income tax purposes of shares
earned by the five highest paid executive officers. In order to integrate and
transition all compensation programs of the Corporation, the Committee, in
February 1996, approved a conversion of all outstanding performance shares.
Under the conversion, all or a portion of the outstanding performance shares
were converted to new performance shares under the Stock Plan and became
subject to newly established performance criteria under the Stock Plan. Under
the conversion methodology, a portion of prior NBD performance share awards
were converted to restricted shares, based upon actual performance for the
portion of the performance period completed as of December 31, 1995. These
restricted shares are subject only to continued employment through the end of
the original performance period. As a result of the change in previously
established performance standards, these restricted shares became non-
deductible under Section 162(m).
The final number of converted performance shares to be earned based on the
performance cycle ending December 31, 1997, could vary from 0% to 150% of the
original grant. The final number of shares earned was determined based on the
Corporation's ROE for 1996 and 1997 compared to reported ROE of the peer bank
group for that same period. Based on the Corporation's cumulative two-year ROE
results for 1996 and 1997 and the prescribed award formula, the Committee
approved a final distribution of 105% of the original performance share grant
for this performance cycle.
COMPENSATION OF VERNE G. ISTOCK
Effective in April 1997, Mr. Istock's annual base salary rate was increased
from $788,100 to $800,000, reflecting both his normal annual review and his
competitive position relative to other chief executive officers in the
Corporation's peer bank group. The reported base salary earnings of $796,797
in the Summary Compensation Table differ only due to the timing of the
increase during the year.
Under the Bonus Plan, Mr. Istock received an annual cash bonus, as reflected
in the Summary Compensation Table, of $1,100,000. This cash bonus award
reflects a subjective evaluation of Mr. Istock's performance, including
consideration of the Corporation's record 1997 earnings, EPS of $4.90, ROE of
18.6%, TSR in 1997 of approximately 59% (which was 20% above the Corporation's
peer group) and other financial results that were at or above target levels
for the year as well as attainment of various organizational and non-financial
objectives during 1997.
Under the Stock Plan, Mr. Istock received 35,000 performance shares and
105,000 non-qualified stock options in February 1997. The performance shares
provide for a four-year performance period commencing January 1, 1997. The
actual number of performance shares earned will be based on the Corporation's
ROE and TSR relative to the peer group. The number of shares granted reflects
median award levels within the peer group as well as the Committee's
subjective assessment of Mr. Istock's past performance and expected future
contribution to the Corporation's success.
DEDUCTIBILITY
The Internal Revenue Code limits allowable Federal income tax deductions for
compensation paid by a publicly held corporation. Section 162(m) of the
Internal Revenue Code limits deductible compensation to $1 million for the
Corporation's chief executive officer and for each of the four other most
highly compensated executive officers employed at year end. However,
performance-based compensation may be excluded from this limit provided, among
other things, that payment of performance-based compensation is made pursuant
to a plan approved by stockholders, is payable upon attainment of pre-
determined, objective goals and that the board committee approving such
payments is made up of "outside" directors as defined in Section 162(m).
The Committee believes that executive compensation should be reasonable and
competitive and that a substantial portion of total compensation should be
based upon the Corporation's performance. It has approved both annual cash and
long-term incentive compensation programs and developed target award
opportunities
11
<PAGE>
accordingly. The Committee will ordinarily seek to provide performance-based
compensation that allows for maximum deductibility under Section 162(m)
regulations. However, tax deductibility is only one of many factors that must
be considered in any final decision regarding executive compensation. In order
to best serve the Corporation and the interests of its stockholders, the
Committee may determine that payment of non-deductible compensation is
necessary to provide an appropriate award consistent with its overall
philosophy and the intent of the performance-based programs.
STOCK OWNERSHIP GUIDELINES
Consistent with the importance of long-term, stock-based incentives and to
further ensure that the interests of its senior managers are in line with
those of stockholders, the Committee and Board of Directors has established
formal stock ownership guidelines for Senior Vice President and higher level
officers. These guidelines assume that affected officers will meet or exceed
the guideline within five years of implementation or of attaining the level
associated with each guideline.
Respectfully submitted,
The Organization, Compensation and
Nominating Committee
James J. O'Connor, Chair
James K. Baker
James S. Crown
Maureen A. Fay, O.P.
Richard A. Manoogian
Adele Simmons
12
<PAGE>
PERFORMANCE GRAPH
The following graph compares the cumulative total return on the Common Stock
of the Corporation with the Standard & Poor's 500 Index (the "S&P 500 Index")
and the KBW 50 Index published by Keefe, Bruyette & Woods, Inc. (the "KBW 50
Index"). The S&P 500 Index is a broad-based market index, and the KBW 50 Index
includes a cross-section of major banking institutions. Each of these indices
includes the Corporation's Common Stock. The values in the graph show the
relative performance of a $100 investment made on December 31, 1992, in the
Corporation's Common Stock, the S&P 500 Index and the KBW 50 Index.
Comparison of Five Year Cumulative Total Return(/1/)
Among the Corporation, S&P 500 Index and KBW 50 Index.(/2/)
[PERFORMANCE GRAPH APPEARS HERE]
<TABLE>
<CAPTION>
1992 1993 1994 1995 1996 1997
<S> <C> <C> <C> <C> <C> <C>
Corporation 100 94 90 136 191 304
S&P 500 100 110 112 153 189 252
KBW 50 100 106 100 160 227 332
</TABLE>
- -------
(1) Assumes $100 invested at December 31, 1992, with reinvested dividends.
(2) At December 31 in each year.
13
<PAGE>
COMPENSATION OF EXECUTIVE OFFICERS
EXECUTIVE OFFICER COMPENSATION TABLE
The following table sets forth the compensation paid, earned or awarded for
the years indicated therein, to the Corporation's chief executive officer and
its other four most highly compensated executive officers.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG TERM COMPENSATION
-------------------------------------
ANNUAL COMPENSATION AWARDS PAYOUTS
---------------------------- ----------------------- -------------
OTHER ALL
ANNUAL RESTRICTED SECURITIES OTHER
COMPEN- STOCK UNDERLYING COMPEN-
NAME AND PRINCIPAL SALARY SATION AWARDS OPTIONS/SARS LTIP SATION
POSITION YEAR ($) BONUS ($) ($) ($)(1)(2) (#)(3) PAYOUTS(4)(5) ($)(6)
- -------------------------- ---- -------- ---------- -------- ---------- ------------ ------------- -------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Verne G. Istock........... 1997 $796,797 $1,100,000 $131,153 $ 0 173,837 $657,628 $35,856
Chairman of the Board, 1996 774,416 1,000,000 297,261(7) 691,431 185,206 163,309 6,000
President
and Chief Executive Offi- 1995 746,154 550,000 65,934 0 60,468 372,600 6,000
cer
Thomas H. Jeffs II........ 1997 669,004 510,000 58,711 0 85,884 499,464 30,105
Vice Chairman of the Board 1996 655,015 475,000 48,915 571,774 90,284 152,913 6,000
1995 652,500 400,000 55,556 0 54,123 356,400 6,000
Scott P. Marks, Jr........ 1997 431,923 570,000 58,120 0 59,665 622,484 19,437
Vice Chairman of the Board 1996 403,128 550,000 42,008 0 66,268 451,970 12,469
1995 317,988 525,000 6,397 0 127,158 0 9,915
David J. Vitale........... 1997 499,615 675,000 61,967 0 61,344 711,425 11,241
Vice Chairman of the Board 1996 481,580 650,000 45,521 0 96,701 516,520 14,822
1995 419,349 750,000 6,495 0 169,867 0 12,955
Andrew J. Paine, Jr....... 1997 398,332 375,000 17,545 0 9,000 145,677 16,966
Executive Vice President 1996 383,959 350,000 13,891 180,302 10,500 52,099 12,375
1995 381,463 185,000 12,540 0 0 0 12,375
</TABLE>
- -------
(1) In February 1996, Messrs. Istock, Jeffs and Paine received restricted
shares of the Corporation's Common Stock in connection with the
modification of certain prior awards of performance shares originally
granted by NBD in 1993 through 1995. Dividends on these shares are payable
in cash. The following table sets forth the number of restricted shares
that vest on December 31 in each of the years indicated.
<TABLE>
<CAPTION>
NUMBER OF
RESTRICTED SHARES
VESTING ON
DECEMBER 31 TOTAL
----------------- SHARES
NAME 1996 1997 1998 AWARDED
---------------- ---- ----- ----- -------
<S> <C> <C> <C> <C>
Verne G. Istock................................. 6,698 7,900 3,188 17,786
Thomas H. Jeffs II.............................. 6,270 6,000 2,438 14,708
Andrew J. Paine, Jr. ........................... 2,138 1,750 750 4,638
</TABLE>
(2) Dividends on restricted shares are payable in cash. At December 31, 1997,
the aggregate number of restricted shares of the Corporation's Common
Stock held by the executive officers named in the Summary Compensation
Table and the value of these shares, based upon the $83.50 per share
closing price of the Corporation's Common Stock on December 31, 1997, were
as follows:
<TABLE>
<CAPTION>
NUMBER OF
NAME SHARES VALUE
---------------- --------- ----------
<S> <C> <C>
Verne G. Istock..................................... 27,755 $2,317,543
Thomas H. Jeffs II.................................. 25,105 2,096,268
Scott P. Marks, Jr.................................. 5,881 491,024
David J. Vitale..................................... 5,341 445,946
Andrew J. Paine, Jr................................. 2,500 208,750
</TABLE>
(3) The number of stock options listed in this column represents the sum of
new and restorative stock options granted during the year. The number of
new stock options granted to the named executive officers were as follows:
<TABLE>
<CAPTION>
NAME 1997 1996 1995
---------------- ------- ------- ------
<S> <C> <C> <C>
Verne G. Istock.................................... 105,000 100,000 0
Thomas H. Jeffs II................................. 30,000 36,000 0
Scott P. Marks, Jr................................. 30,000 36,000 47,965
David J. Vitale.................................... 30,000 36,000 72,400
Andrew J. Paine, Jr................................ 9,000 10,500 0
</TABLE>
The Corporation granted new stock options in 1997 and 1996 under its Stock
Performance Plan. The new stock options granted in 1995 to Messrs. Marks
and Vitale were granted under First Chicago's Stock Incentive Plan. No new
options were granted in 1995 to Messrs. Istock, Jeffs and Paine under NBD's
Performance Incentive Plan.
For a description of restorative stock options, see the Organization,
Compensation and Nominating Committee Report on Executive Compensation
contained herein and footnote (2) to the "Options/SAR Grants in Last Fiscal
Year" table below.
14
<PAGE>
(4) In February 1996, the remaining two-thirds of the performance restricted
shares originally granted to Messrs. Marks and Vitale by First Chicago in
1994, plus reinvested dividends previously accrued thereon, were converted
into performance shares, which would be earned upon the attainment of
certain performance criteria during three new calendar year-based
performance periods: 1996; 1996-1997 and 1996-1998. For each new
performance period, the executive officer earns a stated percentage of
one-third of the number of shares remaining from the original grant. The
determination of the percentage of the shares earned, which may range from
0% to 150%, is based upon the Corporation's ROE relative to the ROE of
peer banking institutions for each year in the new performance period
averaged for the numbers of years in the performance period.
(5) The dollar values equal the market value of the Common Stock on the date
the payouts of performance share awards were certified.
(6) Except for Mr. Paine, the amounts for 1997 represent matching
contributions to the Corporation's 401(k) and supplemental 401(k) plans.
The amounts for 1996 and 1995 for Messrs. Marks and Vitale represent
matching contributions to the First Chicago 401(k) and supplemental 401(k)
plans. The amounts for 1996 and 1995 for Messrs. Istock and Jeffs
represent matching contributions to NBD's 401(k) plan. The amounts for Mr.
Paine represent matching contributions to the Corporation's 401(k) and
supplemental 401(k) plans in the amount of $7,966 in 1997, matching
contributions to NBD's 401(k) plan in the amount of $3,375 in 1996 and
1995, and payments of split-dollar life insurance premiums of $9,000 in
each year with respect to a policy for the benefit of Mr. Paine.
(7) During 1996, the Corporation reimbursed Mr. Istock for moving expenses in
the amount of $98,642.
OPTION GRANTS TABLE
The following table provides information on stock options granted in 1997 to
the executive officers named in the Summary Compensation Table. In 1997, the
Corporation granted both new and restorative stock options to Messrs. Istock,
Jeffs, Marks and Vitale and new stock options to Mr. Paine. All options
granted by the Corporation in 1997 were non-qualified stock options, and no
stock appreciation rights ("SARs") were granted in 1997.
OPTION/SAR GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS
---------------------------------------------------------
NUMBER OF PERCENT OF TOTAL
SECURITIES OPTIONS/SARS
UNDERLYING GRANTED TO
OPTIONS/ EMPLOYEES IN EXERCISE OR GRANT DATE PRESENT
SARS GRANTED FISCAL YEAR BASE PRICE EXPIRATION VALUE ($)
NAME (#) (1)(2) (3) ($/SH) DATE (4)
- ----------------------- ------------------ ------------ ---------- ------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Verne
G.
Istock. 105,000 3.3924% $60.44 2/14/07 $1,888,824
3,002 0.0970 68.78 6/14/02 44,184
5,506 0.1779 68.78 6/19/04 96,140
19,627 0.6341 68.78 3/08/06 378,619
11,176 0.3611 68.78 6/14/02 164,489
11,012 0.3558 68.78 6/19/04 192,279
8,212 0.2653 68.78 3/13/98 38,114
10,302 0.3328 68.78 6/28/00 114,941
Thomas
H.
Jeffs
II.... 30,000 0.9693 60.44 2/14/07 539,664
3,134 0.1013 65.87 6/14/02 44,534
4,791 0.1548 65.87 6/19/04 80,459
7,377 0.2383 65.87 3/08/06 136,487
12,538 0.4051 65.87 6/14/02 178,166
9,582 0.3096 65.87 6/19/04 160,917
10,577 0.3417 65.87 6/28/00 114,542
7,885 0.2548 65.87 3/13/98 36,406
Scott
P.
Marks,
Jr.... 30,000 0.9693 60.44 2/14/07 539,664
9,356 0.3023 54.72 1/14/04 126,385
11,258 0.3637 54.72 1/13/05 160,341
9,051 0.2924 53.69 3/08/06 134,857
David
J.
Vitale. 30,000 0.9693 60.44 2/14/07 539,664
14,704 0.4751 57.94 1/14/04 212,227
16,640 0.5376 57.94 1/13/05 253,670
Andrew
J.
Paine,
Jr.... 9,000 0.2908 60.44 2/14/07 161,899
</TABLE>
15
<PAGE>
- -------
(1) The first line denotes new grants made by the Corporation in 1997; all
other grants by the Corporation in 1997 were restorative options. One
third of each new option grant becomes exercisable on the first, second
and third anniversaries of the grant date, which was February 14, 1997.
(2) Restorative Option Feature: The new stock options granted by the
Corporation in 1997 and 1996 and the new stock options granted by either
First Chicago pursuant to its Stock Incentive Plan ("SIP") or by NBD
pursuant to its Performance Incentive Plan ("PIP") that were outstanding
at the time of the Merger include a restorative feature which provides for
the issuance of restorative options. The restorative feature allows a
participant who exercises a stock option during the participant's
employment, and who pays all or a part of the exercise price of a stock
option with shares of Common Stock held by the participant for at least
six months, to receive a restorative option to purchase the number of
shares of Common Stock equal to the number of whole shares used by the
participant in payment of the stock option's exercise price. Restorative
options become exercisable six months after the date of grant. The
expiration date of a restorative option is the expiration date of the
original stock option to which it relates, and the exercise price is not
less than 100% of the fair market value of the Common Stock on the date
the restorative option is granted.
Under the restorative feature of stock options issued under First Chicago's
SIP, additional restorative options are granted with respect to shares
exchanged to pay tax withholding obligations related to the option
exercise; the market price of the Common Stock must be at least 25% higher
than the exercise price of the outstanding stock option at the time of
exercise of the new stock option; and a restorative stock option will not
be granted upon the exercise of a restorative stock option.
(3) The percentages shown are based on total options granted by the
Corporation in 1997 (both new and restorative options) on 3,095,175 shares
of Common Stock.
(4) The grant date present values were determined using the Black-Scholes
option pricing model. The assumptions used in calculating the Black-
Scholes present value of $17.99 per option for new option grants were as
follows:
(a) Option Term (time of exercise and vesting): options assumed to commence
on grant date with a ten year term.
(b) Volatility: 20.11%--based on ten years of daily stock prices from
February 15, 1987, through February 14, 1997;
(c) Risk-Free Rate of Return: 6.27%--estimated ten year zero coupon
treasury yield; and
(d) Dividend Yield: 2.65%--dividend at the time of grant divided by the
stock price at the time of grant.
The calculations with respect to all restorative options assume: (a) a
restorative option vests six months after the grant date and has a term
equal to the remaining term of the original option; (b) volatility is based
on daily stock prices over a period of years equal to the remaining term of
the grant and ending on the grant date; (c) a risk-free rate of return
equal to the zero coupon treasury yield curve for the remaining term of the
option granted at the grant date; and (d) a dividend yield equal to the
dividend on the grant date divided by the stock price on such date. The
specific assumptions used for the calculation of the grant date present
values for the restorative options granted to the named executive officers
are as follows:
<TABLE>
<CAPTION>
WEIGHTED
AVERAGE
NUMBER OF DATE REMAINING RISK-FREE DIVIDEND
OPTIONS GRANTED GRANTED TERM VOLATILITY RATE OF RETURN YIELD
--------------- ------- --------- ---------- -------------- --------
<S> <C> <C> <C> <C> <C> <C>
Verne G. Istock......... 68,837 7/29/97 5.63 18.38% 6.01% 2.33%
Thomas H. Jeffs II...... 55,884 7/18/97 4.95 18.64 6.13 2.43
Scott P. Marks, Jr...... 20,614 1/20/97 7.54 19.40 6.43 2.92
9,051 4/18/97 8.89 19.33 6.80 2.98
David J. Vitale......... 31,344 2/10/97 7.46 19.36 6.28 2.76
Andrew J. Paine, Jr..... 0 -- -- -- -- --
</TABLE>
No adjustments were made in calculating the grant date present value of an
option to account for potential forfeiture or the non-transferable nature
of the option.
The actual value of the options will depend on the market value of the
Common Stock on the dates the options are exercised. No realization of
value from the options is possible without an increase in the price of the
Common Stock, which would benefit all stockholders.
16
<PAGE>
1997 OPTION EXERCISES AND YEAR-END OPTION VALUE TABLE
The following table provides information on options exercised in 1997 by the
executive officers named in the Summary Compensation Table, the number of
unexercised options each of them held at December 31, 1997, and the value of
the unexercised in-the-money options each of them held as of that date. No
SARs were outstanding at any time during 1997.
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR
AND FY-END OPTION/SAR VALUES
<TABLE>
<CAPTION>
NUMBER OF SECURITIES
SHARES UNDERLYING UNEXERCISED VALUE OF UNEXERCISED
ACQUIRED OPTIONS/SARS IN-THE-MONEY OPTIONS/SARS
ON VALUE AT FY-END (#) AT FY-END ($) (1)
EXERCISE REALIZED ------------------------- -------------------------
NAME (#) ($) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- ----------------- ---------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Verne
G.
Istock. 108,964 $2,759,776 0 264,504 $ 0 $7,547,658
Thomas
H.
Jeffs
II.... 83,284 1,804,763 0 129,884 0 3,747,478
Scott
P.
Marks,
Jr.... 189,729 7,092,874 21,995 69,989 642,339 2,646,525
David
J.
Vitale. 61,157 2,007,721 248,233 78,134 11,068,748 3,116,573
Andrew
J.
Paine,
Jr.... 4,400 216,494 39,692 25,200 2,328,505 985,312
</TABLE>
- -------
(1) The values are based on the $83.50 per share closing price of the Common
Stock on December 31, 1997, less the exercise price of the options.
LONG-TERM INCENTIVE PLANS--AWARDS IN LAST FISCAL YEAR TABLE
The following table provides information on performance share awards made by
the Corporation in 1997 under the Stock Performance Plan to the executive
officers named in the Summary Compensation Table.
LONG-TERM INCENTIVE PLANS--AWARDS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
ESTIMATED FUTURE
PERFORMANCE
SHARE PAYOUTS UNDER NON-
PERFORMANCE STOCK
NUMBER OF OR OTHER PRICE-BASED PLANS
PERFORMANCE PERIOD UNTIL ------------------------
SHARES MATURATION OR THRESHOLD TARGET MAXIMUM
NAME (#) (1) PAYOUT (2) (#) (#) (#)
- ----------------- ----------- ------------- --------- ------ -------
<S> <C> <C> <C> <C> <C>
Verne G. Istock............. 35,000 1997-2000 0 35,000 52,500
Thomas H. Jeffs II.......... 10,000 1997-2000 0 10,000 15,000
Scott P. Marks, Jr.......... 10,000 1997-2000 0 10,000 15,000
David J. Vitale............. 10,000 1997-2000 0 10,000 15,000
Andrew J. Paine, Jr......... 3,000 1997-2000 0 3,000 4,500
</TABLE>
- -------
(1) Each performance share awarded in 1997 consisted of one share of Common
Stock, contingently granted and earned by achievement of certain financial
goals. During the performance period, the shares are issued and
outstanding and the executive officer has the right to vote the shares and
to receive cash dividends.
(2) The performance shares granted in 1997 provide for a four-year performance
period commencing January 1, 1997. At the end of this period, the
performance shares awarded will be earned in a stated percentage of the
award which will range from 0% to 150% of the original share award. The
percentage earned will be determined based on the Corporation's relative
performance on two measures, return on equity and total stockholder
return, as compared with that of the peer banking institutions for each
year averaged for the four years in the performance period.
PENSION PLAN
Personal Pension Account Plan
In general, salaried employees and regular hourly employees (scheduled to
work at least 20 hours per week) of designated subsidiaries of the Corporation
were eligible during 1997 to participate in the Corporation's Personal Pension
Account Plan ("PPAP") upon both attaining age 21 and completing one year of
service. A participant is 100% vested after completing five years of vesting
service. The PPAP became effective as of January 1, 1997, reflecting the
merger of the prior First Chicago and NBD pension plans, the provisions of
which were maintained as a minimum benefit entitlement for participants in the
former plans whose age plus service (with a minimum of five years) as of
December 31, 1996, equaled or exceeded 65.
17
<PAGE>
After becoming eligible to participate in the PPAP, an employee's PPAP
account is credited with a percentage of his covered compensation for the
month, as reflected in the following chart. Covered compensation includes base
pay, commissions, overtime, shift differential, and certain amounts deducted
on a pre-tax basis, plus the employee's annual management incentive award;
however, the amount of the annual incentive eligible for inclusion in covered
compensation is limited to 50% of the employee's annual salary at the time of
the award.
<TABLE>
<CAPTION>
COMPLETED ANNIVERSARY YEARS OF SERVICE PERCENT OF ELIGIBLE MONTHLY PAY
FOR PPAP CONTRIBUTIONS CREDITED TO PPAP ACCOUNT
-------------------------------------- -------------------------------
<S> <C>
1- 4................................. 3.0%
5- 9................................. 4.0
10-14................................. 5.5
15-19................................. 7.0
20-24................................. 9.0
25-34................................. 12.0
35-39................................. 7.0
40+................................... 0.0
</TABLE>
Also at the end of each month the participant's beginning account balance is
credited with interest for the month at a rate equal to the one-year U.S.
Treasury bill rate plus 1% (subject to a minimum rate of 5.33%). Interest
rates are determined on a quarterly basis.
Generally, an employee who has attained age 65 (with a minimum of five years
of vesting service) is entitled to receive annual retirement income (in
monthly installments) for life equal to the actuarial equivalent of his
account balance. Participants may commence a reduced annuity benefit at any
earlier age after separation from service, and (with spousal consent) may
elect a lump sum payment of their PPAP account balance.
Supplemental Personal Pension Account Plan
The Corporation's Supplemental Personal Pension Account Plan ("Supplemental
PPAP") was adopted to permit the payment of supplemental benefits to employees
whose annual benefits upon retirement under the PPAP would exceed those
permitted by the Internal Revenue Code. The Supplemental PPAP provides that if
the amount of the annual retirement benefit that would otherwise be payable
under the PPAP to a person who has completed five or more years of vesting
service is limited by reason of compliance with the Internal Revenue Code,
such person shall be entitled to a supplemental benefit equal to the
difference between the benefit such person receives under the PPAP and the
benefit such person would have received if such limitation had not been
included. The benefit is payable from the general assets of the Corporation.
Estimated Annual Benefits Payable to Executive Officers
The following table provides the estimated annual benefits (including any
Supplemental PPAP benefits) payable for life, beginning at normal retirement
age (65), for the covered executive officers named in the Summary Compensation
Table based on each officer's service to the Corporation through December 31,
1997, and with projected interest credits on cash balances estimated at a rate
of 6.46% per annum.
<TABLE>
<CAPTION>
YEAR OF ESTIMATED
NAME 65TH BIRTHDAY ANNUAL BENEFIT
---------------- ------------- --------------
<S> <C> <C>
Verne G. Istock.............................. 2005 $902,553
Thomas H. Jeffs II........................... 2003 840,873
Scott P. Marks, Jr........................... 2011 195,381
David J. Vitale.............................. 2011 627,338
Andrew J. Paine, Jr.......................... 2002 455,314
</TABLE>
TERMINATION OF EMPLOYMENT AND CHANGE OF CONTROL ARRANGEMENTS
Mr. Marks resigned as an officer of the Corporation effective December 31,
1997. The Corporation entered into an agreement with Mr. Marks in November
1997 which provided that he would continue to receive his current salary,
payable bi-weekly at an annual rate of $440,000, through March 31, 1998; he
would be eligible to receive a bonus for 1997 in full; he would receive office
space, secretarial support and parking through March 31, 1998; and he would
continue to be treated as an employee on an unpaid leave of absence through
June 30, 1998, which would extend his eligibility (i) for benefits under the
Corporation's medical plan and (ii) to vest in restricted and performance
shares and to exercise stock options previously granted to him.
18
<PAGE>
Executive Officer Separation Plan. The Corporation has adopted an Executive
Officer Separation Plan for its Executive Vice Presidents and higher level
officers, effective December 1, 1997. If a covered officer is involuntarily
terminated, excluding termination for cause, the officer must irrevocably
elect, during a 30-day transition period beginning upon his initial notice of
termination, either a lump sum payment option or a salary continuation option.
Pursuant to the lump sum payment option, a payment equal to two times the
officer's annualized base salary plus two times the officer's average annual
bonus (based on the officer's prior three bonus awards) will be paid to the
officer upon employment termination, which will be at the conclusion of the
transition period. Pursuant to the salary continuation option, the officer's
termination date will occur on the earlier of the date twelve months from the
end of the transition period or the date upon which he obtains other
employment elsewhere and his salary continuation ceases; the officer will
continue to receive his base salary until his termination date and a lump sum
equal to one year's base salary (plus any unpaid salary continuation) will be
paid at the termination date; and the officer will receive one times his
average bonus, to be paid at the next annual bonus cycle following the initial
notice date and an additional one times average bonus paid at termination. The
factors that provide the basis for calculating the payments vary over time,
and, consequently, can only be determined as of the specific date upon which
any such payments accrue. If the payments had been calculated as of December
31, 1997, the total of such payments, assuming selection of the lump sum
payment option, to each of Messrs. Istock, Jeffs, Marks, Vitale and Paine
would have been $2,923,334, $2,156,666, $1,946,666, $2,243,334 and $1,263,334.
Under either option, the officer is eligible for continuation of certain
benefits until his employment termination date and is eligible to vest in
awards previously granted as if he were a retiree retiring on the termination
date.
Change of Control Agreements. Change of control severance agreements are in
effect between the Corporation and certain key executives (including Messrs.
Istock, Jeffs, Vitale and Paine). These executive change of control agreements
(the "Change of Control Agreements") were effective as of July 11, 1995, the
date of the Merger Agreement, have been general obligations of the Corporation
since the Merger, and provide, generally, that if, following a change of
control of the Corporation (a "Change of Control"), an executive officer
terminates his employment with the Corporation for any reason during the 30-
day period which begins one year after the Change of Control, or if, during
the three years following the Change of Control the executive's employment is
terminated (other than for cause, or for other limited reasons specified in
the Change of Control Agreements), or if the executive terminates employment
for Good Reason (defined in the Change of Control Agreements to include a
diminution of duties and responsibilities or benefits), the executive will be
entitled to receive a severance payment consisting of: (a) the executive's
base salary through the date of termination, (b) a proportionate bonus based
upon the average bonus paid to the executive with respect to the three
calendar years prior to the date the executive's employment terminates (the
"Average Bonus"), (c) two and one-half times the sum of the executive's base
salary and the Average Bonus, and (d) unpaid deferred compensation and
vacation pay. The executive will also be entitled to a payment equal to the
actuarial value of the additional service credit under the Corporation's
qualified and supplemental retirement plans that the executive would have
received had the executive remained employed for 30 months after the date of
termination, which amount will be payable pursuant to the terms of the
supplemental retirement plan. The factors that provide the basis for
calculating the severance payments and additional service credit payments vary
over time, and consequently can only be determined as of the specific date
upon which any such payments accrue. If payments had been made at December 31,
1997, the total of such severance payments and additional service credit
payments to each of Messrs. Istock, Jeffs, Marks, Vitale and Paine would have
been approximately $5,182,000, $3,703,000, $3,081,000, $6,604,000 and
$2,224,000, respectively. In addition to such severance payments and
additional service credit payments, the executive is entitled to continued
employee welfare benefits for 30 months after his date of termination. The
Corporation will also provide the executive with outplacement services,
secretarial support, office space and a company car (if provided prior to the
termination of employment) for one year following such termination. In
addition, the Change of Control Agreements provide that in the event an
executive becomes entitled to receive a severance payment, additional service
credit payment and other severance benefits, and such severance payment and
benefits are subject to an excise tax, the executive will become entitled to
receive an additional payment in an amount such that after the payment of all
income and excise taxes, the executive will be in the same after-tax position
as if no excise tax has been imposed.
TRANSACTIONS WITH DIRECTORS, EXECUTIVE OFFICERS, STOCKHOLDERS AND ASSOCIATES
Directors and executive officers of the Corporation and their associates
were customers of, or had transactions with, the Corporation or the
Corporation's banking or other subsidiaries in the ordinary course of business
during 1997. Additional transactions may be expected to take place in the
future. All outstanding loans to directors, executive officers and their
associates, commitments and sales, purchases and placements of investment
securities and other financial instruments included in such transactions, were
made in the ordinary
19
<PAGE>
course of business, on substantially the same terms, including interest rates
and collateral, where applicable, as those prevailing at the time for
comparable transactions with other persons, and do not involve more than normal
risk of collectibility or present other unfavorable features. All other
transactions described below were entered into in the ordinary course of
business and on substantially the same terms as those prevailing at the time
for comparable transactions with other persons.
During 1997, subsidiaries of the Corporation paid approximately $6,727,700 to
Kelly Services, Inc. and its subsidiaries for the provision of temporary
employment services. Terence E. Adderley, Chairman, President, Chief Executive
Officer and a shareholder of Kelly Services, Inc., is a director of the
Corporation.
During 1997, subsidiaries of the Corporation paid approximately $444,300 to
Group II Communications, Inc. for corporate promotional products and gift
program services. Andrew J. McKenna, a director of the Corporation, is a
director and shareholder of Group II Communications, Inc. Also during 1997,
subsidiaries of the Corporation paid approximately $208,300 to Schwarz for
office supplies. Mr. McKenna is the Chairman and Chief Executive Officer and a
shareholder of Schwarz.
During 1997, a subsidiary of the Corporation paid approximately $218,400, for
rent and incidental services pursuant to leases for office space, to two real
estate partnerships in which Reilly Industries, Inc. has indirect ownership
interests. Thomas E. Reilly, Jr., a director of the Corporation, is the
Chairman and Chief Executive Officer and a shareholder of Reilly Industries,
Inc.
RATIFICATION OF APPOINTMENT OF INDEPENDENT PUBLIC ACCOUNTANTS
The Board of Directors recommends that the stockholders ratify the
appointment by the Audit Committee of the Board of Directors of Arthur Andersen
LLP as independent public accountants for the Corporation for the year 1998.
Arthur Andersen LLP has served as independent public accountants for the
Corporation since 1995 and had served as the independent public accountants for
First Chicago since First Chicago commenced operations in 1969. Representatives
of Arthur Andersen LLP will be present at the Annual Meeting and will have an
opportunity to make a statement if they desire to do so. They will also be
available to respond to appropriate questions presented at the Annual Meeting.
In the event the appointment of Arthur Andersen LLP is not ratified by the
affirmative vote of a majority of the shares of Common Stock represented at the
Annual Meeting, the appointment of independent public accountants will be
reconsidered by the Audit Committee of the Board of Directors.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR RATIFICATION OF THE APPOINTMENT
OF INDEPENDENT PUBLIC ACCOUNTANTS.
STOCKHOLDER PROPOSAL
The Corporation has been advised that Mr. John J. Gilbert, 29 East 64th
Street, New York, New York 10021-7043, President of the Ruffy Corporation,
owner of 362 shares of Common Stock, and Mr. Martin Glotzer, 7061 N. Kedzie,
Chicago, Illinois 60645, who is the owner of 10 shares and represents a further
family interest of 11 shares of Common Stock, intend to introduce the following
resolution at the Annual Meeting:
RESOLVED: The stockholders of First Chicago NBD Corporation, assembled in
annual meeting in person and by proxy, hereby request that the by-laws be
amended to read: Any two or more offices, may be held by the same person,
except that the Chairman and President and the Corporate Secretary and the
Treasurer shall not be held by the same person.
Messrs. Gilbert and Glotzer have submitted the following statement in support
of the resolution:
Corporations are too big for any one man to hold the office of Chairman
and President.
One should be the Chairman and Chief Executive Officer and another the
President and Chief Operating Officer.
We believe splitting the job of Chairman-President, as we suggest, makes
for better decentralization of management and more shareholder protection
in administration of business over a long period of time.
If you agree, please mark your proxy for this resolution; otherwise it is
automatically cast against it, unless you have marked to abstain.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE AGAINST THE STOCKHOLDER PROPOSAL.
The Board of Directors believes that it is not in the best interests of the
Corporation to adopt the proposed by-law provision that would require the
separation of the offices of Chairman and President and the offices of
Secretary and Treasurer. It is the view of the Board of Directors that it
should be free to make decisions concerning officers in a manner that seems
best for the Corporation at the particular point in time. The proposed by-law
would, instead, require a particular structure and deprive the Board of its
flexibility.
20
<PAGE>
At the present time, Mr. Istock does hold the offices of Chairman and
President of the Corporation. The Corporation is a holding company that does
not directly engage in any operating businesses with the public. All of the
Corporation's operating businesses are carried out by separate corporations
and banks that are either directly or indirectly owned by the Corporation, and
Mr. Istock is not the president of any of these corporations or banks,
including The First National Bank of Chicago, NBD Bank (Michigan), American
National Bank and Trust Company of Chicago, FCC National Bank and NBD Bank,
N.A. (Indiana). Each subsidiary has a different president who is well
qualified to lead that organization. The Board of Directors believes that,
with this type of organizational structure, it is appropriate for Mr. Istock,
as Chief Executive Officer of the holding company, to serve at the same time
as Chairman of the Board and President of the holding company. The proposed
by-law amendment would, therefore, prevent the Board of Directors from
exercising its best judgment regarding the Corporation's management structure.
For these reasons, the Board of Directors recommends a vote AGAINST the
stockholder proposal.
SUBMISSION OF STOCKHOLDER PROPOSALS
Any proposal that a holder of Common Stock intends to present at next year's
Annual Meeting of Stockholders must be received by the Corporation, at the
address appearing on the first page of this proxy statement, no later than
November 27, 1998, in order to be included in the proxy statement and form of
proxy relating to that meeting.
OTHER MATTERS
As of the date of this proxy statement, the Board of Directors of the
Corporation does not know of any matters to be presented at the Annual Meeting
other than those specifically set forth in the Notice of Annual Meeting of
Stockholders. If other proper matters, however, should come before the Annual
Meeting or any adjournment thereof, the persons named in the enclosed proxy
intend to vote the shares represented by them in accordance with their best
judgment in respect to any such matters.
MISCELLANEOUS
The cost of soliciting proxies will be borne by the Corporation. The
solicitation will be primarily by mail. In addition to the use of the mail,
some of the officers, directors and regular employees of the Corporation and
its subsidiaries may solicit proxies by telephone, telegram or personal
interview without additional remuneration therefor. The Corporation intends to
reimburse banks, brokerage houses and other institutions, custodians, nominees
and fiduciaries for reasonable expenses in forwarding proxy material to their
principals.
Stockholders are urged to sign and date the enclosed proxy and return it as
promptly as possible in the envelope enclosed for that purpose. Stockholders
of record can also give proxies by calling a toll-free telephone number or by
using the Internet. The telephone and Internet voting procedures are designed
to authenticate stockholders' identities, to allow stockholders to give their
voting instructions and to confirm that stockholders' instructions have been
recorded properly. The Corporation has been advised by counsel that the
procedures that have been put in place are consistent with the requirements of
applicable law. Specific instructions for stockholders of record who wish to
use the telephone or Internet voting procedures are included with the enclosed
proxy card.
Properly executed proxies will be voted in accordance with stockholders'
directions. If no directions are given, proxies will be voted for the election
of directors and, with respect to each other matter scheduled for
consideration at the Annual Meeting, in accordance with the recommendations of
the Board of Directors as set forth in this proxy statement. The proxy does
not affect the right to vote in person at the Annual Meeting and may be
revoked at any time prior to the voting at the meeting by submitting a later
dated proxy (including a proxy via telephone or the Internet) or by giving
written notice of such revocation to the Secretary of the Corporation.
By order of the Board of
Directors,
March 27, 1998 Sherman I. Goldberg
Secretary
21
<PAGE>
FIRST CHICAGO NBD CORPORATION
PROXY SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
FOR THE ANNUAL MEETING OF STOCKHOLDERS, MAY 8, 1998
PROXY
The undersigned hereby appoints Willard A. Valpey and Walter C. Watkins,
Jr. and each of them, as proxies, with full power of substitution, to represent
the undersigned and to vote all shares of stock of First Chicago NBD Corporation
that the undersigned is entitled to vote at the Annual Meeting of Stockholders
of the Corporation to be held on May 8, 1998, and any adjournments thereof, upon
all matters that may properly come before the Meeting. This proxy when properly
executed will be voted in the manner directed herein by the undersigned
stockholder. If no direction is made, this proxy will be voted FOR the election
of directors, FOR the ratification of the appointment of independent public
accountants and AGAINST the stockholder proposal.
This card also provides voting instructions for any shares held in the
Corporation's dividend reinvestment and stock purchase plan.
Your vote for the election of the Class III Directors may be indicated on
the other side. The nominees are--1. Adderley, 2. Baker, 3. Crown, 4. Jeffs, 5.
Manoogian and 6. Thomas.
Please date and sign on the reverse side and return promptly in the
enclosed business reply envelope.
If you do not sign and return a proxy, or vote your shares over the
telephone or the Internet, or attend the meeting and vote by ballot, your shares
cannot be voted. -----------
SEE REVERSE
SIDE
-----------
- --------------------------------------------------------------------------------
[FOLD AND DETACH HERE]
Dividend Direct Deposit
First Chicago NBD offers common stockholders the convenience of having
dividends electronically deposited without charge into their checking, savings
or money market account at most U.S. financial institutions. To obtain an
enrollment card, contact First Chicago Trust Company of New York at (800) 446-
2617.
Dividend Reinvestment and Stock Purchase Plan
Stockholders can increase their ownership in the Corporation without
brokerage commissions or service fees through the Dividend Reinvestment and
Stock Purchase Plan. For a prospectus and an enrollment card, contact First
Chicago Trust Company of New York at (800) 446-2617.
<PAGE>
[X] Please mark your 6777
vote as in this
example.
This proxy when properly executed, will be voted in the manner directed
herein. If no direction is made, this proxy will be voted FOR the election of
directors, FOR proposal 2 and AGAINST proposal 3.
- --------------------------------------------------------------------------------
The Board of Directors recommends a vote FOR proposal 2 and AGAINST proposal 3.
- --------------------------------------------------------------------------------
FOR WITHHELD
1. Election of Directors (see reverse) [_] [_]
Except vote withheld from the following nominee(s):
- ---------------------------------------------------
FOR AGAINST ABSTAIN
2. Ratification of the appointment of [_] [_] [_]
Independent Public Accountants.
FOR AGAINST ABSTAIN
3. Stockholder Proposal - Dual Executive [_] [_] [_]
Offices.
- --------------------------------------------------------------------------------
The signer hereby revokes all proxies
heretofore given by the signer to vote at
said meeting or any adjournments thereof.
Please sign exactly as name appears hereon.
Joint owners should each sign. When signing
as attorney, executor, administrator,
trustee or guardian, please give full title
as such.
--------------------------------------------
--------------------------------------------
SIGNATURE(S) DATE
- --------------------------------------------------------------------------------
[FOLD AND DETACH HERE]
IMPORTANT: PLEASE VOTE AND SIGN YOUR
PROXY AND RETURN IT IN THE ENVELOPE PROVIDED
FIRST CHICAGO NBD CORPORATION
Annual Meeting of Stockholders
May 8, 1998
9:30 A.M. (Eastern Daylight Time)
Auditorium, Staff Floor
NBD Bank
611 Woodward Avenue
Detroit, Michigan
First Chicago NBD common stockholders can now vote their shares either over the
telephone or the Internet. This eliminates the need to return the proxy card.
To vote your shares over the telephone or the Internet you must have your proxy
card and SSN available. The series of numbers that appear in the box above must
be used to access the system.
1. To vote over the telephone:
On a touch-tone telephone call 1-800-OK2-VOTE (1-800-652-8683) 24
hours a day, 7 days a week.
2. To vote over the Internet:
Log on to the Internet and go to the web site http://www.vote-by-
net.com
Your vote over the telephone or the Internet authorizes the named proxies in the
same manner as if you marked, signed, dated and returned your proxy card.
If you choose to vote your shares over the telephone or the Internet, there is
no need for you to mail back your proxy card.
