<PAGE>
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES EXCHANGE ACT OF 1934
(AMENDMENT NO. N/A)
Filed by the Registrant [X]
Filed by a Party other than the Registrant [_]
Check the appropriate box:
[_] Preliminary Proxy Statement
[X] Definitive Proxy Statement
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to (S)240.14a-11(c) or (S)240.14a-12
NORWEST CORPORATION
(Name of Registrant as Specified In Its Charter)
Payment of Filing Fee (check the appropriate box):
[X] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-6(j)(2).
[_] $500 per each party to the controversy pursuant to Exchange Act Rule 14a-
6(i)(3).
[_] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
(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:*
(4) Proposed maximum aggregate value of transaction:
- --------
*Set forth the amount on which the filing is calculated and state how it was
determined.
[_] 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:
----------------------------------------------------
Notes:
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
<PAGE>
(LOGO OF NORWEST CORPORATION APPEARS HERE)
March 23, 1994
Dear Stockholder:
The annual meeting of stockholders will be held on Tuesday, April 26, 1994,
at 10:00 a.m., Minneapolis time, in the Lutheran Brotherhood Auditorium, 625
Fourth Avenue South, Minneapolis, Minnesota. The formal Notice of the Meeting
and Proxy Statement appear in the pages that follow.
In addition to the election of directors and the ratification of the
appointment of auditors for the year 1994, stockholders will be asked to
consider and vote upon proposals to approve Norwest Corporation's Performance-
Based Compensation Policy for Covered Executive Officers, the Employees'
Deferred Compensation Plan, and an amendment to the Directors' Formula Stock
Award Plan.
We recommend that you vote for the proposals referred to above, which are set
forth in more detail in the accompanying proxy statement.
Sincerely,
[SIGNATURE OF RICHARD M. KOVACEVICH APPEARS HERE]
RICHARD M. KOVACEVICH
President and
Chief Executive Officer
----------------
Please sign and date the enclosed proxy and return it promptly in the enclosed
envelope if you do not expect to be personally present and wish your stock to
be voted. If you later find that you may be present or for any other reason
desire to revoke your proxy, you may do so at any time before it is voted.
----------------
<PAGE>
NORWEST CORPORATION
---------------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
APRIL 26, 1994
---------------------
To the Holders of Common Stock of
Norwest Corporation:
NOTICE IS HEREBY GIVEN that the annual meeting of stockholders of Norwest
Corporation, a Delaware corporation (the "Corporation"), will be held in the
Lutheran Brotherhood Auditorium, 625 Fourth Avenue South, Minneapolis,
Minnesota, on Tuesday, April 26, 1994, at 10:00 a.m., Minneapolis time, for the
following purposes:
(1) To elect directors to hold office until the next annual election and
until their successors shall be duly elected and qualified;
(2) To consider and vote upon a proposal to approve the Performance-Based
Compensation Policy for Covered Executive Officers pursuant to which
incentive compensation awards may be made to certain executive
officers;
(3) To consider and vote upon a proposal to approve the Employees' Deferred
Compensation Plan under which a total of 500,000 shares of common stock
of the Corporation may be issued;
(4) To consider and vote upon a proposal to amend the Directors' Formula
Stock Award Plan to increase the annual award to non-employee directors
under such plan;
(5) To consider and vote upon a proposal to ratify the appointment by the
Board of Directors of KPMG Peat Marwick to audit the books of the
Corporation and subsidiaries for the year ending December 31, 1994; and
(6) To transact such other business as may properly come before the
meeting.
Only holders of common stock of record at the close of business on March 8,
1994, will be entitled to vote at the meeting or any adjournment thereof.
By Order of the Board of Directors,
[SIGNATURE OF LAUREL A. HOLSCHUH APPEARS HERE]
LAUREL A. HOLSCHUH
Secretary
March 23, 1994
<PAGE>
NORWEST CORPORATION
NORWEST CENTER
SIXTH AND MARQUETTE
MINNEAPOLIS, MINNESOTA 55479
---------------------
PROXY STATEMENT
---------------------
This proxy statement is furnished in connection with the solicitation by the
Board of Directors of Norwest Corporation (the "Corporation") of proxies for
the annual meeting of stockholders to be held Tuesday, April 26, 1994. Shares
of common stock may be represented at the annual meeting by stockholders in
person or by proxy. Shares represented by proxies will be voted on the matters
submitted to stockholders for vote at the annual meeting. Where specification
is made in the proxy, the stock will be voted in accordance therewith. Where no
specification is made in the proxy, the stock will be voted in favor of the
election of the director-nominees named herein and the other proposals being
submitted to stockholders at the meeting, unless authority to vote has been
properly withheld on the proxy, as discussed more fully under the heading
"VOTING PROCEDURES" below. Proxies may be revoked at any time before being
voted.
This proxy statement and the enclosed form of proxy are being mailed to
stockholders commencing on or about March 23, 1994.
Expenses in connection with this solicitation of proxies will be paid by the
Corporation. Solicitation of proxies will be principally by mail. In addition,
several officers or employees of the Corporation or its subsidiaries may
solicit proxies, either personally, by telephone, or by special letter, from
some stockholders. The Corporation will also make arrangements with brokerage
houses and other custodians, nominees and fiduciaries to send proxy materials
to their principals, and will reimburse them for their expenses in so doing.
The Corporation has retained Georgeson & Company Inc., New York, New York, to
assist in the solicitation of proxies on its behalf for a fee of $7,000 plus
out-of-pocket expenses.
So far as the Board of Directors and the management of the Corporation are
aware, no matters other than those described in this proxy statement will be
acted upon at the meeting. If, however, any other matters properly come before
the meeting, it is the intention of the persons named in the enclosed proxy to
vote the same in accordance with their judgment on such other matters.
SHARES OUTSTANDING
There were outstanding on March 8, 1994, the record date for stockholders
entitled to vote at the meeting, 310,965,468 shares of common stock, each share
being entitled to one vote.
The following table contains information with respect to each person,
including any group, known to the Corporation to be the beneficial owner of
more than 5% of the common stock of the Corporation as of December 31, 1993.
Beneficial ownership of common stock has been determined for this purpose in
accordance with Rule 13d-3 of the Securities and Exchange Commission, under
which a person is deemed to
1
<PAGE>
be the beneficial owner of securities if he or she has or shares voting power
or investment power in respect of such securities or has the right to acquire
beneficial ownership within 60 days.
<TABLE>
<CAPTION>
AT DECEMBER 31, 1993
---------------------------------
AMOUNT AND NATURE OF PERCENT OF
NAME AND ADDRESS OF BENEFICIAL OWNER BENEFICIAL OWNERSHIP COMMON STOCK
- ------------------------------------ -------------------- ------------
<S> <C> <C>
Certain subsidiary banks, including Norwest
Bank Minnesota, N.A., and a trust company
subsidiary of Norwest Corporation, Norwest
Center, Sixth and Marquette, Minneapolis,
Minnesota 55479 24,538,243(1) 8.4%
Certain subsidiaries, including investment
advisors and an insurance company, of The
Equitable Companies Incorporated, 787 Seventh
Avenue, New York, New York 10019 20,036,194(2) 6.8%
</TABLE>
- ---------------------
(1) With respect to 7,078,537 of these shares, which include 1,000 shares
issuable upon conversion of the Corporation's convertible subordinated
debentures and 137,112 shares issuable upon conversion of the Corporation's
Cumulative Convertible Preferred Stock, Series B, such subsidiaries had, in
the aggregate: sole voting power over 5,481,623 shares, shared voting power
over 1,208,829 shares and no voting power over the remaining 388,045
shares; sole dispositive power over 4,026,969 shares, shared dispositive
power over 2,793,016 shares, and no dispositive power over the remaining
258,552 shares.
The amount shown also includes 17,459,706 shares held in the Master Savings
Trust for participants in the Corporation's Savings-Investment Plan.
Participants have the power to direct the voting of the shares held in
trust based on the ratio of the value of each participant's accounts in the
Norwest stock funds to the total value of the funds on a valuation date not
more than 90 days preceding the record date for the applicable
stockholders' meeting. Shares held in trust on the applicable record date
will be voted by Norwest Bank Minnesota, N.A., as trustee of the trust,
ratably based on the instructions of all plan participants who give
instructions.
The foregoing shares are held in a fiduciary or representative capacity,
and the Corporation and such subsidiary banks and trust company disclaim
beneficial interest in these shares.
(2) With respect to these shares, certain subsidiaries, including investment
advisors and an insurance company, of The Equitable Companies Incorporated
had, in the aggregate: sole voting power over 11,718,206 shares, shared
voting power over 515,100 shares, and no voting power over the remaining
7,802,888 shares; sole dispositive power over 20,034,694 shares and shared
dispositive power over the remaining 1,500 shares.
VOTING PROCEDURES
ELECTION OF DIRECTORS
Under Delaware corporate law, directors are elected by a plurality of the
votes cast by the shares present in person or represented by proxy at the
meeting. Consequently, only shares that are voted in favor of a particular
nominee will be counted toward such nominee's achievement of a plurality.
Shares present at the meeting that are not voted for a particular nominee or
shares present by proxy where the stockholder properly withheld authority to
vote for such nominee (including broker non-votes) will not be counted toward
such nominee's achievement of a plurality.
OTHER MATTERS
The vote of the majority of shares present in person or represented by proxy
at the meeting in favor of a matter, other than the election of directors, is
required under Delaware law for the matter to be deemed an act of the
stockholders. Shares abstaining from voting on a particular matter are
considered present at the meeting for purposes of determining a quorum, but are
treated as having voted against the matter at the
2
<PAGE>
meeting. Shares for which a broker non-vote has been recorded are not
considered present at the meeting for the particular matter as to which the
broker withheld authority. Consequently, broker non-votes are not counted for
quorum or voting purposes with respect to such matter, but they do have the
practical effect of reducing the number of affirmative votes required to
achieve a majority for such matter by reducing the total number of shares from
which the majority vote is calculated.
ITEM 1. ELECTION OF DIRECTORS
At the meeting, 17 directors are to be elected to hold office until the next
annual election and until their successors shall be duly elected and
qualified. The Board of Directors has designated the individuals named below
as nominees for election. All of the nominees have indicated a willingness to
serve, but in case any nominee is not a candidate at the annual meeting, it is
the intention of the persons named in the enclosed proxy to vote for the
remainder of the designated nominees and to vote for a substitute nominee in
their discretion. All nominees are presently directors of the Corporation. All
nominees have been previously elected by the stockholders except Gerald J.
Ford, who was elected a director by the Board of Directors effective January
14, 1994.
Additional information regarding these nominees is set forth below and on
pages 12, 27 and 28, and the number of shares of common stock of the
Corporation beneficially owned by each of them as of February 28, 1994, is set
forth on pages 13 through 15. Except as may be otherwise expressly stated, all
nominees for director have served in the capacities indicated for more than
five years.
(PHOTO OF DAVID A. CHRISTENSEN, 58 Director since 1977
DAVID A. President and Chief Executive Officer
CHRISTENSEN and Director
APPEARS HERE) Raven Industries, Inc.
(Diversified Manufacturer of Plastics,
Electronics, and Special-Fabric Products)
Sioux Falls, South Dakota
Mr. Christensen also serves as a director of Northern States
Power Company and Norwest Bank South Dakota, N.A., a
subsidiary of the Corporation.
- -------------------------------------------------------------------------------
(PHOTO OF GERALD J. FORD, 49 Director since 1994
GERALD J. FORD Chairman of the Board and Director
APPEARS HERE) First Madison Bank, FSB
(Financial Services)
Dallas, Texas
Over the last five years, Mr. Ford served as Chairman of the
Board and Chief Executive Officer and a director of First
Madison Bank, FSB of Dallas, Texas (formerly known as First
Gibraltar Bank, FSB), until February 1993, when he assumed
his present position. Mr. Ford also served as Chairman and
Chief Executive Officer of First United Bank Group, Inc.,
until it was acquired by the Corporation on January 14, 1994.
Mr. Ford also serves as President and a director of Madison
Financial, Inc.; as a director of Affiliated Computer
Systems, Inc., Millennium Mortgage Company, and Madison
Realty Advisors, Inc.; as a trustee of Southern Methodist
University (SMU) and Children's Medical Foundation; as a
member of the Dallas Citizen's Counsel; as Vice Chairman of
the Executive Board of Dedman College, SMU; and as a director
of the Dallas Boys and Girls Clubs, Inc. and the School of
American Research, Santa Fe, New Mexico.
3
<PAGE>
(PHOTO OF PIERSON M. GRIEVE, 66 Director since 1987
PIERSON M. Chairman and Chief Executive Officer
GRIEVE and Director
APPEARS HERE) Ecolab Inc.
(Developer and Marketer of Cleaning,
Sanitizing, and Maintenance Products
and Services)
St. Paul, Minnesota
Over the last five years, Mr. Grieve served as Chairman,
President and Chief Executive Officer until August 21, 1992,
when he assumed his present position.
Mr. Grieve also serves as a director of Meredith Corporation,
U S WEST, Inc., and The St. Paul Companies, Inc.; as Chairman
of the Board of Overseers of the Carlson School of Management
at the University of Minnesota; as Chairman of the Advisory
Board of Minnegasco; as a member of the Advisory Council of
the Kellogg Graduate School of Management of Northwestern
University; and as a member of the Executive Committee of the
Minnesota Business Partnership, Inc. and The Guthrie Theater.
- --------------------------------------------------------------------------------
(PHOTO OF CHARLES M. HARPER, 66 Director since 1985
CHARLES M. Chairman and Chief Executive Officer
HARPER and Director
APPEARS HERE) RJR Nabisco Holdings Corp.
(Consumer Packaged Goods)
Omaha, Nebraska
Over the last five years, Mr. Harper served as Chairman of
the Board and Chief Executive Officer of ConAgra, Inc. until
September 16, 1992, when he was elected as Chairman of the
Board. Effective May 31, 1993, Mr. Harper assumed his present
position.
Mr. Harper also serves as a director of Peter Kiewit Sons',
Inc., Valmont Industries, Inc., E. I. DuPont deNemours &
Company, and ConAgra, Inc.
- --------------------------------------------------------------------------------
(PHOTO OF N. BERNE HART, 64 Director since 1991
N. BERNE HART Retired Chairman and Director
APPEARS HERE) Norwest Colorado, Inc.
Denver, Colorado
Over the last five years, Mr. Hart served as Chairman and
Chief Executive Officer and director of United Banks of
Colorado, Inc. until April 19, 1991, when United Banks of
Colorado, Inc. was merged into the Corporation. In May 1991,
he became Chairman and Chief Executive Officer and director
of United Banks of Colorado, Incorporated, a subsidiary of
the Corporation (now Norwest Colorado, Inc.), until his
retirement on January 31, 1992.
Mr. Hart also serves as a director of Great-West Life
Assurance Company, Great West Lifeco, and Great West Life and
Annuity Company.
4
<PAGE>
(PHOTO OF WILLIAM A. HODDER, 62 Director since 1971
WILLIAM A. Chairman, President and Chief Executive
HODDER Officer, and Director
APPEARS HERE) Donaldson Company, Inc.
(Manufacturer of Filtration and
Emission Control Products)
Minneapolis, Minnesota
Mr. Hodder also serves as a director of Tennant Company,
Cowles Media Company, The NWNL Companies, Inc., and SUPERVALU
INC.; and as a member of the Board of Overseers of the
Carlson School of Management at the University of Minnesota.
- --------------------------------------------------------------------------------
(PHOTO OF GEORGE C. HOWE, 67 Director since 1973
GEORGE C. HOWE President and Managing Partner
APPEARS HERE) Howe Seed Farms
(Farming)
Fargo, North Dakota
Mr. Howe also serves as a member of the advisory board of the
Northern Crops Institute.
- --------------------------------------------------------------------------------
(PHOTO OF LLOYD P. JOHNSON, 63 Director since 1985
LLOYD P. Chairman of the Board and Director
JOHNSON Norwest Corporation
APPEARS HERE) Minneapolis, Minnesota
Over the last five years, Mr. Johnson served as Chairman of
the Board and Chief Executive Officer until January 1, 1993,
when he assumed his present position.
Mr. Johnson also serves as a director of Cargill,
Incorporated, Musicland Stores Corporation, and Valmont
Industries, Inc.; as a member of the advisory board of
Minnegasco; as a trustee of the Minnesota Mutual Life
Insurance Company; as Vice Chairman of the Board of Trustees
and Chairman of the Capital Campaign of Carleton College; as
Chairman of the Board of Trustees of the Minneapolis
Institute of Arts; and as a member of the Board of Overseers
of the Carlson School of Management at the University of
Minnesota.
5
<PAGE>
(PHOTO OF REATHA CLARK KING, 55 Director since 1986
REATHA President and Executive Director
CLARK KING General Mills Foundation
APPEARS HERE) (Charitable Foundation for General
Mills, Inc.)
Minneapolis, Minnesota
Dr. King also serves as a director of H.B. Fuller Company and
the Minnesota Mutual Life Insurance Company; as a member of
the Board of the Minnesota Council on Foundations; and as a
member of the Board of Trustees of Carleton College and the
University of Chicago.
- --------------------------------------------------------------------------------
(PHOTO OF RICHARD M. KOVACEVICH, 50 Director since 1986
RICHARD M. President and Chief Executive Officer
KOVACEVICH and Director
APPEARS HERE) Norwest Corporation
Minneapolis, Minnesota
Over the last five years, Mr. Kovacevich served as President
and Chief Operating Officer until January 1, 1993, when he
assumed his present position.
Mr. Kovacevich also serves as a director of The NWNL
Companies, Inc., Northwestern National Life Insurance
Company, Northern States Power Company, VISA U.S.A. Inc.,
Fingerhut Companies, Inc., The Guthrie Theater, the Walker
Art Center, and the Bankers' Roundtable; as a director and a
member of the Executive Committee of the Minnesota Business
Partnership, Inc., as Vice Chairman of the Board of The
Greater Minneapolis Metropolitan Housing Corporation; as a
trustee of Twin Cities Public Television, Inc.; as Chairman
of the American Bankers Council; and as a member of the
Advisory Council of Stanford University Graduate School of
Business.
- --------------------------------------------------------------------------------
(PHOTO OF RICHARD S. LEVITT, 63 Director since 1982
RICHARD S. Chairman of the Board and Director
LEVITT Nellis Corporation
APPEARS HERE) (Private Capital Management)
Minneapolis, Minnesota
Mr. Levitt also serves as a director of Meredith Corporation,
Gaylord Container Corporation, the Northwest Area Foundation,
the University of Iowa Law School Foundation, the University
of Iowa Foundation, and Norwest Bank Iowa, N.A., a subsidiary
of the Corporation.
6
<PAGE>
(PHOTO OF RICHARD D. MCCORMICK, 53 Director since 1983
RICHARD D. Chairman and Chief Executive Officer
MCCORMICK and Director
APPEARS HERE) U S WEST, Inc.
(Communications)
Englewood, Colorado
Over the last five years, Mr. McCormick served as President
and Chief Operating Officer of U S WEST, Inc. until December
31, 1990, when he was elected President and Chief Executive
Officer. Effective May 1, 1992, Mr. McCormick assumed his
present position.
Mr. McCormick also serves as a director of SUPERVALU INC.
- --------------------------------------------------------------------------------
(PHOTO OF CYNTHIA H. MILLIGAN, 47 Director since 1992
CYNTHIA H. President and Chief Executive Officer
MILLIGAN CMA
APPEARS HERE) (Consulting Firm to Financial Institutions)
Lincoln, Nebraska
Over the last five years, Ms. Milligan served as Director of
the Nebraska Department of Banking and Finance until January
9, 1991, when she assumed her present position.
Ms. Milligan also serves as a director of Norwest Bank
Nebraska, N.A., a subsidiary of the Corporation; as a member
of the Board of Advisors of Gallup, Inc.; as a director and
trustee of the University of Nebraska Foundation; as a
trustee of Hastings College; and as a director and a member
of the Executive Committee of the Richard Nixon Library and
Birthplace.
- --------------------------------------------------------------------------------
(PHOTO OF JOHN E. PEARSON, 67 Director since 1986
JOHN E. PEARSON Retired Chairman and Director
APPEARS HERE) The NWNL Companies, Inc.
(Life and Health Insurance)
Minneapolis, Minnesota
Over the last five years, Mr. Pearson served as Chairman and
Chief Executive Officer and director of The NWNL Companies,
Inc. and continued to serve as Chairman and Chief Executive
Officer and director of Northwestern National Life Insurance
Company. On July 1, 1991, he became Chairman of The NWNL
Companies, Inc. and Northwestern National Life Insurance
Company until his retirement on January 31, 1992.
Mr. Pearson also serves as a director of Northern States
Power Company, the Minneapolis Foundation, and HealthSystem
Minnesota; and as a member of the Board of Regents of St.
Olaf College.
7
<PAGE>
(PHOTO OF IAN M. ROLLAND, 60 Director since 1993
IAN M. ROLLAND Chairman and Chief Executive Officer
APPEARS HERE) and Director
Lincoln National Corporation
Lincoln National Life Insurance Company
(Insurance)
Fort Wayne, Indiana
Over the last five years, Mr. Rolland served as President and
Chief Executive Officer of Lincoln National Corporation and
Chairman and President of Lincoln National Life Insurance
Company, until January 1, 1992, when he assumed his present
positions.
Mr. Rolland also serves as a director of Tokheim Corporation,
NIPSCO Industries, Inc., and Norwest Bank Indiana, N.A., a
subsidiary of the Corporation.
- --------------------------------------------------------------------------------
(PHOTO OF STEPHEN E. WATSON, 49 Director since 1989
STEPHEN E. President and Director
WATSON Dayton Hudson Corporation
APPEARS HERE) (General Merchandise Company)
Minneapolis, Minnesota
Over the last five years, Mr. Watson served as Chairman and
Chief Executive Officer of Dayton Hudson Department Store
Company until September 1989, when he became Executive Vice
President of Dayton Hudson Corporation and continued to serve
as Chairman and Chief Executive Officer of the Department
Store Company. On February 1, 1990, he was named President of
Dayton Hudson Corporation. On October 1, 1991, he was renamed
Chairman and Chief Executive Officer of the Department Store
Company of Dayton Hudson Corporation while continuing to
serve as President of Dayton Hudson Corporation.
Mr. Watson also serves as a director of the Walker Art
Center, the Minneapolis Downtown Council, and the Minneapolis
Club; and as director of Associated Merchandising Corporation
and Chairman of its Executive Committee.
- --------------------------------------------------------------------------------
(PHOTO OF MICHAEL W. WRIGHT, 55 Director since 1991
MICHAEL W. Chairman, President and Chief Executive
WRIGHT Officer, and Director
APPEARS HERE) SUPERVALU INC.
(Food Distribution and Retailing)
Minneapolis, Minnesota
Mr. Wright also serves as a director of Cargill,
Incorporated, Musicland Stores Corporation, Honeywell, Inc.,
Shopko Stores, Inc., the National-American Wholesale Grocers
Association, the International Association of Chain Stores,
the Independent Grocers Alliance, Inc., and the Food
Marketing Institute; as the 1993 Chairman of the Campaign of
the United Way of Minneapolis; as a member of the Executive
Committee of the Minnesota Business Partnership, Inc.; as a
member of the Board of Overseers of the Carlson School of
Management at the University of Minnesota; and as a trustee
of St. Thomas Academy.
8
<PAGE>
CERTAIN INFORMATION REGARDING
THE BOARD OF DIRECTORS AND COMMITTEES THEREOF
MEETINGS AND COMMITTEES
During the year ended December 31, 1993, the Board of Directors of the
Corporation held 6 regular meetings and one special meeting. During 1993,
committees established by the Board met as follows: the Audit and Examination
Committee met 3 times, the Human Resources Committee met 3 times, the Finance
Committee met 4 times, the Credit Committee met 4 times and the Board Affairs
Committee met once. Attendance by directors at these meetings averaged 94%
during 1993, with Mr. McCormick attending less than 75% of the aggregate number
of Board meetings and meetings of committees on which he served.
The members of the Audit and Examination Committee are William A. Hodder
(Chairman), David A. Christensen, N. Berne Hart, Richard S. Levitt, Cynthia H.
Milligan, Ian M. Rolland, and Stephen E. Watson. The functions performed by the
Committee include: recommendation to the Board of Directors as to engagement of
the independent auditors, review with the independent auditors of the scope and
results of the audit engagement, review of the scope, frequency and results of
internal audits and examinations, review of the adequacy of the Corporation's
system of internal accounting controls, review of bonding and insurance
coverage, and review of examination reports of the Corporation.
The members of the Human Resources Committee are Pierson M. Grieve
(Chairman), Charles M. Harper, Richard D. McCormick, John E. Pearson, and
Michael W. Wright. The Committee recommends to the Board of Directors the
election of and remuneration arrangements for senior management. The Committee
also approves the adoption of benefit and compensation plans in which officers
are eligible to participate and approves awards under such compensation plans.
The members of the Board Affairs Committee are John E. Pearson (Chairman),
David A. Christensen, and Richard D. McCormick. The Committee reviews and makes
recommendations to the Board of Directors regarding proposed directors, the
compensation of directors and the composition and size of the Board and its
committees. The Committee will consider qualified nominees recommended by
stockholders of the Corporation if any such recommendation is submitted in
writing to the Secretary of the Corporation no later than the December 31
preceding the annual meeting. Such recommendation must include information
which will enable the Committee to evaluate the qualifications of the
recommended nominee.
The members of the Finance Committee are Richard D. McCormick (Chairman),
David A. Christensen, Gerald J. Ford, N. Berne Hart, William A. Hodder, Richard
S. Levitt, Cynthia H. Milligan, John E. Pearson, and Ian M. Rolland. The
Committee reviews and makes recommendations to the Board of Directors regarding
the Corporation's annual and long-term financial plans, including proposed debt
and equity issues. The Committee also reviews the policies of the Corporation
with respect to capital structure and investment portfolio composition.
The members of the Credit Committee are David A. Christensen (Chairman),
Gerald J. Ford, George C. Howe, Reatha Clark King, Richard S. Levitt, Stephen
E. Watson, and Michael W. Wright. The Committee reviews credit policies and
examination reports, trends in domestic and international loans outstanding,
and the adequacy of the allowance for credit losses.
COMPENSATION OF DIRECTORS
Annual Retainer and Meeting Fees. In 1993 each non-employee director was paid
an annual cash retainer fee of $20,000 plus $1,000 for each Board meeting or
committee meeting attended. The Chairmen of the Audit and Examination, Human
Resources, Finance, and Credit Committees also received an additional annual
fee of $4,000, and the Chairman of the Board Affairs Committee was paid an
additional annual fee of $1,000. Effective January 1, 1994, the cash retainer
fee was increased to $22,500.
9
<PAGE>
Directors' Plans. Effective January 1, 1992, the Corporation adopted the
Norwest Corporation Directors' Formula Stock Award Plan (the "Directors'
Formula Plan"), which was approved by stockholders at the 1992 annual meeting.
The purpose of the Directors' Formula Plan is to compensate non-employee
directors of the Corporation for their services in the form of shares of the
Corporation's common stock, in order to aid in attracting and retaining
individuals with outstanding abilities and skills for service on the
Corporation's Board of Directors.
Each person who is a non-employee director of the Corporation on December 31
of a calendar year and who served as a non-employee director of the Corporation
during that calendar year (an "Eligible Non-Employee Director") will receive on
January 31 (the "Award Date") of the following year, as compensation for
services rendered in the prior year, an award of shares of common stock of the
Corporation. Under the terms of the Directors' Formula Plan, each Eligible Non-
Employee Director who served as a non-employee director during all of the
preceding calendar year is awarded that number of shares of common stock having
an aggregate fair market value on the Award Date of $11,000 ( an "Award"). The
fair market value of such shares of common stock is computed using the closing
price of a share of the Corporation's common stock as reported on the
consolidated tape of the New York Stock Exchange (the "NYSE"). Each Eligible
Non-Employee Director who served during less than all of the preceding year is
awarded one-twelfth of an Award for each month or portion thereof that he or
she served as a non-employee director. On February 22, 1994, the Board amended
the Directors' Formula Plan to increase the Award to $18,000, subject to
stockholder approval. See the discussion under "PROPOSAL TO APPROVE AN
AMENDMENT TO THE DIRECTORS' FORMULA STOCK AWARD PLAN" below.
Effective July 27, 1993, the Board also amended the Directors' Formula Plan
to allow each Eligible Non-Employee Director to elect to defer in the form of
shares of the Corporation's common stock all or a portion of his or her Award
otherwise payable in the Corporation's common stock for the calendar year
following the year in which the deferral election is made. Participants in the
Directors' Formula Plan annually elect the percentage of the Award to be
deferred, the year in which the deferred amount will be paid, and a lump sum or
installment payment option. The number of shares so deferred will be credited
to a Deferred Stock Account established for each participating director. When
dividends are paid on the Corporation's common stock, the director's Deferred
Stock Account will be credited with a number of shares determined by
multiplying the number of shares credited to that account on the dividend
record date by the per share dividend amount and then dividing the product by
the average of the high and low market prices of a share of common stock on the
dividend payment date.
The Directors' Formula Plan allows a director to elect distribution of his or
her Deferred Stock Account in a lump sum in the form of whole shares of the
Corporation's common stock. Alternatively, a director may elect distribution of
such credits in the Corporation's common stock in up to 10 annual installments,
the undistributed portion of which will receive credits for shares when
dividends are paid on the Corporation's common stock.
On January 31, 1994, as compensation for services rendered in 1993, non-
employee directors were issued a total of 4,907 shares of the Corporation's
common stock pursuant to the terms of the Directors' Formula Plan, based on a
closing price per share of common stock on the NYSE on that date of $26.375, as
follows: Messrs. Christensen, Grieve, Hart, Hodder, Howe, and Pearson, and Dr.
King, 418 shares; Mr. Rolland, 313 shares; Messrs. Harper, Levitt, McCormick,
Watson, and Wright, and Ms. Milligan, 278 shares. In addition, effective
January 31, 1994, 140 shares were credited to a Deferred Stock Account for each
of Messrs. Harper, Levitt, McCormick, Watson, and Wright, and Ms. Milligan
pursuant to deferral elections made by these directors.
The Corporation currently has in effect two other plans for non-employee
directors, the "Directors' Stock Deferral Plan" and the "Deferred Compensation
Plan for Non-Employee Directors" (the "Directors' Deferred Compensation Plan"),
pursuant to which a participating director may defer all or a portion of his or
her annual retainer and meeting fees otherwise payable in cash. Such deferral
may be in the form of shares
10
<PAGE>
of the Corporation's common stock pursuant to the Directors' Stock Deferral
Plan or in cash pursuant to the Directors' Deferred Compensation Plan.
The Directors' Stock Deferral Plan, which was approved by the stockholders on
April 28, 1992, is intended to encourage ownership of the Corporation's common
stock by non-employee directors. All non-employee directors are eligible to
participate in the Directors' Stock Deferral Plan. Commencing January 1, 1993,
any non-employee director may defer all or a part of his or her annual retainer
and meeting fees otherwise payable in cash for service as a director in the
form of shares of the Corporation's common stock pursuant to the Directors'
Stock Deferral Plan. Participants in the Directors' Stock Deferral Plan
annually elect the amount to be deferred and the year in which the deferred
amount will be paid. Amounts so deferred will be credited to a Deferred Stock
Account established for each participating director. The number of shares
credited to a director's Deferred Stock Account are determined by dividing the
amount of the deferred fees earned during a calendar quarter by the average of
the high and low prices of a share of common stock of the Corporation as
reported on the consolidated tape of the NYSE on the first day of the calendar
quarter following the quarter in which the fees would otherwise have been paid
to the participant. When dividends are paid on the Corporation's common stock,
the director's Deferred Stock Account will be credited with a number of shares
determined by multiplying the number of shares credited to that account on the
dividend record date by the per share dividend amount and then dividing the
product by the average of the high and low market prices of a share of common
stock on the dividend payment date.
The Directors' Stock Deferral Plan allows a director to elect distribution of
his or her Deferred Stock Account in a lump sum in the form of cash or whole
shares of the Corporation's common stock, or a combination of both.
Alternatively, a director may elect distribution of such credits in annual cash
installments, the unpaid portion of which will bear interest monthly at an
annual rate equal to the interest equivalent of the secondary market yield for
three-month U.S. Treasury bills for the preceding month. Deferred compensation
and earnings thereon will be includable in the taxable income of a participant,
and will be deductible by the Corporation, when distributed.
Effective January 1, 1993, the Directors' Stock Deferral Plan replaced those
provisions of the Directors' Deferred Compensation Plan that permitted
participating directors to make deferrals of a cash amount in the form of its
defined equivalent in shares of the Corporation's common stock to a phantom
stock account established for each participant (a "Phantom Stock Account"). On
and after that date, no further deferrals to the Phantom Stock Accounts may be
made, although the value of the Phantom Stock Accounts will continue to be
adjusted to reflect credits in the form of additional phantom shares when
dividends are paid on the Corporation's common stock until all deferred amounts
have been distributed. Directors may continue, however, to elect deferrals
under the Directors' Deferred Compensation Plan in the form of cash of all or
part of their retainer and meeting fees earned during any calendar year, to be
distributed to the director in a lump sum or in up to 10 annual installments
following his or her termination of service as a director. Amounts deferred in
cash are credited to an unfunded account for the director (a "Deferred Cash
Account"). Deferred Cash Accounts earn interest monthly at a rate per annum
equal to the interest equivalent of the secondary market yield for three-month
U.S. Treasury bills for the preceding month. Under the Directors' Deferred
Compensation Plan, distributions from either a director's Deferred Cash Account
or Phantom Stock Account will be made in cash. In the case of a Phantom Stock
Account, such distributions will be based upon the defined value of the
Corporation's common stock at the time of distribution. For the year ended
December 31, 1993, a total of $4,813 in interest was credited to Deferred Cash
Accounts and $40,289 in dividends was credited in the form of an aggregate of
1,646 shares to Phantom Stock Accounts for the six current non-employee
directors who are participants in the Directors' Deferred Compensation Plan.
All non-employee directors of the Corporation with five or more years of
service on the Board of the Corporation or one of its subsidiaries are eligible
to participate in the Corporation's Retirement Plan for Non-Employee Directors.
Under this plan, following retirement or other cessation of service as a
director of the Corporation, a participant will receive an annual benefit equal
to the amount of the annual retainer fee payable in cash in effect at the time
of the participant's last day of service on the Board. The annual benefit is
payable in monthly installments for the same number of full years that the
participant served as a
11
<PAGE>
non-employee director of either the Corporation or Norwest Bank Minneapolis,
N.A., or a combination of both, up to a maximum of 10 years. Benefits may be
deferred by a participant and, if deferred, will bear interest monthly until
payment begins at a rate per annum equal to the interest equivalent of the
secondary market yield for three-month U.S. Treasury bills for the preceding
month. The non-employee director participants in the plan as of January 1,
1994, and the number of years of service then credited to each participant's
account for purposes of determining the retirement benefit payable were:
Messrs. Christensen, Hodder, Howe, McCormick, and Pearson, and Dr. King, 10
years; Mr. Harper, 8 years; Messrs. Grieve and Levitt, 6 years.
Consulting Agreements with Certain Directors. The Corporation and one of its
national bank subsidiaries have consulting agreements with, respectively,
Gerald J. Ford and Cynthia H. Milligan, both of whom are nominees for election
as directors at the annual meeting, as described in more detail below.
On January 19, 1994, the Corporation entered into a consulting agreement with
Gerald J. Ford, a director of the Corporation. Mr. Ford served as the Chief
Executive Officer and Chairman of the Board of First United Bank Group, Inc.
("First United"), a bank holding company with bank affiliates located in Texas
and New Mexico, until January 14, 1994, when First United was acquired by the
Corporation. Under this consulting agreement, the Corporation has engaged Mr.
Ford as a consultant for a period of four years, subject to earlier termination
as provided therein. Mr. Ford's responsibilities as a consultant will include,
among others, participation in developing appropriate business strategies for
the Corporation and its bank affiliates in Texas and New Mexico, and assistance
to the Corporation in marketing and other business related activities, and
identification of acquisition candidates in those states.
In exchange for his consulting services, Mr. Ford will receive an annual
consulting fee of $300,000, payable in equal quarterly installments, plus
reimbursement of all reasonable travel and out-of-pocket expenses in accordance
with the Corporation's existing policies for reimbursement of such expenses for
its senior executive officers. The consulting agreement requires Mr. Ford to
devote such energy and skill in the performance of his consulting
responsibilities in a manner that will diligently further the business and
interests of the Corporation and its subsidiaries, but does not prohibit him
from serving as a director, officer, employee or consultant to any other
company, including any other financial institution, provided such service does
not materially affect the performance of his consulting duties for the
Corporation.
The consulting agreement may be terminated by the Corporation as a result of
(i) Mr. Ford's disability based on his absence from his consulting duties, and
failure to return to such duties, for a period of either three months or 90
days in twelve consecutive months due to physical or mental illness, (ii) his
willful failure to materially perform his consulting duties, or (iii) his
death. Mr. Ford may terminate the agreement on not less than 60 days notice to
the Corporation. However, if such notice is given less than 60 days prior to
the date a quarterly installment of Mr. Ford's consulting fee is due, the
Corporation is not required to make such quarterly payment.
Cynthia H. Milligan, a nominee for re-election as a director, is the
president and sole owner of CMA, a consulting firm to financial institutions
based in Lincoln, Nebraska. CMA performs such consulting services as may be
requested by Norwest Bank Nebraska, N. A., a national bank subsidiary of the
Corporation. During 1993, CMA received payments of approximately $42,000 for
consulting services rendered to Norwest Bank Nebraska, N.A.
12
<PAGE>
BENEFICIAL OWNERSHIP OF DIRECTORS AND EXECUTIVE OFFICERS
OF EQUITY SECURITIES OF THE CORPORATION
Set forth below is information with respect to shares of common stock of the
Corporation beneficially owned as of February 28, 1994, by the current
director-nominees, the executive officers named in the Summary Compensation
Table herein, and all director-nominees and executive officers of the
Corporation as a group. No director-nominee or executive officer of the
Corporation beneficially owns any equity security of the Corporation other than
shares of common stock except James R. Campbell and Reatha Clark King, who own
757 and 300 depositary shares, respectively, of the Corporation's 10.24%
Cumulative Preferred Stock.
<TABLE>
<CAPTION>
AMOUNT AND NATURE OF
NAME BENEFICIAL OWNERSHIP (1)(2)(3)
---- ------------------------------
<S> <C>
Leslie S. Biller........................... 397,027(4)
James R. Campbell.......................... 422,664(5)
David A. Christensen....................... 9,416
Gerald J. Ford............................. 2,274,558(6)
Pierson M. Grieve.......................... 24,064
Charles M. Harper.......................... 5,832
N. Berne Hart.............................. 108,821(7)
William A. Hodder.......................... 9,220
George C. Howe............................. 5,346
Lloyd P. Johnson........................... 1,804,115(8)
Reatha Clark King.......................... 5,323
Richard M. Kovacevich...................... 715,682(9)
Richard S. Levitt.......................... 41,460
Richard D. McCormick....................... 5,750
Cynthia H. Milligan........................ 1,077
Kenneth R. Murray.......................... 498,952(10)
John E. Pearson............................ 7,832
Ian M. Rolland............................. 4,284
Daniel A. Saklad........................... 325,370(11)
Stephen E. Watson.......................... 2,146
Michael W. Wright.......................... 4,628
All directors and executive officers as a
group
(30 individuals).......................... 7,952,580(12)
</TABLE>
- ---------------------
(1) Each individual owns less than 1% and all directors and executive officers
as a group own 2.6% of the outstanding shares of common stock of the
Corporation.
(2) Amounts shown include shares allocated to participants' accounts in the
Norwest stock funds held in trust under the Corporation's Savings-
Investment Plan. Under the plan, a participant has the power to direct the
voting of the shares held in trust based on the ratio of the value of such
participant's accounts in such funds to the total value of such funds on a
valuation date not more than 90 days preceding the record date for the
applicable stockholders' meeting. Shares held in trust on the applicable
record date will be voted by the trustee of the trust ratably based on the
instructions of all participants who give instructions. The numbers of
shares allocated to the accounts of the named executive officers, as of
September 30, 1993, were: Mr. Biller, 9,045 shares; Mr. Campbell, 16,241
shares; Mr. Kovacevich, 30,095 shares; Mr. Murray, 27,398 shares; and Mr.
Saklad, 8,821 shares. There were 9,056 shares allocated to an account for
Mr. Levitt, a director and former officer; 19,165 shares allocated to an
account for Mr. Johnson, a director and executive officer; and 195,232
shares allocated to the accounts of all directors and executive officers
as a group.
Amounts shown also include shares of common stock of the Corporation
credited as of September 30, 1993, to executive officers' accounts under
the Supplemental Savings-Investment Plan. The Corporation
13
<PAGE>
has deposited shares of its common stock in trust to be used to satisfy in
part its obligations under said plan. The numbers of shares credited to
the named executive officers' accounts as of September 30, 1993, were: Mr.
Biller, 9,354 shares; Mr. Campbell, 7,029 shares; Mr. Kovacevich, 25,788
shares; Mr. Murray, 12,298 shares; and Mr. Saklad, 7,462 shares. There
were 33,498 shares credited to an account for Mr. Johnson, a director and
executive officer; and 113,630 shares credited to accounts of all
directors and executive officers as a group.
Amounts shown also include shares credited as of December 31, 1993, to
executive officers' deferral accounts under the Executive Incentive
Compensation Plan. The Corporation has deposited shares in trust to be
used to satisfy in part its obligations under said plan. The numbers of
shares credited as of December 31, 1993 to deferral accounts for the named
executive officers were: Mr. Campbell, 496 shares; and Mr. Murray, 34,809
shares. There were 42,666 shares credited to an account for Mr. Johnson, a
director and executive officer; and 81,921 shares credited to accounts of
all directors and executive officers as a group.
Amounts shown also include shares credited as of January 31, 1994, to
certain outside directors' Deferred Stock Accounts under the Directors'
Stock Deferral Plan and the Directors' Formula Stock Award Plan. The
Corporation has deposited shares in trust to be used to satisfy in part
its obligations under said plans. The numbers of shares credited as of
January 31, 1994 to Deferred Stock Accounts under the Directors' Stock
Deferral Plan were: Mr. Christensen, 1,670 shares; Mr. Grieve, 1,318
shares; Mr. Harper, 1,086 shares; Mr. Hodder, 1,474 shares; Mr. Levitt,
1,474 shares; Mr. Pearson, 1,398 shares; and Mr. Wright, 1,240 shares. The
number of shares credited as of January 31, 1994 to Deferred Stock
Accounts under the Directors' Formula Stock Award Plan were: Messrs.
Harper, Levitt, McCormick, Watson and Wright, and Ms. Milligan, 140
shares.
(3) Amounts shown do not include the following share equivalents which were
credited as of February 28, 1994, to participants' Phantom Stock Accounts
under the Corporation's Deferred Compensation Plan for Non-Employee
Directors: Mr. Christensen, 17,706 shares; Mr. Grieve, 14,113 shares; Mr.
Harper, 6,427 shares; Mr. Hodder, 15,960 shares; Mr. Levitt, 8,253 shares;
and Mr. Wright, 1,522 shares.
(4) Mr. Biller is one of the executive officers listed in the Summary
Compensation Table on page 22 of this proxy statement. In addition to
shares credited to Mr. Biller's accounts under the plans described in
footnote (2) above, the amount shown includes 22,950 shares held by Mr.
Biller's spouse, 193,178 shares which Mr. Biller has the right to acquire
within 60 days after February 28, 1994, through the exercise of stock
options, 47,820 shares of restricted stock, and 5,402 shares subject to
restrictions on transfer of ownership.
(5) Mr. Campbell is one of the executive officers listed in the Summary
Compensation Table on page 22 of this proxy statement. In addition to
shares credited to Mr. Campbell's accounts under the plans described in
footnote (2) above, the amount shown includes 42,584 shares held by Mr.
Campbell's spouse, 200 shares held by Mr. Campbell's minor son, 239,798
shares which Mr. Campbell has the right to acquire within 60 days after
February 28, 1994, through the exercise of stock options, 20,000 shares of
restricted stock, and 5,402 shares subject to restrictions on transfer of
ownership.
(6) This amount includes 93,500 shares which Mr. Ford has the right to acquire
within 60 days after February 28, 1994, through the exercise of stock
options.
(7) This amount includes 523 shares held by Mr. Hart's spouse and 4,000 shares
which Mr. Hart has the right to acquire within 60 days after February 28,
1994, through the exercise of stock options.
(8) In addition to shares credited to Mr. Johnson's accounts under the plans
described in footnote (2) above, the amount shown includes 123,562 shares
held in a trust of which Mr. Johnson is a beneficiary, 1,119,640 shares
which Mr. Johnson has the right to acquire within 60 days after February
28, 1994, through the exercise of stock options, 71,760 shares of
restricted stock, and 393,824 shares held in a revocable trust for which
Mr. Johnson is settlor and trustee.
14
<PAGE>
(9) Mr. Kovacevich is one of the executive officers listed in the Summary
Compensation Table on page 22 of this proxy statement. In addition to
shares credited to Mr. Kovacevich's accounts under the plans described in
footnote (2) above, the amount shown includes 414 shares held by Mr.
Kovacevich's spouse, 3,683 shares held by Mr. Kovacevich's spouse as
custodian for his minor daughter under the UGMA, 7,366 shares held in
revocable trusts for Mr. Kovacevich's daughter and son for which Mr.
Kovacevich is co-trustee, 100,000 shares held in a trust of which Mr.
Kovacevich is a beneficiary, 202,799 shares which Mr. Kovacevich has the
right to acquire within 60 days after February 28, 1994, through the
exercise of stock options, 40,080 shares of restricted stock, and 8,897
shares subject to restrictions on transfer of ownership.
(10) Mr. Murray is one of the executive officers listed in the Summary
Compensation Table on page 22 of this proxy statement. In addition to
shares credited to Mr. Murray's accounts under the plans described in
footnote (2) above, the amount shown includes 370 shares held by Mr.
Murray's spouse, 162 shares held in an IRA by Mr. Murray's brother over
which Mr. Murray has power of attorney and in which he has an indirect
beneficial interest, 239,816 shares which Mr. Murray has the right to
acquire within 60 days after February 28, 1994, through the exercise of
stock options, 47,820 shares of restricted stock, and 5,402 shares subject
to restrictions on transfer of ownership.
(11) Mr. Saklad is one of the executive officers listed in the Summary
Compensation Table on page 22 of this proxy statement. In addition to
shares credited to Mr. Saklad's accounts under the plans described in
footnote (2) above, the amount shown includes 643 shares held by Mr.
Saklad's father, in which shares Mr. Saklad disclaims beneficial interest,
36,355 shares held in a trust of which Mr. Saklad is a beneficiary,
134,698 shares which Mr. Saklad has the right to acquire within 60 days
after February 28, 1994, through the exercise of stock options, 47,820
shares of restricted stock, 5,402 shares subject to restrictions on
transfer of ownership, and 84,169 shares held in a revocable trust for
which Mr. Saklad is settlor and trustee.
(12) The amount shown includes 6,673,567 shares listed opposite the names of
the 21 directors and executive officers (including directors who are
executive officers) named in the above table, and the remaining 1,279,013
shares include: (i) 536,787 shares held by 9 executive officers, including
68,100 shares of restricted stock held by 5 executive officers; (ii) 330
shares held by spouses of 2 executive officers; (iii) 75,410 shares
allocable as of September 30, 1993, to the accounts of 9 executive
officers under the Savings-Investment Plan; (iv) 18,201 shares credited as
of September 30, 1993, to the accounts of 8 executive officers under the
Supplemental Savings-Investment Plan; (v) 3,950 shares credited as of
December 31, 1993, to the account of one executive officer under the
Executive Incentive Compensation Plan; and (vi) 742,226 shares which 9
executive officers have the right to acquire within 60 days after February
28, 1994, through the exercise of stock options.
EXECUTIVE OFFICERS
Information regarding the current executive officers of the Corporation,
including their names, ages, positions with the Corporation, and a brief
description of their business experience during the past five years, is
presented below. Executive officers are elected annually by the Board of
Directors.
Lloyd P. Johnson, 63, Chairman of the Board and a director. Mr. Johnson has
been associated with Norwest for the past 9 years. Additional information
regarding Mr. Johnson is set forth on page 5.
Richard M. Kovacevich, 50, President and Chief Executive Officer and a
director. Mr. Kovacevich has been associated with Norwest for the past 8 years.
Additional information regarding Mr. Kovacevich is set forth on page 6.
15
<PAGE>
Leslie S. Biller, 46, Executive Vice President (South Central Banking). Mr.
Biller served as Executive Vice President (Strategic Planning and Acquisitions)
for the Corporation until July 30, 1990, when he assumed his present position.
Mr. Biller has been associated with Norwest for the past 6 years.
James R. Campbell, 51, Executive Vice President (Twin Cities Banking). Mr.
Campbell served as Executive Vice President (Corporate Banking) until February
23, 1993, when he assumed his present position. He also serves as President and
Chief Executive Officer of Norwest Bank Minnesota, N.A. Mr. Campbell has been
associated with Norwest for the past 29 years.
John E. Ganoe, 49, Senior Vice President (Strategic Planning and
Acquisitions). Mr. Ganoe served as Vice President, Director of Strategic
Planning and Acquisitions until September 25, 1990, when he assumed his present
position. Mr. Ganoe has been associated with Norwest for the past 11 years.
Michael A. Graf, 55, Senior Vice President and Controller. Mr. Graf has held
his present position since February 1988. He has been associated with Norwest
for the past 6 years.
Stephen W. Hansen, 52, Senior Vice President (Human Resources). Mr. Hansen
has held his present position since September 1987. He has been associated with
Norwest for the past 6 years.
Laurel A. Holschuh, 43, Senior Vice President, Assistant General Counsel and
Secretary. Ms. Holschuh served as Vice President, Assistant General Counsel and
Assistant Secretary until April 23, 1991, when she was elected Vice President,
Assistant General Counsel and Secretary. On April 27, 1993, she assumed her
present position. Ms. Holschuh has been associated with Norwest for the past 14
years.
Kenneth R. Murray, 55, Executive Vice President (Western Banking). Mr. Murray
served as Executive Vice President and head of Community Banking until July 30,
1990, when he assumed his present position. Mr. Murray has been associated with
Norwest for the past 11 years.
Brian R. Phillips, 54, Executive Vice President (Technical Services). Mr.
Phillips has held his present position since February 1986. He has been
associated with Norwest for the past 8 years.
William H. Queenan, 55, Executive Vice President (Chief Credit Officer). Mr.
Queenan has held his present position since May 1987. He has been associated
with Norwest for the past 21 years.
Daniel A. Saklad, 51, Executive Vice President (North Central Banking). Mr.
Saklad served as Regional President of the Corporation for Minnesota and
Wisconsin until September 26, 1989, when he assumed his present position. Mr.
Saklad has been associated with Norwest for the past 6 years.
Stanley S. Stroup, 50, Executive Vice President and General Counsel. Mr.
Stroup served as Senior Vice President, General Counsel and Secretary of the
Corporation until April 23, 1991, when he became Senior Vice President and
General Counsel. On February 23, 1993, he assumed his present position. Mr.
Stroup has been associated with Norwest for the past 10 years.
John T. Thornton, 56, Executive Vice President and Chief Financial Officer.
Mr. Thornton has held his present position since October 1987. Mr. Thornton has
been associated with Norwest for the past 10 years.
Charles D. White, 49, Senior Vice President and Treasurer. Mr. White served
as Senior Vice President of Norwest Bank Minnesota, N.A. and Banking Group
Treasurer until July 27, 1993, when he assumed his present position. Mr. White
has been associated with Norwest for the past 12 years.
EXECUTIVE COMPENSATION
REPORT OF THE HUMAN RESOURCES COMMITTEE ON EXECUTIVE COMPENSATION
The Human Resources Committee of the Board of Directors (the "Committee")
determines annually the compensation (including awards under compensation
plans) to be paid to the Corporation's chief executive officer and other
executive officers, including the executive officers named in the Summary
Compensation Table. This Report discusses the objectives and procedures used by
the Committee to establish
16
<PAGE>
1993 compensation for the chief executive officer and the four other executive
officers named in the Summary Compensation Table.
OBJECTIVES
The Committee's executive officer compensation policies are structured to
reward contributions to the Corporation's performance and to enable the
Corporation to compete favorably with the largest banking institutions and
other large corporations in the United States in attracting and retaining
highly-qualified individuals as executive officers. The primary objective of
the Committee's compensation policy is to pay for performance. As a result, a
substantial portion of each executive officer's compensation for 1993 consisted
of an incentive component with a payout based on the Corporation's performance
for the year and the executive officer's contribution to that performance.
To establish compensation levels for executive officers for 1993, the
Committee analyzed compensation data for the immediately preceding year from a
peer group consisting of the 35 largest domestic banking organizations (ranked
based on asset size) included in the Salomon 50-Bank Index (the "Comparison
Group"*). The Committee set 1993 compensation levels for the Corporation's
executive officers to be comparable to estimated executive officer compensation
to be paid by banking organizations ranked among the highest-paying in the
Comparison Group, based on the Committee's conclusion that the Corporation's
projected performance for 1993 (based on earnings per share and the assumption
that the quality of the Corporation's earnings would be satisfactory in light
of the factors enumerated below under the heading "Chief Executive Officer")
would place it among the highest-performing banking organizations in the
Comparison Group.
As a result of amendments to the Internal Revenue Code (the "Code") enacted
in 1993, effective for tax years beginning January 1, 1994 and thereafter, a
publicly-held company, such as the Corporation, will be limited to an annual
deduction for federal income tax purposes of $1,000,000 for compensation paid
to each of its chief executive officer and the four highest compensated
executive officers (other than its chief executive officer) ("Covered Executive
Officers") determined at the end of each year. However, performance-based
compensation established by an independent compensation committee and based on
performance goals and a maximum compensation amount which have been disclosed
to and approved by stockholders is excluded from this limitation. The Internal
Revenue Service recently published Proposed Regulations to provide specific
guidance to such independent committees on developing performance-based
compensation policies.
In light of this legislation and in order to comply with the Proposed
Regulations, the Committee has adopted, and the Board is submitting to
stockholders for approval, the Committee's "Performance-Based Compensation
Policy for Covered Executive Officers" (the "Policy"). The Policy, which is
described in detail on pages 29 through 31 of this proxy statement, limits the
maximum amount of incentive compensation that any Covered Executive Officer may
be paid in 1994 and thereafter and requires the establishment of one or more
performance goals for each Covered Executive Officer based on business criteria
set forth in the Policy. Under the Policy, payment of an incentive compensation
award to a Covered Executive Officer will be contingent upon the attainment of
one or more of such pre-established performance goals. The Committee retains
the discretion under the Policy to reduce the incentive compensation award
payable to a Covered Executive Officer notwithstanding the attainment of any
such performance goal and, in the exercise of this discretion, will continue to
review competitive market data and other factors including, for Covered
Executive Officers other than the chief executive officer, management
recommendations.
- ---------------------
* The members of the Comparison Group were the 35 banking organizations
identified on page 21 of this proxy statement that constitute the "Peer Group
Index" for determining the Corporation's comparative stock performance, as
illustrated on the Performance Graph.
17
<PAGE>
EXECUTIVE OFFICER COMPENSATION
Executive officer compensation consists primarily of an annual compensation
opportunity (comprised of base salary and an incentive amount) and long-term
compensation. Base salary ranges for executive officers are developed using
competitive compensation data from the Comparison Group, as described in more
detail below. Annual incentive compensation expressed as a percentage of base
salary and long-term compensation for executive officers are determined by the
Committee, also as described below.
Annual Compensation. To establish potential compensation levels for 1993, the
Committee evaluated the Corporation's projected performance for 1993 and
available 1992 compensation data from the Comparison Group. The Committee
developed estimates of the 1993 compensation to be paid by the highest-paying
banks in the Comparison Group to their respective executive officers. Based on
these estimates, the Committee established an annual compensation opportunity
(consisting of base salary and a target incentive opportunity payable in cash
or stock or a combination of cash and stock) for each executive officer that
would be competitive with the total annual compensation estimated to be paid by
such banks. No executive officer was guaranteed a minimum incentive
compensation.
Individual base salaries for executive officers other than Mr. Kovacevich are
recommended by the Corporation's chief executive officer and approved by the
Committee. Mr. Kovacevich's base salary is determined by the Committee.
Salaries are reviewed annually and adjusted periodically, typically at
intervals of 12 months or more. Adjustments are based on the relationship of
the executive officer's current salary to the base salary range for the
position and a subjective evaluation of overall performance. Base salaries paid
in 1993 to executive officers named in the Summary Compensation Table were near
the median of estimated base salaries paid by the Comparison Group banks.
The Committee also set 1993 target incentive amounts (payable in cash and/or
stock), expressed as a percentage of base salary, for each executive officer.
This percentage was computed by subtracting the base salary from each officer's
total annual compensation opportunity and then dividing the remainder by the
amount of that base salary. Incentive awards based on these targets were paid
to executive officers pursuant to the Corporation's Executive Incentive
Compensation Plan (the "EICP") (for cash incentive awards) and/or pursuant to
the Corporation's 1985 Long-Term Incentive Compensation Plan ("LTICP") (for
incentive awards paid in the form of stock or restricted stock). The Committee
also determined the financial performance and other factors for executive
officers to receive a full payout of the 1993 incentive opportunity. The EICP
and stock incentive awards for 1993 paid in 1994 to each executive officer
named in the Summary Compensation Table, other than Mr. Kovacevich, were
determined by the extent to which such executive officer met his performance
objectives, based primarily on the performance of the business unit managed by
the executive officer and on the Corporation's achievement of its earnings per
share goal for 1993. EICP incentive award payments to Mr. Kovacevich for 1993
were determined based on the Corporation's earnings per share and the quality
of its earnings. (See the information under the heading "Chief Executive
Officer" below for a discussion of the performance criteria used in connection
with Mr. Kovacevich's compensation.) The stock incentive awards are subject to
restrictions on transfer of ownership that expire as to 30% of the shares
granted pursuant to such awards in each of February 1997 and 1998, and expire
as to the balance in February 1999.
Under a policy in effect for 1992, restricted stock awards, if any, could be
granted by the Committee after the end of the completed year, once an executive
officer's EICP award payment had been determined. Restricted stock awards would
be made to the extent appropriate to adjust the total compensation for that
executive officer if actual executive compensation data from the Comparison
Group for the preceding year indicated that an executive officer's combined
salary and cash incentive award were below competitive levels for the
Comparison Group. Because actual 1992 annual compensation paid by the highest
paying banks in the Comparison Group exceeded the total cash compensation paid
to the Corporation's executive officers for 1992, restricted stock awards
attributable to 1992 compensation were granted by the Committee in 1993. This
policy was discontinued by the Committee for compensation earned beginning in
1993.
18
<PAGE>
Long-Term Compensation. Long-term compensation is provided in the form of
stock options granted under the LTICP and is intended to increase management
ownership of stock and to provide an incentive to executive officers to improve
long-term corporate performance. Each executive officer is assigned stock
ownership goals expected to be achieved by specified dates. Once the basic
ownership level is achieved the goal continues to increase each time an
executive officer exercises a stock option or a restricted stock grant vests.
All executive officers named in the Summary Compensation Table have exceeded
their ownership goals.
The primary means for executive officers to achieve these goals is through
the exercise of stock options and the retention of a substantial portion of the
stock acquired. In determining original option grants, the Committee considers
the number of shares of common stock owned by the executive officer relative to
the executive officer's ownership goal, and the stock option grant practices of
the Comparison Group at the time of grant. If the executive officer does not
meet his or her stock ownership goal, the number of stock options granted by
the Committee to such executive officer in the future will be less than
competitive practice. The Committee encourages executive officers to achieve
their stock ownership goals by including in original option grants the right to
acquire an Accelerated Ownership Non-Qualified Stock Option (an "AO"). Upon
exercise of the original option using shares of previously owned common stock,
the optionee is granted an AO to purchase the same number of whole shares of
stock, at their fair market value on the date of the AO grant, as were used to
pay the purchase price of the shares acquired upon exercise of the original
option and related taxes. AO grants are exerciseable at any time over the
remaining term applicable to the original option. Such grants allow the
exercise of the original option early in its term while preserving the
executive officer's opportunity for future appreciation in the shares exchanged
to exercise the original option. The Committee believes that the AO feature in
original option grants encourages executive officers to acquire and retain the
Corporation's stock. Under the Proposed Regulations, stock options granted by
the Committee under the LTICP are considered performance-based compensation and
therefore not subject to the deduction limitation under Section 162(m) of the
Code.
Other Compensation. Executive officers also receive various perquisites and
supplemental retirement benefits of a type and value comparable to those made
available to executive officers of Comparison Group banking organizations, as
well as retirement and medical benefits generally available to the
Corporation's employees.
Chief Executive Officer. Mr. Kovacevich's 1993 salary and incentive award
payment shown in the Summary Compensation Table were determined by the
Committee generally in accordance with the methodology described above except
that Mr. Kovacevich's stated performance objective consisted solely of the
Corporation's earnings per share goal for 1993. With respect to Mr.
Kovacevich's incentive payments for 1993, the Committee determined that
corporate earnings per share for 1993 had exceeded that year's objective.
However, the Committee also evaluated the quality of the Corporation's earnings
based on its review of the following factors: earnings growth, return on common
equity, return on total assets, common equity as a percentage of total assets,
non-performing assets and loan loss reserves, respectively, as a percentage of
total assets, the 12-month rate of return to stockholders (including stock
price performance and total return), the ratio of the Corporation's common
stock market price to its book value, and the ratio of the Corporation's total
non-interest expense to its total revenue. In evaluating the Corporation's
overall performance for purposes of establishing Mr. Kovacevich's incentive
payment, the Committee also compared the Corporation's performance to that of
banking organizations included in the Comparison Group using these same
factors. The Committee's final determination of Mr. Kovacevich's 1993
compensation was based both on the achievement of the Corporation's earnings
per share goal and on the Committee's subjective evaluation of the
Corporation's overall performance and the quality of its earnings based on its
assessment of the factors set forth above compared to the performance of the
Comparison Group.
In recognition of the Corporation's performance and its earnings quality, the
Committee awarded a cash bonus for 1993 to Mr. Kovacevich under the EICP of
$1,260,000 which represents 180% of his base salary. He also received in 1994 a
stock incentive award for 1993 of 14,000 shares, which is subject to
restrictions on transfer of ownership that expire as to 30% of such shares in
each of February 1997 and 1998, and expire as to the balance in February 1999.
19
<PAGE>
Mr. Kovacevich was also awarded 15,000 shares of restricted stock in July
1993 relating to his 1992 compensation, based on the factors set forth in the
description of the restricted stock policy on page 18. Information regarding
this restricted stock award and the fair market value of the underlying shares
is set forth for the year 1993 in column (i) of the Summary Compensation Table
and note (6) thereto. Under the terms of this award as originally made, these
shares of restricted stock would have vested over a three-year period ending in
1998. However, in November, 1993, after a review of the amendments to the Code
with respect to the deductibility of executive officer compensation in excess
of $1,000,000 payable in 1994 and thereafter, the award was amended to cause
the entire restricted stock award to vest on December 31, 1993 and to impose
restrictions on transfer of ownership on the shares in lieu of the prior
vesting requirements. The Committee approved this amendment so that the
compensation paid to Mr. Kovacevich attributable to these shares would be fully
deductible by the Corporation in 1993. Mr. Kovacevich also was granted an AO
for 202,799 shares in 1993 upon his exercise of an original option granted
prior to 1993 that had the AO feature described above.
Members of the Committee:
Pierson M. Grieve, Chairman
Charles M. Harper
Richard D. McCormick
John E. Pearson
Michael W. Wright
20
<PAGE>
COMPARATIVE STOCK PERFORMANCE
The Performance Graph set forth below compares the cumulative total
stockholder return on Norwest Corporation ("Norwest") common stock for the last
five fiscal years with the cumulative total return on the S&P 500 Index and a
peer group stock performance index defined as follows: the 35 largest banking
organizations (ranked based on their total assets as of December 31 of the
immediately preceding fiscal year) included in the Salomon 50-Bank Index
published by Salomon Brothers in the first February issue of "Bank Stock
Weekly" of the year in which the annual meeting will be held (the "Peer Group
Index"). The cumulative total stockholder return computations set forth in the
Performance Graph assume the investment of $100 in Norwest common stock, the
S&P 500 Index and the Peer Group Index on December 31, 1988, and reinvestment
of all dividends.
The 35 banking organizations (ranked based on total assets as of December 31,
1993) that constitute the Peer Group Index are as follows: Citicorp,
BankAmerica Corporation, NationsBank, Chemical Banking Corporation, J.P. Morgan
& Co., Chase Manhattan Corporation, Bankers Trust Corporation of New York,
BancOne Corporation, First Union Corporation, PNC Bank Corporation, First
Chicago Corporation, Wells Fargo & Co., First Interstate, Norwest Corporation,
Fleet Financial Group, Inc., Bank of New York, NBD Bancorp, SunTrust Banks,
Inc., Bank of Boston Corporation, Republic New York Corporation, Barnett Banks,
Inc., Wachovia Corporation, Mellon Bank Corporation, First Fidelity
Bancorporation, KeyCorp, National City Corporation, Comerica, Inc., Society
Corporation, Boatmen's Bancshares, First Bank System, Inc., CoreStates
Financial Corporation, Continental Bank Corporation, U.S. Bancorp, First of
America, and State Street Boston Corporation.
[PERFORMANCE GRAPH APPEARS HERE]
21
<PAGE>
COMPENSATION
The following table sets forth the cash and noncash compensation earned or
awarded for the last three years to the chief executive officer of the
Corporation and the four other most highly compensated executive officers of
the Corporation.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG TERM
ANNUAL COMPENSATION COMPENSATION AWARDS
--------------------------------------------- -------------------------
(A) (B) (C) (D) (E) (F) (G) (I)
RESTRICTED
NAME AND OTHER ANNUAL STOCK OPTIONS/ ALL OTHER
PRINCIPAL POSITION YEAR SALARY($) BONUS($)(1) COMPENSATION($)(2) AWARD(S)($)(3) SARS(#)(4) COMPENSATION($)(5)(6)
------------------ ---- --------- ----------- ------------------ -------------- ---------- ---------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Richard M. Kovacevich 1993 $700,000 $1,596,875 $26,230 0 202,799 $472,875
President and Chief 1992 625,000 786,000 13,425 $194,688 0 75,000
Executive Officer 1991 592,917 625,000 14,508 290,625 423,710 67,435
Leslie S. Biller 1993 430,000 879,531 20,231 408,750 47,050 46,590
Executive 1992 393,333 346,500 21,207 194,688 119,606 42,410
Vice President 1991 340,000 313,500 37,945 203,438 215,642 32,064
Kenneth R. Murray 1993 425,000 841,531 22,908 408,750 0 46,538
Executive 1992 402,083 350,625 13,623 194,688 27,198 43,925
Vice President 1991 363,333 330,000 19,349 203,438 272,618 38,000
Daniel A. Saklad 1993 396,667 819,531 25,681 408,750 43,698 43,105
Executive 1992 363,333 321,750 13,092 194,688 51,280 39,125
Vice President 1991 316,667 288,750 13,141 203,438 223,182 19,000
James R. Campbell 1993 338,750 721,531 15,568 408,750 0 33,285
Executive 1992 320,000 216,000 14,254 97,344 86,080 31,148
Vice President 1991 295,000 199,126 10,380 0 538,176 17,700
</TABLE>
- ---------------------
(1) The amounts shown for 1993 in column (d) include the fair market value of
shares of common stock, based on the average of the high and low trading
prices per share of $24.0625 for the Corporation's common stock on February
22, 1994, awarded to the named executive officers as incentive
compensation, as follows: 14,000 shares, $336,875 to Mr. Kovacevich, and
8,500 shares, $204,531 to each of Messrs. Biller, Murray, Saklad and
Campbell. These shares are subject to restrictions on transfer of ownership
expiring over a three-year period, commencing in 1997 and ending in 1999.
(2) The amounts shown in column (e) represent amounts reimbursed to the named
executive officers in the years 1991-1993 for the payment of taxes incurred
in connection with perquisites. The named executive officers also received
compensation in the form of certain perquisites and personal benefits in
the years 1991-1993, the aggregate amount of which did not exceed $50,000
in each such year for any named executive officer.
(3) The shares of restricted common stock held by each of the persons named in
the above table and the market value of such shares, based on the number of
shares held and closing market price of the Corporation's common stock as
of December 31, 1993, were as follows: Richard M. Kovacevich, 40,080
shares, $976,950; Leslie S. Biller, 47,820 shares, $1,165,613; Kenneth R.
Murray, 47,820 shares, $1,165,613; Daniel A. Saklad, 47,820 shares,
$1,165,613; James R. Campbell, 20,000 shares, $487,500. Dividends are paid
on shares of restricted stock on the same dates and at the same rate as
those paid to all holders of the Corporation's common stock.
(4) All option grants have been adjusted to reflect the June 1993 2-for-1 stock
split.
(5) The amount shown in column (i) for each named executive officer is the
total of the Corporation's contributions to the Corporation's Savings-
Investment Plan ("SIP"), a 401(k) plan in which all employees are eligible
to participate, and contributions to the Corporation's Supplemental
Savings-
22
<PAGE>
Investment Plan, a non-qualified supplemental executive retirement plan
("Supplemental SIP"). For the year ended December 31, 1993, the
Corporation's contribution to SIP for each of the named executive officers
was $8,994 (the maximum allowable contribution under SIP). The Corporation's
contribution to Supplemental SIP for the year ended December 31, 1993, for
such persons was as follows: Mr. Kovacevich, $98,256; Mr. Biller, $37,596;
Mr. Murray, $37,544; Mr. Saklad, $34,111; and Mr. Campbell, $24,291.
(6) The amounts shown under column (i) for Mr. Kovacevich for 1993 include the
fair market value of 15,000 shares of the Corporation's common stock
awarded to Mr. Kovacevich in July 1993 as restricted stock relating to his
1992 compensation. Under the terms of this restricted stock award as
originally made, these shares would have vested over a three-year period
ending in 1998. In November 1993, this award was amended to accelerate
vesting of these shares to December 31, 1993 and to add restrictions on
transfer of ownership expiring over a period of three years, commencing in
1996 and ending in 1998. These amendments were intended to allow the
compensation paid to Mr. Kovacevich attributable to these shares to be
fully deductible by the Corporation in 1993, in light of the new
limitations on deductibility for federal income tax purposes of
compensation in excess of $1,000,000 payable in 1994 and thereafter. See
"Proposal to Approve Performance-Based Compensation Policy for Covered
Executive Officers," for a discussion of these limitations. As of December
31, 1993, the fair market value of these shares was $365,625, based on the
closing price per common share of $24.375 on that date.
OPTION GRANTS AND EXERCISES
The following tables summarize for 1993 under the Corporation's 1985 Long-
Term Incentive Compensation Plan option grants to and option exercises by the
executive officers named in the Summary Compensation Table above, and the value
of the options held by such persons at December 31, 1993:
OPTION/SAR GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
POTENTIAL REALIZABLE
VALUE AT ASSUMED
ANNUAL RATES OF STOCK
PRICE APPRECIATION FOR
INDIVIDUAL GRANTS OPTION TERM(3)
- ------------------------------------------------------------------------------- -----------------------
(A) (B) (C) (D) (E) (F) (G)
PERCENT OF TOTAL
OPTIONS/SARS OPTIONS/SARS EXERCISE OR
GRANTED GRANTED TO EMPLOYEES BASE PRICE EXPIRATION 5% 10%
NAME (#)(1)(2) IN FISCAL YEAR ($/SH) DATE ($) ($)
- ---- ------------ -------------------- ----------- ---------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
Richard M. Kovacevich 202,799 14.6% $27.6875 7/23/2001 $ 2,603,648 $ 6,203,240
Leslie S. Biller 47,050 3.4% 25.8125 7/23/2001 576,744 1,380,041
Kenneth R. Murray 0 -- -- -- -- --
Daniel A. Saklad 43,698 3.1% 26.3750 7/23/2001 548,009 1,311,583
James R. Campbell 0 -- -- -- -- --
</TABLE>
- --------------------
(1) All option grants shown are "accelerated ownership" options ("AOs") and are
immediately exercisable. The general terms of AOs are described under the
heading "Report of the Human Resources Committee on Executive
Compensation." No SARs were granted in 1993.
(2) Stock options have no value on the date of grant because the exercise price
per share is equal to the market price per share of the Corporation's
common stock on the date the option is granted. A stock option has value to
the optionee in the future only if the market price of the Corporation's
common stock at the time the option is exercised exceeds the exercise
price.
(3) The dollar amounts under Columns (f) and (g) are the result of calculations
at the 5% and 10% rates set by the Securities and Exchange Commission (the
"Commission"). Based on these 5% and 10%
23
<PAGE>
assumed annual rates of appreciation and a closing per share stock price of
$24.375 for the Corporation's common stock on December 31, 1993, the
potential realizable value to the holders of all issued and outstanding
shares on that date (294,131,670 shares), if such shares were held for an
assumed 7.86 year period (a period equal to the weighted average terms of
the options shown above), would be $3.35 billion (based on the 5% rate) and
$7.99 billion (based on the 10% rate). The potential realizable value over
the option terms of the options included in the above table and the
potential realizable values to stockholders on an aggregate basis over the
assumed holding period are computed using the assumed rates set by the
Commission and should not be viewed as, and are not intended to be, a
forecast of possible future appreciation, if any, in the Corporation's stock
price.
AGGREGATED OPTION/SAR EXERCISES IN
LAST FISCAL YEAR AND FY-END OPTION/SAR VALUES
<TABLE>
<CAPTION>
(A) (B) (C) (D) (E)
NUMBER OF UNEXERCISED
OPTIONS/SARS VALUE OF UNEXERCISED IN-THE-
SHARES AT FISCAL YEAR MONEY OPTIONS/SARS AT FISCAL
ACQUIRED ON VALUE REALIZED END (#) (IN SHARES) YEAR END (IN DOLLARS)
NAME EXERCISE (#) ($)(1) EXERCISABLE/UNEXERCISABLE(2) EXERCISABLE/UNEXERCISABLE
- --------------------- ------------ -------------- ---------------------------- ----------------------------
<S> <C> <C> <C> <C>
Richard M. Kovacevich 276,000 $3,631,111 202,799/138,000 $ 0/$1,375,681
Leslie S. Biller 63,064 721,111 193,178/60,000 721,668/598,122
Kenneth R. Murray 0 -0- 239,816/60,000 2,044,206/598,122
Daniel A. Saklad 120,404 1,533,781 134,698/60,000 674,069/598,122
James R. Campbell 0 -0- 239,798/48,000 2,362,673/478,498
</TABLE>
- --------------------
(1) Once a stock option becomes exercisable, the timing of the option exercise
occurs at the discretion of the executive. If the value realized in column
(c) is divided by the number of years between the date the option was
granted and its exercise date, the annualized value realized by each of the
executive officers named above would have been as follows: Mr. Kovacevich,
$1,655,760; Mr. Biller, $354,249 and Mr. Saklad, $610,191.
(2) Column (d) lists the total options held (stated as shares exercisable and
unexercisable) for the named executive officers as of December 31, 1993. As
of that date, such executive officers also beneficially held an aggregate
of 1,320,590 shares of the Corporation's common stock. As a consequence,
executive officers share with all stockholders the risk of future changes
in the market value of the Corporation's common stock, which will depend
upon, among other factors, the Corporation's future performance and such
executive officer's contribution to that performance.
PENSION PLANS
The Corporation's Pension Plan is a defined benefit plan covering all
employees of the Corporation and participating subsidiaries who have attained
age 21 and have worked at least 1,000 hours during a period specified in the
plan. Employees do not contribute to the plan, and the contributions by the
Corporation and its subsidiaries are not allocated to the accounts of the
individual participants. Benefits under the plan are determined on the basis of
age, years of service and compensation. A participant becomes vested upon
completing 5 years of Vesting Service or having attained the age of 65.
The monthly benefit at regular retirement age is a life annuity equal to 1.1%
of final average monthly earnings up to the Integration Level and 1.6% of final
average monthly earnings in excess of the Integration Level for each year of
credited service. No more than 35 years of credited service is recognized under
the plan. Under the provisions of the Pension Plan, the "Integration Level" for
any year is determined by the following formula: ($1,400 X Social Security Wage
Base for Current Year) divided by $48,000. Based on this
24
<PAGE>
formula, the Integration Level (stated as an amount per month) is $1,768 for
participants retiring in 1994. For participants retiring in years after 1994
the Integration Level is indexed to increase at the same rate as the Social
Security wage base. The benefit formula described above may be further amended
effective January 1, 1989, to comply with regulations under the Tax Reform Act
of 1986.
A participant's final average earnings is the highest average monthly
compensation paid during any 36 consecutive months within the last 120 months
of employment. Compensation for purposes of the plan is the participant's basic
compensation, including salary reduction amounts under Section 401(k) and
Section 125 of the Internal Revenue Code and payments made under the
Corporation's Executive Incentive Compensation Plan approved by the Board of
Directors and other designated incentive compensation plans, but excluding
compensation deferred under the Corporation's Executive Incentive Compensation
Plan or any other deferral plan.
For the individual executive officers named in the Summary Compensation
Table, the compensation recognized under the plan for 1993 is the amount shown
in the table for the year 1993 as "Salary" (column (c)) and as "Bonus" (column
(d)). As of December 31, 1993, credited service for such persons was as
follows: Mr. Kovacevich, 7 years, 10 months; Mr. Biller, 6 years, 4 months; Mr.
Murray, 11 years; Mr. Saklad, 6 years, 5 months; Mr. Campbell, 29 years, 6
months.
Effective January 1, 1994, compensation under the Pension Plan for purposes
of a plan year is limited by the Internal Revenue Code to $150,000. In
addition, the Employee Retirement Income Security Act of 1974, as amended
("ERISA"), places certain limitations on the annual pension that can be paid
from a tax-qualified pension plan. The annual limit currently in effect is
$118,800, but depending on when a participant retires, the annual benefit may
exceed that amount. As permitted by ERISA, the Board of Directors has adopted a
Supplemental Pension Plan under which amounts otherwise payable under the
Pension Plan in excess of the Internal Revenue Code and ERISA limitations will
be paid by the Corporation as an operating expense. The Supplemental Pension
Plan also provides an unfunded pension benefit equivalent to the difference
between the amount actually payable under the Pension Plan and the amount that
would have been payable if deferred compensation had been recognized as
earnings under the Pension Plan.
The following table shows the estimated annual average retirement benefits
payable under the Pension Plan and the Supplemental Pension Plan for
individuals with various combinations of annualized final average compensation
and years of credited service, without regard to the limitations imposed by the
Internal Revenue Code and ERISA. The annual amounts shown are not subject to
reduction for Social Security benefits.
<TABLE>
<CAPTION>
ANNUALIZED FINAL YEARS OF SERVICE AT RETIREMENT
AVERAGE ---------------------------------------------------------
COMPENSATION 10 15 20 25 30 35
---------------- -------- -------- -------- -------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
$ 250,000 $ 38,940 $ 58,409 $ 77,879 $ 97,349 $ 116,819 $ 136,288
500,000 78,940 118,409 157,879 197,349 236,819 276,288
750,000 118,940 178,409 237,879 297,349 356,819 416,288
1,000,000 158,940 238,409 317,879 397,349 476,819 556,288
1,250,000 198,940 298,409 397,879 497,349 596,819 696,288
1,500,000 238,940 358,409 477,879 597,349 716,819 836,288
1,750,000 278,940 418,409 557,879 697,349 836,819 976,288
2,000,000 318,940 478,409 637,879 797,349 956,819 1,116,288
2,250,000 358,940 538,409 717,879 897,349 1,076,819 1,256,288
2,500,000 398,940 598,409 797,879 997,349 1,196,819 1,396,288
</TABLE>
Lloyd P. Johnson, Chairman of the Board and a nominee for re-election as a
director of the Corporation, has an agreement with the Corporation which
provides for payments to him of the difference, if any, between the amount he
will receive under the Corporation's Pension Plan and the amount he would have
been entitled to receive under any Pension Plan of the Corporation selected by
him in effect during the term of his employment. In addition, the agreement
provides for certain supplemental retirement benefits, the amount of
25
<PAGE>
which will be determined by reference to the benefits Mr. Johnson actually
receives from his former employer. If Mr. Johnson had retired on December 31,
1993, and received the maximum benefit available under this agreement, he
would have been entitled to an annual early retirement benefit from the
Corporation of approximately $244,800.
LONG TERM DISABILITY PLANS
The executive officers named in the Summary Compensation Table participate
in the Corporation's Long Term Disability Plan, which is available to all
employees of the Corporation. This plan covers compensation of up to $500,000
in salary and payments made under incentive compensation plans designated by
the Chairman, the President, any Executive Vice President or any Senior Vice
President of the Corporation. The plan provides a monthly benefit to an
employee scheduled to work 30 or more hours per week who has elected to
participate in the plan and who becomes totally disabled for more than 22
weeks. The monthly benefit equals 65% of the participant's average basic
monthly compensation, up to a maximum monthly benefit (based on a maximum
annual compensation of $500,000) of $27,083. The Corporation's Supplemental
Long Term Disability Plan extends similar disability coverage for the base
salaries earned by Richard M. Kovacevich and Lloyd P. Johnson in excess of
$500,000. The monthly benefit payable under either plan may be subject to
offset for other sources of income.
SEVERANCE AGREEMENTS
The Corporation has entered into severance agreements with the five
executive officers of the Corporation named in the Summary Compensation Table
above. The purpose of these agreements is to encourage the officers to
continue to carry out their duties in the event of a possible change of
control of the Corporation. Under the terms of these agreements the officers
may become entitled to receive certain payments upon their termination of
employment or if their job duties or compensation and benefits are
substantially reduced within three years following a change of control of the
Corporation. The maximum amount of payments is two times the sum of: (i) the
officer's base salary rate, (ii) the value of perquisites provided by the
Corporation, and (iii) the officer's highest potential bonus or, in the case
of Mr. Kovacevich, an amount equal to the two-year average of his Executive
Incentive Compensation Plan payments or his target award under that plan,
whichever is greater. In addition, the agreements provide for the continuation
of certain medical, dental and life insurance benefits for up to two years
after termination. If payments received by any such officer as a result of a
change of control result in an excise tax liability for such officer, the
Corporation will also pay to the officer an additional amount equal to the
excise tax plus a gross-up for additional income taxes, interest and penalties
related to the excise tax. If a change of control and termination of
employment had occurred on January 1, 1994, giving rise to payments under
these severance agreements, the approximate amounts payable to the executive
officers named in the Summary Compensation Table would be as follows: Mr.
Kovacevich, $4,181,210; Mr. Biller, $2,252,414; Mr. Murray, $2,172,058; Mr.
Saklad, $2,077,766, and Mr. Campbell, $1,747,780.
The Corporation has a plan that provides severance pay to employees who are
discharged from employment under certain circumstances. The amount of
severance pay is based on years of service, job level, and the severance
option selected by the employee. If Mr. Kovacevich had been discharged on
January 1, 1994, the maximum amount payable under this policy would have been
his base salary for a period of 22 months, plus life and health insurance
benefits for 18 months. With respect to the other individuals named in the
Summary Compensation Table herein, the maximum amount payable under this
policy would have been their base salary plus benefits for the following
periods: Mr. Biller, 16 months; Mr. Murray, 18 months; Mr. Saklad, 16 months,
Mr. Campbell, 18 months. In addition, Mr. Kovacevich will be entitled to
receive benefits consisting of a minimum payment of 12 months' salary (less
the amount of any other severance payments to which he may
26
<PAGE>
be entitled under any severance plan of the Corporation then in effect) and a
prorata portion of his incentive compensation, together with certain life and
health insurance benefits, if his employment is terminated by the Corporation
for a reason other than cause or if his job duties are substantially reduced
and he resigns within 90 days thereafter.
OTHER INFORMATION RELATING TO DIRECTORS, NOMINEES,
EXECUTIVE OFFICERS AND ASSOCIATES
LOAN TRANSACTIONS
During the past year certain directors (in addition to those directors named
below under the heading "Compensation Committee Interlocks and Insider
Participation") and executive officers of the Corporation and/or one or more of
their associates had banking transactions in the ordinary course of business
with one or more of the bank subsidiaries of the Corporation. Such transactions
included loans made in the ordinary course of business. All such loans were
made on substantially the same terms, including interest rates and collateral,
as those prevailing at the time for comparable transactions with other persons
and did not involve more than the normal risk of collectibility or present
other unfavorable features.
Certain executive officers and non-employee directors of the Corporation have
also obtained mortgage loans from Norwest Mortgage, Inc. ("NMI"), a subsidiary
of the Corporation. In connection with each of these loans and in accordance
with its policy applicable to all employees and the Corporation's directors,
NMI waived an origination fee equal to one percent of the loan amount for each
executive officer. Three of the executive officers named in the Summary
Compensation Table obtained mortgage loans through NMI. Information for each
such named executive officer, including the highest balance on each loan
outstanding since January 1, 1993, the balance outstanding on each loan on
December 31, 1993, and the annual interest rate thereon, is as follows: Leslie
S. Biller, highest balances on two loans -- $500,000 and $203,000, balances
outstanding on December 31, 1993 -- $497,150 and $202,714, initial interest
rates per annum (adjustable) --7.125% and 4.125%; Kenneth R. Murray, highest
loan balance -- $203,150, balance outstanding on December 31, 1993 -- $203,150,
interest rate per annum -- 7.25%; James R. Campbell, highest loan balance --
$375,000, balance outstanding on December 31, 1993 -- $375,000, initial
interest rate per annum (adjustable) -- 4.875%. In addition, three other
executive officers and two non-employee directors of the Corporation were
indebted to NMI in the aggregate amount of $1,525,000, representing mortgage
loans with interest rates ranging from 4.375% to 8.25% per annum. As of
February 28, 1994, of the mortgage loans indicated above, five have been sold
by NMI in the secondary real estate mortgage market and one was sold by NMI to
Norwest Bank Minnesota, N.A.
In addition, one other executive officer of the Corporation had a personal
loan outstanding from Norwest Capital Markets, Inc., ("NCM"), a subsidiary of
the Corporation. As of December 31, 1993, the outstanding balance of the loan
was $200,000, which amount was also the highest outstanding loan balance since
January 1, 1993. The loan bears interest at a floating rate equal to one
percent (1%) in excess of the base lending rate from time to time of Norwest
Bank Minnesota, N.A. The annual interest rate charged on this loan during 1993
was 7%. The loan is secured by a security interest to NCM in all shares of the
Corporation's common stock obtained by the executive officer from the exercise
of stock options up to a total value equal to 120% of the outstanding balance
of the loan.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The Human Resources Committee (the "Committee") determines annually the
compensation to be paid to the Corporation's chief executive officer and other
executive officers, including the executive officers named in the Summary
Compensation Table. The members of the Committee are Pierson M. Grieve
(Chairman), Charles M. Harper, Richard D. McCormick, John E. Pearson, and
Michael W. Wright. During 1993, Richard D. McCormick and Michael W. Wright had
banking transactions in the ordinary course of business with one or more of the
bank subsidiaries of the Corporation. Such transactions involved loans made in
the
27
<PAGE>
ordinary course of business. All such loans were made on substantially the same
terms, including interest rates and collateral, as those prevailing at the time
for comparable transactions with other persons and did not involve more than
the normal risk of collectibility or present other unfavorable features.
CERTAIN INFORMATION WITH RESPECT TO GERALD J. FORD
On January 14, 1994, the Corporation completed its acquisition of First
United Bank Group, Inc. ("First United") pursuant to an Agreement and Plan of
Merger (the "Merger Agreement"), by the merger of First United into GST Co.
("GST"), a wholly-owned subsidiary of the Corporation, in exchange for shares
of the Corporation's common stock (the "Merger"). Gerald J. Ford, who is a
nominee for election as a director of the Corporation, served as Chairman,
Chief Executive Officer, and a director of First United until the Merger.
Certain information about Mr. Ford, as well as information regarding certain
transactions entered into between the Corporation and him or a company of which
he is a stockholder, a director and an executive officer, in connection with
the Merger, is set forth below. See also pages 3 and 12 of this proxy statement
for additional information about Mr. Ford.
Election as a Director. Under the terms of the Merger Agreement and as a
condition to First United's completion of the Merger, the Corporation agreed to
expand its Board of Directors by one member upon consummation of the Merger and
to appoint Mr. Ford as a director to fill the vacancy created by the increase.
Mr. Ford was appointed a director of the Corporation as of January 14, 1994,
the effective date of the Merger. In addition, the Corporation has agreed
pursuant to the Merger Agreement to publicly support and nominate Mr. Ford for
election to the Corporation's Board of Directors at any meeting of its
stockholders called for the purpose of electing directors and held prior to
January 14, 1997.
Mr. Ford also serves as Chairman of the Board and a director of First Madison
Bank, FSB ("First Madison"), formerly known as First Gibraltar Bank, FBS, in
Dallas, Texas, and its parent bank holding companies, under a waiver of the
Depository Institutions Management Interlocks Act granted by the Federal Home
Loan Bank Board ("FHLBB"), as operating head of the Federal Savings and Loan
Insurance Corporation ("FSLIC") in connection with the acquisition of certain
assets and assumption of certain liabilities by First Madison from FSLIC. Mr.
Ford believes and is seeking confirmation from the Office of Thrift
Supervision, as successor to FSLIC, that the waiver continues to allow Mr. Ford
to serve both as a director of First Madison and as a director of the
Corporation.
Certain Transactions. After the execution of the Merger Agreement with First
United and prior to the completion of the Merger, the Corporation guaranteed
repayment of a $20 million line of credit from a third party bank. The purpose
of this line of credit was to provide financing to complete two pending bank
acquisitions in Texas by an indirect bank holding company subsidiary of First
United and to enable First United to repurchase its outstanding Series B
Floating Rate Cumulative Preferred Stock (the "Series B Preferred Stock") and a
related stock warrant (the "Series B Warrant") as required by the Merger
Agreement. Fifteen million dollars was advanced in October 1993 on this line of
credit to complete the pending bank acquisitions in Texas. The remaining $5
million balance of the line of credit was advanced in January 1994 prior to the
Merger to First United to finance a portion of the repurchase price for the
Series B Preferred Stock and Series B Warrant. The line of credit was repaid in
full and the Corporation's guaranty was discharged in February 1994.
Prior to the Merger, First United and Madison Financial, Inc. ("Madison
Financial") each owned a 50% undivided interest in a 1985 IAI Westwind I jet
airplane. Mr. Ford is the Chairman, Chief Executive Officer, a director and a
stockholder of Madison Financial. In connection with consummation of the Merger
and as a condition thereto, First United sold its interest in the airplane to
Madison Financial for its appraised value of $850,000. First United was also
released upon the sale from its obligations under a security agreement with the
third-party bank that provided financing for the original purchase of the
airplane.
Also in connection with the Merger, the Corporation agreed to sell and Mr.
Ford agreed to purchase certain artwork owned by First United for its appraised
value of approximately $105,000.
28
<PAGE>
COMPLIANCE WITH SECTION 16(A) OF THE SECURITIES EXCHANGE ACT OF 1934
Section 16(a) of the Securities Exchange Act of 1934 requires the
Corporation's directors, certain officers, and any persons holding more than
10% of the Corporation's common stock to report their initial ownership of the
Corporation's common stock and any subsequent changes in that ownership to the
Securities and Exchange Commission and the New York Stock Exchange. Specific
due dates for these reports have been established, and the Corporation is
required to disclose in this proxy statement any failure to file by these dates
during 1993. All of these filing requirements were satisfied.
ITEM 2. PROPOSAL TO APPROVE THE
PERFORMANCE-BASED COMPENSATION POLICY FOR
COVERED EXECUTIVE OFFICERS
The Human Resources Committee of the Board of Directors (the "Committee") has
approved the Corporation's Performance-Based Compensation Policy for Covered
Executive Officers (the "Policy"), and the Board of Directors has directed that
the Policy be submitted to stockholders at the annual meeting. The full text of
the Policy is set forth in Exhibit A to this proxy statement and the following
description of the Policy is qualified in its entirety by the text of the
Policy.
PURPOSE
As a result of the enactment in 1993 of Section 162(m) of the Internal
Revenue Code of 1986, as amended (the "Code"), effective for tax years
beginning January 1, 1994 and thereafter, a publicly-held company, such as the
Corporation, will be limited to an annual deduction for federal income tax
purposes of $1,000,000 for compensation paid to each of its chief executive
officer and the four highest compensated executive officers (other than its
chief executive officer) ("Covered Executive Officers") determined at the end
of each year. However, "performance-based" compensation is excluded from this
limitation. Under Section 162(m), compensation is considered performance-based
if it is payable on account of the attainment of one or more performance goals
established by a compensation committee of the board of directors consisting of
at least two outside directors, the material terms of the compensation and the
performance goals are disclosed to and approved by stockholders before payment,
and the compensation committee certifies that such performance goals have been
satisfied. The Committee qualifies as a compensation committee under Section
162(m). The Internal Revenue Service (the "IRS") published proposed regulations
on December 20, 1993 (the "Proposed Regulations") to provide additional
guidance to compensation committees on the requirements of Section 162(m) in
developing performance-based compensation policies and obtaining stockholder
approval of such policies.
Under the Proposed Regulations, qualified performance-based compensation must
be paid solely on account of the attainment of one or more objective
performance goals established in writing by the compensation committee prior to
the commencement of the services to which the performance goal relates and
while its outcome is substantially uncertain. Performance goals can be based on
one or more business criteria that apply to an individual, a business unit or
the corporation as a whole, but need not be based on an increase or positive
result under the business criterion selected. The maximum amount that may be
paid to Covered Executive Officers or the formula used to calculate such amount
must be approved by stockholders. The Proposed Regulations prohibit the
compensation committee from increasing the amount of compensation payable if
the performance goal is met but permit the committee to reduce or eliminate
compensation even if the performance goal is attained. In light of this
legislation and in order to comply with the Proposed Regulations, the Committee
has adopted, and the Board is submitting to stockholders for approval, the
Committee's "Performance-Based Compensation Policy for Covered Executive
Officers."
29
<PAGE>
DESCRIPTION OF THE POLICY
The Policy applies to each Covered Executive Officer of the Corporation,
defined as an individual who, on the last day of a taxable year, is the chief
executive officer of the Corporation or is acting in such capacity or is among
the four highest compensated executive officers (other than the chief executive
officer) of the Corporation. If the Policy had been in effect for 1993, each of
the persons named in the Summary Compensation Table above would be a Covered
Executive Officer under the Policy.
Under the Policy, payment of an incentive compensation award to a Covered
Executive Officer will be contingent upon the attainment of one or more
performance goals (which may be stated as alternative goals) established in
writing by the Committee for a Covered Executive Officer for each Performance
Period, commencing with the Performance Period beginning January 1, 1994. A
Performance Period is defined in the Policy as a calendar year, commencing
January 1 and ending December 31. The performance goal or goals for each
Performance Period must be established by the Committee not later than the
latest date permitted under Section 162(m) of the Code, the Proposed
Regulations or in any other regulations promulgated thereunder or in rulings or
advisory opinions published by the IRS. For 1994 compensation, this date is
March 31, 1994.
Performance goals established by the Committee may be based on any one or
more of the following business criteria defined as set forth in the Policy:
Earnings Per Share means the Corporation's primary earnings per share as
reported in the Corporation's consolidated financial statements for each
applicable Performance Period, adjusted as described below for Net Income.
Business Unit Net Earnings means the net earnings of the business unit of
the Corporation managed by a Covered Executive Officer, as determined in
accordance with generally accepted accounting principles, adjusted in
accordance with the Corporation's management accounting practices and
conventions in effect at the beginning of the Performance Period, and
further adjusted as described below for Net Income.
Return on Common Equity means the Net Income of the Corporation on an
annualized basis less dividends accrued on outstanding preferred stock,
divided by the Corporation's average total common equity for the applicable
Performance Period.
As set forth in the Policy, the maximum amount of an incentive compensation
award payable for any Performance Period to any Covered Executive Officer may
not exceed four-tenths of one percent (.4%) of the Corporation's Net Income for
the Performance Period. For purposes of the Policy, the term "Net Income" means
the Corporation's net income as reported in the Corporation's consolidated
financial statements for the applicable Performance Period, adjusted to
eliminate the effect of (1) restatements of prior periods' financial results
relating to an acquisition accounted for as a pooling of interests; (2) losses
resulting from discontinued operations; (3) extraordinary gains or losses; (4)
the cumulative effect of changes in generally accepted accounting principles;
and (5) any other unusual, non-recurring gain or loss which is separately
identified and quantified in the Corporation's financial statements. If the
Policy had been in effect for 1993, based on the Corporation's 1993 Net Income
of $653.6 million, the maximum incentive compensation award payable under the
Policy would have been $2,614,400 (.4% of $653.6 million).
The Committee retains the discretion under the Policy to reduce the incentive
compensation award payable to a Covered Executive Officer notwithstanding the
attainment of any performance goal. In the exercise of this discretion, the
Committee will continue to review competitive market data and other factors
including, for Covered Executive Officers other than the chief executive
officer, management recommendations.
An incentive compensation award pursuant to the Policy paid in stock or
restricted stock will be governed by the provisions (other than the provisions
with respect to the computation of such award) of the Corporation's 1985 Long-
Term Incentive Compensation Plan (the "LTICP"). Deferral of an incentive
30
<PAGE>
compensation award paid in cash under the Policy will be made pursuant to the
Corporation's Employees' Deferred Compensation Plan, which is also being
submitted to stockholders for approval at the 1994 annual meeting.
The Policy is effective as of January 1, 1994. However, no incentive
compensation award to Covered Executive Officers will be paid pursuant to the
Policy unless the Policy is approved by stockholders at the 1994 annual
meeting. The Committee may at any time terminate, suspend, amend or modify the
Policy, except that stockholder approval will be required for an amendment or
modification to the Policy that, in the opinion of counsel, would be required
by Section 162(m) of the Code, the Proposed Regulations, or any other
regulations promulgated under the Code, or rulings or advisory opinions
published by the IRS.
As described above under the heading "EXECUTIVE COMPENSATION -- Report of the
Human Resources Committee on Executive Compensation," Covered Executive
Officers also are eligible to receive stock options granted at fair market
value under the LTICP. Grants of stock options pursuant to the LTICP are not
subject to the Policy because the Proposed Regulations treat stock options that
meet certain criteria, such as options granted under the LTICP, as compensation
based on a pre-established performance goal. Specifically, in order to qualify
as performance based compensation, options must have an exercise price not less
than the fair market value of the underlying shares on the date of grant, and
be granted by a compensation committee consisting of disinterested directors
pursuant to a stockholder approved plan that sets individual limits on stock
option grants. Under special transition rules provided under the Proposed
Regulations, stockholder approved plans that contain an aggregate (rather than
an individual) limit on the number of options that may be granted to all plan
participants will nevertheless satisfy the requirements of the Proposed
Regulations until the earlier of the plan's expiration, the grant of all
options permitted by the plan, or the first stockholders' meeting held after
December 31, 1996. It is anticipated that, based on the LTICP's expiration date
and the number of options still available for future grants, stock options
granted through 1996 under the LTICP will be treated as performance-based
compensation for purposes of Section 162(m).
The incentive awards that would have been paid or that would be payable in
the future under the Policy to the executive officers named in the Summary
Compensation Table (assuming such persons will continue to be Covered Executive
Officers) cannot be determined, because the payment of such awards would be
contingent upon attainment of the pre-established performance goals, the
maximum amount of such awards would depend on the Corporation's Net Income for
the applicable Performance Period, and the actual incentive award to a Covered
Executive Officer may reflect exercise of the Committee's discretion to reduce
the incentive award otherwise payable upon attainment of the performance goal.
STOCKHOLDER APPROVAL
Section 162(m) of the Code and the Proposed Regulations require that
stockholders approve the material terms of the performance goal pursuant to
which such compensation may be paid. Under the Proposed Regulations, the
material terms of the performance goal include the individuals eligible to
receive compensation, a description of the business criteria on which the
performance goal is based, and either the maximum amount of the compensation to
be paid or the formula used to calculate the amount of such maximum
compensation. Because the Policy sets forth all of the foregoing information,
the Committee believes that the approval of the Policy by the requisite vote of
the Corporation's common stockholders will constitute approval of the material
terms of the performance goal as contemplated by the Proposed Regulations.
Approval of the Policy requires the affirmative vote of a majority of the
shares of common stock of the Corporation present in person or represented by
proxy and entitled to vote at the meeting. Under Delaware law, abstentions will
be counted for purposes of determining a quorum at the annual meeting, and will
be counted as voted against Item 2.
THE BOARD OF DIRECTORS RECOMMENDS THAT STOCKHOLDERS VOTE
FOR THE APPROVAL OF THE PERFORMANCE-BASED COMPENSATION POLICY.
31
<PAGE>
ITEM 3. PROPOSAL TO APPROVE THE
EMPLOYEES' DEFERRED COMPENSATION PLAN
IN GENERAL
On July 27, 1993, the Board of Directors approved the Employees' Deferred
Compensation Plan (the "Plan"), effective October 1, 1993, for submission to
the common stockholders at the annual meeting. The Plan permits eligible
employees, including executive officers and directors who are employees, to
defer to a later year a portion of their base salary and incentive
compensation that would otherwise be includable in income in the year in which
it would have been paid. Amounts so deferred are treated as if invested
pursuant to one or more "earnings options," including an earnings option in
the form of the Corporation's common stock, selected by participants in
accordance with the terms of the Plan. The Plan replaces the existing
Employees' Stock Deferral Plan (the "Stock Deferral Plan"), which allowed
employees, including executive officers, to defer base salary and incentive
compensation only in the form of the Corporation's common stock. The full text
of the Plan is set forth in Exhibit B to this proxy statement and the
following description of the Plan is qualified in its entirety by the text of
the Plan.
DESCRIPTION OF THE PLAN
Full-time employees of the Corporation and its subsidiaries, including
executive officers and directors who are employees, who have target total
annual compensation of at least $80,000 and who are selected for participation
in the Plan by the Human Resources Committee (the "Committee") or those
officers of the Corporation to whom the Committee has delegated this
authority, are eligible to participate in the Plan. As of December 31, 1993,
approximately 950 employees, including the chief executive officer and the
four executive officers named in the "Summary Compensation Table" above and
all other executive officers (10 persons), were eligible to participate in the
Plan. The Plan allows participants pursuant to an irrevocable written Deferral
Election to defer to a later year a portion of salary and incentive
compensation which would otherwise be includable in income for tax purposes in
the year in which it would have been paid. The Deferral Election must be made
annually not later than December 15 of the year preceding the calendar year
during which the compensation will be earned, and must specify the amount and
type of compensation (base salary and/or incentive compensation) deferred.
Amounts deferred are credited to a Deferral Account established for each
participant, either annually or periodically based on how the compensation to
be deferred would otherwise have been paid to the participant.
The Plan allows a participant to select in the Deferral Election a number of
different earnings options pursuant to which deferred amounts and adjustments
to such amounts will be credited to a participant's Deferral Account. The
earnings options (the "Earnings Options") available under the Plan consist of
one-year certificates of deposit of Norwest Bank Minnesota, N.A. (the "CD
Option"), a selection of registered investment companies chosen by the
Employee Benefit Review Committee of the Corporation (the "Fund Options"), and
an option in the form of the Corporation's common stock (the "Common Stock
Option"). The maximum number of shares that may be credited to all
participants' Deferral Accounts who have selected the Common Stock Option
under the Plan is 500,000 shares, subject to adjustment to reflect certain
changes in capitalization, such as stock splits, stock dividends, or
recapitalizations.
For participants who have selected the Common Stock Option, amounts deferred
will be credited to the participant's Deferral Account in the form of shares
(rounded to the nearest one-hundredth of a share) determined by dividing the
amount deferred by the average of the high and low prices of a share of the
Corporation's common stock as reported on the consolidated tape of the New
York Stock Exchange (the "NYSE") on the last day of each month, or if the NYSE
is closed on that date, on the next preceding date on which it was open. When
dividends are paid on the Corporation's common stock, the participant's
Deferral Account will be adjusted by that number of shares determined by
multiplying the number of shares credited to that account on the dividend
record date by the per share dividend amount and then dividing the product by
the average of the high and low market prices of a share of the Corporation's
common stock on the dividend payment date. Adjustments to the Deferral Account
of a participant who has selected the CD Option and/or
32
<PAGE>
one or more of the Fund Options (whether or not in conjunction with the Common
Stock Option) will be made, in the case of the CD Option, by multiplying the
Participant's average balance in the CD Option for the month by an earnings
factor based on the interest rate for a Norwest Bank Minnesota, N.A. one-year
certificate of deposit as determined by the Plan Administrator, and in the case
of a Fund Option, by multiplying the Participant's average balance in the Fund
Option for the month by an adjustment factor based on the reported positive or
negative performance of the registered investment company assets relating to
the Fund Option selected.
Amounts credited to a participant's Deferral Account are distributed to such
participant in the year designated for such distribution in the Deferral
Election, or upon the termination of the participant's employment. Upon such
distribution, amounts credited to a Deferral Account will be paid in cash or,
for a participant who has elected the Common Stock Option, in the form of cash
or whole shares of common stock, or a combination of both. Deferred amounts
payable in the year specified for distribution in the participant's Deferral
Election or upon termination of employment prior to retirement or disability
will be distributed as a lump sum. Deferred amounts payable upon a
participant's retirement or disability may be paid either in a lump sum or in
up to 10 annual installments, as elected by the participant. Lump sum
distributions from a Deferral Account will be made on either February 28 (or
the next preceding business day) in the calendar year designated for such
distribution in the Deferral Election or on the date 60 days following the
occurrence of the event which triggers such distribution. Distributions in
annual installments will commence on February 28 (or the next preceding
business day) of the calendar year following the date of retirement or
disability. If a participant dies before receiving all payments to which he or
she is entitled under the Plan, the balance in the Deferral Account will be
distributed in a lump sum either on February 28 (or the next preceding business
day) of the year following the Participant's date of death or 60 days following
the date of death, as designated in the Participant's Deferral Election, to
such Participant's estate or, if the Participant has designated a beneficiary
in writing pursuant to the Plan prior to the Participant's date of death, then
to that beneficiary.
Amounts distributed on any February 28 will be determined by the value of the
Participant's Deferred Account balance as of the preceding December 31. Amounts
paid as of any other date will be determined as of the end of the month in
which the event triggering the distribution occurred. The amount of any
installment payment distribution will be computed as of the December 31
preceding the date of the installment payment, based on the value of the
Participant's Deferral Account on that date, divided by the number of
installments elected less the number of installments previously paid.
Because employees who are executive officers may participate in the Plan, the
Plan is being submitted to common stockholders for approval in order to comply
with certain Securities and Exchange Commission rules applicable to employee
benefit plans in which officers of the Corporation subject to Section 16 of the
Securities Exchange Act of 1934 ("Section 16 Officers") (the "Exchange Act")
may participate. Pursuant to these rules (the "Section 16 Rules"), if the Plan
is approved by common stockholders and assuming the Plan is otherwise
administered in accordance with its terms and the Section 16 Rules, management
of the Corporation believes that credits in the form of the Corporation's
common stock to the Deferral Accounts of those Section 16 Officers who
participate in the Plan and have elected the Common Stock Option and
distribution of such shares of common stock to such officers in accordance with
the Plan will not be treated as purchases or sales subject to Section 16 of the
Exchange Act. As a result, other purchases or sales of the Corporation's common
stock outside of the Plan may be made by Section 16 Officers within six months
of a Plan transaction without liability for short-swing profits under Section
16 of the Exchange Act. If the Plan is not approved by stockholders, then the
Common Stock Option will not be available to participants who are Section 16
Officers.
The Committee has the authority to terminate, suspend, or amend the Plan.
However, those provisions of the Plan relating to eligibility, elections to
defer compensation, the computation and timing of credits and the number of
shares issuable under the Plan may not be amended more than once in every six
months other than to comport with changes in the Internal Revenue Code, ERISA,
or the rules thereunder.
As of December 31, 1993, of the chief executive officer and four other
executive officers named above in the Summary Compensation Table, only Leslie
S. Biller has elected to defer incentive compensation earned
33
<PAGE>
for 1994 and payable in 1995, under the Plan. One other executive officer and
119 other employees, including officers other than executive officers, have
elected to defer 1994 compensation pursuant to the Plan. Benefits under the
Plan cannot be determined, since such benefits depend on the amount of base
salary and incentive compensation each participating employee, including
employees who are executive officers and directors, will receive and elect to
defer under the Plan, the adjustments thereon based on the combination of one
or more Earnings Options selected by each participant, and, with respect to
those participants who have selected the Common Stock Option, the average of
the high and low market prices of the Corporation's common stock and the
amounts of dividends paid thereon.
Approval of the Plan requires the affirmative vote of a majority of the
shares of common stock of the Corporation present in person or represented by
proxy and entitled to vote at the meeting.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE
PROPOSAL TO APPROVE THE EMPLOYEES' DEFERRED COMPENSATION PLAN.
ITEM 4. PROPOSAL TO APPROVE AN AMENDMENT TO
THE DIRECTORS' FORMULA STOCK AWARD PLAN
The Norwest Corporation Directors' Formula Stock Award Plan (the "Directors'
Formula Plan") was adopted by the Corporation effective January 1, 1992 and
approved by stockholders at the 1992 annual meeting. On February 22, 1994, the
Board of Directors approved an amendment to the Directors' Formula Plan,
subject to stockholders' approval, to increase the value of the annual award
(the "Award") to non-employee directors who have served as directors of the
Corporation during the prior year (an "Eligible Non-Employee Director") from
shares of the Corporation's common stock having an aggregate fair market value
on the date of the Award of $11,000 to shares having a value of $18,000. The
text of the amendment to Section 3 of the Directors' Formula Plan (the "Plan
Amendment") is set forth in Exhibit C to this proxy statement.
The purpose of the Directors' Formula Plan is to compensate non-employee
directors of the Corporation for their services in the form of shares of the
Corporation's common stock. Management of the Corporation believes that the
Award, as amended, will continue to aid in attracting and retaining individuals
with outstanding abilities and skills for service on the Corporation's Board of
Directors. Under the terms of the Directors' Formula Plan, up to 50,000 shares
of the Corporation's common stock may be issued in payment of Awards. The Plan
Amendment, if approved by stockholders, will not increase the number of shares
of such common stock issuable under the Directors' Formula Plan.
The Directors' Formula Plan was also amended by the Board of Directors on
July 27, 1993, pursuant to those provisions of the Directors' Formula Plan
which permit certain amendments to be made without stockholder approval, to
permit non-employee directors to defer payment of all or a portion of an Award
under the Directors' Formula Plan in the form of shares of the Corporation's
common stock. A summary of the terms of the Directors' Formula Plan, as well as
a description of the July 27, 1993 amendment, prior to the adoption of the Plan
Amendment, and the Awards made to non-employee directors for service as
directors during 1993, including any Award deferred in whole or in part in the
form of shares of the Corporation's common stock by those non-employee
directors electing such deferrals, is set forth above under the heading
34
<PAGE>
"CERTAIN INFORMATION REGARDING THE BOARD OF DIRECTORS AND COMMITTEES THEREOF --
Compensation of Directors."
If the Plan Amendment is approved by stockholders, the Award for service as a
non-employee director during 1994 will equal that number of shares of common
stock having an aggregate fair market value of $18,000 on the Award Date,
rounded to the next highest whole share. Each Eligible Non-Employee Director
who serves during less than all of 1994 will be awarded one-twelfth of such
Award for each month or portion thereof that he or she serves as a non-employee
director. If the Plan Amendment had been in effect on January 31, 1994, each of
the non-employee directors who had served as a director for all of 1993 (13
persons) would have received an Award of 683 shares, based on the closing price
of $26.375 per share of common stock of the Corporation on the New York Stock
Exchange on that date.
The Directors' Formula Plan provides that no amendment may be made without
prior approval of the stockholders if the amendment would materially increase
the benefits to participants or the number of shares to be issued under the
Directors' Formula Plan or materially modify the requirements as to eligibility
for participation in the Directors' Formula Plan. Because the Plan Amendment
increases the amount of the Award payable to participants under the Directors'
Formula Plan, the Board of Directors is submitting the Plan Amendment to
stockholders for approval.
Approval of the Plan Amendment requires the affirmative vote of a majority of
the shares of common stock of the Corporation present in person or represented
by proxy and entitled to vote at the meeting.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE
PROPOSAL TO APPROVE THE AMENDMENT TO THE DIRECTORS' FORMULA STOCK AWARD PLAN.
ITEM 5. APPOINTMENT OF AUDITORS
At the meeting a vote will be taken on the proposal to ratify the appointment
by the Board of Directors of KPMG Peat Marwick, independent certified public
accountants, as auditors of the Corporation and its subsidiaries for the year
ending December 31, 1994. KPMG Peat Marwick or its predecessors have examined
the accounts of the Corporation annually since 1931.
Representatives of KPMG Peat Marwick are expected to be present at the annual
meeting of stockholders on April 26, 1994, with the opportunity to make a
statement if they desire to do so, and such representatives are expected to be
available to respond to appropriate questions.
DEADLINE FOR SUBMISSION OF STOCKHOLDER PROPOSALS
Proposals of stockholders intended to be presented at the annual meeting of
stockholders to be held in 1995 must be received by the Secretary of the
Corporation, at Norwest Center, Sixth and Marquette, Minneapolis, Minnesota
55479-1026, no later than November 23, 1994.
35
<PAGE>
ANNUAL REPORTS
The Annual Report of the Corporation for the year 1993, including financial
statements, has been sent to stockholders. THE CORPORATION WILL PROVIDE WITHOUT
CHARGE TO EACH STOCKHOLDER, ON WRITTEN REQUEST, A COPY OF THE CORPORATION'S
ANNUAL REPORT ON FORM 10-K FOR THE YEAR 1993, INCLUDING THE FINANCIAL
STATEMENTS AND SCHEDULES THERETO, FILED WITH THE SECURITIES AND EXCHANGE
COMMISSION. If a stockholder requests copies of any exhibits to such Form 10-K,
the Corporation will require the payment of a fee covering its reasonable
expenses. A written request should be addressed to the Secretary, Norwest
Corporation, Norwest Center, Sixth and Marquette, Minneapolis, Minnesota 55479-
1026.
By Order of the Board of Directors,
[SIGNATURE OF LAUREL A. HOLSCHUH APPEARS HERE]
LAUREL A. HOLSCHUH
Secretary
March 23, 1994
36
<PAGE>
EXHIBIT A
NORWEST CORPORATION
PERFORMANCE-BASED COMPENSATION POLICY FOR COVERED EXECUTIVE OFFICERS
1. PURPOSE. The purpose of the "Norwest Corporation Performance-Based
Compensation Policy for Covered Executive Officers" (the "Policy") is to
establish one or more performance goals for payment of incentive compensation
other than stock options and the maximum amount of such incentive compensation
that may be paid to certain executive officers. It is the intention of the
Human Resources Committee (the "Committee") of the Board of Directors of the
Corporation that incentive compensation awarded to each Covered Executive
Officer (as defined below) pursuant to the Policy for the taxable year
commencing January 1, 1994 and each taxable year thereafter be deductible by
the Corporation for federal income tax purposes in accordance with Section
162(m) of the Internal Revenue Code of 1986, as amended (the "Code"), and the
Proposed Regulations published December 20, 1993 relating thereto (the
"Proposed Regulations").
2. COVERED EXECUTIVE OFFICERS. This Policy shall apply to any individual (a
"Covered Executive Officer") who, on the last day of a taxable year, commencing
with the taxable year beginning January 1, 1994, is (a) the chief executive
officer of the Corporation or is acting in such capacity, or (b) is among the
four highest compensated executive officers (other than the chief executive
officer) of the Corporation. Whether an individual is the chief executive
officer or among the four highest compensated executive officers shall be
determined pursuant to the executive compensation disclosure rules under the
Securities Exchange Act of 1934.
3. INCENTIVE COMPENSATION AWARD/ESTABLISHMENT OF PERFORMANCE GOALS. An
incentive compensation award to a Covered Executive Officer pursuant to this
Policy may be paid in the form of cash, stock, or restricted stock, or any
combination thereof. Payment of an incentive compensation award to a Covered
Executive Officer under this Policy will be contingent upon the attainment of
the performance goal or goals for the Performance Period established for such
Covered Executive Officer by the Committee as provided herein. The Committee
shall retain the discretion to reduce the incentive compensation award payable
to a Covered Executive Officer, notwithstanding attainment of any performance
goal.
The Committee shall establish in writing one or more performance goals to be
attained (which performance goals may be stated as alternative performance
goals) for a Performance Period for each Covered Executive Officer on or before
the latest date permitted under Section 162(m) of the Code, the Proposed
Regulations or in any other regulations promulgated thereunder or in rulings or
advisory opinions published by the Internal Revenue Service (the "IRS").
Performance goals may be based on any one or more of the following business
criteria (as defined in paragraph 4 below) as the Committee may select:
. Earnings Per Share
. Business Unit Net Earnings
. Return on Common Equity.
The maximum amount of an incentive compensation award for any Performance
Period to any Covered Executive Officer shall be a dollar amount not to exceed
four-tenths of one percent (.4%) of the Corporation's Net Income (as defined
below).
4. DEFINITIONS. For purposes of this Policy and for determining whether a
particular performance goal is attained, the following terms shall have the
meanings given them below:
(a) The term "Business Unit Net Earnings" shall mean the net earnings of
the business unit of the Corporation managed by a Covered Executive
Officer, as determined in accordance with generally accepted accounting
principles, adjusted in accordance with the Corporation's management
accounting practices and conventions in effect at the beginning of the
Performance Period, and as further adjusted in the same manner as provided
below for Net Income.
A-1
<PAGE>
(b) The term "Earnings Per Share" shall mean the Corporation's primary
earnings per share as reported in the Corporation's consolidated financial
statements for the Performance Period, adjusted in the same manner as
provided below for Net Income.
(c) The term "Net Income" shall mean the Corporation's net income for the
applicable Performance Period as reported in the Corporation's consolidated
financial statements, adjusted to eliminate the effect of (1) restatements
of prior periods' financial results relating to an acquisition accounted
for as a pooling of interests; (2) losses resulting from discontinued
operations; (3) extraordinary gains or losses; (4) the cumulative effect of
changes in generally accepted accounting principles; and (5) any other
unusual, non-recurring gain or loss which is separately identified and
quantified in the Corporation's financial statements.
(d) The term "Performance Period" shall mean a calendar year, commencing
January 1 and ending December 31.
(e) The term "Return on Common Equity" shall mean the Net Income of the
Corporation on an annualized basis less dividends accrued on outstanding
preferred stock, divided by the Corporation's average total common equity
for the Performance Period.
5. APPLICABILITY OF CERTAIN PROVISIONS OF THE 1985 LONG-TERM INCENTIVE
COMPENSATION PLAN AND THE EMPLOYEES' DEFERRED COMPENSATION PLAN TO INCENTIVE
COMPENSATION AWARDS. An incentive compensation award paid in stock or
restricted stock pursuant to this Policy shall be governed by the provisions
(other than provisions with respect to the computation of such award) of the
Corporation's 1985 Long-Term Incentive Compensation Plan. Deferral of an
incentive compensation award paid in cash under this Policy shall be made
pursuant to the provisions of the Corporation's Employees' Deferred
Compensation Plan.
6. EFFECTIVE DATE; AMENDMENT AND TERMINATION. This Policy shall be effective
as of January 1, 1994; provided, however, that no incentive compensation award
shall be paid pursuant to this Policy unless this Policy has been approved by
the stockholders of the Corporation. The Committee may at any time terminate,
suspend, amend or modify this Policy except that stockholder approval shall be
required for any amendment or modification to this Policy that, in the opinion
of counsel, would be required by Section 162(m) of the Code, the Proposed
Regulations, or any other regulations promulgated under the Code, or rulings or
advisory opinions published by the IRS.
A-2
<PAGE>
EXHIBIT B
NORWEST CORPORATION
EMPLOYEES' DEFERRED COMPENSATION PLAN
1. ELIGIBILITY. Each full-time employee of Norwest Corporation (the
"Corporation") or any of its subsidiaries who has target total compensation of
$80,000 or more ("Compensation") and who has also been selected for
participation in this Plan by the Human Resources Committee of the Board of
Directors or such officers of the Corporation to which said Committee has
delegated its authority ("Eligible Employee") shall be eligible to participate
in the Employees' Deferred Compensation Plan (the "Plan").
2. DEFERRAL OF COMPENSATION. An Eligible Employee may elect to defer all or a
portion of his or her Compensation, subject, however, to a minimum deferral per
pay period of $100, that he or she may earn from the Corporation or its
subsidiaries during the calendar year (the "Deferral Year") following the year
in which the Deferral Election (as defined in Section 3(a)) is made; provided
however, that any other payroll deductions elected by the Eligible Employee
(such as payments for welfare or retirement benefits or insurance), including
FICA taxes, shall be made before any deferrals are made under this Plan. Such
election shall be made pursuant to Section 3.
3. ELECTION TO PARTICIPATE AND DEFER COMPENSATION.
a) PARTICIPATION. An Eligible Employee becomes a participant in the Plan by
filing not later than December 15 of the year preceding the Deferral Year an
irrevocable election (the "Deferral Election") with the Plan Administrator (as
defined in Section 10) on a form provided for that purpose. An Eligible
Employee who has made a Deferral Election under this Section for any year and
has a Deferral Account (as defined in Section 4) is deemed a "Participant." The
Deferral Election shall be effective only for the Deferral Year specified. A
new Deferral Election must be filed for each Deferral Year.
b) DEFERRAL ELECTION. The Deferral Election shall consist of two parts: 1)
the deferral of incentive pay which is earned throughout the year and paid
after the end of the year, and 2) the deferral of base pay or incentives, which
are paid on a periodic basis during the year. The employee shall specify in the
Deferral Election a) an amount to be deferred, expressed either as a percentage
or a dollar amount of Compensation otherwise payable in cash to the employee;
b) an earnings option as described in Section 4; c) one of the payment options
described in Section 6; and d) the event which triggers payment or the year in
which amounts deferred shall be paid in a lump sum or in which installment
payments shall commence pursuant to Section 6.
c) INITIAL DEFERRAL ELECTION OR INITIAL ELIGIBILITY. The initial Deferral
Elections by Participants will be made within thirty days of the effective date
of the Plan for compensation to be earned subsequent to the Deferral Election.
A new Eligible Employee must make a Deferral Election within thirty days of the
date the employee becomes eligible to participate in the Plan to defer
compensation earned in that year.
d) EARLY WITHDRAWAL. A Participant who wishes to receive payment of all or
part of his or her deferred Compensation on a date earlier than that specified
in the Deferral Election may do so by filing a request for such early
withdrawal with the Corporation, whereupon the balance of the Deferral Account,
reduced by 10%, shall be paid to the Participant. Further, the Participant will
be ineligible to defer any further Compensation in the current Deferral Year
and for the two subsequent Deferral Years.
4. DEFERRAL ACCOUNT
a) EARNINGS OPTIONS. The earnings options available for selection in the
Deferral Election are as follows:
i) Norwest Corporation common stock option ("Common Stock Option").
ii) Norwest Bank Minnesota, N.A. one-year certificate of deposit option
("CD Option").
B-1
<PAGE>
iii) A selection of registered investment companies chosen by the
Employee Benefit Review Committee of the Corporation ("Fund Option").
A Participant may choose to allocate amounts credited to his or her account
under the Plan (the "Deferral Account") among the earnings options in
increments of five (5) percent. The allocation of earnings options must be made
by the Participant in advance of each Deferral Year and, once made, cannot be
changed for the deferred Compensation. If the Participant makes no earnings
option election, the Participant will be deemed to have selected the Common
Stock Option for that Deferral Year.
b) PERIODIC CREDITS. On each pay day on which the deferred Compensation would
otherwise be paid to a Participant, the Participant shall receive a credit to
his or her Deferral Account. The amount of each credit shall be equal to the
amount the Participant elected to defer in the Deferral Election, and each
credit shall be accounted for based on the earnings options selected by the
Participant in the Deferral Election. In the case of the Common Stock Option,
the credit shall be a number of shares of Norwest common stock ("Common Stock")
determined in accordance with paragraph 5(b) below.
c) ADJUSTMENTS. That portion of a Participant's Deferral Account which is
accounted for under each earnings option shall be further adjusted by an amount
determined in accordance with the respective earnings option as follows:
i) CD OPTION. Adjustments under the CD Option shall be made monthly as of
the last day of each month. The amount of the adjustment for the CD Option
shall be calculated by multiplying the Participant's average balance in the
CD Option for the month by an earnings factor based on the interest rate
for a Norwest Bank Minnesota, N.A. one-year certificate of deposit as
determined from time to time by the Plan Administrator.
ii) FUND OPTION. Adjustments under any Fund Option shall be made monthly
as of the last day of each month. The amount of the adjustment for a Fund
Option shall be calculated by multiplying the Participant's average balance
in the Fund Option for the month by an adjustment factor based on the
reported positive or negative performance for the month of the registered
investment company assets relating to the Fund Option selected.
iii) COMMON STOCK OPTION. Adjustments under the Common Stock Option shall
be made each time a dividend is paid on Common Stock in accordance with
paragraph 5(c) below.
5. COMMON STOCK OPTION
a) ACCOUNTING. All periodic credits and all adjustments to a Participant's
Deferral Account under the Common Stock Option shall be credited in shares of
Common Stock. Shares of Common Stock shall be rounded to the nearest one-
hundredth of a share.
b) DETERMINATION OF NUMBER OF SHARES. The number of shares of Common Stock
credited to a Participant's Deferral Account under the Common Stock Option
shall be determined by dividing the amount of each periodic credit by the
average of the high and low prices per share of Common Stock reported on the
consolidated tape of the New York Stock Exchange on the last day of each month
(or, if the New York Stock Exchange is closed on that date, on the next
preceding date on which it was open).
c) ADJUSTMENTS BASED ON DIVIDENDS. Adjustments under the Common Stock Option
shall be made each time a dividend is paid on Common Stock. The number of
shares credited to a Participant's Deferral Account for such adjustments shall
be determined by multiplying the dividend amount per share by the number of
shares credited to the Participant's Deferral Account as of the record date for
the dividend and dividing the product by the average of the high and low prices
per share of Common Stock reported on the consolidated tape of the New York
Stock Exchange on the dividend payment date (or, if the New York Stock Exchange
is closed on that date, on the next preceding date on which it was open).
B-2
<PAGE>
d) NUMBER OF SHARES ISSUABLE UNDER THE PLAN. Subject to adjustment as
provided in Section 5(e), the maximum number of shares of Common Stock that may
be credited under the Plan is 500,000.
e) ADJUSTMENTS FOR CERTAIN CHANGES IN CAPITALIZATION. If the Corporation
shall at any time increase or decrease the number of its outstanding shares of
Common Stock or change in any way the rights and privileges of such shares by
means of the payment of a stock dividend or any other distribution upon such
shares payable in Common Stock, or through a stock split, subdivision,
consolidation, combination, reclassification, or recapitalization involving the
Common Stock, then the numbers, rights, and privileges of the shares issuable
under the Plan shall be increased, decreased, or changed in like manner as if
such shares had been issued and outstanding, fully paid, and nonassessable at
the time of such occurrence.
f) AVAILABILITY. The Common Stock Option shall be available only to those
Participants who are not subject to the provisions of Section 16 of the
Securities Exchange Act of 1934 and rules promulgated by the Securities and
Exchange Commission thereunder until such time as this Plan has been approved
by a vote of the stockholders of the Corporation. After such approval, the
Common Stock Option shall be available to all Participants.
6. DISTRIBUTIONS. Payment of Deferral Accounts shall be made pursuant to the
Participant's Deferral Election, subject to the following:
a) UPON RETIREMENT OR DISABILITY. A Participant may designate in the Deferral
Election distribution of the Deferral Account in either a lump sum or annual
installments for a period of years not to exceed ten if the Participant elects
distribution to be made after his or her regular retirement date or early
retirement as defined in Sec. 6.1 or 6.2 of the Norwest Corporation Pension
Plan or following his or her disability as described in the Norwest Corporation
Long Term Disability Plan.
b) UPON DEATH. If a Participant dies before receiving all payments to which
he or she is entitled under the Plan, payment of the balance in the Deferral
Account shall be made in a lump sum on February 28 (or the next preceding
business day if February 28 is not a business day) of the year following the
date of death or 60 days following the date of death, as designated in the
Deferral Election, to such Participant's estate or, if the Participant has
designated a beneficiary in writing and the written designation has been
delivered to and accepted by the Plan Administrator prior to the Participant's
death, to such beneficiary.
c) UPON OTHER TERMINATION OF EMPLOYMENT. Notwithstanding any Deferral
Election to the contrary, if a Participant terminates employment with the
Corporation prior to regular or early retirement as defined in Sec. 6.1 or 6.2
of the Norwest Corporation Pension Plan or disability as described in the
Norwest Corporation Long Term Disability Plan, the Deferral Account will be
paid to the Participant in a lump sum.
d) FORM OF DISTRIBUTIONS. All distributions shall be payable as follows:
i) in cash for all Deferral Accounts for which the Participant elected an
earnings option other than the Common Stock Option; or
ii) if the Participant elected the Common Stock Option, in cash, or in
whole shares of Common Stock (together with cash in lieu of a fractional
share), or in a combination thereof, as the Participant shall elect prior
to payment. If no election is made, distribution shall be made in whole
shares of Common Stock (together with cash in lieu of a fractional share).
e) VALUATION OF DEFERRAL ACCOUNTS FOR DISTRIBUTION.
i) Amounts paid on any February 28 (or the next preceding business day if
February 28 is not a business day) shall be determined based on the
Participant's Deferral Account balance and/or on the price of Common Stock
determined pursuant to Section 5 as of the preceding December 31 (or the
next preceding business day if December 31 is not a business day). Amounts
paid as of any other date on which a distribution is made shall be
determined based on the Participant's Deferral Account balance
B-3
<PAGE>
and/or on the price of Common Stock determined pursuant to Section 5 as of
the end of the month in which the event which triggers distribution occurs.
ii) The amount of each installment payment shall be a fraction of the
value of the Participant's Deferral Account as of the December 31 preceding
the date of the installment payment (or the next preceding business day if
December 31 is not a business day), the numerator of which is one and the
denominator of which is the total number of installments elected (not to
exceed ten) minus the number of installments previously paid. The balance
remaining in the Deferral Account shall continue to be adjusted based on
the earnings options selected by the Participant in the Deferral Election
until the Deferral Account is paid out in full. All installment payments
will be made by pro rata withdrawals from each earnings option elected by
the Participant.
f) TIMING OF DISTRIBUTIONS.
i) All lump sum distributions shall be made as designated in the Deferral
Election on either February 28 (or the next preceding business day if
February 28 is not a business day) of the year designated in the Deferral
Election or on the date 60 days following the occurrence of the event which
triggers distribution.
ii) All annual installment distributions shall be made on February 28 (or
the next preceding business day if February 28 is not a business day),
commencing on February 28 of the calendar year following disability or
retirement.
7. NONASSIGNABILITY. No right to receive cash payments under the Plan nor any
shares of Common Stock credited to a Participant's Deferral Account shall be
assignable or transferable by a Participant other than by will or the laws of
descent and distribution or pursuant to a qualified domestic relations order as
defined by the Internal Revenue Code of 1986, as amended ("Internal Revenue
Code"), Title I of the Employee Retirement Income Security Act of 1974, as
amended ("ERISA"), or rules thereunder. The designation of a beneficiary by a
Participant does not constitute a transfer.
8. WITHHOLDING OF TAXES. Distributions under this Plan shall be subject to
the deduction of the amount of any federal, state, or local income taxes,
Social Security tax, Medicare tax, or other taxes required to be withheld from
such payments by applicable laws and regulations.
9. UNSECURED OBLIGATION. Benefits payable under this Plan shall be an
unsecured obligation of the Corporation.
10. ADMINISTRATION. The Plan shall be administered by the Human Resources
Committee of the Corporation's Board of Directors (the "Plan Administrator") or
its delegate, which shall have the authority to interpret the Plan, to adopt
procedures for implementing the Plan, and to determine adjustments under the
Plan.
11. AMENDMENT AND TERMINATION. The Human Resources Committee of the
Corporation's Board of Directors may at any time terminate, suspend, or amend
this Plan; provided, however, that the provisions of Sections 1, 2, 3, 4 and 5
may not be amended more than once in every six months other than to comport
with changes in the Internal Revenue Code, ERISA, or the rules thereunder or
the regulations of the Securities and Exchange Commission. No such action shall
deprive any Participant of any benefits to which he or she would have been
entitled under the Plan if termination of the Participant's employment had
occurred on the day prior to the date such action was taken, unless agreed to
by the Participant.
12. EFFECTIVE DATE. The effective date of the Plan shall be determined by the
Human Resources Committee of the Board of Directors or such officers of the
Corporation to which said Committee has delegated its authority to set the
effective date.
B-4
<PAGE>
EXHIBIT C
PROPOSED AMENDMENT TO THE DIRECTORS' FORMULA STOCK AWARD PLAN
The proposed amendment to Section 3 of the Directors' Formula Stock Award
Plan is underscored and the language to be deleted is set forth in brackets.
"3. Formula Award. In consideration for past services rendered, on January
31 of each year (the "Award Date"), each Eligible Non-Employee Director
who was a non-employee director of the Corporation during all of the
preceding calendar year shall be awarded that number of shares (rounded
up to the next whole share) of Common Stock having an aggregate fair
market value on the Award Date of [$11,000] $18,000 (an "Award"). Each
Eligible Non-Employee Director who was a non-employee director of the
Corporation for less than all of the calendar year preceding an Award
Date shall be awarded one-twelfth of an Award for each calendar month
or portion thereof during which such person served as a non-employee
director of the Corporation."
C-1
<PAGE>
(LOGO OF NORWEST CORPORATION APPEARS HERE)
NC54228MSC94
<PAGE>
NORWEST CORPORATION SAVINGS--INVESTMENT PLAN
CONFIDENTIAL VOTING INSTRUCTIONS TO
NORWEST BANK MINNESOTA, NATIONAL ASSOCIATION, TRUSTEE
I hereby direct that the voting rights pertaining to the stock of Norwest
Corporation held by the Trust and allocable to my account under the above
Plan, as of December 31, 1993, shall be exercised at the Annual Meeting of
Stockholders of said Corporation to be held April 26, 1994, and at any
adjournment thereof, as specified on this instruction card and also on any
other business as may properly come before said meeting or any adjournment
thereof.
This instruction card must be returned to Norwest Bank Minnesota, National
Association, Trustee, by April 22, 1994, if your instructions are to be
honored. The Trustee will tabulate the instructions from all participants
received by the deadline and will determine the ratio of votes for and
against each item. The Trustee will then vote all shares held in the Trust
according to the ratios so determined.
If no choice is specified, this proxy will be voted "FOR" Items 1 through 5.
Item 1. Election of Directors. Nominees: David A. Christensen, Gerald J.
Ford, Pierson M. Grieve, Charles M. Harper, N. Berne Hart, William
A. Hodder, George C. Howe, Lloyd P. Johnson, Reatha Clark King,
Richard M. Kovacevich, Richard S. Levitt, Richard D. McCormick,
Cynthia H. Milligan, John E. Pearson, Ian M. Rolland, Stephen E.
Watson and Michael W. Wright.
[_] FOR [_] WITHHOLD FOR ALL
(INSTRUCTIONS: To withhold authority to vote for any individual nominee,
write nominee's name on the line below.)
- -------------------------------------------------------------------------------
Item 2. Approval of the Performance-Based Compensation Policy for Covered
Executive Officers.
[_] FOR [_] AGAINST [_] ABSTAIN
(Continued, and to be signed and dated, on the reverse side)
<PAGE>
Item 3. Approval of the Employees' Deferred Compensation Plan.
[_] FOR [_] AGAINST [_] ABSTAIN
Item 4. Approval of amendment to Directors' Formula Stock Award Plan to
increase the annual award to non-employee directors.
[_] FOR [_] AGAINST [_] ABSTAIN
Item 5. Ratification of appointment of KPMG Peat Marwick as auditors.
[_] FOR [_] AGAINST [_] ABSTAIN
Date:____________________________, 1994
----------------------------------------
Signature of Participant
PLEASE DATE, SIGN AND MAIL this
instruction card promptly using the
enclosed envelope.
<PAGE>
NORWEST CORPORATION PROXY
- -----------------------------------------------------------------------------
This proxy is solicited by the Board of Directors for use at the Annual
Meeting on Tuesday, April 26, 1994.
The shares of common stock of Norwest Corporation which you are entitled to
vote on March 8, 1994, will be voted as you specify on this card.
If no choice is specified, this proxy will be voted "FOR" Items 1 through 5.
By signing this proxy, you revoke all prior proxies and appoint Leslie S.
Biller, James R. Campbell, Kenneth R. Murray and Daniel A. Saklad, and each of
them, with full power of substitution, to vote your shares as specified on
this card and on any other business which may properly come before the Annual
Meeting or any adjournment thereof.
Item 1. Election of Directors. Nominees: David A. Christensen, Gerald J.
Ford, Pierson M. Grieve, Charles M. Harper, N. Berne Hart, William
A. Hodder, George C. Howe, Lloyd P. Johnson, Reatha Clark King,
Richard M. Kovacevich, Richard S. Levitt, Richard D. McCormick,
Cynthia H. Milligan, John E. Pearson, Ian M. Rolland, Stephen E.
Watson and Michael W. Wright.
[_] FOR [_] WITHHOLD FOR ALL
(INSTRUCTIONS: To withhold authority to vote for any individual nominee,
write the nominee's name on the line below.)
- -------------------------------------------------------------------------------
Item 2. Approval of the Performance-Based Compensation Policy for Covered
Executive Officers.
[_] FOR [_] AGAINST [_] ABSTAIN
(Continued, and to be signed and dated, on the reverse side)
<PAGE>
Item 3. Approval of the Employees' Deferred Compensation Plan.
[_] FOR [_] AGAINST [_] ABSTAIN
Item 4. Approval of amendment to Directors' Formula Stock Award Plan to
increase the annual award to non-employee directors.
[_] FOR [_] AGAINST [_] ABSTAIN
Item 5. Ratification of appointment of KPMG Peat Marwick as auditors.
[_] FOR [_] AGAINST [_] ABSTAIN
Date:____________________________, 1994
----------------------------------------
Signature
----------------------------------------
Signature
Please sign exactly as your name appears above. In the case of joint owners,
each should sign. If signing as executor, trustee, guardian, or in any other
representative capcity or as an officer of a corporation, please indicate your
full title as such.
<PAGE>
GRAPHIC MATERIAL CROSS-REFERENCE PAGE
Photographs of the Director-Nominees appear to the left of each respective
name on pages 3, 4, 6, 7 and 8.
A performance graph showing a comparison of the Five-Year Total Stockholder
Return among Norwest Corporation, the S&P 500 Index and a Peer Group Index
appears on page 21. A paper copy of the Performance Graph, including the
numbers used therein, as it appears on page 21 of the definitive proxy
statement was filed with the Commission under cover of Form SE on March 23,
1994 pursuant to Rule 304(d)(1) of Regulation S-T.
