<PAGE>
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES EXCHANGE ACT OF 1934
Filed by the Registrant [X]
Filed by a Party other than the Registrant [_]
Check the appropriate box:
[_] Preliminary Proxy Statement [_] CONFIDENTIAL, FOR USE OF THE
COMMISSION ONLY (AS PERMITTED BY
[X] Definitive Proxy Statement RULE 14A-6(E)(2))
[_] 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)
------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[_] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), 14a-6(i)(2) or
Item 22(a)(2) of Schedule 14A.
[_] $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
[_] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
------------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
------------------------------------------------------------------------
(5) Total fee paid:
------------------------------------------------------------------------
[X] Fee paid previously with preliminary materials.
[_] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
------------------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
------------------------------------------------------------------------
(3) Filing Party:
------------------------------------------------------------------------
(4) Date Filed:
------------------------------------------------------------------------
Notes:
<PAGE>
Revised Proxy Statement Filed
To Correct Typographical
Error on Page 22
LOGO
March 19, 1996
Dear Stockholder:
The annual meeting of stockholders will be held on Tuesday, April 23, 1996,
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 1996, stockholders will be asked to
consider and vote upon proposals to approve amendments to the 1985 Long-Term
Incentive Compensation Plan and 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,
LOGO
RICHARD M. KOVACEVICH
Chairman, 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 23, 1996
---------------------
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 23, 1996, 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 vote on a proposal to amend the 1985 Long-Term Incentive
Compensation Plan to increase the number of shares available for awards
by 17,500,000, to limit the number of shares that may be subject to
stock options or stock appreciation rights granted to any employee in a
calendar year, to permit the Human Resources Committee to extend the
exercise period for stock options and stock appreciation rights
following a holder's death, permanent disability, or retirement to a
date no later than the original expiration date, and to eliminate a
stated expiration date for the Plan;
(3) To vote on a proposal to amend the Directors' Formula Stock Award Plan
to award non-employee directors annually shares of common stock with a
value equal to the annual cash retainer and to provide for a one-time
award under the Plan for 1996;
(4) To vote on a proposal to ratify the appointment by the Board of
Directors of KPMG Peat Marwick LLP to audit the books of the
Corporation and subsidiaries for the year ending December 31, 1996; and
(5) 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 5,
1996, will be entitled to vote at the annual meeting or any adjournment
thereof. A list of the stockholders entitled to vote at the annual meeting or
any adjournment thereof will be made available for the examination of any
stockholder of the Corporation for any purpose germane to the meeting, during
business hours, for a period of at least 10 days prior to the meeting at the
office of the Secretary of the Corporation, Norwest Center, Sixth and
Marquette, Minneapolis, Minnesota 55479-1026.
By Order of the Board of Directors,
LOGO
LAUREL A. HOLSCHUH
Secretary
March 19, 1996
<PAGE>
Revised Proxy Statement
Filed to Correct Typographical
Error on Page 22
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 23, 1996. Shares
of common stock may be represented at the annual meeting by stockholders in
person or by proxy. If shares of common stock are represented by proxy, the
shares will be voted in accordance with directions given in the proxy. If no
directions are given, the shares will be voted in favor of the election of the
director-nominees named in this Proxy Statement 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 19, 1996.
Expenses in connection with this solicitation of proxies will be paid by the
Corporation. Solicitation of proxies will be principally by mail. One or more
officers or employees of the Corporation or its subsidiaries may also 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 $10,000 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 5, 1996, the record date for stockholders
entitled to vote at the meeting, 358,395,538 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, 1995.
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 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.
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<TABLE>
<CAPTION>
AT DECEMBER 31, 1995
---------------------
AMOUNT AND PERCENT
NATURE OF OF
BENEFICIAL COMMON
NAME AND ADDRESS OF BENEFICIAL OWNER OWNERSHIP 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 29,943,745(1) 8.5%
AXA, 23 Avenue Matignon, 75008 Paris, France, as a
parent holding company of, and certain subsidiaries,
including investment advisors and an insurance
company, of The Equitable Companies Incorporated, 787
Seventh Avenue, New York, New York 10019 19,137,726(2) 5.4%
</TABLE>
- ---------------------
(1) With respect to 11,051,358 of these shares, such subsidiaries had, in the
aggregate: sole voting power over 9,440,969 shares, shared voting power
over 848,128 shares, and no voting power over the remaining 762,261 shares;
sole dispositive power over 7,905,379 shares, shared dispositive power over
2,355,454 shares, and no dispositive power over the remaining 790,525
shares.
The amount shown also includes 18,892,387 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 ratably by Norwest Bank Minnesota, N.A., as trustee of the
trust, 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 subsidiaries disclaim beneficial interest in
these shares.
(2) With respect to these shares, AXA, as a parent holding company of, and
certain subsidiaries, including investment advisors and an insurance
company, of The Equitable Companies Incorporated had, in the aggregate:
sole voting power over 11,407,302 shares, shared voting power over 472,900
shares, and no voting power over the remaining 7,271,694 shares; and sole
dispositive power over 19,137,726 shares.
VOTING PROCEDURES
ELECTION OF DIRECTORS
Under Delaware law, directors are elected by a plurality of the votes of the
shares present in person or represented by proxy at the meeting. 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, as described below) 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 presented to stockholders, 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
meeting. Shares for which a broker has not received voting instructions from
the beneficial owner either on matters on which the broker is not permitted to
vote in its discretion under applicable exchange rules, or for which
discretionary authority has been withheld (a "broker non-vote"), are
2
<PAGE>
also considered present at the meeting but are not counted for voting purposes
with respect to such matter. Consequently, both abstentions and broker non-
votes have the same effect as votes against such matter.
POLICY ON CONFIDENTIAL VOTING
It is the policy of the Corporation that all stockholder meeting proxies,
ballots, and voting tabulations that identify the particular vote of a
stockholder are to be kept confidential and that the particular vote of any
stockholder shall not be disclosed to any third party prior to the tabulation
of the final vote at the annual stockholders' meeting except (i) as necessary
to meet applicable legal requirements; (ii) to assert claims for or defend
claims against the Corporation; (iii) to allow the inspectors of election to
certify the results of the stockholder vote; (iv) in the event of a proxy
solicitation in opposition to the Corporation or the Board of Directors; or (v)
to respond to stockholders who have written comments on proxy cards or where a
stockholder expressly requests disclosure. As provided in such policy,
inspectors of election and tabulators of stockholder votes may not be employees
of the Corporation, but may be employees of an affiliated bank, provided that
such inspectors and tabulators shall be instructed to comply with this policy.
ITEM 1. ELECTION OF DIRECTORS
The Board of Directors currently consists of 14 persons. The Board has fixed
the number of directors to be elected at the annual meeting at 14 and has
nominated the individuals named below for election as directors. All of the
nominees have indicated a willingness to serve; however, in case any nominee is
no longer a candidate at the annual meeting, the persons named in the enclosed
proxy intend to vote for the remainder of the designated nominees and to vote
for a substitute nominee in their discretion. All nominees are currently
directors of the Corporation and have been previously elected by the
stockholders, except Benjamin F. Montoya, who was elected as a director by the
Board of Directors effective February 26, 1996. Directors are elected to hold
office until the next annual election and until their successors are duly
elected and qualified.
Additional information regarding these nominees is set forth below and on
pages 12, 13, 26, 27 and 28, and the number of shares of common stock of the
Corporation beneficially owned by each of them as of February 29, 1996, is set
forth on pages 13 through 15. Except as may be otherwise stated, all director
nominees have served in the capacities indicated for more than five years.
DAVID A. CHRISTENSEN, 60 Director since 1977
President and Chief Executive Officer and Director
(PICTURE) 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.
3
<PAGE>
GERALD J. FORD, 51 Director since 1994
Chairman of the Board, Chief Executive Officer and Director
(PICTURE) First Nationwide Bank, a Federal Savings Bank
(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 ("First Madison")
(formerly known as First Gibraltar Bank, FSB). In 1994, in
connection with its acquisition of First Nationwide Bank,
FSB, First Madison changed its name to "First Nationwide
Bank, a Federal Savings Bank." 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 director of Diamond A-
Ford Corporation; as a director of Affiliated Computer
Systems, Inc.; as a trustee of Southern Methodist University
("SMU") and Children's Medical Foundation; as a member of the
Dallas Citizen's Council; 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.
- --------------------------------------------------------------------------------
PIERSON M. GRIEVE, 68 Director since 1987
Retired Chairman and Director
(PICTURE) 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 of Ecolab Inc. until
August 21, 1992, when he became Chairman and Chief Executive
Officer. On March 1, 1995, he became Chairman until his
retirement on December 31, 1995.
Mr. Grieve also serves as a director of Meredith Corporation,
U S WEST, Inc., The St. Paul Companies, Inc., Danka Business
Systems PLC, and Waldorf Corporation; 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 Chairman of the Metropolitan Airports
Commission, State of Minnesota; as a member of the Advisory
Council of the Kellogg Graduate School of Management of
Northwestern University; as a member of the Executive
Committee of The Guthrie Theater; and as a trustee of the
University of St. Thomas.
4
<PAGE>
CHARLES M. HARPER, 68 Director since 1985
Chairman of the Board and Director
RJR Nabisco Holdings Corp.
(PICTURE) (Consumer Packaged Goods)
New York, New York
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 became Chairman and
Chief Executive Officer of RJR Nabisco Holdings Corp. until
December 1995, when he 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.
- --------------------------------------------------------------------------------
WILLIAM A. HODDER, 64 Director since 1971
Chairman and Chief Executive Officer, and Director
(PICTURE) Donaldson Company, Inc.
(Manufacturer of Filtration and Emission Control Products)
Minneapolis, Minnesota
Over the last five years, Mr. Hodder served as Chairman,
President, and Chief Executive Officer until August 1, 1994,
when he assumed his present position.
Mr. Hodder also serves as a director of Cowles Media Company,
Musicland Stores Corporation, ReliaStar Financial Corp.,
SUPERVALU INC., and Tennant Company; as a member of the Board
of Overseers of the Carlson School of Management at the
University of Minnesota; and as a member of the Executive
Committee of the Minnesota Business Partnership, Inc.
- --------------------------------------------------------------------------------
LLOYD P. JOHNSON, 65 Director since 1985
Retired Chairman and Director
(PICTURE) Norwest Corporation
Minneapolis, Minnesota
Over the last five years, Mr. Johnson served as Chairman of
the Board and Chief Executive Officer. Effective January 1,
1993, he became Chairman of the Board until his retirement on
May 1, 1995.
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; and as Vice Chairman of the Board of
Trustees and Chairman of the Capital Campaign of Carleton
College.
5
<PAGE>
REATHA CLARK KING, 57 Director since 1986
President and Executive Director
(PICTURE) General Mills Foundation
(Charitable Foundation for General Mills, Inc.)
Minneapolis, Minnesota
Dr. King also serves as a director of H.B. Fuller Company; as
a trustee of the Minnesota Mutual Life Insurance Company and
the University of Chicago; as Acting Chair of the Board of
Directors of the Corporation for National Service,
Washington, D.C.; as a member of the Board of the National
Council on Foundations; and as a member of the Board of
Managers of the Ministers and Missionaries Benefit Board of
the American Baptist Churches, New York City.
- --------------------------------------------------------------------------------
RICHARD M. KOVACEVICH, 52 Director since 1986
Chairman, President and Chief Executive Officer,
(PICTURE) and Director
Norwest Corporation
Minneapolis, Minnesota
Over the last five years, Mr. Kovacevich served as President
and Chief Operating Officer until January 1, 1993, when he
became President and Chief Executive Officer. Effective May
1, 1995, he assumed his present position.
Mr. Kovacevich also serves as a director of ReliaStar
Financial Corp., Northern States Power Company, Fingerhut
Companies, Inc., and the Bankers Roundtable; as a director
and Vice President of the Walker Art Center; as a director
and 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
Chairman of the American Bankers Council; and as a member of
the Federal Reserve Advisory Council and the Advisory Council
of Stanford University Graduate School of Business.
- --------------------------------------------------------------------------------
RICHARD S. LEVITT, 65 Director since 1982
Chairman of the Board and Director
(PICTURE) Nellis Corporation
(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
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RICHARD D. MCCORMICK, 55 Director since 1983
Chairman and Chief Executive Officer, and Director
(PICTURE) U S WEST, Inc.
(Communications)
Englewood, Colorado
Over the last five years, Mr. McCormick served as President
and Chief Executive Officer of U S WEST, Inc., until May 1,
1992, when he assumed his present position.
Mr. McCormick also serves as a director of UAL Corporation
and Financial Security Assurance Holdings, Inc.
- --------------------------------------------------------------------------------
CYNTHIA H. MILLIGAN, 49 Director since 1992
President and Chief Executive Officer
(PICTURE) Cynthia Milligan & Associates
(Consulting Firm to Financial Institutions)
Lincoln, Nebraska
Over the last five years, in addition to her present
position, Ms. Milligan has served as Adjunct Professor of Law
(Banking) at the University of Nebraska College of Law.
Ms. Milligan also serves as a director of Norwest Bank
Nebraska, N.A., a subsidiary of the Corporation, Gallup,
Inc., and Bryan Memorial Hospital Foundation; as a trustee of
Hastings College and the University of Nebraska Foundation;
as a director and member of the Executive Committee of the
Richard Nixon Library and Birthplace; and as President and
director of People's City Mission.
- --------------------------------------------------------------------------------
BENJAMIN F. MONTOYA, 60 Director since 1996
President and Chief Executive Officer, and Director
(PICTURE) Public Service Company of New Mexico
(Public Utilities)
Albuquerque, New Mexico
Over the last five years, Mr. Montoya served as Vice
President of Pacific Gas & Electric Company until November 1,
1991, when he became Senior Vice President and General
Manager of Pacific Gas & Electric Company. Effective August
1, 1993, he assumed his present position.
Mr. Montoya also serves as a member of the Board of the
Albuquerque Community Foundation, Governor's Business
Executives for Education, and the United Way of Greater
Albuquerque; and as a member of the University of New Mexico
School of Engineering and the New Mexico State University
Business Advisory Council.
7
<PAGE>
IAN M. ROLLAND, 62 Director since 1993
Chairman and Chief Executive Officer, and Director
(PICTURE) Lincoln National Corporation
(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 became Chairman and
Chief Executive Officer of Lincoln National Corporation and
Lincoln National Life Insurance Company. Effective May 17,
1994, Mr. Rolland assumed his present position.
Mr. Rolland also serves as a director of Tokheim Corporation,
NIPSCO Industries, Inc., and Norwest Bank Indiana, N.A., a
subsidiary of the Corporation.
- --------------------------------------------------------------------------------
MICHAEL W. WRIGHT, 57 Director since 1991
Chairman, President and Chief Executive Officer,
(PICTURE) and Director
SUPERVALU INC.
(Food Distribution and Retailing)
Minneapolis, Minnesota
Mr. Wright also serves as a director of Cargill,
Incorporated, Musicland Stores Corporation, Honeywell, Inc.,
and Shopko Stores, Inc.; as a member of the Board of the
National-American Wholesale Grocers Association, the
International Center for Companies of the Food Trade and
Industry, and the Food Marketing Institute; as a member of
the Executive Committee of the Minnesota Business
Partnership, Inc. and 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
The Board of Directors of the Corporation held six regular meetings and two
special meetings during the year ended December 31, 1995. The Board of
Directors has established certain committees, including committees with audit,
compensation, and nominating responsibilities, that also met during 1995.
Attendance by directors at these meetings averaged 91% during 1995, with each
director, except Mr. McCormick, attending more than 75% of the aggregate number
of Board meetings and meetings of committees on which he or she served. The
committees that meet regularly and their members, a brief description of their
responsibilities, and the number of meetings held by each such committee are as
follows:
Audit and Examination Committee. (Richard S. Levitt (Chair), David A.
Christensen, Gerald J. Ford, Cynthia H. Milligan, and Benjamin F. Montoya). The
Audit and Examination Committee recommends to the Board of Directors the
engagement of the independent auditors and reviews (i) the scope and results of
the audit engagement with the independent auditors, (ii) the scope, frequency,
and results of internal audits and examinations, (iii) the adequacy of the
Corporation's system of internal accounting controls, (iv) bonding and
insurance coverage, and (v) examination reports of the Corporation. The Audit
and Examination Committee met three times during 1995.
Human Resources Committee. (Pierson M. Grieve (Chair), Charles M. Harper,
William A. Hodder, Richard D. McCormick, Ian M. Rolland, and Michael W.
Wright). The Human Resources Committee makes recommendations to the Board of
Directors regarding compensation arrangements for senior management. The
Committee also approves the adoption of benefit and compensation plans in which
officers are eligible to participate and awards under such compensation plans.
The Human Resources Committee met three times during 1995.
Board Affairs Committee. (William A. Hodder (Chair), David A. Christensen,
Pierson M. Grieve, and Richard S. Levitt). The Board Affairs Committee is
responsible for providing advice and assistance relating to corporate
governance, the organization and function of the Board of Directors and its
committees, selection of members for the Board and appointments to its
committees, and director compensation. As part of its advisory role on
corporate governance, the Committee also reviews and makes recommendations on
matters relating to the effectiveness of the Board, including the Board
schedule, its agenda, and information provided to the Board. In addition, the
Committee Chair determines the agenda for, and chairs executive sessions of the
Board of Directors at which management directors are not present, and
coordinates the Chief Executive Officer evaluation process for the Board. The
Board Affairs Committee met three times during 1995.
In connection with its nominating responsibilities, the Board Affairs
Committee will consider qualified nominees recommended by a stockholder of the
Corporation if the recommendation is submitted in writing to the Secretary of
the Corporation no later than the December 31 preceding the annual meeting. Any
such recommendation must include information which will enable the Committee to
evaluate the qualifications of the proposed nominee.
Finance Committee. (Richard D. McCormick (Chair), Charles M. Harper, Lloyd P.
Johnson, Reatha Clark King, Cynthia H. Milligan, and Ian M. Rolland). The
Finance Committee reviews and makes recommendations to the Board regarding the
Corporation's annual and long-term financial plans, including proposed debt and
equity issues, and also reviews the policies with respect to capital structure
and investment portfolio composition. The Finance Committee met three times
during 1995.
Credit Committee. (David A. Christensen (Chair), Gerald J. Ford, Lloyd P.
Johnson, Reatha Clark King, Richard S. Levitt, and Michael W. Wright). The
Credit Committee reviews credit policies and examination reports, trends in
domestic and international loans outstanding, and the adequacy of the allowance
for credit losses. The Credit Committee met three times during 1995.
9
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COMPENSATION OF DIRECTORS
Annual Retainer and Meeting Fees. Each non-employee director received an
annual cash retainer fee of $22,500 plus $1,000 for each Board or committee
meeting attended in 1995. The Chairs of the Audit and Examination, Human
Resources, Finance, and Credit Committees also were paid an additional annual
fee of $4,000. In 1995, the Chair of the Board Affairs Committee received an
additional annual fee of $3,250 (based on an annual rate of $1,000 effective
for the period January 1 through March 31, 1995, and an annual rate of $4,000
after March 31, 1995). Effective January 1, 1996, the annual cash retainer was
set at $24,000 and the additional annual fee for the Chairs of the Audit and
Examination, Human Resources, Board Affairs, Finance, and Credit Committees was
set at $5,000.
Directors' Plans. The Corporation has the following plans for non-employee
directors: the Directors' Formula Stock Award Plan (the "Directors' Formula
Plan"), a stock compensation plan adopted by the Corporation effective January
1, 1992 and approved by stockholders at the 1992 annual meeting; the
"Directors' Stock Deferral Plan" and the "Deferred Compensation Plan for Non-
Employee Directors" (the "Directors' Deferred Compensation Plan"), which allow
participating directors to defer payment of annual and meeting fees; and the
"Retirement Plan for Non-Employee Directors" (the "Directors' Retirement
Plan"). A brief description of each of these plans and the compensation
received by non-employee directors pursuant to these plans is set forth below.
Directors' Formula Plan. 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.
Under the terms of this plan, each person who serves as a non-employee
director during a calendar year, and who is a director of the Corporation
on December 31 of that calendar year (an "Eligible Non-Employee Director")
will receive on February 1 of the following year (the "Award Date"), as
compensation for services rendered in the prior year, an award of shares of
common stock of the Corporation (the "Award"). Under the terms of the
Directors' Formula Plan in effect for 1995, each Eligible Non-Employee
Director who served as a non-employee director during all of 1995 received
an Award of shares of common stock having an aggregate fair market value
equal to $18,000. Pursuant to the plan, each Eligible Non-Employee Director
who served during part of 1995 received one-twelfth of an Award for each
month or portion thereof that he or she served as a non-employee director.
The fair market value of the shares of common stock awarded 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") on the Award Date.
The Directors' Formula Plan also allows each Eligible Non-Employee
Director to defer in the form of shares of the Corporation's common stock
all or a portion of his or her Award. 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 are 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 is 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.
On February 1, 1996, as compensation for services rendered in 1995, non-
employee directors were issued a total of 3,547 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
$33.875, as follows: Mr. Johnson, 355 shares; Messrs. Christensen, Ford,
Hodder, and Rolland, Ms. Milligan and Dr. King, 532 shares. In addition,
532 shares were credited to a Deferred Stock Account for each of Messrs.
Grieve, Harper, Levitt, McCormick, and Wright, pursuant to deferral
elections made by these directors. For the year ended December 31, 1995, a
total of $4,759 in dividends was credited in the form of an aggregate of
163 shares to the Deferred Stock Accounts of the six current non-employee
directors who have deferred Awards pursuant to the Directors' Formula Plan.
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<PAGE>
In 1996, the Board of Directors adopted a policy that 50% of the annual
compensation for non-employee directors be paid in the Corporation's common
stock. To implement this policy, the Board of Directors approved an
amendment to the Directors' Formula Plan, subject to and effective upon
stockholder approval at the 1996 annual meeting, which provides that,
beginning February 1, 1997, the Award under the plan shall be that number
of shares of common stock having an aggregate fair market value equal to
the annual cash retainer for service as a director in effect on the January
1 immediately preceding the Award Date. To conform director compensation
received in 1996 to this policy, the proposed amendment also includes a
one-time award equal to $6,000, to be paid in shares of common stock on May
1, 1996, to all non-employee directors who were directors during all of
1995, and who were directors on March 1, 1996. See Item 3, "Proposal to
Amend the Directors' Formula Stock Award Plan," below, for additional
information with respect to this proposed amendment.
Directors' Stock Deferral Plan and Directors' Deferred Compensation Plan.
Under these plans, 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 of the Corporation's common stock
pursuant to the Directors' Stock Deferral Plan or in cash pursuant to the
Directors' Deferred Compensation Plan.
Participants in the Directors' Stock Deferral Plan annually elect the
amount of cash fees to be deferred in the form of shares and the year in
which the deferred amount will be paid. Amounts so deferred are credited to
a Deferred Stock Account established for each participating director under
the plan. The number of shares credited to a director's Deferred Stock
Account is 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.
Under the terms of the Directors' Stock Deferral Plan, a participating
director may elect distribution of his or her Deferred Stock Account in a
lump sum in the form of cash, whole shares of the Corporation's common
stock, or a combination of both, or may elect distribution of such credits
in up to ten annual cash installments. If the director elects distribution
in the form of annual cash installments, the unpaid portion of such
installments 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 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 continues 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.
Amounts so deferred may be distributed to the director in a lump sum or in
up to ten 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
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<PAGE>
of a Phantom Stock Account, such distributions will be based upon the value
of the Corporation's common stock at the time of distribution.
For the year ended December 31, 1995, non-employee directors elected to
defer an aggregate of $344,500 in fees in the form of 11,663 shares of the
Corporation's common stock under the Directors' Stock Deferral Plan, and a
total of $22,807 in dividends was credited in the form of an aggregate of
771 shares to the Deferred Stock Accounts of the nine current non-employee
directors who participate in the Directors' Stock Deferral Plan. In
addition, a total of $5,095 in interest was credited to Deferred Cash
Accounts for two current non-employee directors, and $60,168 in dividends
was credited in the form of an aggregate of 2,058 shares to Phantom Stock
Accounts for six current non-employee directors under the Directors'
Deferred Compensation Plan.
Directors' Retirement Plan. All non-employee directors of the Corporation
with five or more years of service on the Board of Directors of the
Corporation or the former Norwest Bank Minneapolis, N.A., (now part of
Norwest Bank Minnesota, N.A.) or a combination of both, are eligible to
participate in the Corporation's Directors' Retirement Plan. Under this
plan, following retirement or other cessation of service as a director, 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 non-employee director, up to a maximum of ten
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. Benefits under the plan are subject
to forfeiture if following retirement, a director serves as a management
official of another depository organization. The non-employee director
participants in the plan and the number of years of service credited as of
January 1, 1996 to each participant's account for purposes of determining
the retirement benefit payable were: Messrs. Christensen, Harper, Hodder,
McCormick, and Dr. King, 10 years; and Messrs. Grieve and Levitt, 8 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 re-
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. 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 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 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 receives 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. During 1995, Mr. Ford received payment of $300,000 in consulting
fees.
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 12 consecutive months due to physical or mental illness; (ii) his
willful failure to
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<PAGE>
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 is the president and sole owner of Cynthia Milligan &
Associates, a financial institutions consulting firm based in Lincoln,
Nebraska. Cynthia Milligan & Associates performs such consulting services as
may be requested by Norwest Bank Nebraska, N.A., a national bank subsidiary of
the Corporation. During 1995, Cynthia Milligan & Associates received payments
of approximately $20,900 for consulting services rendered to Norwest Bank
Nebraska, N.A.
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
beneficially owned and common stock share equivalents of the Corporation held
as of February 29, 1996, by the current directors, the executive officers named
in the Summary Compensation Table herein, and all directors and executive
officers of the Corporation as a group.
<TABLE>
<CAPTION>
AMOUNT AND NATURE OF OWNERSHIP(1)
---------------------------------------------
SHARES OF COMMON STOCK SHARE
NAME COMMON STOCK(2) EQUIVALENTS(3)(4) TOTAL
- ---- --------------- ------------------ ---------
<S> <C> <C> <C>
Leslie S. Biller............. 498,510(5) 81,264 579,774
David A. Christensen......... 9,028 24,067 33,095
Gerald J. Ford............... 2,274,262 1,186 2,275,448
Pierson M. Grieve............ 22,746 20,803 43,549
Charles M. Harper............ 4,606 12,183 16,789
William A. Hodder............ 9,228 21,783 31,011
Lloyd P. Johnson............. 1,674,687(6) 37,502 1,712,189
Reatha Clark King............ 7,144 -- 7,144
Richard M. Kovacevich........ 1,016,701(7) 38,094 1,054,795
Richard S. Levitt............ 40,515 14,957 55,472
Richard D. McCormick......... 5,716 2,768 8,484
Cynthia H. Milligan.......... 1,529 922 2,451
Benjamin F. Montoya.......... 100 -- 100
Kenneth R. Murray............ 581,856(8) 55,055 636,911
Ian M. Rolland............... 5,566 2,713 8,279
Daniel A. Saklad............. 440,548(9) 13,267 453,815
John T. Thornton............. 372,712(10) 13,136 385,848
Michael W. Wright............ 3,248 7,224 10,472
All directors and executive
officers as a group
(29 individuals)............ 8,668,516 386,059 9,054,575(11)
</TABLE>
- ---------------------
(1) Each individual owns less than 1%, and all directors and executive
officers as a group own 2.4% of the outstanding shares of common stock of
the Corporation. Except as may otherwise be indicated in the footnotes
below, each director and executive officer has sole voting power with
respect to all shares of common stock shown in the above table.
(2) Amounts shown include shares of common stock allocated to the accounts of
executive officers (including directors who were former executive
officers) and the accounts of all directors and executive officers as a
group who participate in 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 pro rata based on the
instructions of all participants who give instructions.
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<PAGE>
(3) Amounts shown include common stock share equivalents credited as of
December 31, 1995 to the accounts of executive officers (including
directors who were former executive officers) and the accounts of all
directors and executive officers as a group under the Corporation's
Supplemental Savings-Investment Plan, Executive Incentive Compensation
Plan, Employees' Stock Deferral Plan, and Employees' Deferred Compensation
Plan. The Corporation has deposited shares in trust to be used to satisfy
in part its obligations under all of the foregoing plans.
(4) Amounts shown include common stock share equivalents credited in the form
of shares as of February 29, 1996 to Deferred Stock Accounts for non-
employee directors under the Directors' Stock Deferral Plan and the
Directors' Formula Stock Award Plan, and the Phantom Stock Accounts for
non-employee directors under the Deferred Compensation Plan for Non-
Employee Directors.
(5) Mr. Biller is one of the executive officers listed in the Summary
Compensation Table on page 22 of this Proxy Statement. In addition to the
shares allocated to Mr. Biller's account under the plan described in
footnote (2) above, the amount shown includes 67,341 shares held by Mr.
Biller's spouse, 800 shares held in an irrevocable trust for Mr. Biller's
daughter for which Mr. Biller is co-trustee, 297,107 shares which Mr.
Biller has the right to acquire through the exercise of stock options
currently or within 60 days after February 29, 1996, 27,600 shares of
restricted stock, and 5,402 shares subject to restrictions on transfer of
ownership.
(6) In addition to shares allocated to Mr. Johnson's account under the plan
described in footnote (2) above, the amount shown includes 342,185 shares
held in a trust of which Mr. Johnson is a beneficiary, 1,001,202 shares
which Mr. Johnson has the right to acquire through the exercise of stock
options currently or within 60 days after February 29, 1996, and 308,834
shares held in a revocable trust for which Mr. Johnson is settlor and
trustee.
(7) Mr. Kovacevich is one of the executive officers listed in the Summary
Compensation Table on page 22 of this Proxy Statement. In addition to the
shares allocated to Mr. Kovacevich's account under the plan described in
footnote (2) above, the amount shown includes 5,237 shares held by Mr.
Kovacevich's spouse, 5,047 shares held by Mr. Kovacevich's spouse as
custodian for his minor daughter under the UGMA, 10,082 shares held in
revocable trusts for Mr. Kovacevich's daughter and son for which Mr.
Kovacevich is co-trustee, 31,927 shares held in a trust of which Mr.
Kovacevich is a beneficiary, 483,075 shares which Mr. Kovacevich has the
right to acquire through the exercise of stock options currently or within
60 days after February 29, 1996, 63,990 shares of restricted stock, and
8,897 shares subject to restrictions on transfer of ownership.
(8) Mr. Murray is one of the executive officers listed in the Summary
Compensation Table on page 22 of this Proxy Statement. In addition to the
shares allocated to Mr. Murray's account under the plan 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, 39,162 shares held in a trust of which Mr. Murray is
a beneficiary, 349,590 shares which Mr. Murray has the right to acquire
through the exercise of stock options currently or within 60 days after
February 29, 1996, 27,600 shares of restricted stock, and 5,402 shares
subject to restrictions on transfer of ownership.
(9) Mr. Saklad is one of the executive officers listed in the Summary
Compensation Table on page 22 of this Proxy Statement. In addition to the
shares allocated to Mr. Saklad's account under the plan described in
footnote (2) above, the amount shown includes 73,155 shares held in a
trust of which Mr. Saklad is a beneficiary, 240,580 shares which Mr.
Saklad has the right to acquire through the exercise of stock options
currently or within 60 days after February 29, 1996, 27,600 shares of
restricted stock, 5,402 shares subject to restrictions on transfer of
ownership, and 82,806 shares held in a revocable trust for which Mr.
Saklad is settlor and trustee.
(10) Mr. Thornton is one of the executive officers listed in the Summary
Compensation Table on page 22 of this Proxy Statement. In addition to the
shares allocated to Mr. Thornton's account under the plan described in
footnote (2) above, the amount shown includes 224,842 shares which Mr.
Thornton has the right to acquire through the exercise of stock options
currently or within 60 days after February 29, 1996, and 20,500 shares of
restricted stock.
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<PAGE>
(11) In addition to the shares of common stock and common stock share
equivalents held in the aggregate by the directors and executive officers
named in the above table, the amount shown in the table under the heading
"Shares of Common Stock" includes 369,157 shares of common stock held by
11 executive officers (including spouses and children of executive
officers); 2,990 shares held in trust for the minor children of one
executive officer; 74,900 shares of restricted stock held by six executive
officers; 5,402 shares subject to restrictions on transfer of ownership
held by one executive officer; 58,500 shares held in a trust of which one
executive officer is a beneficiary; 1,080,102 shares subject to stock
options exercisable within 60 days after February 29, 1996 held by 11
executive officers; and 108,763 shares allocable as of December 31, 1995
to the accounts of 11 executive officers under the Savings Investment
Plan; and the amount shown in the table under the heading "Common Stock
Share Equivalents" includes 36,181 share equivalents credited as of
December 31, 1995 to the accounts of ten executive officers under the
Supplemental Savings-Investment Plan; 528 share equivalents credited as of
December 31, 1995 to the account of one executive officer under the
Executive Incentive Compensation Plan; 2,350 share equivalents credited as
of December 31, 1995 to the account of one executive officer under the
Employees' Stock Deferral Plan; and 76 share equivalents credited as of
December 31, 1995 to the account of one executive officer under the
Employees' Deferred Compensation Plan.
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.
Richard M. Kovacevich, 52, Chairman, President and Chief Executive Officer,
and a director. Mr. Kovacevich has been associated with Norwest for the past
ten years. Additional information regarding Mr. Kovacevich is set forth on page
6.
Leslie S. Biller, 48, Executive Vice President (South Central Banking). Mr.
Biller has held his present position since July 1990. He has been associated
with Norwest for the past eight years.
James R. Campbell, 53, Executive Vice President (Commercial Banking Services
and Specialized Lending). Mr. Campbell served as Executive Vice President
(Corporate Banking) until February 23, 1993, when he became Executive Vice
President (Twin Cities Banking). On January 23, 1996, he assumed his present
position. He also serves as Chairman of Norwest Bank Minnesota, N.A. Mr.
Campbell has been associated with Norwest for the past 31 years.
C. Webb Edwards, 48, Executive Vice President and Chief Technology Officer.
Mr. Edwards served as Executive Vice President and General Manager of
Information Services for First Interstate Bancorp, a bank holding company with
its principal offices in Los Angeles, California, from January 1990 until May
2, 1995, when he assumed his present position.
Thomas E. Emerson, 45, Executive Vice President, Chief Auditor, and Chief
Examiner. Mr. Emerson served as Vice President and Audit Director of Norwest
Audit Services, Inc., until April 26, 1994, when he was elected Senior Vice
President, Chief Auditor, and Chief Examiner. On January 23, 1996, he assumed
his present position. Mr. Emerson has been associated with Norwest for the past
nine years.
John E. Ganoe, 51, Executive Vice President (Corporate Development). Mr.
Ganoe served as Senior Vice President (Strategic Planning and Acquisitions)
until January 23, 1996, when he assumed his present position. He has been
associated with Norwest for the past 13 years.
Michael A. Graf, 57, Senior Vice President and Controller. Mr. Graf has held
his present position since February 1988. He has been associated with Norwest
for the past eight years.
15
<PAGE>
Stephen W. Hansen, 54, Executive Vice President (Human Resources). Mr. Hansen
served as Senior Vice President (Human Resources) until January 23, 1996, when
he assumed his present position. He has been associated with Norwest for the
past eight years.
Laurel A. Holschuh, 45, 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 16 years.
Scott A. Kisting, 49, Executive Vice President (Twin Cities Banking). Mr.
Kisting served as Executive Vice President, Norwest Bank Minnesota, N.A., from
January 1990 until October 1993, when he became Twin Cities Banking Regional
President. On December 11, 1995, he was elected President and Chief Executive
Officer of Norwest Bank Minnesota, and on January 23, 1996, he also assumed his
present position. Mr. Kisting has been associated with Norwest for the past six
years.
Kenneth R. Murray, 57, Executive Vice President (Southwestern Banking). Mr.
Murray has held his present position since July 1990. He has been associated
with Norwest for the past 13 years.
William H. Queenan, 57, Executive Vice President and Chief Credit Officer.
Mr. Queenan has held his present position since May 1987. He has been
associated with Norwest for the past 23 years.
Daniel A. Saklad, 53, Executive Vice President (North Central Banking). Mr.
Saklad has held his present position since September 1989. He has been
associated with Norwest for the past eight years.
Stanley S. Stroup, 52, 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 12 years.
John T. Thornton, 58, 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 12 years.
Charles D. White, 51, 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 14 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 1995 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
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 and to pay
executive officers based on their contributions to the Corporation's
performance. In 1994, the Committee adopted its "Performance-Based Compensation
Policy for Covered Executive Officers" (the "Performance-Based Compensation
Policy" or the "Policy") in response to the enactment of Section 162(m) of the
Internal Revenue Code. This legislation and related regulations limit the
ability of a publicly-held corporation to deduct annual compensation in excess
of $1,000,000 paid to certain highly-compensated executive officers, unless
such compensation is
16
<PAGE>
contingent on the attainment of pre-established performance goals based on
business criteria and a maximum compensation amount which have been approved by
stockholders. The Performance-Based Compensation Policy, which sets forth such
business criteria and maximum compensation, was approved by stockholders at the
1994 annual meeting.
Pursuant to the Policy, the 1995 annual incentive compensation for the
executive officers named in the Summary Compensation Table set forth in the
Proxy Statement, including the Chief Executive Officer, was based on each such
executive officer's attainment of one or more pre-established performance
goals, subject to the maximum compensation amount set forth in the Policy. The
terms of the Policy, and the procedures used by the Committee to make incentive
compensation awards thereunder, are discussed in greater detail in this Report
under the heading "Executive Officer Compensation--Annual Compensation."
EXECUTIVE OFFICER COMPENSATION
Compensation for the executive officers named in the Summary Compensation
Table consists primarily of annual compensation (comprised of base salary and
an incentive compensation award under the Policy) and long-term compensation.
As described more fully below, base salary ranges for executive officers are
developed using available competitive compensation data for the immediately
preceding fiscal year from a comparison group of banking organizations. Annual
incentive compensation (payable in cash or in the form of stock, including
restricted stock) is determined for the executive officers named in the Summary
Compensation Table pursuant to the Performance-Based Compensation Policy. Long-
term compensation for such officers, awarded in the form of stock options
pursuant to the Corporation's 1985 Long-Term Incentive Compensation Plan (the
"LTICP"), is determined by the Committee. Although the following discussion
applies generally to the Committee's determination of the 1995 annual salary
and incentive compensation and long-term compensation for Mr. Kovacevich as
Chief Executive Officer of the Corporation, a more complete description of Mr.
Kovacevich's 1995 compensation based on the Corporation's 1995 performance is
set forth below under the heading "Chief Executive Officer."
Annual Compensation. For purposes of establishing base salaries and
determining final annual incentive compensation awards pursuant to the
Performance-Based Compensation Policy, the Committee considered available
competitive compensation data from a comparison group (the "Comparison Group")
selected from banking organizations included in the "Peer Group Index" for
purposes of the performance graph set forth in the Proxy Statement for the 1995
annual meeting of stockholders./1/
- ---------------------
/1The/Comparison Group, for purposes of 1995 compensation, consisted of the
following 33 banking organizations: BancOne Corporation, BankAmerica
Corporation, Bank of Boston Corporation, Bank of New York, Barnett Banks,
Inc., Boatmen's Bancshares, Chase Manhattan Corporation, Chemical Banking
Corporation, Citicorp, Comerica, Inc., CoreStates Financial Corporation,
First Bank System, Inc., First Chicago-NBD Corporation, First Interstate
Bancorp, First of America, First Union Corporation, Fleet Financial Group,
Inc., Huntington Bancshares, KeyCorp, Mellon Bank Corporation, National City
Corporation, NationsBank, Norwest Corporation, Northern Trust Corporation,
PNC Bank Corporation, Republic New York Corporation, State Street Boston
Corporation, Southern National Corporation, SouthTrust Corporation, SunTrust
Banks, Inc., U.S. Bancorp, Wachovia Corporation, and Wells Fargo & Co. The
"Peer Group Index," for purposes of the performance graph included in the
Corporation's annual proxy statement, is defined as 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. (See page 21
for a listing of the banking organizations constituting the 1996 Peer Group
Index for purposes of the performance graph.) Although most of the banks in
the Comparison Group are also included in the 1996 Peer Group Index, the two
groups are not identical. The differences reflect, in part, changes in the
composition of the Peer Group Index due to mergers occurring in 1995 and the
fact that 1995 salary and long-term compensation decisions are made before
the 1996 Peer Group Index can be determined. They also reflect the
Committee's decision in 1994 to eliminate J.P. Morgan & Co. and Bankers Trust
Corporation of New York from the Comparison Group for 1994 and future
incentive compensation purposes, because the business mix of such banks is
not, in the Committee's judgment, comparable to the businesses of the
Corporation.
17
<PAGE>
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 1995 to executive officers named in the Summary Compensation Table
were near the median of estimated base salaries paid by the Comparison Group
banks.
Annual incentive compensation (payable in cash or in the form of stock,
including restricted stock) for a "Covered Executive Officer" is governed by
the Performance-Based Compensation Policy. The Policy defines a "Covered
Executive Officer" of the Corporation 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 determined
pursuant to the executive compensation disclosure rules under the Securities
Exchange Act of 1934. Each of the persons named in the Summary Compensation
Table set forth in the Proxy Statement is a Covered Executive Officer under
the Performance-Based Compensation Policy.
Under the Performance-Based Compensation Policy, payment of an incentive
compensation award to a Covered Executive Officer is 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 at the beginning of each "Performance Period." The Committee
retains the discretion under the Policy to reduce the incentive compensation
award payable to a Covered Executive Officer from the maximum award permitted
by the Policy, notwithstanding the attainment of any performance goal. In the
exercise of this discretion, the Committee reviews available competitive
market data from the prior fiscal year and reasonable estimates with respect
to incentive compensation to be paid by the Comparison Group banks to their
executive officers for the most recently completed fiscal year. With respect
to the Chief Executive Officer, the Committee also considers the quality of
the Corporation's earnings based on certain factors, as discussed below under
the heading "Chief Executive Officer." For Covered Executive Officers other
than the Chief Executive Officer, the Committee also reviews the Chief
Executive Officer's recommendations.
For the Performance Period commencing January 1 and ending December 31,
1995, the Committee established alternative performance goals for each Covered
Executive Officer, including Mr. Kovacevich as Chief Executive Officer, based
on the Corporation's "Earnings Per Share" and "Return on Common Equity," as
those business criteria are defined in the Performance-Based Compensation
Policy. In addition, for each Covered Executive Officer other than Mr.
Kovacevich and John T. Thornton, the Corporation's chief financial officer
(whose management responsibilities do not include management of a specific
business unit), the Committee established an additional alternative
performance goal based on the "Business Unit Net Earnings" (as defined in the
Performance-Based Compensation Policy) of the business unit managed by each
such Covered Executive Officer.
As set forth in the Performance-Based Compensation Policy, the maximum
amount of an incentive compensation award payable for any Performance Period
to any Covered Executive Officer who has attained one or more of his or her
pre-established performance goals may not exceed four-tenths of one percent
(.4%) of the Corporation's Net Income/2/ for the Performance Period. Based on
the Corporation's 1995 Net Income of $956 million, the maximum incentive
compensation award payable under the Policy would have been $3,824,000 (.4% of
$956 million).
- ---------------------
/2For/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.
18
<PAGE>
For the 1995 Performance Period, each Covered Executive Officer, including
Mr. Kovacevich, met their respective performance goals. Based on the
Committee's certification that each Covered Executive Officer had met such
performance goals established by the Committee, its review of projected 1995
executive officer incentive compensation data from the Comparison Group and
recommendations of the Chief Executive Officer, the Committee awarded to the
executive officers named in the Summary Compensation Table, an incentive award
under the Performance-Based Compensation Policy consisting of (i) cash in the
amount shown for 1995 in column (d); and (ii) for Mr. Kovacevich and Mr.
Thornton, shares of restricted stock having the market value shown for 1995 in
column (f) of the Summary Compensation Table. No Covered Executive Officer,
including the Chief Executive Officer, received the maximum incentive
compensation award under the Policy.
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. Stock options granted by the Committee to
covered executive officers under the LTICP (as it currently exists and as
proposed to be amended at the 1996 annual meeting) are considered performance-
based compensation under Section 162(m) of the Code, and thus are not subject
to the Policy. Each executive officer is assigned stock ownership goals
expected to be achieved by specified dates. 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. 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.
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. It is the Committee's practice to make
original grants of stock options on an aggregate basis every three years, with
the most recent original stock option grants occurring in 1994. 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 exercisable 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. Of the executive officers named in the Summary
Compensation Table, John T. Thornton received an AO grant in 1995 as the result
of his exercise of original stock options granted prior to 1995 that had the AO
feature.
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 1995 salary as shown in the Summary
Compensation Table was determined by the Committee in accordance with the
salary procedures described above for Covered Executive Officers. With respect
to Mr. Kovacevich's incentive award under the Performance-Based Compensation
Policy, the Committee certified that Mr. Kovacevich had exceeded his
performance goals based on the Corporation's 1995 Earnings Per Share and Return
on Common Equity, and thus was eligible to receive the maximum amount for an
incentive compensation award under the Policy, subject to reduction
19
<PAGE>
of the amount of such award in the Committee's discretion. In connection with
the exercise of this discretion, the Committee 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 appreciation and dividends), 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 determining
Mr. Kovacevich's incentive award under the Performance-Based Compensation
Policy, subject to the maximum amount set forth in the Policy, the Committee
also compared the Corporation's performance to that of banking organizations
included in the Comparison Group using these same factors. Mr. Kovacevich's
1995 incentive award was finally determined in the exercise of the Committee's
discretion in light of its 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 and
the aggregate compensation paid by Comparison Group banks to their chief
executive officers.
Based on Mr. Kovacevich's achievement of his performance goals, and the
Committee's exercise of its discretion under the Performance-Based Compensation
Policy, the Committee awarded incentive compensation for 1995 to Mr. Kovacevich
under the Policy of $2,950,875, of which $2,187,000 was payable in cash, and
$763,875 was paid in the form of 21,000 shares of restricted stock (valued
based on a closing market price of $36.375 on February 26, 1996, the date of
the award). That portion of the incentive compensation award under the Policy
paid to Mr. Kovacevich in the form of shares of restricted stock is subject to
certain vesting requirements and may be forfeited, except in the case of death,
disability, retirement, or change of control of the Corporation, unless Mr.
Kovacevich is continuously employed by the Corporation or an affiliate until
the restrictions lapse. Prior to the lapse of the restrictions, Mr. Kovacevich
is entitled to vote and receive dividends on the restricted shares but may not
sell or otherwise transfer the shares. The restrictions on the restricted stock
grant included in Mr. Kovacevich's 1995 incentive compensation award lapse in
1999 as to 30% of the shares, in 2000 as to an additional 30% of the shares,
and in 2001 with respect to the remainder of the shares. That portion of Mr.
Kovacevich's incentive compensation award under the Performance-Based
Compensation Policy made in the form of restricted shares is governed by the
provisions (other than the provisions with respect to the computation of the
award) of the LTICP.
Members of the Committee:
Pierson M. Grieve, Chair
Charles M. Harper
William A. Hodder
Richard D. McCormick
Ian M. Rolland
Michael W. Wright
20
<PAGE>
COMPARATIVE STOCK PERFORMANCE
The Performance Graph set forth below compares the cumulative total
stockholder return on the Corporation's ("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, 1989, and reinvestment
of all dividends.
The 35 banking organizations (ranked based on total assets as of December 31,
1995) that constitute the Peer Group Index are as follows: Citicorp,
BankAmerica Corporation, NationsBank, J.P. Morgan & Co., Chemical Banking
Corporation, First Union Corporation, First Chicago-NBD Corporation, Chase
Manhattan Corporation, Bankers Trust Corporation of New York, BancOne
Corporation, Fleet Financial Group, Inc., PNC Financial Corporation, Norwest
Corporation, Key Corp, First Interstate Bancorp, Bank of New York, Wells Fargo
& Co., Bank of Boston Corporation, SunTrust Banks, Inc., Wachovia Corporation,
Republic New York Corporation, Barnett Banks, Inc., Mellon Bank Corporation,
National City Corporation, Comerica, Inc., First Bank System, Inc., Boatmen's
Bancshares, U.S. Bancorp, CoreStates Financial Corporation, State Street Boston
Corporation, First of America, SouthTrust Corporation, Southern National
Corporation, Huntington Bancshares, and Northern Trust Corporation.
COMPARISON OF FIVE-YEAR CUMULATIVE TOTAL RETURN
<TABLE>
<CAPTION>
Measurement Period TOTAL STOCKHOLDER RETURN
(Fiscal Year Covered) NORWEST S&P 500 PEER GROUP
- ------------------- ------- ------- ----------
<S> <C> <C> <C>
Measurement Pt-
1990 $100.0 $100.0 $100.0
FYE 1991 $181.9 $130.3 $161.5
FYE 1992 $221.0 $140.3 $211.2
FYE 1993 $256.5 $154.3 $229.1
FYE 1994 $253.3 $156.4 $218.7
FYE 1995 $369.0 $215.0 $346.7
</TABLE>
- -------------------------------------------------------------------------------
----.---- NORWEST -- --[_]-- -- S&P 500 ....(DIAMOND).... PEER GROUP
- -------------------------------------------------------------------------------
<TABLE>
-------------------------------
<CAPTION>
1990 1991 1992 1993 1994 1995
- ------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
NORWEST $100.0 $181.9 $221.0 $256.5 $253.3 $369.0
- ------------------------------------------------------
S&P 500 $100.0 $130.3 $140.3 $154.3 $156.4 $215.0
- ------------------------------------------------------
PEER GROUP $100.0 $161.5 $211.2 $229.1 $218.7 $346.7
</TABLE>
- --------------------------------------------------------------------------------
21
<PAGE>
COMPENSATION
The following table sets forth the cash and non-cash compensation earned or
awarded for the last three years to the Chief Executive Officer of the
Corporation and the four other most highly compensated executive officers of
the Corporation.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG-TERM COMPENSATION
ANNUAL COMPENSATION AWARDS
--------------------------------------------- --------------------------
(A)
(B) (C) (D) (E) (F) (G) (I)
RESTRICTED
NAME AND PRINCIPAL OTHER ANNUAL STOCK OPTIONS/ ALL OTHER
POSITION YEAR SALARY($) BONUS($)(1) COMPENSATION($)(2) AWARD(S)($)(3)(4) SARS(#) COMPENSATION($)(6)
------------------ ---- --------- ----------- ------------------ ----------------- -------- ------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Richard M. Kovacevich 1995 $820,000 $2,187,000 $26,341 $763,875(5) 0 $178,500
President and Chief 1994 745,000 2,155,000 19,226 507,275 633,610 120,540
Executive Officer 1993 700,000 1,596,875 26,230 0 202,799 472,875
Leslie S. Biller 1995 455,000 1,046,250 24,982 0 0 81,600
Executive 1994 450,000 905,000 14,104 0 245,756 67,740
Vice President 1993 430,000 879,531 20,231 409,688 47,050 46,590
Kenneth R. Murray 1995 440,000 990,000 19,934 0 0 79,560
Executive 1994 433,750 886,000 14,587 0 273,108 64,485
Vice President 1993 425,000 841,531 22,908 409,688 0 46,538
Daniel A. Saklad 1995 425,000 956,250 27,416 0 0 76,950
Executive Vice 1994 415,000 857,500 11,153 0 246,861 62,040
President 1993 396,667 819,531 25,681 409,688 43,698 43,105
John T. Thornton 1995 365,000 821,250 25,619 109,125(5) 46,353 60,318
Executive Vice 1994 355,250 655,500 17,298 0 190,680 50,067
President and Chief 1993 337,000 475,200 25,489 362,375 29,361 31,812
Financial Officer
</TABLE>
- ---------------------
(1) The amounts shown for 1995 in column (d) represent that portion of the 1995
incentive compensation awards paid in cash to the named executive officers
pursuant to the Corporation's "Performance-Based Compensation Policy for
Covered Executive Officers" discussed above under the heading "Report of
the Human Resources Committee on Executive Compensation."
(2) The amounts shown in column (e) represent amounts reimbursed to the named
executive officers in the years 1993-1995 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 1993-1995, the aggregate amount of which did not exceed $50,000
in any such year for any named executive officer.
(3) Restricted stock awards shown in column (f) are valued as of the dates of
their respective grants, based on the closing market prices of the
Corporation's common stock on such dates. The shares of restricted stock
held by each of the persons named and the market value of such shares,
based on the number of shares held and a closing market price of the
Corporation's common stock of $33.00 per share as of December 29, 1995 (the
last trading day prior to December 31, 1995), were as follows: Richard M.
Kovacevich, 34,700 shares, $1,145,100; Leslie S. Biller, 27,600 shares,
$910,800; Kenneth R. Murray, 27,600 shares, $910,800; Daniel A. Saklad,
27,600 shares, $910,800; John T. Thornton, 17,500 shares, $577,500.
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. All of the restricted stock awards vest over a period of three
years, commencing in the fourth year after the date of the original award.
(4) The restricted stock awards made in 1993 represent compensation
attributable to 1992 performance, and in the case of Mr. Thornton, in part
for 1993 performance.
22
<PAGE>
(5) The dollar amounts shown as restricted stock awards to Richard M.
Kovacevich and John T. Thornton constitute that portion of their 1995
incentive compensation awards payable in the form of restricted stock
pursuant to the policy described in footnote (1) above and represent 21,000
shares and 3,000 shares, respectively, of the Corporation's common stock
valued as of February 26, 1996, the date such restricted stock awards were
made, based on a closing market price of the Corporation's common stock of
$36.375 per share on that date.
(6) Except as noted below with regard to Richard M. Kovacevich, 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-Investment
Plan, a non-qualified supplemental executive retirement plan ("Supplemental
SIP"). For the year ended December 31, 1995, the Corporation's contribution
to SIP for each of the named executive officers was $9,000 (the maximum
allowable contribution under SIP). The Corporation's contribution to
Supplemental SIP for the year ended December 31, 1995, for such persons was
as follows: Mr. Kovacevich, $169,500; Mr. Biller, $72,600; Mr. Murray,
$70,560; Mr. Saklad, $67,950; and Mr. Thornton, $51,320. The amount shown
for Mr. Kovacevich for 1993 also includes the fair market value of a stock
award to Mr. Kovacevich in 1993 relating to his 1992 compensation which
contains restrictions on transfer of ownership expiring over a period of
three years.
OPTION GRANTS AND EXERCISES
The following tables summarize for 1995 under the Corporation's 1985 Long-
Term Incentive Compensation Plan option grants to and option exercises by the
executive officers named in the Summary Compensation Table above, and the value
of the options held by them at December 31, 1995:
OPTION/SAR GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
POTENTIAL
REALIZABLE VALUE AT
ASSUMED ANNUAL
RATES OF STOCK
PRICE APPRECIATION
INDIVIDUAL GRANTS FOR OPTION TERM(2)
- -------------------------------------------------------------------- -------------------
(A) (B) (C) (D) (E) (F) (G)
PERCENT OF
TOTAL
OPTIONS/SARS EXERCISE
OPTIONS/SARS GRANTED TO OR BASE
GRANTED(#) EMPLOYEES IN PRICE EXPIRATION
NAME (1) FISCAL YEAR ($/SH) DATE 5%($) 10%($)
- ---- ------------ ------------ -------- ---------- -------- ----------
<S> <C> <C> <C> <C> <C> <C>
Richard M. Kovacevich -- -- -- -- -- --
Leslie S. Biller -- -- -- -- -- --
Kenneth R. Murray -- -- -- -- -- --
Daniel A. Saklad -- -- -- -- -- --
John T. Thornton 46,343 2.5% $33.625 7/26/2004 $817,480 $1,993,431
</TABLE>
- ---------------------
(1) No options or SARs were granted in 1995 to the executive officers named
above except for John T. Thornton, who was granted an immediately
exercisable "accelerated ownership" option ("AO") as the result of his
exercise of a stock option in 1995. The general terms of AOs are described
above under the heading "Report of the Human Resources Committee on
Executive Compensation."
(2) 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% assumed annual rates of
appreciation and a per share closing stock price of $33.00 for the
Corporation's common stock on December 29, 1995 (the last trading day prior
to December 31, 1995), the potential realizable
23
<PAGE>
value to the holders of all issued and outstanding shares on that date
(352,760,457 shares), if such shares were held for an assumed 8.58 year
period (a period equal to the remaining term of the AO grant shown above),
would be $6.1 billion (based on the 5% rate) and $14.8 billion (based on the
10% rate). The potential realizable value over the option term of the AO
included in the above table and the potential realizable values to
stockholders on an aggregate basis over the assumed holding period are
computed using the assumed rates set by the Commission and should not be
viewed as, and are not intended to be, a forecast of possible future
appreciation, if any, in the Corporation's stock price.
AGGREGATED OPTION/SAR EXERCISES IN
LAST FISCAL YEAR AND FY-END OPTION/SAR VALUES
<TABLE>
<CAPTION>
VALUE OF UNEXERCISED
NUMBER OF UNEXERCISED IN-THE-MONEY
OPTIONS/SARS OPTIONS/SARS
AT FISCAL YEAR END(#) AT FISCAL YEAR END
SHARES (IN SHARES) (IN DOLLARS)
ACQUIRED ON VALUE REALIZED EXERCISABLE/ EXERCISABLE/
NAME EXERCISE(#) ($)(1) UNEXERCISABLE(2) UNEXERCISABLE
(A) (B) (C) (D) (E)
- ---- ----------- -------------- --------------------- ---------------------
<S> <C> <C> <C> <C>
Richard M. Kovacevich -- -- 483,075/353,334 $3,028,591/$2,672,088
Leslie S. Biller -- -- 305,600/133,334 3,126,381/1,008,338
Kenneth R. Murray -- -- 349,590/133,334 4,814,085/1,008,338
Daniel A. Saklad -- -- 248,225/133,334 2,639,549/1,008,338
John T. Thornton 53,333 $436,664 224,842/106,667 2,372,114/ 806,669
</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 Mr.
Thornton, the only executive officer named above who exercised an option
during 1995, would have been $321,335.
(2) Column (d) lists the total options held (stated as shares exercisable and
unexercisable) for the named executive officers as of December 31, 1995. As
of that date, such executive officers also beneficially held an aggregate
of 1,282,001 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 (the "Pension Plan") is a defined benefit plan
qualified under the Employee Retirement Income Security Act of 1974, as amended
("ERISA") that covers 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
Pension Plan, and the contributions by the Corporation and its subsidiaries are
not allocated to the accounts of the individual participants. Benefits under
the Pension Plan are determined on the basis of age, years of service, and
compensation. A participant becomes vested upon completing five 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 Pension 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 formula,
the Integration Level (stated as an amount per month) is $1,829 for
participants retiring in 1996. For participants retiring in years after 1996,
the Integration Level is indexed to increase at the same rate as the Social
Security wage base.
24
<PAGE>
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 pursuant to
designated incentive compensation plans of the Corporation, whether or not
deferred under any deferral plan maintained by the Corporation.
For the individual executive officers named in the Summary Compensation
Table, the compensation recognized under the plan for 1995 is the amount shown
in the table for the year 1995 as "Salary" (column (c)) and as "Bonus" (column
(d)). As of December 31, 1995, credited service for such persons was as
follows: Mr. Kovacevich, 9 years, 10 months; Mr. Biller, 8 years, 4 months; Mr.
Murray, 13 years; Mr. Saklad, 8 years, 5 months; Mr. Thornton, 11 years, 8
months.
Compensation under the Pension Plan for purposes of a plan year is limited by
the Internal Revenue Code to $150,000. In addition, Section 415 of the Internal
Revenue Code places certain limitations on the annual pension that can be paid
from a tax-qualified pension plan. The annual limit currently in effect is
$120,000, 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 that would otherwise be payable
under the Pension Plan but for the Internal Revenue Code limitations will be
paid by the Corporation as an operating expense.
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. The annual amounts shown below, as estimated and when
paid, are not subject to offset by the amount of Social Security benefits.
<TABLE>
<CAPTION>
YEARS OF SERVICE AT RETIREMENT
ANNUALIZED FINAL -------------------------------------------------------
AVERAGE COMPENSATION 10 15 20 25 30 35
- -------------------- ------- ------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C> <C>
$ 250,000 $38,903 $58,354 $ 77,806 $ 97,257 $ 116,708 $ 136,160
500,000 78,903 118,354 157,806 197,257 236,708 276,160
750,000 118,903 178,354 237,806 297,257 356,708 416,160
1,000,000 158,903 238,354 317,806 397,257 476,708 556,160
1,250,000 198,903 298,354 397,806 497,257 596,708 696,160
1,500,000 238,903 358,354 477,806 597,257 716,708 836,160
1,750,000 278,903 418,354 557,806 697,257 836,708 976,160
2,000,000 318,903 478,354 637,806 797,257 956,708 1,116,160
2,250,000 358,903 538,354 717,806 897,257 1,076,708 1,256,160
2,500,000 398,903 598,354 797,806 997,257 1,196,708 1,396,160
2,750,000 438,903 658,354 877,806 1,097,257 1,316,708 1,536,160
3,000,000 478,903 718,354 957,806 1,197,257 1,436,708 1,676,160
3,250,000 518,903 778,354 1,037,806 1,297,257 1,556,708 1,816,160
3,500,000 558,903 838,354 1,117,806 1,397,257 1,676,708 1,956,160
3,750,000 598,903 898,354 1,197,806 1,497,257 1,796,708 2,096,160
</TABLE>
Lloyd P. Johnson, a nominee for re-election as a director of the Corporation,
retired as the Chairman of the Board and as an employee of the Corporation in
1995. Under an agreement with the Corporation in effect prior to his
retirement, Mr. Johnson is entitled to receive payments on his retirement equal
to the difference 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. Pursuant to this agreement, Mr. Johnson receives an additional
annual retirement benefit of $47,290, payable with his regular annual
retirement benefit of $220,552 under the Corporation's Pension Plan and
Supplemental Pension Plan.
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LONG-TERM DISABILITY PLANS
The executive officers named in the Summary Compensation Table are eligible
to 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 20 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
salary earned by Richard M. Kovacevich 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 certain executive
officers of the Corporation, including the five executive officers named in the
Summary Compensation Table. 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 incentive compensation
award or, in the case of Mr. Kovacevich, an amount equal to the two-year
average of his incentive compensation awards. 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 also will 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 February 29, 1996, 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, $7,506,850; Mr. Biller, $3,090,270; Mr. Murray,
$2,929,650; Mr. Saklad, $2,838,480; and Mr. Thornton, $2,447,500.
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, 1996, 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, 22 months; Mr.
Murray, 24 months; Mr. Saklad, 22 months; and Mr. Thornton, 24 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 be entitled under any severance plan of the
Corporation then in effect) and a pro rata 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
discussed below under the heading "Compensation Committee Interlocks and
Insider Participation") and executive officers of the Corporation
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and/or one or more of their immediate family and 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 of the Corporation and the director discussed
below under the heading "Compensation Committee Interlocks and Insider
Participation," also have 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 and director. Three of the executive
officers named in the Summary Compensation Table were indebted to NMI or a
subsidiary thereof in 1995. Information for each such named executive officer,
including the highest balance on each loan outstanding since January 1, 1995,
the balance outstanding on each loan on December 31, 1995, and the annual
interest rate thereon, is as follows: Leslie S. Biller, highest balances on two
loans--$491,535 and $197,800, balances outstanding on December 31, 1995--
$485,954 and $197,646, interest rates per annum--7.125% (adjustable) and 7.25%;
Daniel A. Saklad, highest loan balances on two loans--$430,304 and $400,000,
balances outstanding on December 31, 1995--$426,538 and $399,703, interest
rates per annum--7.875% and 7.5% (adjustable); John T. Thornton, highest loan
balance--$750,000, balance outstanding on December 31, 1995--$747,862, interest
rate per annum--7.75% (adjustable). In addition, five other executive officers
of the Corporation were indebted to NMI in the aggregate amount of $2,271,489,
representing mortgage loans with interest rates ranging from 7.125% to 8.375%
per annum. As of February 29, 1996, of the mortgage loans discussed above,
eight have been sold by NMI in the secondary real estate mortgage market.
One other executive officer of the Corporation also had a personal loan
outstanding from Norwest Capital Markets, Inc. ("NCM"), a subsidiary of the
Corporation. As of December 31, 1995, the outstanding balance of the loan was
$200,000, which amount was also the highest outstanding loan balance since
January 1, 1995. The loan bore 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 1995 was
9.5%. The loan was 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. The executive officer repaid the loan in full in January 1996 with
the proceeds of a loan from Norwest Bank Minnesota, N.A., which loan was made
on substantially the same terms, including interest rate 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 terms.
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 (Chair),
Charles M. Harper, William A. Hodder, Richard D. McCormick, Ian M. Rolland, and
Michael W. Wright. During 1995, Pierson M. Grieve and Richard D. McCormick had
banking transactions, including loans, in the ordinary course of business with
one or more of the bank subsidiaries of the Corporation. All 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. In addition, Pierson M. Grieve was indebted to a
subsidiary of NMI in the aggregate amount of $420,601, representing a mortgage
loan with an adjustable interest rate of 7.25% per annum which, as of February
29, 1996, had been sold by NMI in the secondary real estate mortgage market.
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CERTAIN TRANSACTIONS WITH RESPECT TO DIRECTORS
Gerald J. Ford. In January, 1994, the Corporation acquired 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
re-election as a director of the Corporation, served as Chairman, Chief
Executive Officer, and a director of First United until the Merger. 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, and
was elected as a director by the stockholders of the Corporation at the 1994
and 1995 annual meetings. 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. See
also page 12 of this Proxy Statement for additional information about Mr. Ford.
Mr. Ford also serves as Chairman of the Board, Chief Executive Officer, and a
director of First Nationwide Bank, a Federal Savings Bank, in Dallas, Texas,
under a waiver of the Depository Institutions Management Interlocks Act granted
by the Federal Home Loan Bank Board, as operating head of the Federal Savings
and Loan Insurance Corporation ("FSLIC"). Mr. Ford has obtained confirmation
from the Office of Thrift Supervision, as successor to FSLIC, that the waiver
continues to allow Mr. Ford to serve as a director of the Corporation and of
First Nationwide.
Richard S. Levitt. Norwest Financial Maryland, Inc. ("NFM"), a wholly-owned
subsidiary of Norwest Financial, Inc. ("NFI"), and an indirect wholly-owned
subsidiary of the Corporation, leases office space under a lease having a term
of five years from MB Limited Partnership ("MB"), and also leases additional
office space for a term of five years from AF Limited Partnership ("AF"). The
general partner of both MB and AF is Nellis Corporation ("Nellis"). Richard S.
Levitt, a nominee for re-election as a director, is the Chairman of the Board
and a director of Nellis. One hundred percent of the outstanding voting stock
of Nellis is owned by Mr. Levitt's two sons, both of whom are also officers of
Nellis. In addition, the sole limited partners of MB and AF are trusts, the
beneficiaries of which are descendants of Mr. Levitt.
NFM's existing lease with MB provides for a total fixed rent over the lease
term of $129,412, plus estimated operating expenses of approximately $5,900
annually. NFM's lease with AF provides for a total fixed rent over the lease
term of approximately $125,370, plus estimated operating expenses of $3,800
annually. Both leases are guaranteed by NFI. In the opinion of the management
of NFM and NFI and the management of the Corporation, the terms of the leases
are fair and reasonable with respect to NFM and NFI.
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 1995. All of these filing requirements were satisfied. In making these
disclosures, the Corporation has relied on written representations of its
directors and officers and copies of the reports that they have filed with the
Commission.
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ITEM 2. PROPOSAL TO AMEND THE 1985
LONG-TERM INCENTIVE COMPENSATION PLAN
IN GENERAL
On February 26, 1996 the Board of Directors approved amendments (the "Plan
Amendment") to the Corporation's 1985 Long-Term Incentive Compensation Plan
(the "1985 Plan"), subject to the approval of the stockholders, to increase the
maximum number of shares of common stock that may be awarded under the 1985
Plan by an additional 17,500,000 shares, to limit to 3,500,000 shares the
number of shares of common stock subject to stock options or stock appreciation
rights that may be granted to any employee in a calendar year, to permit the
Human Resources Committee of the Board of Directors (the "Committee") to extend
the exercise period for stock options and stock appreciation rights following a
holder's death, permanent disability, or retirement to a date no later than the
original expiration date of such options or rights, and to eliminate the stated
expiration date in the 1985 Plan.
The Board of Directors believes that the 1985 Plan has been and continues to
be an important incentive in attracting, retaining and motivating key
employees, and that it is appropriate to increase the number of shares
available for awards under the 1985 Plan and to make the other modifications to
the 1985 Plan as provided in the Plan Amendment. Approval of the proposed Plan
Amendment will enable the Committee to exercise greater flexibility in the
granting and administration of awards under the 1985 Plan, and will assure that
sufficient shares are available to enable the Committee to achieve its stated
objectives of encouraging stock ownership by executive officers and key
employees and of attracting and retaining individuals who are in a position to
contribute to the successful conduct of the business and affairs of the
Corporation and its subsidiaries. The Plan Amendment also will conform the
terms of the 1985 Plan to the requirements of Section 162(m) of the Internal
Revenue Code (the "Code") with respect to performance-based compensation.
A copy of the Plan Amendment is attached to this Proxy Statement as Exhibit
A.
GENERAL DESCRIPTION OF THE PLAN
Key employees (including executive officers and directors who are employees)
of the Corporation and its subsidiaries selected by a committee comprised of
non-employee directors of the Corporation (currently, the Human Resources
Committee) are eligible to become participants in the 1985 Plan. Key employees
so selected may receive awards in the form of stock options, stock appreciation
rights, restricted stock, performance shares, performance units or stock. As of
December 31, 1995, a total of 925 persons participated in the 1985 Plan.
Stock options may be granted as non-qualified stock options or incentive
stock options, but may not be granted at a price less than the fair market
value of the stock as of the date of grant. Fair market value as of any date is
defined as 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 for that date. Stock options may be exercised during a period of
time fixed by the Committee, except that no stock option may be exercised more
than ten years after the date of grant. At the discretion of the Committee,
payment of the purchase price for the shares of stock acquired through the
exercise of a stock option may be made in cash or shares of the Corporation's
common stock or a combination thereof.
Stock options granted under the 1985 Plan may include the right to acquire an
Accelerated Ownership Non-Qualified Stock Option ("AO"). If an option grant
contains the AO feature and if a participant pays all or part of the purchase
price of the option with shares of the Corporation's common stock held by the
participant for at least six months, then upon exercise of the option the
participant is granted an AO to purchase, at the fair market value as of the
date of the AO grant, the number of shares of common stock of the Corporation
equal to the sum of the number of whole shares used by the participant in
payment of the purchase price and, if shares are withheld by the Corporation as
payment for withholding taxes, a number of shares which take into account the
participant's estimated tax on the exercise. An AO may be exercised at
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any time between the date of grant and the date of expiration, which will be
the same as the date of expiration of the option to which the AO is related.
AOs are intended to encourage participants to exercise their options early in
their terms by granting the participant an AO for the balance of the original
option's term, thereby allowing the participant to preserve his or her
opportunity for future appreciation in the original option's value.
Stock appreciation rights may be granted in conjunction with, or may be
unrelated to, stock options. A stock appreciation right entitles a participant
to receive a payment, in cash or common stock or a combination thereof, in an
amount equal to the excess of the fair market value of the stock at the time of
exercise over the fair market value as of the date of grant. Stock appreciation
rights may be exercised during a period of time fixed by the Committee not to
exceed ten years after the date of grant.
A grant of restricted stock consists of a specified number of shares of
common stock which are subject to restrictions on transfer, conditions of
forfeiture, and such other terms and conditions for such period or periods as
shall be determined by the Committee. Under the terms of each grant and except
in the case of a participant's death, disability or retirement or a change of
control of the Corporation, a participant forfeits his or her right to receive
the shares if he or she is not continuously employed by the Corporation or an
affiliate until the restrictions lapse. Prior to the lapse of the restrictions,
a participant is entitled to vote and receive dividends on the restricted stock
but may not sell or otherwise transfer the shares. Awards of common stock
without restrictions may also be made by the Committee.
A grant of performance shares or performance units entitles a participant to
receive cash, common stock (which may be restricted stock), or a combination
thereof, based on the degree of achievement of pre-established performance
targets over a performance cycle of not more than five nor less than two years,
as determined by the Committee. Maximum and minimum performance targets
relating to corporate, group, unit and/or individual performance shall be
established in terms of earnings, growth in earnings, ratios of earnings to
equity or assets, or such other measures or standards as the Committee may
determine. In addition, the maximum amount of a participant's award,
denominated in shares of common stock in the case of performance shares and in
dollars in the case of performance units, shall be established by the
Committee. Achievement of the maximum performance target entitles a participant
to payment at the maximum amount of his award, except the Committee may set an
upper limit on the amount payable in the case of performance shares. For
performance that falls below the maximum but exceeds the minimum performance
target, the Committee may determine that a portion of the maximum amount of a
participant's award will be paid.
The Board of Directors may modify, suspend or terminate the 1985 Plan but may
not, without the prior approval of the stockholders of the Corporation, make
any modification to the 1985 Plan which increases the total amount of common
stock which may be awarded (except as permitted by the 1985 Plan to reflect
changes in capitalization), changes the class of employees eligible to
participate, withdraws the administration from the Committee, permits any
person, while a member of the Committee, to be eligible to participate, or
extends the duration of the 1985 Plan.
As of December 31, 1995, 15,156,815 shares were covered by options (including
AOs) granted under the 1985 Plan, at option prices averaging $22.81 per share
and with expiration dates ranging from May 27, 1996 to November 28, 2005, and
209,200 shares were subject to restricted stock awards granted under the 1985
Plan, which will vest in full on dates ranging from January 25, 1996 to
February 28, 2000. As of February 29, 1996, the closing market price of a share
of the Corporation's common stock was $36.50. Other than stock options and
restricted stock awards, no stock appreciation rights or other types of awards
are currently outstanding under the 1985 Plan.
Options (other than AOs) granted prior to April 26, 1988 generally were not
exercisable during the first year after the date of grant. Options (other than
AOs) granted after April 26, 1988, generally became or will become exercisable,
in whole or in part, one year after the date of the option grant, and if
exercisable in part, then in one, two, or three equal annual installments after
the date of grant. All AOs are exercisable upon grant.
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Information with respect to 1995 restricted stock awards to the Chief
Executive Officer and the four other most highly compensated executive officers
is set forth in column (f) of the Summary Compensation Table on page 22 of this
Proxy Statement. Information with respect to options granted in 1995 to the
Chief Executive Officer and the four other most highly compensated executive
officers is set forth in the table under the heading "Options/SAR Grants in
Last Fiscal Year" on page 23 of this Proxy Statement. In 1995, options
(including AO's) totaling 271,125 shares were granted to current executive
officers as a group, and options (including AO's) totaling 1,589,816 shares
were granted to all employees (excluding executive officers) as a group. Also
in 1995, restricted stock awards (including restricted stock awards made in
February 1996 and attributable to 1995 compensation) totaling 48,000 shares of
common stock were made to current executive officers as a group.
No information can be provided with respect to awards, if any, that may be
made in the future under the 1985 Plan, as amended by the Plan Amendment. Such
awards are within the discretion of the Committee administering the 1985 Plan,
and no decisions have been made with respect to future awards or any recipients
thereof.
DESCRIPTION OF PLAN AMENDMENT
The Plan Amendment, if approved by stockholders at the 1996 annual meeting,
would (i) increase the maximum number of shares of common stock available for
issuance under the 1985 Plan by 17,500,000; (ii) limit to 3,500,000 shares the
aggregate shares of common stock subject to stock options or stock appreciation
rights that may be granted to any employee in a calendar year; (iii) permit the
Human Resources Committee to extend the exercise period for stock options and
stock appreciation rights following a holder's death, permanent disability, or
retirement to a date not later than the expiration date of such option or
right; and (iv) eliminate the stated termination date for the 1985 Plan. A
description of each of the foregoing provisions included in the Plan Amendment
is set forth below.
Increase in Shares Available for Issuance. If the Plan Amendment is approved
by stockholders, the maximum number of shares that may be issued under the 1985
Plan (in addition to shares subject to awards as of April 23, 1996) would be
increased to a number not to exceed the sum of (i) the number of shares of
common stock available for, but not yet subject to, an award under the 1985
Plan as of April 23, 1996, plus (ii) 17,500,000 shares. As of February 29,
1996, awards (including options and restricted stock awards) covering
14,865,540 shares were outstanding and 6,773,873 shares were available for
grant under the 1985 Plan.
As currently provided in the 1985 Plan, either authorized but unissued shares
or treasury shares of common stock may be issued pursuant to awards under the
1985 Plan, and any shares subject to the terms and conditions of an award which
are forfeited or not issued because the terms and conditions of the award are
not met, any shares which are used for full or partial payment of the purchase
price of shares with respect to which an option is exercised, any shares that
are subject to awards which are paid in cash, and any shares with respect to
which a stock appreciation right has been exercised may again be used for an
award under the 1985 Plan.
If the Plan Amendment is approved, the estimated maximum number of shares of
common stock that would be available for award under the 1985 Plan, in addition
to shares reserved for issuance pursuant to awards outstanding on April 23,
1996, would equal an aggregate of approximately 24,273,873 shares, which is the
sum of (i) shares available for, but not yet subject to, an award as of April
23, 1996 (6,773,873 shares, assuming no awards are made under the 1985 Plan
between February 29, 1996 and that date), plus (ii) the additional 17,500,000
shares authorized by the Plan Amendment.
Individual Limit on Maximum Shares Subject to Options. The Plan Amendment
limits the number of shares of common stock that may be subject to stock option
grants or stock appreciation rights awarded to any employee to a maximum of
3,500,000 shares in a calendar year. This provision of the Plan Amendment is
intended to conform the 1985 Plan to the requirements of Section 162(m) of the
Code and related regulations, so that stock options and stock appreciation
rights granted to those executive officers of the
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Corporation who may be deemed to be "covered executive officers" within the
meaning of Section 162(m) will continue to qualify as performance-based
compensation deductible by the Corporation. See the "Report of the Human
Resources Committee on Executive Compensation" under the heading "EXECUTIVE
COMPENSATION" above for a discussion of Section 162(m), and the "Summary
Compensation Table," also under such heading, for the names of those executive
officers who are "covered executive officers" for 1995.
Under the Section 162(m) regulations, stock options and stock appreciation
rights must be granted pursuant to a plan that states "the maximum number of
shares with respect to which options or rights may be granted during a
specified period to any employee" in order for such options or rights to
constitute performance-based compensation. A plan pursuant to which options and
rights may be granted, such as the 1985 Plan, that currently provides for an
aggregate limit on the number of shares available for grant to all employees
but does not also include an individual limit on the number of shares that may
be subject to options or rights, must be amended to incorporate such a limit by
the earliest date on which one of the following events occurs: (1) the
expiration of the plan; (2) a material modification to the terms of the plan;
(3) the issuance of all employer stock and other compensation allocated under
the plan; or (4) the first annual meeting of stockholders at which directors
will be elected occurring after December 31, 1996. Because the other provisions
of the Plan Amendment may be deemed to be "material modifications" to the 1985
Plan, a provision for an individual limit on the maximum number of shares that
may be subject to stock options or stock appreciation rights granted in any
calendar year has also been included in the Plan Amendment.
Determination of Exercise Periods for Certain Awards following Participant
Death, Permanent Disability, or Retirement. The 1985 Plan currently provides
that in the event of a participant's death, all outstanding options held by the
participant as of the date of death become immediately exercisable and may be
exercised for a period of up to one year after death. In the event of a
participant's permanent disability or retirement (as those terms are defined in
the 1985 Plan), all outstanding options then held by the participant become
immediately exercisable and may be exercised for a period, as determined by the
Human Resources Committee, of up to three years following the date of permanent
disability or retirement. The 1985 Plan also provides that any outstanding
stock appreciation rights granted in conjunction with options become
immediately exercisable for a period of 90 days following a participant's
retirement, but are canceled upon death or permanent disability. Stock
appreciation rights granted independent of any option become immediately
exercisable for a period of 90 days following a participant's retirement and
for a period of one year following a participant's death or permanent
disability. Notwithstanding such specified exercise periods, the 1985 Plan
provides that no option or right may be exercised after its stated expiration
date.
The Plan Amendment includes a provision which eliminates the limited periods
during which stock options or stock appreciation rights may be exercised
following a participant's death, permanent disability, or retirement, to allow
the Committee, in its discretion, to determine the period of time in which
options or stock appreciation rights remain exercisable under such
circumstances. However, in no event may any exercise period so determined by
the Committee extend beyond the originally stated expiration date of the option
or right.
Subject to stockholder approval of the Plan Amendment, the Committee has
approved amendments to all employee option agreements outstanding as of April
23, 1996 (other than option agreements for executive officers, including a
director who is a former executive officer) to permit employees to exercise
options following permanent disability or retirement at any time prior to the
expiration of the original option terms. The Committee also has approved
amendments, effective September 1, 1996 and also subject to stockholder
approval of the Plan Amendment, to the option agreements for certain options
that are held by officers and directors subject to the short-swing profit rules
of Section 16 of the Securities Exchange Act of 1934 ("insiders"). Options
expiring more than three years after an insider's earliest retirement date will
be amended to change the number of years such option may be exercised following
an insider's permanent disability or retirement from three years to the
option's original expiration date, subject to the insider's agreement not to
exercise any such amended option for a period of six months from September 1,
1996.
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As a result of the Committee's action and subject to stockholder approval of
the Plan Amendment, amendments to option agreements were approved for certain
named executive officers, for all current executive officers as a group, and
for all employees as a group (excluding executive officers) covering options to
acquire the aggregate number of shares, as follows: Mr. Kovacevich, 530,000
shares; Mr. Murray, 363,108 shares; and Mr. Thornton, 150,010 shares; for all
current executive officers as a group, 1,761,810 shares, and for all employees
as a group (excluding executive officers), approximately 11,372,000 shares. In
addition, the Committee also has approved amendments to option agreements for
Lloyd P. Johnson, a director who is a former executive officer, covering an
aggregate of 380,286 shares.
The proposed amendments to the option or stock appreciation rights exercise
period provisions contained in the Plan Amendment are intended to give the
Committee the flexibility to establish option and stock appreciation right
exercise periods following death, permanent disability, or retirement.
Management believes that this provision of the Plan Amendment will aid the
Corporation in attracting and retaining executives and key personnel.
Elimination of Stated Expiration Date. The 1985 Plan currently provides that
no award may be made under the Plan after April 25, 1998. Because the
Corporation regularly presents the 1985 Plan to stockholders for approval of
amendments, and because an expiration date is not legally required to be
included in the Plan, the Plan Amendment eliminates the expiration date.
CERTAIN FEDERAL INCOME TAX CONSEQUENCES
The following discussion summarizes the federal income tax consequences, in
the opinion of counsel for the Corporation, to participants who may receive
awards under the 1985 Plan. This summary is based upon the provisions of the
Code in effect as of January 1, 1996, and regulations and interpretations with
respect to the applicable provisions of the Code as of that date.
Non-Qualified Stock Options. A participant who is granted a non-qualified
stock option will not recognize income and the Corporation will not be allowed
a deduction at the time such option is granted. Except as discussed below under
"Participants Subject to Section 16 of the Act," when a participant exercises a
non-qualified stock option, the difference between the option price and any
higher market value of the stock on the date of exercise will be ordinary
income to the participant and will be allowed as a deduction for federal income
tax purposes to the Corporation or its subsidiary. The capital gain holding
period of the shares acquired will begin one day after the date such stock
option or stock appreciation right is exercised. When a participant disposes of
shares acquired by the exercise of the option, any amount received in excess of
the fair market value of the shares on the date of exercise will be treated as
short-term or long-term capital gain, depending upon the holding period of the
shares. If the amount received is less than the market value of the shares on
the date of exercise, the loss will be treated as short-term or long-term
capital loss, depending upon the holding period of the shares.
Incentive Stock Options. A participant who is granted an incentive stock
option also will not recognize income and the Corporation will not be allowed a
deduction at the time such an option is granted. When a participant exercises
an incentive stock option while employed by the Corporation or its subsidiary
or within the three-month (one year, in the case of disability) period after
termination of employment, no ordinary income will be recognized by the
participant at that time but the excess of the fair market value of the shares
acquired by such exercise over the option price will be an item of tax
preference for purposes of any federal alternative minimum tax applicable to
individuals. If the shares acquired upon exercise are not disposed of until
more than two years after the date of grant and one year after the date of
transfer of the shares to the participant (statutory holding periods), the
excess of the sale proceeds over the aggregate option price of such shares will
be long-term capital gain. Except in the event of death, if the shares are
disposed of prior to the expiration of the statutory holding periods (a
"Disqualifying Disposition"), the excess of the fair market value of such
shares at the time of exercise over the aggregate option price (but not more
than the gain on the disposition if the disposition is a transaction on which a
loss, if sustained, would be recognized) will be ordinary income at the time of
such Disqualifying Disposition (and the Corporation or its subsidiary will be
entitled to a federal tax deduction in a like amount).
33
<PAGE>
Payment of Option Price in Shares. If a participant pays the exercise price
of a non-qualified or incentive stock option with previously-owned shares of
the Corporation's common stock and the transaction is not a Disqualifying
Disposition, the shares received equal to the number of shares surrendered are
treated as having been received in a tax-free exchange. The shares received in
excess of the number surrendered will not be taxable if an incentive stock
option is being exercised, but will be taxable as ordinary income to the extent
of their fair market value if a non-qualified option is being exercised. The
participant does not recognize income and the Corporation receives no deduction
as a result of the tax-free portion of the exchange transaction. If the use of
previously-acquired incentive stock option shares to pay the exercise price of
another incentive stock option constitutes a Disqualifying Disposition, the tax
results are as described under the heading "Incentive Stock Options."
Stock Appreciation Rights. A participant who receives stock appreciation
rights will not recognize income and the Corporation will not be allowed a
deduction at the time such stock appreciation rights are granted. Except as
discussed below under the heading "Participants Subject to Section 16 of the
Act," when a participant exercises stock appreciation rights, the amount of
cash and the fair market value of the shares of common stock of the Corporation
received will be ordinary income to the participant and will be allowed as a
deduction for federal income tax purposes to the Corporation or its subsidiary.
Participants Subject to Section 16 of the Act. If a participant who is
subject to the insider trading rules of Section 16(b) of the Securities
Exchange Act of 1934 (the "Act") receives shares by reason of the exercise of a
non-qualified option or stock appreciation right, the participant will
recognize ordinary income equal to the excess of the fair market value of the
shares received over the amount paid for the shares, if any, on the first day
the sale of such shares at a profit is no longer subject to Section 16(b) of
the Act, which may be the earlier of (i) the date of exercise, or (ii) six
months less one day from the date of exercise of the option (the "Recognition
Date"), and the Corporation or its subsidiary will be entitled to a deduction
of a like amount for federal income tax purposes at that time. The income when
recognized will include any appreciation in the value of the stock prior to the
Recognition Date, and the capital gain holding period will not begin until the
Recognition Date. However, if the Recognition Date is not the date of exercise,
such a participant may elect to have the normal rules described with respect to
non-qualified stock options or stock appreciation rights apply by filing a
Section 83(b) election with the Internal Revenue Service within 30 days after
the exercise of the non-qualified stock option or stock appreciation right.
Restricted Stock Awards. A recipient of a restricted stock award will be
subject to tax at ordinary income rates on the fair market value of the
Corporation's common stock at the time the restricted shares are transferable
or are no longer subject to restrictions. However, a recipient who so elects
under Section 83(b) of the Code within 30 days of the date of the grant will
have ordinary taxable income on the date of the grant equal to the fair market
value of the shares as if such shares were unrestricted and could be sold
immediately. If the restricted shares subject to such election are forfeited,
the recipient will not be entitled to any deduction, refund or loss for tax
purposes with respect to the forfeited restricted shares. The holding period to
determine whether the recipient has long-term or short-term capital gain or
loss upon sale of the restricted shares is measured from the date the
restriction period expired. However, if the recipient timely elects to be taxed
as of the date of the grant, the holding period commences on the date of the
grant and the tax basis will be equal to the fair market value of the
restricted shares on the date of the grant.
RECOMMENDATION; VOTE REQUIRED
The affirmative vote of a majority of the shares of the common stock of the
Corporation present in person or represented by proxy and entitled to vote at
the annual meeting is required to approve the Plan Amendment.
THE BOARD OF DIRECTORS RECOMMENDS THAT STOCKHOLDERS VOTE FOR
THE PROPOSAL TO AMEND THE 1985 LONG-TERM INCENTIVE COMPENSATION PLAN.
34
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ITEM 3. 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. 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. 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
under the plan, as described below. On September 25, 1995, the Board of
Directors adopted a policy, effective January 1, 1996, that 50% of the annual
compensation for non-employee directors for their service as directors be in
the form of the Corporation's common stock. In order to implement this policy,
the Board of Directors has approved an amendment to the Directors' Formula Plan
(the "Plan Amendment"), subject to stockholders' approval, to provide that,
effective February 1, 1997, and on each February 1 thereafter (the "Award
Date"), non-employee directors who have served as non-employee directors of the
Corporation during all of the prior year would receive an award (the "Award")
of shares of the Corporation's common stock having an aggregate fair market
value on the date of the Award equal to the annual cash retainer in effect as
of the January 1 immediately preceding the Award Date. A non-employee director
who served during part of the prior year through December 31, would receive a
prorated Award based on the months he or she served as a non-employee director.
In order to conform director compensation received in 1996 to this policy, the
Plan Amendment also includes a one-time award on May 1, 1996 of shares of
common stock having an aggregate fair market value on May 1 of $6,000, payable
to all directors who served as directors during all of 1995, and who continued
to serve in that capacity on March 1, 1996. The Plan Amendment, if approved by
stockholders, will not increase the number of shares of common stock issuable
under the Directors' Formula Plan. The text of the Plan Amendment is set forth
in Exhibit B to this Proxy Statement.
A summary of the terms of the Directors' Formula Plan currently in effect,
and the Awards made to current non-employee directors for service as directors
during 1995, 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 "CERTAIN
INFORMATION REGARDING THE BOARD OF DIRECTORS AND COMMITTEES THEREOF--
Compensation of Directors."
If the Plan Amendment had been in effect on February 1, 1996, each of the
current non-employee directors who had served as a non-employee director for
all of 1995 (11 persons) would have received an Award of 709 shares, computed
based on an annual cash retainer of $24,000 in effect as of the immediately
preceding January 1, and a closing price of $33.875 per share of common stock
of the Corporation on the New York Stock Exchange on that date, and rounded up
to the nearest whole share.
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 believes
that the Directors' Formula Plan, as proposed to be amended, will aid in
attracting and retaining individuals with outstanding abilities and skills for
service on the Corporation's Board of Directors. It also reflects the Board's
belief that a significant component of a director's total compensation should
be paid in the Corporation's common stock.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR
THE PROPOSAL TO AMEND THE DIRECTORS' FORMULA STOCK AWARD PLAN.
35
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ITEM 4. 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 LLP, independent certified
public accountants, as auditors of the Corporation and its subsidiaries for the
year ending December 31, 1996. KPMG Peat Marwick LLP or its predecessors have
examined the accounts of the Corporation annually since 1931.
Representatives of KPMG Peat Marwick LLP are expected to be present at the
annual meeting of stockholders on April 23, 1996, 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 1997 must be received by the Secretary of the
Corporation, at Norwest Center, Sixth and Marquette, Minneapolis, Minnesota
55479-1026, no later than November 19, 1996.
ANNUAL REPORTS
The Annual Report of the Corporation for the year 1995, 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 1995, 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,
LOGO
LAUREL A. HOLSCHUH
Secretary
March 19, 1996
36
<PAGE>
EXHIBIT A
PROPOSED AMENDMENT TO
1985 LONG-TERM INCENTIVE COMPENSATION PLAN
The proposed language to be added to Sections 4, 9.2, 10.2, and 15.2 of the
1985 Long-Term Incentive Compensation Plan is underlined and the language to be
deleted is set forth in brackets.
4. Shares Available Under the Plan; LIMITATION ON AWARDS. The maximum
number of Shares that may be issued under this Plan on and after APRIL 23,
1996 [April 27, 1993] (in addition to Shares which prior to April 23, 1996
[April 27, 1993] were subject to Awards) shall not exceed the sum of (i)
the number of Shares available for, but not yet subject to, an Award as of
APRIL 23, 1996 [April 27, 1993] plus (ii) 17,500,000 [9,000,000] Shares.
These Shares may consist, in whole or in part, of authorized but unissued
Stock or treasury Stock not reserved for any other purpose. Any Shares
subject to the terms and conditions of an Award under this Plan which are
forfeited or not issued because the terms and conditions of the Award are
not met or for which payment is not made in Stock and any Shares which are
used for full or partial payment of the purchase price of Shares with
respect to which an Option is exercised may again be used for an Award
under the Plan. NO EMPLOYEE MAY BE AWARDED IN ANY CALENDAR YEAR OPTIONS OR
STOCK APPRECIATION RIGHTS COVERING AN AGGREGATE OF MORE THAN 3,500,000
SHARES.
9.2 Termination of Employment Due to Death, Disability, or Retirement.
(a) If a Participant ceases to be an Employee by reason of his death,
all Options outstanding shall become immediately exercisable and remain
exercisable for a period DETERMINED BY THE COMMITTEE [of one year] but
not beyond the expiration date of said Options.
(b) If a Participant ceases to be an Employee by reason of his
permanent disability or Retirement, all Options outstanding shall
become immediately exercisable and remain exercisable for a period [of
up to three years as] determined by the Committee but not beyond [the
earlier of one year after the date of death of the Participant or] the
expiration date of said Options.
(c) If a Participant ceases to be an Employee by reason of his DEATH,
PERMANENT DISABILITY OR Retirement, all Stock Appreciation Rights
granted in conjunction with Options then outstanding shall become
immediately exercisable and remain exercisable for SUCH [a] period OR
PERIODS DETERMINED BY THE COMMITTEE [of 90 days] but not beyond the
expiration date of said Stock Appreciation Rights. [If a Participant
ceases to be an employee by reason of his death or permanent
disability, all Stock Appreciation Rights granted in conjunction with
Options then outstanding (but not the related Options) shall be
canceled immediately.]
10.2 Termination of Employment Due to Death, Disability or Retirement. If
a Participant ceases to be an Employee by reason of his DEATH, PERMANENT
DISABILITY OR Retirement, all Stock Appreciation Rights then outstanding
which were granted independent of any Option shall become immediately
exercisable and remain exercisable for SUCH [a] period OR PERIODS
DETERMINED BY THE COMMITTEE [of 90 days] but not beyond the expiration date
of said Stock Appreciation Rights. [If a Participant ceases to be an
Employee by reason of his death or permanent disability, all Stock
Appreciation Rights then outstanding which were granted independent of any
Option shall become immediately exercisable for a period of one year but
not beyond the expiration date of said Stock Appreciation Rights.]
15.2 Duration of the Plan. The Plan shall remain in effect until all
Stock subject to it shall be distributed, until the Term of all Options or
Stock Appreciation Rights granted under this Plan shall expire, until all
restrictions on Restricted Stock granted under this Plan shall lapse, or
until the Performance Cycle for any Performance Shares or Performance Units
awarded under this Plan shall end. [, but no Award shall be made after
April 25, 1998.]
A-1
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EXHIBIT B
PROPOSED AMENDMENT TO
DIRECTORS' FORMULA STOCK AWARD PLAN
The proposed language to be added to Section 3 of the Directors' Formula
Stock Award Plan is underlined and the language to be deleted is set forth in
brackets.
3. Formula Award. In consideration for past services rendered, on
February 1 of each year BEGINNING FEBRUARY 1, 1997 (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 EQUAL TO THE ANNUAL
CASH RETAINER ESTABLISHED BY THE BOARD AND IN EFFECT AS OF THE IMMEDIATELY
PRECEDING JANUARY 1 [of $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.
The fair market value shall be determined using the closing price of a
share of Common Stock as reported on the consolidated tape of the New York
Stock Exchange. If the New York Stock Exchange is not open on the Award
Date, the shares shall be valued at their fair market value as of the next
preceding day on which the New York Stock Exchange was open.
EACH ELIGIBLE NON-EMPLOYEE DIRECTOR WHO WAS A DIRECTOR OF THE CORPORATION
DURING ALL OF 1995 AND IS A DIRECTOR ON MARCH 1, 1996 SHALL BE AWARDED ON
MAY 1, 1996 THAT NUMBER OF SHARES (ROUNDED UP TO THE NEXT WHOLE SHARE) OF
COMMON STOCK HAVING AN AGGREGATE FAIR MARKET VALUE (DETERMINED AS SET FORTH
ABOVE) ON SAID DATE OF $6,000.
B-1
<PAGE>
LOGO
NC54228MSC96
<PAGE>
<TABLE>
<S> <C>
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NORWEST CORPORATION
This proxy is solicited by the Board of Directors for use at the Annual Meeting on Tuesday,
April 23, 1996.
The shares of common stock of Norwest Corporation which you are entitled to vote on
March 5, 1996, will be voted as you specify on this card.
If no choice is specified, this proxy will be voted "FOR" Items 1 through 4.
By signing this proxy, you revoke all prior proxies and appoint William H. Queenan, Stanley S.
Stroup, and John T. Thornton, 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, William A. Hodder, Lloyd P. Johnson, Reatha Clark King,
Richard M. Kovacevich, Richard S. Levitt, Richard D. McCormick, Cynthia H. Milligan,
Benjamin F. Montoya, Ian M. Rolland, 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 amendment to the 1985 Long-Term Incentive Compensation Plan to increase the
number of shares available for awards by 17,500,000, to limit the number of shares that
may be subject to stock options or stock appreciation rights granted to any employee in
a calendar year, to permit the Human Resources Committee to extend the exercise period
for stock options and stock appreciation rights following a holder's death, permanent
disability, or retirement to a date no later than the original expiration date, and to
eliminate a stated expiration date for the Plan.
[_] FOR [_] AGAINST [_] ABSTAIN
(Continued, and to be signed and dated, on the reverse side)
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</TABLE>
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<TABLE>
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<S> <C>
Item 3. Approval of amendment to the Directors' Formula Stock Award Plan to award non-employee
directors annually shares of common stock with a value equal to the annual cash retainer
and to provide for a one-time award under the Plan for 1996.
[_] FOR [_] AGAINST [_] ABSTAIN
NORWEST CORPORATION Item 4. Ratification of appointment of KPMG Peat Marwick LLP as auditors.
ANNUAL MEETING
[_] FOR [_] AGAINST [_] ABSTAIN
Lutheran Brotherhood Auditorium
625 Fourth Avenue South Dated: , 1996
Minneapolis, Minnesota ---------------------------------------
---------------------------------------------------
Signature
APRIL 23, 1996 ---------------------------------------------------
10:00 a.m., Minneapolis Time Signature
Please sign exactly as your name appears to the
left. In the case of joint owners, each should sign.
If signing as executor, trustee, guardian, or in any
other representative capacity or as an officer of a
corporation, please indicate your full title as
such.
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</TABLE>
<PAGE>
<TABLE>
<S> <C>
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NORWEST CORPORATION SAVINGS INVESTMENT PLAN
CONFIDENTIAL VOTING INSTRUCTIONS
NORWEST BANK MINNESOTA, NATIONAL ASSOCIATION, TRUSTEE
I hereby direct that the voting rights pertaining to the stock of Norwest Corporation held by the
Norwest Corporation Master Savings Trust (the "Trust") and allocable to my account under the
above Plan as of February 7, 1996, shall be exercised at the Annual Meeting of Stockholders of
said Corporation to be held April 23, 1996, 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 19, 1996, 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 4.
By signing this proxy, you revoke all prior proxies and appoint William H. Queenan, Stanley S.
Stroup, and John T. Thornton, 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, William A. Hodder, Lloyd P. Johnson, Reatha Clark King,
Richard M. Kovacevich, Richard S. Levitt, Richard D. McCormick, Cynthia H. Milligan,
Benjamin F. Montoya, Ian M. Rolland, 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 amendment to the 1985 Long-Term Incentive Compensation Plan to increase the
number of shares available for awards by 17,500,000, to limit the number of shares that
may be subject to stock options or stock appreciation rights granted to any employee in
a calendar year, to permit the Human Resources Committee to extend the exercise period
for stock options and stock appreciation rights following a holder's death, permanent
disability, or retirement to a date no later than the original expiration date, and to
eliminate a stated expiration date for the Plan.
[_] FOR [_] AGAINST [_] ABSTAIN
(Continued, and to be signed and dated, on the reverse side)
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</TABLE>
<PAGE>
<TABLE>
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<S> <C>
Item 3. Approval of amendment to the Directors' Formula Stock Award Plan to award non-employee
directors annually shares of common stock with a value equal to the annual cash
retainer and to provide for a one-time award under the Plan for 1996.
NORWEST CORPORATION
ANNUAL MEETING [_] FOR [_] AGAINST [_] ABSTAIN
Item 4. Ratificatin of appointment of KPMG Peat
Marwick LLP as auditors.
Lutheran Brotherhood Auditorium
625 Fourth Avenue South
Minneapolis, Minnesota [_] FOR [_] AGAINST [_] ABSTAIN
Dated: , 1996
---------------------------------------
APRIL 23, 1996
10:00 a.m., Minneapolis Time ---------------------------------------------------
Signature of Participant
PLEASE DATE, SIGN AND MAIL this instruction card
promptly using the enclosed envelope.
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</TABLE>
<PAGE>
(NORWEST LOGO) NORWEST CORPORATION
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AMERICAN FEDERAL SAVINGS BANK EMPLOYEE STOCK OWNERSHIP 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 ("Norwest") held by the Norwest Corporation Master Savings Trust
(the "Trust") and allocable to my account under the above Plan as of December
31, 1995 (which Plan merged with the Norwest Corporation Savings Investment Plan
("SIP") following Norwest's acquisition of AMFED Financial, Inc. ("AMFED"))
shall be exercised at the Annual Meeting of Stockholders of Norwest Corporation
to be held April 23, 1996, 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 19, 1996, 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. The number of shares shown on the reverse of this card represents
shares of AMFED common stock allocated to your Plan account as of December 31,
1995. When your voting instructions are tabulated, your AMFED common stock will
be counted for voting purposes as votes with respect to the number of shares of
Norwest common stock into which your AMFED common stock was converted based on
the conversion ratio in effect for the AMFED acquisition.
IF NO CHOICE IS SPECIFIED, THIS PROXY WILL BE VOTED "FOR" ITEMS 1 THROUGH 4.
ITEM 1. ELECTION OF DIRECTORS. Nominees: David A. Christensen, Gerald J. Ford,
Pierson M. Grieve, Charles M. Harper, William A. Hodder, Lloyd P.
Johnson, Reatha Clark King, Richard M. Kovacevich, Richard S. Levitt,
Richard D. McCormick, Cynthia H. Milligan, Benjamin F. Montoya, Ian M.
Rolland 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.)
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(Continued, and to be signed and dated, on the reverse side)
<PAGE>
NORWEST CORPORTION
ANNUAL MMEETING
Lutheran Brotherhood Auditorium
625 Fourth Avenue South
Minneapolis, Minnesota
APRIL 23, 1996
10:00 a.m., Minneapolis Time
ITEM 2. APPROVAL OF AMENDMENT TO THE 1985 LONG-TERM INCENTIVE COMPENSATION
PLAN to increase the number of shares available for awards by
17,500,000, to limit the number of shares that may be subject to stock
options or stock appreciation rights granted to any employee in a
calendar year, to permit the Human Resources Committee to extend the
exercise period for stock options and stock appreciation rights
following a holder's death, permanent disability, or retirement, to a
date no later than the original expiration date, and to eliminate a
stated expiration date for the Plan.
[_] FOR [_] AGAINST [_] ABSTAIN
ITEM 3. APPROVAL OF AMENDMENT TO THE DIRECTORS' FORMULA STOCK AWARD PLAN to
award non-employee directors annually shares of common stock with a
value equal to the annual cash retainer and to provide for a one time
award under the Plan for 1996.
[_] FOR [_] AGAINST [_] ABSTAIN
ITEM 4. RATIFICATION OF APPOINTMENT OF KPMG PEAT MARWICK LLP as auditors.
[_] FOR [_] AGAINST [_] ABSTAIN
Dated:_______________________, 1996
-----------------------------------
Signature of Participant
PLEASE DATE, SIGN AND MAIL this
instruction card promptly using
the enclosed envelope.
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