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
(X) Definitive Additional Materials
( ) Soliciting Material Pursuant to Section 240.14a-11(c) or Section 240.14a-12
NATIONSBANK CORPORATION
(Name of Registrant as Specified in its Charter)
(Name of Person(s) Filing Proxy Statement, if other than Registrant)
Payment of Filing Fee (Check the appropriate box):
(X) No fee required
( ) Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
1) Title of each class of securities to which transaction applies:
2) Aggregate number of securities to which transaction applies:
3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
4) Proposed maximum aggregate value of transaction:
5) Total fee paid:
( ) Fee paid previously with preliminary materials.
( ) Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
1) Amount Previously Paid:
2) Form, Schedule, or Registration Statement No.:
3) Filing Party:
4) Date Filed:
<PAGE>
NationsBank
March 20, 1998
To the Shareholders of
NationsBank Corporation:
In connection with the Annual Meeting of Shareholders to be held on
April 22, 1998, we enclose a Notice of the Meeting, a Proxy Statement
containing information about matters which are to be considered at this
meeting, and a form of proxy relating to those matters.
Detailed information relating to the Corporation's activities and
operating performance is contained in our 1997 Annual Report on Form
10-K, which is also enclosed.
You are cordially invited to attend the Annual Meeting of Shareholders.
Please sign and return the form of proxy in the enclosed postage-paid
envelope so that your shares can be voted in the event you are unable
to attend the meeting. If you plan to attend the meeting and your
shares are held in the name of a broker or other nominee, please bring
with you a proxy or letter from the broker or nominee to confirm your
ownership of shares. Your proxy may be revoked if you are present at
the meeting and elect to vote in person. It may also be revoked in the
manner set forth in the Proxy Statement.
Sincerely yours,
/s/ Hugh L. McColl, Jr.
HUGH L. MCCOLL, JR.
Chief Executive Officer
<PAGE>
NATIONSBANK CORPORATION
NationsBank Corporate Center
Charlotte, North Carolina 28255
--------------------------------------------------
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
--------------------------------------------------
To the Shareholders:
Notice is hereby given that the Annual Meeting of Shareholders of
NationsBank Corporation will be held in the Belk Theater of the North
Carolina Blumenthal Performing Arts Center, 130 North Tryon Street, in
the City of Charlotte, North Carolina, on Wednesday, April 22, 1998, at
11:00 A.M., local time, for the following purposes:
1. To elect 26 directors;
2. To consider and act upon a proposal to ratify the action of the Board
of Directors in selecting Price Waterhouse LLP as independent public
accountants to audit the books of the Corporation and its
subsidiaries for the current year;
3. To consider and act upon a shareholder proposal requesting that the
Corporation change the date of the Annual Meeting;
4. To consider and act upon a shareholder proposal requesting that the
Corporation not increase salaries of executive officers or grant
stock options to executive officers and directors in the event the
dividend is reduced;
5. To consider and act upon a shareholder proposal requesting that the
Board adopt a specific definition of independence for members of the
compensation committee; and
6. To transact such other business as may properly come before the
meeting or any adjournment or adjournments thereof.
The Board of Directors has fixed the close of business on March 6, 1998
as the record date for determination of shareholders entitled to notice
of and to vote at the Annual Meeting or any adjournment or adjournments
thereof.
The Board of Directors would appreciate your signing and returning the
accompanying form of proxy promptly, so that if you are unable to
attend your shares can nevertheless be voted at the meeting.
HUGH L. MCCOLL, JR.
Chief Executive Officer
March 20, 1998
IMPORTANT NOTICE
Please Sign and Mail Your Proxy Promptly
<PAGE>
<PAGE>
NATIONSBANK CORPORATION
NationsBank Corporate Center
Charlotte, North Carolina 28255
-------------------
PROXY STATEMENT
-------------------
This statement and the accompanying notice and form of proxy are furnished in
connection with the solicitation by the Board of Directors (the "Board") of
NationsBank Corporation (the "Corporation" or "NationsBank") of proxies to be
used at the Annual Meeting of Shareholders of the Corporation to be held on
April 22, 1998, at 11:00 A.M., local time, in the Belk Theater of the North
Carolina Blumenthal Performing Arts Center, 130 North Tryon Street, Charlotte,
North Carolina and at any adjournment or adjournments thereof (the "Annual
Meeting"). This statement and the accompanying notice and form of proxy are
first being mailed to shareholders on or about March 20, 1998.
The accompanying form of proxy is for use at the Annual Meeting if a
shareholder will be unable to attend in person. The proxy may be revoked by the
shareholder at any time before it is exercised, by submitting to the Secretary
of the Corporation written notice of revocation, a properly executed proxy of a
later date or by attending the meeting and voting in person. All shares
represented by valid proxies will be voted as specified. If no specification is
made, the proxies will be voted in favor of:
1. The election to the Board of the 26 nominees named in this Proxy Statement;
and
2. The ratification of the Board's selection of Price Waterhouse LLP as
independent public accountants to audit the books of the Corporation and
its subsidiaries for the current year;
and against:
3. The shareholder proposal requesting that the Corporation change the date of
the Annual Meeting;
4. The shareholder proposal requesting that the Corporation not increase
salaries of executive officers or grant stock options to executive officers
and directors in the event the dividend is reduced; and
5. The shareholder proposal requesting that the Board adopt a specific
definition of independence for members of the compensation committee.
The entire cost of soliciting proxies will be borne by the Corporation. In
addition to the solicitation of proxies by mail, the Corporation will request
banks, brokers and other record holders to send proxies and proxy material to
the beneficial owners of the stock and secure their voting instructions, if
necessary. The Corporation will reimburse such record holders for their
reasonable expenses in so doing. The Corporation has agreed to pay Georgeson &
Company Inc. $10,000 plus expenses to assist it in soliciting proxies from
banks, brokers and nominees. The Corporation may also use several of its
regular employees, who will not be specially compensated, to solicit proxies,
either personally or by telephone, telegram, facsimile or special delivery
letter.
Pursuant to the North Carolina Business Corporation Act, March 6, 1998 has been
fixed as the record date for determination of shareholders entitled to notice
of and to vote at the Annual Meeting. Accordingly, only holders of record at
the close of business on that date of the Corporation's Common Stock (the
"Common Stock"), its 7% Cumulative Redeemable Preferred Stock, Series B (the
"Series B Stock"), and its ESOP Convertible Preferred Stock, Series C (the
"ESOP Preferred Stock"), will be entitled to notice of and to vote at the
Annual Meeting. Holders of Common Stock, Series B Stock and ESOP Preferred
Stock will vote together without regard to class upon the matters currently
expected to come before the meeting.
There are 962,209,252 outstanding shares of Common Stock, 9,341 outstanding
shares of Series B Stock, and 2,146,914 outstanding shares of ESOP Preferred
Stock entitled to vote at the Annual Meeting. Each of the shares of Common
Stock and Series B Stock is entitled to one vote, and each share of ESOP
Preferred Stock is entitled to two votes. In accordance with North Carolina
law, votes withheld from director nominees and abstentions from voting will be
counted for purposes of determining whether a quorum exists at the Annual
Meeting. Furthermore, shares represented by proxies returned by a broker
holding such shares in nominee or "street" name will be counted for purposes of
determining whether a quorum exists, even if such shares are not voted in
matters where discretionary voting by the broker is not allowed ("broker
non-votes").
1
<PAGE>
Directors will be elected by a plurality of the votes cast, and, in accordance
with North Carolina law, cumulative voting is not permitted. Withheld votes and
broker non-votes, if any, are not treated as votes cast and, therefore, will
have no effect on the proposal to elect directors. Approval of the other
matters requires the affirmative vote of the holders of a majority of the
Common Stock, Series B Stock and ESOP Preferred Stock voted with respect to
each such matter. Abstentions from voting, as well as broker non-votes, if any,
are not treated as votes cast and, therefore, will have no effect on the
adoption of any such proposal.
ELECTION OF DIRECTORS
The Board has set the number of directors at 26. The persons named in the
accompanying proxy will vote only for the 26 named nominees, except to the
extent authority to so vote is withheld for one or more nominees. In the event
of an unexpected vacancy, shares of Common Stock, Series B Stock and ESOP
Preferred Stock will be voted for the election of a substitute nominee selected
by the persons named in the proxy. Each director is elected to serve until the
next annual meeting of shareholders or until a successor shall be elected and
shall qualify.
Set forth below are each nominee's name, age, current principal occupation
(which has continued for at least five years unless otherwise indicated), the
year each incumbent was first elected to the Board, all positions and offices
presently held with the Corporation, 1997 attendance record at Board meetings
and at meetings of committees of the Board of which the nominee was a member,
and directorships in other publicly-held companies. None of the nominees or
current directors is related by blood, marriage or adoption (not more remote
than first cousin) to any other nominee, director or executive officer of the
Corporation.
The Board recommends a vote "FOR" all of the below-listed nominees for election
as directors.
(Photo) RAY C. ANDERSON (63), Chairman and Chief Executive Officer,
Interface, Inc., Atlanta, Georgia, a manufacturer and distributor of
carpet tiles, broadloom carpets, interior fabrics, chemical products
and architectural products. He served as President of Interface, Inc.
until March 1997. He has been a director of the Corporation since
July 1996 and is a member of the asset quality review committee.
During 1997, Mr. Anderson attended 8 out of 9 Board meetings and 7
out of 8 meetings of the committee of the Board on which he served.
He also serves as a director of Interface, Inc.
(Photo) RITA BORNSTEIN (62), President, Rollins College, Winter Park,
Florida, an independent comprehensive liberal arts college with
campuses in Winter Park and Melbourne, Florida. Dr. Bornstein was a
director of Barnett Banks, Inc. from 1991 until January 9, 1998 when
it was merged with the Corporation at which time she was elected as a
director of the Corporation. Dr. Bornstein also has been elected to
serve as a member of the contributions committee. She also serves as
a director of Tupperware Corporation.
(Photo) B.A. BRIDGEWATER, JR. (64), Chairman, President and Chief Executive
Officer, Brown Group, Inc., St. Louis, Missouri, footwear. He has
been a director of the Corporation since January 1997 and is a member
of the audit committee. During 1997, Mr. Bridgewater attended all
Board meetings and all meetings of the committee of the Board on
which he served. He also serves as a director of Brown Group, Inc.,
EEX Corporation and FMC Corporation.
2
<PAGE>
(Photo) THOMAS E. CAPPS (62), Chairman of the Board, President and Chief
Executive Officer, Dominion Resources, Inc., Richmond, Virginia, an
electric utility holding company. He served as President of Dominion
Resources, Inc. from 1986 until August 1994 and was re-elected
President in September 1995. He was named Chairman of the Board of
Dominion Resources, Inc. in December 1992. He also served as Chairman
of the Board of Virginia Electric and Power Company, an electric
utility, from December 1992 until August 1994, and was re-elected to
that position in September 1997. He has been a director of the
Corporation since 1993 and is a member of the asset quality review
committee. During 1997, Mr. Capps attended 7 out of 9 Board meetings
and 7 out of 8 meetings of the committee of the Board on which he
served. He also serves as a director of Dominion Resources, Inc.,
Virginia Electric and Power Company and Bassett Furniture Industries,
Inc.
(Photo) ALVIN R. CARPENTER (56), President and Chief Executive Officer, CSX
Transportation, Inc., Jacksonville, Florida, a transportation
company. Mr. Carpenter was a director of Barnett Banks, Inc. from
1994 until January 9, 1998 when it was merged with the Corporation at
which time he was elected as a director of the Corporation. Mr.
Carpenter also has been elected to serve as a member of the audit
committee. He also serves as a director of American Heritage Life
Insurance Company, Florida Rock Industries, Inc., Regency Realty
Corporation and Stein Mart, Inc.
(Photo) CHARLES W. COKER (64), Chairman and Chief Executive Officer, Sonoco
Products Company, Hartsville, South Carolina, a manufacturer of paper
and plastic products. He has been a director of the Corporation since
1969 and is chairman of the compensation, nominating and stock option
committees and a member of the executive committee. During 1997, Mr.
Coker attended all Board meetings and all meetings of committees of
the Board on which he served. He also serves as a director of Sonoco
Products Company, Carolina Power and Light Company, Sara Lee
Corporation and Springs Industries, Inc.
(Photo) THOMAS G. COUSINS (66), Chairman and Chief Executive Officer, Cousins
Properties Incorporated, Atlanta, Georgia, a real estate development
company. He has been a director of the Corporation since 1993 and is
a member of the executive and nominating committees. During 1997, Mr.
Cousins attended 8 out of 9 Board meetings and all meetings of
committees of the Board on which he served. He also serves as a
director of Cousins Properties Incorporated and Shaw Industries, Inc.
(Photo) ANDREW B. CRAIG, III (66), Chairman of the Board, NationsBank
Corporation, Charlotte, North Carolina. He was Chairman of the Board
and Chief Executive Officer of Boatmen's Bancshares, Inc. from 1989
until January 7, 1997 when Boatmen's Bancshares, Inc. was merged with
the Corporation at which time he was elected as chairman and a
director of the Corporation. He also served as President of Boatmen's
Bancshares, Inc. from 1985 to 1994 and as a director since 1985. Mr.
Craig is a member of the executive committee. During 1997, Mr. Craig
attended all Board meetings and all meetings of the committee of the
Board on which he served. He also serves as a director of Grupo
Modelo and Laclede Gas Company.
3
<PAGE>
(Photo) ALAN T. DICKSON (66), Chairman, Ruddick Corporation, Charlotte, North
Carolina, a diversified holding company. He served as President of
Ruddick Corporation until February 1994. He has been a director of
the Corporation since 1969 and is a member of the executive and
nominating committees. During 1997, Mr. Dickson attended 8 out of 9
Board meetings and 8 out of 9 meetings of committees of the Board on
which he served. He also serves as a director of Ruddick Corporation,
Bassett Furniture Industries, Inc., Lance, Inc. and Sonoco Products
Company.
(Photo) PAUL FULTON (63), Chairman and Chief Executive Officer, Bassett
Furniture Industries, Inc., Winston-Salem, North Carolina, a
furniture manufacturer. He has been in his present position since
August 1997 and was Dean, Kenan-Flagler Business School, University
of North Carolina from January 1994 until August 1997. Prior to that
time he served as President of Sara Lee Corporation, a consumer goods
company, until June 1993. He has been a director of the Corporation
since 1993 and is a member of the executive committee. During 1997,
Mr. Fulton attended 8 out of 9 Board meetings and all meetings of the
committee of the Board on which he served. He also serves as a
director of Bassett Furniture Industries, Inc., The Cato Corporation,
Hudson's Bay Company, Lowe's Companies, Inc. and Sonoco Products
Company.
(Photo) JAMES H. HANCE, JR. (53), Vice Chairman and Chief Financial Officer,
NationsBank Corporation, Charlotte, North Carolina. Mr. Hance has
served as Vice Chairman since October 1993, as Chief Financial
Officer since August 1988 and also served as Executive Vice President
from March 1987 to October 1993. He was elected as a director of the
Corporation in December 1997. He also serves as a director of
Caraustar Industries, Inc., Family Dollar Stores, Inc., Lance, Inc.
and Summit Properties, Inc.
(Photo) C. RAY HOLMAN (55), Chairman of the Board and Chief Executive
Officer, Mallinckrodt Inc., St. Louis, Missouri, a provider of health
care products and specialty chemicals. He has been a director of the
Corporation since January 1997 and is a member of the asset quality
review committee. During 1997, Mr. Holman attended 8 out of 9 Board
meetings and 7 out of 8 meetings of the committee of the Board on
which he served. He also serves as a director of Laclede Gas Company
and Mallinckrodt Inc.
(Photo) W. W. JOHNSON (67), Chairman of the Executive Committee, NationsBank
Corporation, Charlotte, North Carolina. He served as Chairman of the
Board and Chief Executive Officer of Bankers Trust of South Carolina
from 1980 until its merger with the Corporation in 1986. He has been
a director of the Corporation since 1986 and is chairman of the
executive committee. During 1997, Mr. Johnson attended all Board
meetings and all meetings of the committee of the Board on which he
served. He also serves as a director of Alltel Corporation, Duke
Energy Corporation and The Liberty Corporation.
(Photo) KENNETH D. LEWIS (50), President, NationsBank Corporation, Charlotte,
North Carolina. Mr. Lewis has been in his present position since
October 1993 and, prior to that time, served as President of the
Corporation's General Bank. He was elected as a director of the
Corporation in December 1997. He also serves as a director of Health
Management Associates.
4
<PAGE>
(Photo) HUGH L. McCOLL, JR. (62), Chief Executive Officer, NationsBank
Corporation, and Chief Executive Officer of each of its subsidiary
banks, Charlotte, North Carolina. He also served as Chairman of the
Board of the Corporation from 1983 until December 31, 1991 and from
December 31, 1992 until January 7, 1997. He has been a director of
the Corporation since 1972 and is a member of the contributions,
executive and nominating committees. During 1997, Mr. McColl attended
all Board meetings and all meetings of committees of the Board on
which he served. He also serves as a director of CSX Corporation,
Jefferson-Pilot Corporation, Jefferson-Pilot Life Insurance Company,
Ruddick Corporation and Sonoco Products Company.
(Photo) RUSSELL W. MEYER, JR. (65), Chairman and Chief Executive Officer, The
Cessna Aircraft Company, Wichita, Kansas, a manufacturer of general
aviation aircraft. He has been a director of the Corporation since
January 1997 and is a member of the asset quality review committee.
During 1997, Mr. Meyer attended all Board meetings and all meetings
of the committee of the Board on which he served. He also serves as a
director of Western Resources, Inc.
(Photo) RICHARD B. PRIORY (51), Chairman and Chief Executive Officer, Duke
Energy Corporation, Charlotte, North Carolina, a public utility. Mr.
Priory has been in his present position since June 1997 and prior to
that time served as President and Chief Operating Officer, Duke Power
Company, the predecessor of Duke Energy Corporation, from 1994 and as
Executive Vice President, Power Generation Group, Duke Power Company
from 1991 to 1994. He has been a director of the Corporation since
January 1997 and is a member of the audit committee. During 1997, Mr.
Priory attended all Board meetings and all meetings of the committee
of the Board on which he served. He also serves as a director of Duke
Energy Corporation and Dana Corporation.
(Photo) CHARLES E. RICE (62), Officer, NationsBank Corporation, Charlotte,
North Carolina. Mr. Rice was Chairman and Chief Executive Officer of
Barnett Banks, Inc. prior to its merger with the Corporation on
January 9, 1998. He served as a director of Barnett Banks, Inc. from
1972 until January 9, 1998 at which time he was elected as a director
of the Corporation. Mr. Rice also has been elected to serve as a
member of the executive committee. He also serves as a director of
CSX Corporation, Post Properties, Inc. and Sprint Corporation.
(Photo) JOHN C. SLANE (69), President, Slane Hosiery Mills, Inc., High Point,
North Carolina, a manufacturer of textile products. He has been a
director of the Corporation since 1969 and is a member of the audit,
compensation and stock option committees. During 1997, Mr. Slane
attended 8 out of 9 Board meetings and 8 out of 9 meetings of
committees of the Board on which he served.
5
<PAGE>
(Photo) O. TEMPLE SLOAN, JR. (59), Chairman and Chief Executive Officer,
General Parts, Inc., Raleigh, North Carolina, a distributor of
automotive replacement parts. He has been a director of the
Corporation since October 1996 and is a member of the audit
committee. During 1997, Mr. Sloan attended all Board meetings and all
meetings of the committee of the Board on which he served. He also
serves as a director of General Parts, Inc. and the Chairman of the
Board of Highwoods Properties, Inc.
(Photo) MEREDITH R. SPANGLER (60), Trustee and Board Member, Charlotte, North
Carolina. She is a director of C. D. Spangler Construction Company
and is Chairman of the Board of the C. D. Spangler Foundation. She
has served on the Wellesley College Board of Trustees since 1989. She
has been a director of the Corporation since 1988 and is chairman of
the contributions committee and a member of the asset quality review
committee. During 1997, Mrs. Spangler attended all Board meetings and
all meetings of committees of the Board on which she served.
(Photo) ALBERT E. SUTER (62), Senior Vice Chairman and Chief Administrative
Officer, Emerson Electric Co., St. Louis, Missouri, a manufacturer of
electrical and electronic products. He has been in his present
position since October 1997 and prior to that time served as Senior
Vice Chairman and Chief Operating Officer, Emerson Electric Co. He
has been a director of the Corporation since January 1997 and is a
member of the compensation and stock option committees. During 1997,
Mr. Suter attended 8 out of 9 Board meetings and all meetings of
committees of the Board on which he served. He also serves as a
director of Emerson Electric Co. and Furniture Brands International.
(Photo) RONALD TOWNSEND (56), Communications Consultant, Jacksonville,
Florida. He has been in his present position since September 1997,
and prior thereto served as Chairman, US FiberOptics Corporation, a
provider of fiber optics technology, from October 1996. He served as
President Gannett Television, Gannett Company, Inc. from 1989 until
October 1996. He has been a director of the Corporation since 1993
and is a member of the audit and contributions committees. During
1997, Mr. Townsend attended all Board meetings and all meetings of
committees of the Board on which he served. He also serves as a
director of Alltel Corporation.
(Photo) JACKIE M. WARD (59), President and Chief Executive Officer, Computer
Generation Incorporated, Atlanta, Georgia, a computer software
company. She has been a director of the Corporation since 1994 and is
chairman of the asset quality review committee. During 1997, Ms. Ward
attended all Board meetings and all meetings of the committee of the
Board on which she served. She also serves as a director of Matria
Healthcare, Inc., SCI Systems, Inc. and Trigon Blue Cross Blue
Shield.
(Photo) JOHN A. WILLIAMS (54), Chairman and Chief Executive Officer, Post
Properties, Inc., Atlanta, Georgia, a real estate development and
management company. Mr. Williams was a director of Barnett Banks,
Inc. from 1987 until January 9, 1998 when it was merged with the
Corporation at which time he was elected as a director of the
Corporation. Mr. Williams also has been elected to serve as a member
of the compensation and stock option committees. He also serves as a
director of Post Properties, Inc. and Crawford & Company.
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(Photo) VIRGIL R. WILLIAMS (58), Chairman and Chief Executive Officer,
Williams Group International, Inc., Stone Mountain, Georgia, an
industrial and environmental contracting company. He became Chief
Executive Officer of Williams Group International in July 1996. He
also serves as President of Williams Communications, Inc., a
publishing company. Prior to its acquisition by the Corporation in
January 1996, Mr. Williams had served as a director of Bank South
Corporation since 1987. He has been a director of the Corporation
since April 1996 and is a member of the audit committee. During 1997,
Mr. Williams attended all Board meetings and all meetings of the
committee of the Board on which he served. He also serves as a
director of Law Companies Group, Inc.
Security Ownership of Certain Beneficial Owners and Management
As of December 31, 1997, the Corporation had issued and outstanding three
classes of voting securities: the Common Stock, the Series B Stock and the ESOP
Preferred Stock. As of such date, no persons were known to own beneficially 5%
or more of the Common Stock or the ESOP Preferred Stock. All of the shares of
ESOP Preferred Stock outstanding were held of record by State Street Bank and
Trust Company, 225 Franklin Street, Boston, Massachusetts 02110, as trustee of
the ESOP Trust Agreement executed in connection with the Corporation's
Retirement Savings Plan (the "Trustee"). The following table sets forth as of
December 31, 1997, the name and address of each beneficial owner of more than
5% of the Series B Stock known to the Board, showing the amount and nature of
such beneficial ownership.
<TABLE>
<CAPTION>
Name and Address Amount and Nature Percent
of Beneficial Owner of Beneficial Ownership (1) of Class
- ----------------------------------------- ----------------------------- -----------
<S> <C> <C>
Carolyn C. Glassman & Albert Irl Dubinsky
TR UA DTD April 8, 1982
Carolyn Glassman Trust
1815 Locust Street
St. Louis, MO 63103 ................... 2,018 shares 21.60%
Mabel B. Howard
315 North 14th Street
Mount Vernon, IL 62864 ................ 1,096 shares 11.73%
Helen Lucille Powers
835 North 27th Street
Mount Vernon, IL 62864 ................ 975 shares 10.43%
</TABLE>
- ---------
(1) All shares of Series B Stock indicated in the above table are subject to
the sole investment and voting power of the named individuals.
In connection with the acquisition of Barnett Banks, Inc. on January 9, 1998,
the Corporation issued the NationsBank Corporation $2.50 Cumulative Convertible
Preferred Stock, Series BB, a non-voting class of securities. As of January 9,
1998, no executive officer or director of the Corporation owned any shares of
this series of preferred stock.
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<PAGE>
The following table sets forth certain information with respect to beneficial
ownership of the Common Stock as of December 31, 1997 by: (i) each director and
nominee for director of the Corporation; (ii) each executive officer of the
Corporation named in the Summary Compensation Table; and (iii) all directors
and executive officers of the Corporation as a group.
<TABLE>
<CAPTION>
Amount and Nature Percent
Name of Beneficial Ownership (1)(2)(3) of Class
- --------------------------------------------------------- ----------------------------------- -----------
<S> <C> <C>
Ray C. Anderson ......................................... 25,080 (4)
William M. Barnhardt (5) ................................ 57,880 (4)
Rita Bornstein (6) ...................................... 16,806 (4)
B.A. Bridgewater, Jr. (7) ............................... 27,081 (4)
Thomas E. Capps (8) ..................................... 3,909 (4)
Alvin R. Carpenter (9) .................................. 20,819 (4)
Charles W. Coker (10) ................................... 100,046 (4)
Thomas G. Cousins ....................................... 88,682 (4)
Andrew B. Craig, III (11) ............................... 621,759 (4)
Alan T. Dickson (12) .................................... 117,729 (4)
Paul Fulton (13) ........................................ 8,969 (4)
James H. Hance, Jr. (14) ................................ 450,243 (4)
C. Ray Holman ........................................... 4,470 (4)
W. W. Johnson ........................................... 122,825 (4)
Kenneth D. Lewis (15) ................................... 409,117 (4)
Hugh L. McColl, Jr. ..................................... 793,679 (4)
Russell W. Meyer, Jr. (16) .............................. 301,345 (4)
Richard B. Priory ....................................... 1,553 (4)
Charles E. Rice (17) .................................... 2,276,964 (4)
John C. Slane (18) ...................................... 71,035 (4)
O. Temple Sloan, Jr. .................................... 36,776 (4)
John W. Snow ............................................ 4,164 (4)
Meredith R. Spangler (19) ............................... 16,002,882 2.26%
Albert E. Suter ......................................... 6,453 (4)
Ronald Townsend ......................................... 2,560 (4)
F. William Vandiver, Jr. (20) ........................... 241,174 (4)
Jackie M. Ward .......................................... 2,898 (4)
John A. Williams (21) ................................... 94,224 (4)
Virgil R. Williams (22) ................................. 783,904 (4)
All directors, nominees and executive officers as a group
(30 persons) (23) ..................................... 22,981,657 3.23%
</TABLE>
- ---------
(1) All shares of Common Stock indicated in the above table are subject to the
sole investment and voting power of the directors and officers, except as
otherwise set forth in the footnotes below.
(2) As of December 31, 1997, none of the listed individuals beneficially owned
shares of ESOP Preferred Stock, except Messrs. Hance, Johnson, Lewis,
McColl and Vandiver, each of whom owned 205 shares of ESOP Preferred
Stock, which is less than 1% of the outstanding shares of ESOP Preferred
Stock. All executive officers as a group owned 1,230 shares of ESOP
Preferred Stock, which is less than 1% of the outstanding shares of ESOP
Preferred Stock. The ESOP Preferred Stock is held of record by the
Trustee. Subject to the terms and provisions of the trust, the Trustee has
sole investment power with respect to all shares of ESOP Preferred Stock.
It votes shares of ESOP Preferred Stock that have been allocated to
individual accounts in accordance with the participants' instructions, and
it votes allocated shares of ESOP Preferred Stock as to which no
instructions are received together with unallocated shares in the same
proportion as the shares for which voting instructions are received are
voted.
(3) Includes, as of January 9, 1998, the following number of units of Common
Stock equivalents held by nonemployee directors who have elected to defer
payment of a portion of their annual retainer under the NationsBank
Corporation Director Deferral Plan (the "Director Deferral Plan"): Dr.
Bornstein, 101 shares; Mr. Bridgewater, 983 shares; Mr. Carpenter, 101
shares; Mr. Cousins, 1,070 shares; Mr. Fulton, 429 shares; Mr. Holman,
1,552 shares; Mr. Meyer, 1,546 shares; Mr. Priory, 553 shares; Mr. Slane,
1,070 shares; Mrs. Spangler, 1,070 shares; Mr. Suter,
8
<PAGE>
431 shares; Ms. Ward, 1,070 shares; and Mr. John Williams, 101 shares; and
all directors as a group, 10,077 shares. These units, which are held in
individual accounts in each director's name, will be paid in cash upon the
director's retirement based on the fair market value of the Common Stock at
that time. See "Board of Directors' Compensation." Also includes the
following number of shares of Common Stock which were deferred under the
Barnett Banks, Inc. Directors Stock Deferral Plan: Dr. Bornstein, 6,504
shares; Mr. Carpenter, 5,512 shares; Mr. John Williams, 15,281 shares; and
all directors as a group, 27,297 shares.
(4) Represents less than 1% of the outstanding shares of Common Stock.
(5) Includes 5,150 shares of Common Stock over which Mr. Barnhardt shares
voting power and does not include 9,652 shares of Common Stock owned by
Mr. Barnhardt's wife or 6,756 shares of Common Stock held in two trusts
over which he disclaims beneficial ownership.
(6) Consists of shares of Common Stock received on January 9, 1998 in exchange
for shares of common stock of Barnett Banks, Inc. and includes 5,938
shares of Common Stock which Dr. Bornstein could acquire within 60 days
after January 9, 1998 through the exercise of stock options.
(7) Includes 24,672 shares of Common Stock over which Mr. Bridgewater shares
voting and investment power.
(8) Includes 3,909 shares of Common Stock owned by Mr. Capp's wife over which
he shares voting and investment power and does not include 1,000 shares of
Common Stock owned by a subsidiary of Dominion Resources, Inc. over which
Mr. Capps disclaims beneficial ownership.
(9) Consists of shares of Common Stock received on January 9, 1998 in exchange
for shares of common stock of Barnett Banks, Inc. and includes 5,938
shares of Common Stock which Mr. Carpenter could acquire within 60 days
after January 9, 1998 through the exercise of stock options.
(10) Includes 84,900 shares of Common Stock owned by Mr. Coker's wife over
which he shares voting and investment power.
(11) Includes 333,962 shares of Common Stock which Mr. Craig could acquire
within 60 days after December 31, 1997 through the exercise of stock
options.
(12) Includes 4,000 shares of Common Stock held in a trust in which Mr. Dickson
is a beneficiary and 103,090 shares of Common Stock over which Mr. Dickson
shares voting and investment power.
(13) Does not include 200 shares of Common Stock owned by Mr. Fulton's wife
over which he disclaims beneficial ownership.
(14) Includes 2,000 shares of Common Stock held jointly with Mr. Hance's wife
over which he shares voting and investment power, and includes 300,000
shares of Common Stock which Mr. Hance could acquire within 60 days after
December 31, 1997 through the exercise of stock options.
(15) Includes 300,000 shares of Common Stock which Mr. Lewis could acquire
within 60 days after December 31, 1997 through the exercise of stock
options.
(16) Includes 34,768 shares of Common Stock over which Mr. Meyer shares voting
and investment power.
(17) Consists of shares of Common Stock received on January 9, 1998 in exchange
for shares of common stock of Barnett Banks, Inc. and includes 1,364,320
shares of Common Stock which Mr. Rice could acquire within 60 days after
January 9, 1998 through the exercise of stock options.
(18) Includes 8,538 shares of Common Stock owned by Mr. Slane's wife over which
he may be deemed to have beneficial ownership.
(19) Includes 15,980,236 shares of Common Stock owned by Mrs. Spangler's
husband, certain other family members for whom Mrs. Spangler's husband
acts in a fiduciary capacity, and C. D. Spangler Construction Company,
Golden Eagle Industries, Inc., Spangler Foundation, Delcap, Inc. and
Delcor, Inc., all of which are parties related to Mrs. Spangler's husband,
over which Mrs. Spangler shares voting and investment power.
(20) Includes 150,000 shares of Common Stock which Mr. Vandiver could acquire
within 60 days after December 31, 1997 through the exercise of stock
options.
(21) Consists of shares of Common Stock received on January 9, 1998 in exchange
for shares of common stock of Barnett Banks, Inc. and includes 5,938
shares of Common Stock which Mr. John A. Williams could acquire within 60
days after January 9, 1998 through the exercise of stock options.
(22) Includes 17,366 shares of Common Stock over which Mr. Virgil R. Williams
shares voting and investment power and 3,520 shares of Common Stock which
he could acquire within 60 days after December 31, 1997 through the
exercise of stock options.
9
<PAGE>
(23) Includes 2,629,616 shares of Common Stock which such persons could acquire
within 60 days after December 31, 1997 (or January 9, 1998 in the case of
Dr. Bornstein and Messrs. Carpenter, Rice and John A. Williams) through
the exercise of stock options. Of these 22,981,657 shares of Common Stock,
such persons had sole voting and investment power over 6,713,028 shares of
Common Stock and shared voting or investment power or both over 16,268,629
shares.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Pursuant to Section 16(a) of the Securities Exchange Act of 1934, as amended,
directors and executive officers of the Corporation are required to file
reports with the Securities and Exchange Commission indicating their holdings
of and transactions in the Corporation's equity securities. Except as described
below, to the Corporation's knowledge, based solely on a review of the copies
of such reports furnished to the Corporation and written representations that
no other reports were required, insiders of the Corporation complied with all
filing requirements during the fiscal year ended December 31, 1997. Mr. Thomas
E. Capps, a director, filed a late Form 5, reporting the exempt gift of shares
to his wife. Mr. Marc D. Oken, the Corporation's Chief Accounting Officer,
reported on his Form 5 two discretionary transactions in his 401(k) Plan
account which should have been reported on Form 4. Mr. O. Temple Sloan, Jr., a
director, filed one late report on Form 4, reflecting three September 4, 1997
purchases, totaling 135 shares of Common Stock, which were inadvertently
omitted from his September Form 4. Mr. Virgil R. Williams, a director, filed a
late Form 5, reporting stock options that had been granted to him by Bank South
Corporation, a predecessor of the Corporation.
MEETINGS AND COMMITTEES OF THE BOARD OF DIRECTORS
The Corporation has the following standing committees to which directors are
appointed: asset quality review, audit, compensation, contributions, executive,
nominating and stock option.
The audit committee, currently consisting of seven directors who are not
officers of the Corporation or of a subsidiary ("Nonemployee Directors"),
reviews at least semi-annually the work of the audit and credit review staffs
and requires reports covering such work to be prepared. The audit committee
establishes the scope and detail of the continuous audit program which is
conducted by the audit staff and the credit review staff to protect against
improper and unsound practices and to furnish adequate protection to all assets
and records. Subject to the approval of the Board, it engages a qualified firm
of certified public accountants to conduct such audit work as is necessary and
receives written reports, supplemented by such oral reports as it deems
necessary, from the audit firm. In addition, the General Auditor of the
Corporation reports to the chairman of the audit committee on all matters
relating to the Corporation. During 1997, the committee held four meetings.
The compensation committee, currently consisting of four Nonemployee Directors,
provides overall guidance with respect to the establishment, maintenance and
administration of the compensation programs and employee benefit plans of the
Corporation. The committee monitors the salary administration program and
reviews and approves salary changes, grade changes and promotions for executive
officers. The joint recommendations of the compensation committee and the
executive committee as to compensation of the Chief Executive Officer and any
of the Corporation's directors who are also executive officers of the
Corporation are subject to approval by the Board. During 1997, the committee
held three meetings.
The nominating committee, currently consisting of the Chief Executive Officer
and three Nonemployee Directors, reviews information assembled for the purposes
of selecting candidates for nomination to membership on the Board. Following
appropriate investigations, it ascertains the willingness of selected
individuals to serve and extends, on behalf of the Board, invitations to become
candidates. Its recommendations are presented to the Board at regularly
scheduled meetings. The committee will also consider, at its regularly
scheduled meetings, those recommendations by shareholders which are submitted,
along with biographical and business experience information, to the Chief
Executive Officer. During 1997, the committee held two meetings.
BOARD OF DIRECTORS' COMPENSATION
In 1997, the compensation for each Nonemployee Director included an annual
retainer of $60,000. Under the NationsBank Corporation Directors' Stock Plan
(the "Directors' Stock Plan"), $24,000 of the annual retainer was paid in
shares of Common Stock and the remaining $36,000 was paid in cash. In addition,
directors received an attendance fee of
10
<PAGE>
$1,200 for each meeting of the Board or committee of the Board. During 1997,
there were 9 meetings of the Board. The aggregate amount paid by the
Corporation to directors during 1997 under these arrangements was $1,840,200.
Under the Director Deferral Plan, Nonemployee Directors may elect to defer
payment of their annual retainer and attendance fees until they leave the
Board. In that case, shares of Common Stock would not be issued under the
Directors' Stock Plan, but instead would be credited to an account in the
Nonemployee Director's name as a phantom stock unit. Subject to the terms of
the Director Deferral Plan, these units would ultimately be paid in cash to the
Nonemployee Director following his or her retirement from the Board (either in
a single payment or installments, at the director's election) based on the fair
market value of the Common Stock. There are no voting rights associated with
these units.
During 1997, the Corporation paid an aggregate of $525,500 to 24 retired
directors under the previously terminated NationsBank Corporation and
Designated Subsidiaries Directors' Retirement Plan.
EXECUTIVE COMPENSATION
The following table sets forth the compensation paid to each named executive
officer for services rendered to the Corporation and its subsidiaries during
the periods indicated.
Summary Compensation Table
<TABLE>
<CAPTION>
Long Term
Compensation
---------------------------
Annual Compensation Awards
-------------------------------------- ---------------------------
Other Securities All Other
Annual Restricted Underlying Compen-
Name and Salary Bonus Compensation Stock Awards Options sation
Principal Position Year $ $ $(1) $(2) (#) $
- ---------------------------- ------ ----------- ----------- -------------- -------------- ------------ ----------------
<S> <C> <C> <C> <C> <C> <C> <C>
Hugh L. McColl, Jr. 1997 1,000,000 3,500,000 -- 0 150,000 138,382(3)
Chief Executive Officer 1996 900,000 3,100,000 56,007(4) 0 0 149,163
1995 900,000 2,600,000 -- 0 0 155,855
Andrew B. Craig, III (5) 1997 991,318 3,500,000 -- 10,125,000 0 35,820(6)
Chairman of the Board
Kenneth D. Lewis 1997 850,000 2,200,000 -- 0 90,000 38,250(7)
President 1996 750,000 1,850,000 -- 0 0 33,750
1995 700,000 1,300,000 -- 0 400,000 31,500
James H. Hance, Jr. 1997 850,000 2,200,000 -- 0 90,000 38,250(7)
Vice Chairman & 1996 750,000 1,750,000 -- 0 0 33,750
Chief Financial Officer 1995 700,000 1,200,000 -- 0 400,000 31,500
F. William Vandiver, Jr. 1997 700,000 1,500,000 -- 0 60,000 31,500(7)
Chairman, 1996 475,000 1,200,000 -- 0 0 21,375
Corporate Risk Policy 1995 400,000 625,000 -- 0 200,000 18,000
</TABLE>
- ---------
(1) For each year, excludes perquisites and other personal benefits, securities
or property which, in the aggregate, do not exceed $50,000 for each named
executive officer.
(2) On January 8, 1997, the Corporation granted 200,000 shares of restricted
stock to Mr. Craig pursuant to his employment agreement described on page
14. The value shown for these shares is based on the closing price of
$50.625 per share on January 8, 1997. All 200,000 shares will vest on his
retirement. Mr. Craig has the right to receive dividends on these shares
prior to vesting. As of December 31, 1997, the named executive officers
held the following numbers of shares of restricted stock with the
following values (based on the closing price of $60.8125 per share on
December 31, 1997): Mr. McColl -- 280,000 shares valued at $17,027,500 and
Mr. Craig -- 200,000 shares valued at $12,162,500.
(3) For 1997, consists of matching contributions by the Corporation under
certain defined contribution plans in the amount of $45,000 and the value
of certain premiums paid by the Corporation under a split dollar life
insurance arrangement in the amount of $93,382.
(4) Includes imputed income for personal travel in the amount of $22,500 and
tax preparation in the amount of $28,919.
(5) Mr. Craig was not an employee of the Corporation in 1996 and 1995.
11
<PAGE>
(6) For 1997, consists of matching contributions by the Corporation under
certain defined contribution plans in the amount of $4,750 and premiums
paid by the Corporation for term-life insurance coverage under an
executive life insurance program in the amount of $31,070.
(7) For 1997, consists of matching contributions by the Corporation under
certain defined contribution plans.
The following tables show the number and value of options granted in 1997 and
the value realized upon exercise of options during 1997 and certain information
about unexercised options at year-end with respect to the named executive
officers.
Option Grants in Last Fiscal Year (1)
<TABLE>
<CAPTION>
Individual Grants
- -----------------------------------------------------------------------------------------------------
Number of Securities Percent of Total Exercise Grant Date
Underlying Options Granted to Price Expiration Present
Name Options Granted (#) Employees in 1997 ($ per Share) Date Value $(2)
- -------------------------- ---------------------- -------------------- --------------- -------------- -------------
<S> <C> <C> <C> <C> <C>
Hugh L. McColl, Jr. 150,000 0.72% $ 65.375 July 1, 2007 $2,739,900
Andrew B. Craig, III 0 -- -- -- 0
Kenneth D. Lewis 90,000 0.43% $ 65.375 July 1, 2007 $1,643,940
James H. Hance, Jr. 90,000 0.43% $ 65.375 July 1, 2007 $1,643,940
F. William Vandiver, Jr. 60,000 0.29% $ 65.375 July 1, 2007 $1,095,960
</TABLE>
- ---------
(1) The material terms of all option grants to named executive officers during
1997 are as follows: (i) all options are nonqualified stock options; (ii)
all have an exercise price equal to the fair market value of $65.375 on
the date of grant; (iii) all have a 10 year term and become exercisable as
follows: one-third on July 1, 1998, one-third on July 1, 1999 and
one-third on July 1, 2000; (iv) all continue to be exercisable following
termination of employment in certain circumstances; and (v) all are
otherwise subject to the terms and provisions of the NationsBank
Corporation Key Employee Stock Plan (the "Stock Plan").
(2) In accordance with Securities and Exchange Commission rules, the
Black-Scholes option pricing model was used to estimate the Grant Date
Present Value assuming (i) an expected volatility of 0.278; (ii) an expected
dividend yield of 3.50%; (iii) a risk-free interest rate of 6.29%; (iv) an
option term of 7 years; and (v) no discounts for non-transferability or
risk of forfeiture. This is a theoretical value for stock options. The
actual value of the options will depend on the market value of Common Stock
when the options are exercised.
Aggregated Option Exercises In Last Fiscal Year and Fiscal Year-End Option
Values
<TABLE>
<CAPTION>
Number of Securities
Underlying Unexercised Value of Unexercised In-the-
Options Exercised Options on Money Options on
During 1997 December 31, 1997 December 31, 1997 ($)(1)
------------------------------ ----------------------------- ----------------------------
Shares
Acquired On Value Realized
Name Exercise (#) ($)(2) Exercisable Unexercisable Exercisable Unexercisable
- -------------------------- -------------- --------------- ------------- --------------- ------------- --------------
<S> <C> <C> <C> <C> <C> <C>
Hugh L. McColl, Jr. 0 0 0 150,000 0 0
Andrew B. Craig, III 60,010 2,762,110 333,962 0 13,520,954 0
Kenneth D. Lewis 0 0 300,000 190,000 10,200,000 3,400,000
James H. Hance, Jr. 0 0 300,000 190,000 10,200,000 3,400,000
F. William Vandiver, Jr. 0 0 150,000 110,000 5,100,000 1,700,000
</TABLE>
- ---------
(1) Value represents the difference between the exercise price and the market
value of Common Stock of $60.8125 on December 31, 1997. An option is
"in-the-money" if the market value of Common Stock exceeds the exercise
price. Options that are not "in-the-money" as of December 31, 1997 are not
included.
(2) Value represents fair market value at exercise minus the exercise price.
12
<PAGE>
RETIREMENT PLANS
The following table shows the estimated annual pension benefits payable at
normal retirement to a participant in certain of the Corporation's qualified
and nonqualified defined benefit plans.
Pension Plan Table(1)
<TABLE>
<CAPTION>
Annual Benefits Upon Retirement
With Years of Service Indicated
------------------------------------------
15 Years
Average Annual Earnings 5 Years 10 Years or More
- ------------------------- ------------ ------------ ------------
<S> <C> <C> <C>
$ 1,000,000 $ 200,000 $ 400,000 $ 600,000
1,500,000 300,000 600,000 900,000
2,000,000 400,000 800,000 1,200,000
2,500,000 500,000 1,000,000 1,500,000
3,000,000 600,000 1,200,000 1,800,000
3,500,000 700,000 1,400,000 2,100,000
4,000,000 800,000 1,600,000 2,400,000
4,500,000 900,000 1,800,000 2,700,000
5,000,000 1,000,000 2,000,000 3,000,000
</TABLE>
- ---------
(1) The table sets forth the combined benefits payable under the NationsBank
Pension Plan, the NationsBank Corporation and Designated Subsidiaries
Supplemental Retirement Plan, the NationsBank Corporation and Designated
Subsidiaries Supplemental Executive Retirement Plan and Social Security.
Messrs. McColl, Lewis, Hance and Vandiver each participate in the three
plans of the Corporation listed above. Mr. Craig will receive annual
pension benefits pursuant to his employment agreement described on page
14.
A participant's "average annual earnings" means the average of the five highest
years of the participant's salary and bonuses during his last ten years of
employment. The "salary" and "bonuses" used to determine a participant's
"average annual earnings" are the same as the salary and bonuses disclosed in
the "Salary" and "Bonus" columns of the Summary Compensation Table. The table
describes annual benefits payable in the form of a joint and 75% survivor
annuity beginning at normal retirement. For purposes of the table, normal
retirement means a participant's separation from service following either (1)
attainment of age 62 or (2) attainment of age 60 with 20 years of service. A
person who retires before normal retirement may be entitled to reduced benefits
under the plans depending on the participant's age and years of service.
As of December 31, 1997, Messrs. McColl, Lewis, Hance and Vandiver had the
following amounts of "average annual earnings" and completed years of service:
Mr. McColl -- $3,520,000 and 38 years; Mr. Lewis -- $2,150,000 and 28 years;
Mr. Hance -- $2,095,000 and 10 years; and Mr. Vandiver -- $1,380,000 and 30
years.
DEFERRED COMPENSATION PLAN
Messrs. McColl, Lewis and Vandiver also participate in the NationsBank
Corporation and Designated Subsidiaries Deferred Compensation Plan for Key
Employees (the "Deferred Compensation Plan") which was established by the
Corporation as of November 1, 1985. Each of these named executive officers
deferred compensation under the Deferred Compensation Plan during the period
from 1985 through 1989, but no compensation has been deferred by the named
executive officers under the Deferred Compensation Plan since 1989.
Under the Deferred Compensation Plan, a participant is returned his deferrals,
along with interest, following the participant's termination of employment. The
annual rate of interest depends on the participant's age and years of service
at termination and will be approximately 13% (in the case of normal retirement
or "special" early retirement), 11% (in the case of "regular" early retirement)
or 8% (in the case of termination prior to "regular" early retirement). For
these purposes, normal retirement means termination of employment following
attainment of age 62; "special" early retirement means termination of
employment following attainment of age 55 with 20 years of service; and
"regular" early retirement means termination of employment following attainment
of age 50 with 15 years of service. In addition, the designated beneficiary of
a participant who dies while in service receives a benefit equal to the
participant's "regular" early retirement benefit (or the participant's
"special" early retirement benefit or normal retirement benefit to which the
participant may have been entitled at the time of death). As a result, the
designated beneficiary
13
<PAGE>
of a participant who dies prior to eligibility for "regular" early retirement
may, in effect, receive a return on the participant's deferrals that is greater
than an 11% annual rate. Payments under the Deferred Compensation Plan are
generally made over a period of 15 years following retirement or death, but
they are made in a single payment following a termination of employment prior
to eligibility for "regular" early retirement.
SPECIAL COMPENSATION ARRANGEMENTS
Benefit Security Trust
The Corporation and certain of its subsidiaries have established a Benefit
Security Trust (the "Trust") which is a "grantor trust" under Section 671 of
the Internal Revenue Code of 1986, as amended (the "Code"). The purpose of the
Trust is to provide participants in designated supplemental retirement plans
sponsored by the Corporation, including generally all of the Corporation's
nonqualified defined contribution and defined benefit plans, with greater
assurances that the benefits to which such participants are entitled under the
plans will be satisfied. The Corporation may in its discretion designate
additional plans to be covered by the Trust. Contributions to the Trust by the
Corporation and its participating subsidiaries are discretionary from time to
time. In that regard, the Corporation has made cumulative contributions of
$138.2 million to the Trust through December 31, 1997. Prior to a change of
control of the Corporation, benefits are paid from the Trust only upon the
direction of the Corporation. After a change of control of the Corporation,
benefits are paid from the Trust to the extent such benefits are not paid by
the Corporation or its subsidiaries. The assets of the Trust are subject to the
claims of the creditors of the Corporation and its participating subsidiaries
in the event of an "Event of Insolvency" (as such term is defined in the
Trust). The market value of assets held in the Trust as of December 31, 1997
was $171.1 million. In addition, certain nonqualified retirement benefits for
Mr. Craig are covered by a separate benefit security trust established by
Boatmen's Bancshares, Inc., a predecessor of the Corporation, dated December
31, 1993.
Employment Agreement with Mr. Craig
Pursuant to an employment agreement with the Corporation (the "Employment
Agreement"), during the period Mr. Craig serves as Chairman (commencing January
7, 1997 and ending at the Annual Meeting), he receives an annual base salary of
$1.0 million and, for calendar year 1997, a bonus of $3,500,000. For the
portion of 1998 during which Mr. Craig serves as Chairman, he will receive a
bonus of approximately $614,000. If the Chief Executive Officer's 1998 bonus
exceeds $2.0 million, Mr Craig will receive an additional payment equal to the
amount of such excess, prorated for the period in 1998 Mr. Craig serves as
Chairman. Upon Mr. Craig's retirement, he will receive an annual pension of
$1.5 million for his life (offset by any defined benefit pension benefits
received from any other sources) and, upon his death, his current spouse will
receive an annual survivor benefit of $1.0 million for her life. Mr. Craig may
receive, at his election, the actuarial equivalent of these pension benefits in
a lump sum based upon various actuarial assumptions. Mr. Craig also has the
right to payment for any tax imposed with respect to compensation under the
Employment Agreement pursuant to Section 4999 of the Code (or any similar tax).
Retirement Agreement with Mr. Figge
Fredric J. Figge, II, formerly the Chairman of Corporate Risk Policy and a
prior named executive officer, retired from the Corporation on December 31,
1997. In connection with his retirement, the Corporation and Mr. Figge entered
into an agreement dated June 27, 1997 (the "Retirement Agreement"). Under the
Retirement Agreement, (i) Mr. Figge's supplemental retirement benefit set forth
in his July 27, 1987 agreement with the Corporation is specified to equal an
annual pension of $830,000 for his life beginning in January 1998 (offset by
his retirement benefits from the NationsBank Pension Plan, the NationsBank
Supplemental Retirement Plan, a prior employer's defined benefit pension plan
and Social Security) with a 50% survivor benefit for his wife, and (ii) his
outstanding stock options fully vest under the Stock Plan. Mr. Figge was
required to enter into a noncompetition agreement with the Corporation as a
condition to the Retirement Agreement.
14
<PAGE>
TOTAL CUMULATIVE SHAREHOLDER RETURN FOR FIVE-YEAR AND
TEN-YEAR PERIODS ENDING DECEMBER 31, 1997
The following graphs compare the yearly percentage change in the Corporation's
cumulative total shareholders' return on the Common Stock with (i) Standard &
Poor's 500 Index, and (ii) Standard & Poor's Major Regional Banks Index for the
years ended 1993 to 1997, inclusive, and for the years ended 1988 to 1997,
inclusive.
(Performance graph appears here. The plot points are listed in the table below.)
<TABLE>
<CAPTION>
1992 1993 1994 1995 1996 1997
<S> <C> <C> <C> <C> <C> <C>
NationsBank 100 98.54 94.43 150.84 217.77 277.12
S&P 500 100 110.06 111.52 153.39 188.59 251.49
S&P Major Regional Banks 100 106.00 100.32 157.93 215.79 324.48
</TABLE>
(Performance graph appears here. The plot points are listed in the table below.)
<TABLE>
<CAPTION>
1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
NationsBank 100 164.16 285.58 148.53 275.12 359.44 354.20 339.44 542.17 782.77 996.07
S&P 500 100 116.56 153.41 148.66 193.86 208.61 229.60 232.64 319.99 393.43 524.64
S&P Major Regional Banks 100 126.28 154.35 110.18 197.10 250.89 265.94 251.70 396.24 541.40 814.11
</TABLE>
The graphs assume an initial investment of $100 at the end of 1992 and 1987,
respectively, and the reinvestment of all dividends during the periods
indicated.
15
<PAGE>
COMPENSATION COMMITTEE AND STOCK OPTION COMMITTEE
REPORT ON EXECUTIVE COMPENSATION
The compensation committee of the Board provides overall guidance to the
Corporation's executive compensation programs, and the stock option committee
of the Board (which has the same members as the compensation committee)
provides overall guidance to the Corporation's stock incentive plans other than
the 1992 and 1996 Associates Stock Option Award Plans. During 1997, Ronald W.
Allen, Charles W. Coker, W. Frank Dowd, Jr., John C. Slane, John W. Snow and
Albert E. Suter served as members of the compensation and stock option
committees. Mr. Suter was first appointed to these committees on January 7,
1997. During 1997, Mr. Dowd and Mr. Allen ceased as members of these committees
because they retired from the Board (effective April 23, 1997 in the case of
Mr. Dowd and September 24, 1997 in the case of Mr. Allen). This report is
submitted by all of the members of the compensation and stock option committees
who served during 1997 as to actions taken while serving on these committees.
The compensation committee makes recommendations jointly with the executive
committee to the Board regarding the compensation of the Chief Executive
Officer and any other executive officer who also serves as a director. The
Chief Executive Officer does not participate in discussions about his
compensation matters or in the making of recommendations by the compensation
and executive committees about his compensation. The Board (other than any
directors who are executive officers) must approve all compensation actions
regarding the Chief Executive Officer and any other executive officer who also
serves as a director. During 1997, the Board approved all such actions which
were recommended by the compensation and executive committees related to the
compensation of the Chief Executive Officer and any other executive officer who
also serves as a director.
General Executive Compensation Policies
The Corporation's executive compensation policies have two primary goals: (1)
to attract and retain the highest quality executive officers and (2) to reward
those officers for superior corporate performance measured by the Corporation's
financial results and strategic achievements.
The Corporation pays its executive officers three principal types of
compensation: base salary, annual incentive compensation and long-term
incentive compensation, each of which is more fully described below. Executive
officers also participate in the Corporation's various qualified and certain
non-qualified employee benefit plans designed to provide retirement income.
1. Base salary. The relative levels of base salary for the executive officers
are designed to reflect each executive officer's scope of responsibility and
accountability within the Corporation. To determine the necessary amounts of
base salary to attract and retain top quality management, the compensation
committee extensively reviews comparable salary and other compensation
arrangements in effect at comparable competitor financial institutions. Such
comparable competitor financial institutions include substantially all of the
banks listed in the Standard & Poor's Major Regional Banks Index used in the
graphs on page 15. In addition, the committee compares the group with the base
salary data of the 25 largest United States bank holding companies. Base
salaries paid during 1997 to the executive officers generally are in the high
end of the competitive range.
The Corporation's policy is to place less emphasis on base salary and greater
emphasis on variable, performance-related annual and long-term incentive
compensation. The goal of this policy is to further align the interests of
management with the interests of shareholders.
2. Annual incentive compensation. The Corporation provides performance-related
annual incentive compensation to its executive officers under the
shareholder-approved Executive Incentive Compensation Plan ("EIC Plan"). (Mr.
Craig, however, does not participate in the EIC Plan, but instead is paid a
bonus pursuant to the Employment Agreement described on page 14.) Amounts
awarded under the EIC Plan are intended to constitute "performance-based
compensation" under Internal Revenue Code Section 162(m). (Section 162(m)
limits the deductibility of compensation paid to certain executive officers in
excess of $1.0 million, but excludes "performance-based compensation" from this
limit.)
The EIC Plan was amended and restated during 1997 to change its incentive
compensation formula. Under the new formula, which was approved by the
Corporation's shareholders at the 1997 annual meeting of the shareholders,
participating executive officers are eligible to receive maximum deductible
incentive compensation for a year up to 0.20% of the Corporation's net income
for that year. The compensation committee determines the actual amount of the
incentive compensation (up to the maximum) based on the compensation
committee's overall analysis of the
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executive officer's individual performance for the year and competitive market
practices at the same companies considered in establishing base salaries as
described above. In reviewing overall individual performance, the compensation
committee considers such factors as the financial performance of any business
units over which the individual has responsibility and the individual's
contributions during the year towards the Corporation's strategic goals. These
factors are not considered with any specific weighting.
3. Long-term incentive compensation. The compensation and stock option
committees believe that stock ownership is the best way to align the interests
of the executive officers with those of the Corporation's shareholders.
Accordingly, under the Stock Plan, the stock option committee may award to
executive officers and other key employees of the Corporation stock options,
stock appreciation rights, restricted stock and performance shares.
The stock option committee in its discretion determines on an annual basis
which executive officers will receive awards under the Stock Plan, what types
and how large the awards will be and any conditions or restrictions on the
awards. The stock option committee makes such determinations by reviewing the
same factors used by the compensation committee in determining the amount of an
executive officer's annual incentive compensation as described above. In
particular, the stock option committee conducts an overall analysis of the
executive officer's individual performance for the year and competitive market
practices at the same companies considered in establishing base salaries as
described above. In reviewing overall individual performance, the stock option
committee considers such factors as the financial performance of any business
units over which the individual has responsibility and the individual's
contributions during the year towards the Corporation's strategic goals. These
factors are not considered with any specific weighting.
The stock option committee intends that awards made under the Stock Plan
include vesting conditions that encourage an executive officer to remain with
the Corporation over a period of years. For example, the standard arrangement
for stock option awards is for one-third of the option to vest on the first
anniversary of the award and another one-third to vest in each of the next two
years.
1997 Compensation for Mr. McColl
The general policies described above for the compensation of executive officers
also apply to the compensation recommendations made by the compensation and
executive committees and approved by the Board (other than any directors who
are executive officers) with respect to the 1997 compensation for Mr. McColl as
the Corporation's Chief Executive Officer.
Based on the compensation committee's review of practices at comparable
competitor financial institutions, Mr. McColl's annualized rate of base salary
was increased from $900,000 to $1.0 million effective January 1, 1997. This was
the first increase in Mr. McColl's rate of base salary since July 1, 1993.
In determining Mr. McColl's bonus for 1997 under the EIC Plan, the compensation
committee reviewed practices at comparable competitor financial institutions,
the Corporation's strong financial performance during 1997 and the significant
steps taken by the Corporation during 1997 towards its long-term strategic
goals. In particular, the compensation committee noted that during 1997 net
income of the Corporation increased by 30% to $3.08 billion, earnings per share
increased from $4.00 per share for 1996 to $4.27 per share for 1997, and return
on average tangible common shareholders' equity rose from 22.1 percent for 1996
to 30.6 percent for 1997. Also considered were the major strategic events
completed during 1997 under Mr. McColl's leadership, especially the
acquisitions of Barnett Banks, Inc. and Montgomery Securities and the
successful assimilation of Boatmen's Bancshares, Inc.
Under the Stock Plan, in 1997 the stock option committee awarded Mr. McColl a
nonqualified stock option covering 150,000 shares of Common Stock. In making
this award, the stock option committee considered the same factors as described
above in determining Mr. McColl's 1997 bonus. In addition, the stock option
committee noted that Mr. McColl had not received an award under the Stock Plan
since 1994 and that the stock option award served to continue the emphasis in
Mr. McColl's compensation package on long-term corporate performance. Any
compensation ultimately realized by Mr. McColl upon exercise of the option
should qualify as "performance-based compensation" under Section 162(m) and
therefore be fully deductible to the Corporation.
Less than 5% of Mr. McColl's total taxable compensation for 1997 was not
deductible for 1997 as a result of the $1.0 million deduction limit under
Section 162(m). As a result of the merger-related commitments of the
Corporation under the Employment Agreement with Mr. Craig (described on page
14), amounts paid to Mr. Craig for 1997 under the Employment Agreement
(including his bonus disclosed in the Summary Compensation Table) exceeded the
$1.0
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million threshold established by Section 162(m). Compensation decisions for Mr.
McColl, Mr. Craig and the other executive officers were made with full
consideration of the Section 162(m) implications, including the net cost to the
Corporation as a result of paying any nondeductible amounts.
SUBMITTED BY THE COMPENSATION AND STOCK OPTION COMMITTEES OF THE BOARD:
Ronald W. Allen John C. Slane
Charles W. Coker John W. Snow
W. Frank Dowd, Jr. Albert E. Suter
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
Messrs. Allen, Coker, Dowd, Slane, Snow and Suter, none of whom is or has been
an officer or employee of the Corporation, served as members of the
Corporation's compensation committee during 1997. Mr. McColl serves as a
director of Sonoco Products Company, a corporation of which Mr. Coker, chairman
of the compensation committee, is Chairman and Chief Executive Officer. Mr.
McColl also serves as a director of CSX Corporation, a corporation of which Mr.
Snow is Chairman, President and Chief Executive Officer.
CERTAIN TRANSACTIONS
A number of the Corporation's directors and executive officers and certain
business organizations and individuals associated with them have been customers
of the Corporation's various banking subsidiaries. All extensions of credit to
the foregoing persons have been made in the ordinary course of business on
substantially the same terms, including interest rates and collateral, as those
prevailing at the time in comparable transactions with others and did not
involve more than the normal risk of collectibility or present other
unfavorable features.
In the opinion of management, each of the following transactions was on terms
no more or less favorable than those prevailing at the time for comparable
transactions with unaffiliated parties.
NationsBank, N.A. leases space for three Virginia banking centers from a
subsidiary of Dominion Resources, Inc. ("Dominion"), and Dominion leases space
from NationsBank, N.A. in Norfolk. Mr. Thomas E. Capps, a director of the
Corporation, is Chairman, President and Chief Executive Officer of Dominion
Resources, Inc. In 1997, NationsBank, N.A. paid Dominion aggregate rental of
approximately $151,000, and Dominion paid NationsBank, N.A. rental of
approximately $306,000.
The Corporation leases space for its Atlanta headquarters from a joint venture
partnership between an indirect subsidiary of the Corporation and Cousins
Properties Incorporated ("CPI"), which is the managing partner of the
partnership, and the partnership pays CPI a management fee for this building.
Mr. Thomas G. Cousins, a director of the Corporation, is Chairman and Chief
Executive Officer of CPI. The 1997 rental paid for this space was approximately
$16,475,000, and the management fee was approximately $391,000. In addition,
the Corporation leases space for two banking centers and an operational center
from CPI. The aggregate 1997 rental paid for these properties was approximately
$8,066,000.
NationsBank, N.A. leases space for six in-store branches and twenty-eight ATM
machines at thirty-four locations of Harris Teeter Super Markets, which are
owned by a subsidiary of Ruddick Corporation. Mr. Alan T. Dickson, a director
of the Corporation, is Chairman of Ruddick Corporation. In 1997, aggregate
rental paid for this space was approximately $140,000.
In 1997, a subsidiary of the Corporation paid The Cessna Aircraft Company
("Cessna") approximately $5,490,000 for an airplane for which a $425,000
deposit had been paid in 1996. Mr. Russell W. Meyer, Jr., a director of the
Corporation, is Chairman and Chief Executive Officer of Cessna. In addition,
the Corporation from time to time purchases airplane parts and maintenance
services from Cessna, which, in 1997, amounted to approximately $279,000. The
Corporation has a long-standing relationship with Cessna which predates the
nomination of Mr. Meyer to the Board.
Subsidiaries of the Corporation lease space for eleven banking centers in
Florida, North Carolina, South Carolina, Tennessee and Virginia from
subsidiaries of Highwoods Properties, Inc. ("Highwoods"). Mr. O. Temple Sloan,
Jr., a director of the Corporation, is Chairman of the Board of Highwoods. In
1997, the Corporation's subsidiaries paid Highwoods aggregate rental of
approximately $1,671,000 for these eleven centers.
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NationsBank, N.A. leases space for banking-related activities in Atlanta from
Williams Investment Realty, a company in which Mr. Virgil R. Williams, a
director of the Corporation, is a partner. In 1997, rental paid was
approximately $872,000.
RATIFICATION OF INDEPENDENT PUBLIC ACCOUNTANTS
The Board, upon the recommendation of the audit committee, has approved the
selection of the firm of Price Waterhouse LLP as independent public accountants
to audit the books of the Corporation and its subsidiaries for the current
year, to report on the consolidated statement of financial position and related
statement of earnings of the Corporation and its subsidiaries, and to perform
such other appropriate accounting services as may be required by the Board. The
Board recommends that the shareholders vote in favor of ratifying and approving
the selection of Price Waterhouse LLP for the purposes set forth above. The
Corporation has been advised by Price Waterhouse LLP that the firm did not have
any direct financial interest or any material indirect financial interest in
the Corporation and its subsidiaries during 1997.
Representatives of Price Waterhouse LLP are expected to be present at the
Annual Meeting with the opportunity to make a statement if they so desire, and
they are expected to be available to respond to appropriate questions.
Should the shareholders vote negatively, the Board will consider a change in
auditors for the next year.
The Board recommends a vote "FOR" ratifying the selection of Price Waterhouse
LLP as independent public accountants to audit the books of the Corporation and
its subsidiaries for the current year.
SHAREHOLDER PROPOSALS
Annual Meeting Date
The Corporation has received a proposal from Mrs. Evelyn Y. Davis, Watergate
Office Building, 2600 Virginia Avenue, N.W., Suite 215, Washington, D.C. 20037.
Mrs. Davis beneficially owns 466 shares of Common Stock, and she has given
notice that she will present the following resolution at the Annual Meeting:
RESOLVED: That the stockholders recommend that the Board of Directors take the
necessary steps to change the Annual Meeting date to the first Friday in May.
Shareholder's Supporting Statement
REASONS: Recently the Annual Meetings were held on a date where other major
corporations met. In fact, the current date is one of the busiest of the year,
and maximum attendance by outside independent shareholders is desirable.
Last year the owners of 27,454,306 shares, representing approximately 5% of
shares voting, voted FOR this proposal.
If you AGREE, please mark your proxy FOR this proposal.
Management's Statement
This proposal was submitted at the 1997 Annual Meeting and was overwhelmingly
rejected by the shareholders. Approximately 95% of the votes cast voted against
this proposal. The Board has again considered this proposal and continues to
believe that its adoption would not be in the best interests of the
Corporation.
The Corporation's Bylaws provide that the annual meeting of shareholders will
be held at a date and time during the month of April as determined by the
Board. The Board believes that it should retain the flexibility provided by the
Bylaws to determine the date of the annual meetings so that it may consider all
relevant factors. In general, the Board considers the ability to allow
sufficient time for the preparation of the Proxy Statement and the Annual
Report on Form 10-K, the ability to hold the annual meeting as soon after the
end of the fiscal year as is practicable, and the ability to coordinate the
annual meeting with a regularly scheduled Board meeting.
The Corporation encourages all shareholders to attend the annual meetings in
person. Due to the large number of shareholders, however, it is inevitable that
any date selected will be convenient for some shareholders and pose a
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<PAGE>
conflict for others. The Board believes that the flexibility provided by the
Bylaws serves the best interests of the Corporation and its shareholders, and
that the Corporation should not be limited to the annual meeting date specified
in the proposal.
The Board recommends a vote "AGAINST" this shareholder proposal.
Restriction on Salary Increases and Option Grants After Reduction in
Dividend
The Corporation has received a proposal from Edward S. George, Ed.D, 89 Corning
Hill, Glenmont, New York 12077. Mr. George beneficially owns 2,000 shares of
Common Stock, and he has given notice that he will present the following
resolution at the Annual Meeting:
WHEREAS, my proposal received more than 12% of the votes cast in 1997, I would
like to resubmit the proposal for the 1998 proxy vote; and
WHEREAS, the dividend is the first casualty in any economic downturn and the
stockholder is the first casualty and the last to benefit from an upturn; be
it:
RESOLVED: That when a dividend is cut, it is recommended that no salaries will
be increased or any stock options allowed to executives or directors until the
dividend is restored to its original amount before the cut.
Shareholder's Supporting Statement
REASONS: The bullet must be large enough to enable the executives and directors
as well as the stockholders to get their teeth on it. The administration will
maintain that the increases in salary and stock options are necessary to
attract and hold good people. This cliche belongs with the one "The check is in
the mail", the New York State Legislature and certain elected officials to
justify an increase in their salaries, and "I'm from the government and I'm
here to help."
If you AGREE, please mark your proxy FOR this resolution.
Management's Statement
This proposal was submitted at the 1997 Annual Meeting and was soundly
defeated. Approximately 88% of the votes cast voted against this proposal. The
Board has again considered this proposal and continues to believe that adoption
of this proposal would be inappropriate, unnecessary and not in the best
interests of the shareholders.
Historically, the Corporation has consistently paid and regularly increased its
dividends. In the last ten years, for example, the annual per share dividend
has been increased in each year and has grown from 43 cents per share in 1987
to $1.37 per share in 1997. In addition, compensation of the Corporation's
executives has reflected the performance of the Corporation. In fact, there
have been occasions when their compensation was impacted negatively because the
Corporation's earnings did not meet expectations of senior management even
though the earnings were more than adequate to continue the dividend payment
without reduction.
The Board presently does not anticipate the occurrence of circumstances which
would lead to the consideration of a reduction in dividends. Should such
circumstances occur, however, the complexity of today's economy and the
competitive environment in which the financial services industry operates make
it essential that the Board retain its discretion -- free of restrictions -- to
consider all matters, including executive compensation, which could lead to a
resolution of the problems.
The Board recommends a vote "AGAINST" this shareholder proposal.
Compensation Committee
The Corporation has received the following proposal from the Teamsters
Affiliates Pension Fund, 25 Louisiana Avenue, N.W., Washington, D.C. 20001. The
Teamsters Affiliates Pension Fund has represented that it owns 37,700 shares of
Common Stock.
RESOLVED: The shareholders urge that the board of directors adopt a policy that
no board members shall serve on the Compensation Committee if he or she is not
an independent director. For these purposes, the board should adopt the
following definition of independence to mean a director who:
o is not employed by the Company or an affiliate in an executive capacity;
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<PAGE>
o is not a member of a corporation or firm that is one of the Company's paid
advisers or consultants;
o is not employed by a significant customer or supplier to the Company;
o has no personal services contract with the Company or one of its affiliates;
o is not part of an interlocking directorate in which the CEO or any other
executive officer of the Company serves on the board of another corporation
that employs the director;
o and does not have any personal, financial and/or professional relationships
with the CEO or other executive officer that would interfere with the
exercise of independent judgment by such director.
Shareholder's Supporting Statement
REASONS: The purpose of this proposal is to incorporate within the Compensation
Committee a standard of independence that will permit objective decision making
on compensation issues at NationsBank.
When Business Week did an analysis of various boards of directors, NationsBank
received one of the worst scores. The magazine noted that "Funds cheer
performance, but board flunks tests of independence and accountability."
According to NationsBank's proxy, "A number of the Corporation's directors and
executive officers and certain business organizations and individuals
associated with them have been customers of the Corporation's various banking
subsidiaries." (Business Week November 25, 1996) These relationships include:
o NationsBank leases space for its Atlanta headquarters from CSC Associates,
L.P., which is a joint venture partnership between C&S Premises, Inc., an
indirect subsidiary of the Corporation and Cousins Properties Incorporated
(CPI) which is the managing partner of the joint venture. Board member
Thomas Cousins is Chairman and Chief Executive Officer at CPI. The 1996
rental paid for the space was approximately $15,000,000. The partnership
paid CPI approximately $900,000 in 1996 to manage, develop and lease this
building.
o In 1995, NationsBank Services, Inc., a subsidiary of the Corporation, entered
into an agreement to purchase an airplane from The Cessna Aircraft Company,
a company in which board member Russell W. Meyer, Jr. is Chairman and Chief
Executive Officer. The purchase price of the plane was $5,900,000.
o NationsBank, N.A. (South) leases space for banking-related activities in
Atlanta, Georgia from Williams Investment Realty, a company in which Board
member Virgil R. Williams is a partner. In 1996, rental paid to Williams
Investment Realty was approximately $813,000.
o NationsBank leases four banking centers in Virginia from Goodman Hogan
Hoffler, a majority owned indirect subsidiary of Dominion Resources, Inc.,
of which Board member Thomas E. Capps is Chairman. In 1996 rental,
appraisal and commission fees totaled an estimated $277,600.
This proposal would prevent any of these men from serving on the compensation
committee, and assure shareholders of board independence.
For all of these reasons we urge you to vote FOR this proposal.
Management's Statement
The Board and management agree that decisions concerning compensation issues
should be made by a committee of independent directors. To accomplish this
goal, however, the Board already ensures that each member of the compensation
committee has the ability to exercise independent judgment. This policy is
similar to the definition of "independence" adopted by the New York Stock
Exchange, Inc. ("NYSE") with respect to members of audit committees. This
definition would preclude a director who has "any relationship that, in the
opinion of [the] Board of Directors, would interfere with the exercise of
independent judgment." The primary difference between the proponent's
definition and the NYSE standard is that the NYSE standard does not disqualify
a director from independent status solely due to customary commercial
transactions undertaken at arm's-length in the ordinary course of business.
The Corporation is a global organization that has arm's-length business
dealings with over one million companies in the ordinary course of its
business. Due to the size and scope of the Corporation, the Board and
management believe that the standard suggested by the proposal is overly
restrictive and unworkable. Because the Corporation is in the business of
banking, many of the Corporation's directors and executive officers have
banking relationships with the Corporation (as the proponent noted). The
proponent failed to note, however, that all such relationships are in the
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<PAGE>
ordinary course of business and on an arm's-length basis. If the Corporation
were to adopt the proposal, it could be precluded from appointing to the
compensation committee directors that do business with the Corporation in the
ordinary course of business. This could deprive the compensation committee of
expert independent judgment for purely arbitrary reasons.
The current members of the compensation committee are Messrs. Coker, Slane,
Suter and John A. Williams, none of whom is an officer of or otherwise
affiliated with the Corporation or, in the Board's opinion, involved in any
transaction that would compromise his ability to exercise independent judgment
with respect to the Corporation's compensation policies. Further, none of such
individuals is or has been since his appointment to the compensation committee
involved in any transaction that would require disclosure under the SEC's rules
on related party transactions. Accordingly, the Board believes that it has
already established, as the proponent requests, "a standard of independence
that will permit objective decision making on compensation issues." The Board
further believes that it should maintain the flexibility to apply this standard
to qualified directors without imposing arbitrary restrictions. In this manner,
the Corporation will obtain the most qualified individuals to make compensation
decisions and, therefore, better serve the interests of the Corporation and its
shareholders.
The Board recommends a vote "AGAINST" this shareholder proposal.
PROPOSALS FOR 1999 ANNUAL MEETING OF SHAREHOLDERS
Shareholders who intend to present proposals for consideration at next year's
annual meeting of shareholders are advised that any such proposal must be
received by the Secretary of the Corporation no later than the close of
business on November 23, 1998 if such proposal is to be considered for
inclusion in the proxy statement and form of proxy relating to that meeting.
OTHER MATTERS
The Board is not aware of any other matters which may be presented for action
at the Annual Meeting, but if other matters do properly come before the Annual
Meeting, it is intended that shares of Common Stock, Series B Stock and ESOP
Preferred Stock represented by proxies in the accompanying form will be voted
by the persons named in the proxy in accordance with their best judgment.
You are cordially invited to attend the Annual Meeting. However, whether you
plan to attend or not, you are respectfully urged to sign and return the
enclosed proxy, which may be revoked if you are present at the Annual Meeting
and so request.
/s/ Hugh L. McColl, Jr.
HUGH L. MCCOLL, JR.
Chief Executive Officer
March 20, 1998
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<PAGE>
NationsBank
<PAGE>
April 8, 1998
Dear Shareholder:
On March 20, 1998, we mailed to you a notice of the Annual Meeting of
Shareholders which will be held on Wednesday, April 22, 1998, a proxy card and
a proxy statement discussing the proposals which will be presented for
shareholders' consideration.
Since we have not yet received your proxy, we are enclosing a duplicate of the
proxy card, the proxy statement and a return envelope. If you have not mailed
your proxy, please sign it and return to us promptly so that your shares will
be represented at the meeting. If your proxy card has been mailed, please
disregard this second mailing.
You are cordially invited to attend the meeting. Should you attend, the fact
that you have sent in your proxy will not affect your right to vote in person,
if you wish to do so.
Thank you for your cooperation.
Sincerely yours,
/s/ J. W. Kiser
J.W. KISER
Executive Vice President,
Secretary and Corporate Counsel
enclosures
<PAGE>
********************************************************************************
APPENDIX
PROXY
NationsBank Corporation
This Proxy is Solicited on Behalf of the Board of Directors
ANNUAL MEETING OF SHAREHOLDERS, APRIL 22, 1998
The undersigned shareholder of NationsBank Corporation hereby appoints
Clente Flemming, Cheryl F. Keller and Joel A. Smith, III or any of them acting
by majority or acting singly in the absence of the others, attorneys and
proxies, with full power of substitution, to represent the undersigned and vote
all of the shares of NationsBank Corporation's Common Stock and 7% Cumulative
Redeemable Preferred Stock, Series B, of which the undersigned is entitled to
vote at the Annual Meeting of Shareholders to be held in the Belk Theater of the
North Carolina Blumenthal Performing Arts Center, 130 North Tryon Street,
Charlotte, North Carolina, on Wednesday, April 22, 1998, at 11:00 A.M. (local
time) or any adjournment(s) thereof:
THIS PROXY IS CONTINUED ON THE REVERSE SIDE
PLEASE SIGN ON REVERSE SIDE AND RETURN PROMPTLY
IN THE ENCLOSED POSTAGE-PAID ENVELOPE
- --------------------------------------------------------------------------------
FOLD AND DETACH HERE
<PAGE>
The shares represented by this proxy will be voted as directed by
the shareholder. If no direction is given when the duly executed proxy is
returned, such shares will be voted "FOR ALL" nominees in item
1, "FOR" item 2 and "AGAINST" items 3, 4 and 5.
Please mark your votes as indicated in this example [X]
<TABLE>
<CAPTION>
<S><C>
The Board of Directors Recommends a vote "FOR ALL" Nominees in Item 1 and "FOR" FOR ALL WITHHELD
Item 2. (EXCEPT AS FOR
1. Election of the following nominees as Directors: R. Anderson, R. MARKED) ALL
Bornstein, B. Bridgewater Jr., T. Capps, A. Carpenter, C. Coker, T. Cousins, A.
Craig III, A. Dickson, P. Fulton, J. Hance Jr., C. Holman, W. Johnson, K. Lewis,
H. McColl Jr., R. Meyer Jr., R. Priory, C. Rice, J. Slane, O. Sloan Jr., M. [ ] [ ]
Spangler, A. Suter, R. Townsend, J. Ward, J. Williams, V. Williams
To withhold authority to vote for any individual nominee, write that nominee's
name on the line provided below.
</TABLE>
- --------------------------------------------------------------------------------
The Board of Directors Recommends a Vote "AGAINST" Items 3, 4 and 5.
2. Ratification of Independent Public Accountants
FOR AGAINST ABSTAIN
[ ] [ ] [ ]
3. Shareholder Proposal Requesting a Change in the Date of the Annual Meeting
FOR AGAINST ABSTAIN
[ ] [ ] [ ]
4. Shareholder Proposal Requesting No Executive Salary Increases and No
Executive Officer or Director Stock Option Grants if Dividends are Reduced
FOR AGAINST ABSTAIN
[ ] [ ] [ ]
5. Shareholder Proposal Requesting Adoption of a Specific Definition of
Independence for Members of the Compensation Committee
FOR AGAINST ABSTAIN
[ ] [ ] [ ]
The undersigned hereby authorizes the proxies, in their discretion, to vote on
any other business which may properly be brought before the meeting or any
adjournment thereof.
I PLAN TO ATTEND THE ANNUAL MEETING
YES NO
[ ] [ ]
Please mark, date and sign as your name appears below and return in the enclosed
envelope. If acting as executor, administrator, trustee, guardian, etc., you
should so indicate when signing. If the signer is a corporation, please sign in
full corporate name, by duly authorized officer.
Signature Signature Date
----------------------------- --------------- ---------
- -------------------------------------------------------------------------------
FOLD AND DETACH HERE
Your vote is important to us. Whether or not you expect to attend the
Annual Meeting, please complete, sign and return the attached proxy card
promptly in the accompanying envelope. The envelope requires no postage if
mailed in the United States.
