SCHEDULE 14A
(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. _______)
Filed by the registrant X
Filed by a party other than the registrant __
Check the appropriate box:
__ Preliminary proxy statement
x Definitive proxy statement
__ Definitive additional materials
__ Soliciting material pursuant to Rule 14a-11(c) or Rule 14a-12
__ Confidential, for use of the Commission only (as permitted by
Rule 14a-6(e)(2))
OLD KENT FINANCIAL CORPORATION
________________________________________________________________________________
(Name of Registrant as Specified in Its Charter)
________________________________________________________________________________
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of filing fee (Check the appropriate box):
X $125 per Exchange Act Rule 0-11(c)(1)(ii), 14a-6(i)(1), 14a-6(j)(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.
________________________________________________________________________________
(4) Proposed maximum aggregate value of transaction:
________________________________________________________________________________
(5) Total fee paid:
________________________________________________________________________________
__ 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:
________________________________________________________________________________
OLD KENT FINANCIAL CORPORATION
One Vandenberg Center
Grand Rapids, Michigan 49503
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
The annual meeting of shareholders of Old Kent Financial Corpora-
tion will be held in the Pantlind Ballroom of the Amway Grand Plaza Hotel,
187 Monroe Avenue N.W., Grand Rapids, Michigan, on Monday, April 17, 1995,
at 10 a.m. local time to consider and vote upon election of directors and
such other business as may properly come before the meeting.
Shareholders of record at the close of business on February 21,
1995, are entitled to notice of and to vote at the meeting or any adjourn-
ment of the meeting. The following Proxy Statement and enclosed form of
proxy are being furnished to holders of Old Kent Common Stock on and after
March 1, 1995.
March 1, 1995 By Order of the Board of Directors,
Martin J. Allen, Jr.
Secretary
It is important that your shares be represented at the meeting.
Even if you expect to attend the meeting,
PLEASE SIGN AND RETURN YOUR PROXY PROMPTLY.
PROXY STATEMENT
ANNUAL MEETING OF SHAREHOLDERS
OLD KENT FINANCIAL CORPORATION
April 17, 1995
This Proxy Statement and the enclosed proxy are being furnished
to holders of Common Stock, $1 par value, of Old Kent Financial Corporation
("Old Kent" or the "Corporation") on and after March 1, 1995, in connection
with the solicitation of proxies by the Old Kent board of directors for use
at the annual meeting of Old Kent shareholders to be held on April 17,
1995, and at any adjournment of that meeting. The annual meeting will be
held in the Pantlind Ballroom of the Amway Grand Plaza Hotel, 187 Monroe
Avenue N.W., Grand Rapids, Michigan, 49503, at 10 a.m. local time.
The purpose of the annual meeting is to consider and vote upon
election of directors. If a proxy in the form distributed by Old Kent is
properly executed and returned to Old Kent, the shares represented by that
proxy will be voted at the annual meeting of Old Kent shareholders and at
any adjournment of that meeting. Where a shareholder specifies a choice,
the proxy will be voted as specified. If no choice is specified, the
shares represented by the proxy will be voted for the election of all
nominees named in this Proxy Statement and in accordance with the judgment
of the persons named as proxies with respect to any other matter that may
come before the meeting.
A proxy may be revoked at any time prior to its exercise by writ-
ten notice delivered to the Secretary of the Corporation or by attending
and voting at the annual meeting.
Solicitation of proxies will be made initially by mail. Old Kent
directors, officers and employees may also solicit proxies in person or by
telephone without additional compensation. Proxies may be solicited by
nominees and other fiduciaries who may mail materials to or otherwise com-
municate with the beneficial owners of shares held by them. Old Kent has
engaged Corporate Investor Communications, Inc. at an estimated cost of
$5,500 to assist in solicitation of proxies from brokers and other nominee
shareholders. All expenses of solicitation of proxies will be paid by Old
Kent.
Election of Directors
The board of directors proposes that the following seven nominees
be elected as directors for terms expiring at the annual meeting to be held
in the years indicated below:
<TABLE>
<CAPTION>
Nominee Term Expiring in
<S> <C> <C>
John D. Boyles 1998
Richard M. DeVos, Jr. 1998
John P. Keller 1998
Robert L. Sadler 1998
David J. Wagner 1998
James P. Hackett 1997
Erina Hanka 1997
</TABLE>
A plurality of the shares voting is required to elect directors. For the
purpose of counting votes on this proposal, abstentions, broker non-votes
and other shares not voted will not be counted as shares voted, and the
number of shares of which a plurality is required will be reduced by the
number of shares not voted.
The proposed nominees are willing to be elected and to serve. In
the event that any nominee is unable to serve or is otherwise unavailable
for election, which is not contemplated, the incumbent Old Kent board of
directors may or may not select a substitute nominee. If a substitute
nominee is selected, all proxies will be voted for the person so selected.
If a substitute nominee is not selected, all proxies will be voted for the
election of the remaining nominees. Proxies will not be voted for a
greater number of persons than the number of nominees named.
YOUR BOARD OF DIRECTORS RECOMMENDS A
VOTE FOR ELECTION OF ALL NOMINEES AS DIRECTORS
Voting Securities
Holders of record of Common Stock at the close of business on
February 21, 1995, will be entitled to vote at the annual meeting of share-
holders on April 17, 1995, and any adjournment of that meeting. As of
February 21, 1995, there were 42,981,852 shares of Common Stock issued and
outstanding. Each share of Common Stock is entitled to one vote on each
matter presented for shareholder action.
The following table sets forth information concerning the number
of shares of Common Stock held as of December 31, 1994, by the only share-
holder who is known to Old Kent management to have been the beneficial
owner of more than 5% of the outstanding shares of Common Stock as of that
date:
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<TABLE>
<CAPTION>
Amount and Nature of Beneficial Ownership(1)
Sole Voting Shared Voting Total
Name and Address of and Dispositive or Dispositive Beneficial Percent
Beneficial Owner Power Power(2) Ownership of Class
<S> <C> <C> <C> <C>
Old Kent Bank
One Vandenberg Center
Grand Rapids,
Michigan 49503 (3) 2,397,832 3,290,955 5,688,787 8.1%
</TABLE>
The following table shows certain information concerning the
number of shares of Common Stock held as of December 31, 1994, by each of
Old Kent's directors and nominees for director, each of the named executive
officers and all of Old Kent's directors and executive officers as a group:
<TABLE>
<CAPTION>
Amount and Nature of Beneficial Ownership(1)
Sole Voting Shared Voting Total
and Dispositive or Dispositive Beneficial Percent
Power Power(2) Ownership of Class
Name of
Beneficial Owner
<S> <C> <C> <C> <C>
J. M. Bissell 6,985 -- 6,985 *
J. D. Boyles 31,692 -- 31,692 *
J. C. Canepa 348,246(4) 600 348,846(4) *
R. M. DeVos, Jr. 3,387 -- 3,387 *
James P. Hackett -- -- -- *
E. Hanka -- 1,040 1,040 *
E. D. Holton 3,350 4,819 8,169 *
M.J. Jandernoa 4,995 -- 4,995 *
J. P. Keller 5,544 -- 5,544 *
J. K. Myers 3,133 -- 3,133 *
W. U. Parfet 2,683 -- 2,683 *
P. A. Pierre 2,051 -- 2,051 *
R. L. Sadler 49,111(4) 105,959 155,070(4) *
P. F. Secchia 58,335 200 58,335 *
B. P. Sherwood, III 89,525(4) 165 89,690(4) *
D. J. Wagner 108,484(4) 27,272 135,756(4) *
T. D. Wisnom 101,188(4) 1,386 102,574(4) *
All directors and
executive officers
as a group 1,223,108(4) 186,915 1,410,023(4) 3.25%
______________________________
<FN>
* Less than 1%
-3-
(1) The numbers of shares stated are based on information furnished by
each person listed and include shares personally owned of record by
that person and shares which under applicable regulations are con-
sidered to be otherwise beneficially owned by that person. Under
these regulations, a beneficial owner of a security includes any per-
son who, directly or indirectly, through any contract, arrangement,
understanding, relationship or otherwise has or shares voting power or
dispositive power with respect to the security. Voting power includes
the power to vote or direct the voting of the security. Dispositive
power includes the power to dispose or direct the disposition of the
security. A person will also be considered the beneficial owner of a
security if the person has a right to acquire beneficial ownership of
the security within 60 days. These numbers do not include shares held
in various fiduciary capacities through the trust department of Old
Kent Bank and Old Kent Bank (Illinois), each an Old Kent subsidiary.
Old Kent and the directors and officers of Old Kent, Old Kent Bank and
Old Kent Bank (Illinois) disclaim beneficial ownership of shares held
by the banks in fiduciary capacities.
(2) These numbers include shares over which the listed person is legally
entitled to share voting or dispositive power by reason of joint own-
ership, trust, or other contract or property right, and shares held by
spouses and children over whom the listed person may have substantial
influence by reason of relationship. Shares held in fiduciary capaci-
ties by bank subsidiaries of the Corporation are not included unless
otherwise indicated. The directors and officers of the Corporation
may, by reason of their positions, be in a position to influence the
voting or disposition of shares held in trust by bank subsidiaries to
some degree, but disclaim beneficial ownership of these shares.
(3) These numbers consist of shares held in various fiduciary capacities
through the trust department of Old Kent Bank, an Old Kent subsidiary.
Old Kent Bank also holds in various fiduciary capacities through its
trust department a total of 1,398,962 shares over which it does not
have or share voting or dispositive power. Old Kent Bank (Illinois),
another subsidiary of Old Kent, also held a total of 119,722 shares in
various fiduciary capacities through its trust department. Old Kent
and the directors and officers of Old Kent, Old Kent Bank and Old Kent
Bank (Illinois) disclaim beneficial ownership of these shares.
(4) These numbers include shares that may be acquired through the exercise
of stock options. All stock options may be exercised within 60 days.
These numbers also include shares credited to the officer's account
under the Deferred Stock Compensation Plan. Under that plan, each
officer is unconditionally entitled to receive stock at the end of a
deferral period, but has no present voting or dispositive power over
those shares. The number of shares subject to stock options and the
number of shares credited under the Deferred Stock Compensation Plan
for each listed person are shown below:
-4-
Stock Deferred
Options Stock
<S> <C> <C> <C>
Mr. Canepa 33,380 51,015
Mr. Wagner 87,113 20,735
Mr. Sadler 19,293 19,940
Mr. Sherwood 14,307 22,125
Mr. Wisnom 24,387 15,408
All directors and executive
officers as a group 342,240 129,223
</TABLE>
Board of Directors
The Old Kent board of directors presently consists of 14 persons,
5 of whom are standing for reelection. The board of directors has
determined that the number of directors of the Corporation shall be 16, and
has nominated Mr. Hackett and Ms. Hanka for election to the class of
directors with terms expiring in 1997.
The board of directors is divided into three classes which are as
nearly equal in number as possible. Each class of directors has a term of
office of 3 years, with the term of office of one class expiring at the
annual meeting of shareholders in each successive year.
Biographical information concerning nominees for election to the
board of directors at the annual meeting and existing directors whose terms
of office will continue is presented below. Except as otherwise indicated,
all directors and nominees have had the same principal employment for over
5 years.
Terms Expiring in 1995
John D. Boyles (age 60) has been a director since 1985. He is an
attorney with the firm of Verspoor, Waalkes, Lalley & Slotsema, P. C.
Richard M. DeVos, Jr. (age 39) was appointed to the Board of
Directors as of August 1, 1994. He is President of Amway Corporation, a
direct selling company which manufactures and markets home care, personal
care, and health and fitness products. He is also co-owner and Chairman of
the Board of The Windquest Group, a multi-company management group, and,
with his family, an owner of The Orlando Magic, a National Basketball Asso-
ciation franchise. Mr. DeVos served as a director of Old Kent Bank from
1987 until his appointment to the Old Kent Board.
John P. Keller (age 55) has been a director since 1988. He is
President of Keller Group, Inc., a diversified manufacturer. Mr. Keller is
also a director of A.M. Castle Co.
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Robert L. Sadler (age 59) is Vice Chairman of the Board of Old
Kent. He is also President of Old Kent Bank (since July 1, 1994). He has
been a director of Old Kent since 1976 and has served Old Kent in various
other executive capacities since 1972.
David J. Wagner (age 40) is President and Chief Executive Officer
of Old Kent and Chairman of the Board and Chief Executive Officer of Old
Kent Bank. Mr. Wagner was appointed by the Board of Directors to assume
the position of Chief Executive Officer of Old Kent effective March 1,
1995. He has been a director of Old Kent since 1992. He was Executive
Vice President of Old Kent from 1991 until March 1, 1994, was President of
Old Kent Bank from 1986 until July 1, 1994, has been Chief Executive
Officer of Old Kent Bank since 1989 and has been a director of Old Kent
Bank since 1986. Previously, he served Old Kent in various other executive
capacities. Mr. Wagner is also a director of Autocam Corporation.
Terms expiring in 1996
John M. Bissell (age 64) has been a director of Old Kent since
1972 and was previously a director of Old Kent Bank from 1971. He is
Chairman and Chief Executive Officer of BISSELL Inc., a manufacturer of
homecare, healthcare and graphics products. Mr. Bissell is also a director
of Coastal Corporation.
John C. Canepa (age 64) is Chairman of the Board of Old Kent. He
has been a director and officer of Old Kent since 1972. He was Chairman of
the Board of Old Kent Bank until July 1, 1994. He has been Chairman of the
Board of Old Kent since 1988. He relinquished the titles of President of
Old Kent and Chairman of the Board of Old Kent Bank in 1994, and he relin-
quished the title of Chief Executive Officer of Old Kent effective March 1,
1995. Mr. Canepa is also a director of ThornApple Valley, Inc. and
Foremost Corporation of America.
William U. Parfet (age 48) has been a director since 1987. He is
President and Chief Executive Officer of Richard-Allan Medical Industries,
Inc., a manufacturer of surgical instruments and medical supplies. He was
previously Vice Chairman of The Upjohn Company, a manufacturer of pharma-
ceutical, chemical and agricultural products, during 1993 and President of
The Upjohn Company from 1991 until 1993. Prior to 1991, he served The
Upjohn Company in other executive capacities. Mr. Parfet is also a direc-
tor of The Upjohn Company, CMS Energy Corporation, Stryker Corp. and
Universal Foods.
Percy A. Pierre (age 56) has been a director since 1992. He is
Vice President for Research and Graduate Studies and Professor of Elec-
trical Engineering at Michigan State University. Dr. Pierre is also a
director of CMS Energy Corporation.
-6-
Peter F. Secchia (age 57) has been a director since 1993. He is
Chairman of the Board and a director of Universal Forest Products, Inc., a
manufacturer and distributor of building supplies. From 1989 until 1993,
he was United States Ambassador to Italy. Mr. Secchia previously served as
a director of Old Kent Bank in 1988 and 1989.
Terms Expiring in 1997
James P. Hackett (age 39) has been nominated for a two-year term
expiring in 1997. Mr. Hackett is President and Chief Executive Officer of
Steelcase Inc., a manufacturer of office systems. He was Executive Vice
President and Chief Operating Officer of Steelcase North America from
August 1994 until December 1994, Executive Vice President of Steelcase
Ventures from April 1994 until August 1994, and President of Turnstone (a
Steelcase subsidiary) from August 1993 until August 1994. Previously, he
served Steelcase in various other executive capacities.
Erina Hanka (age 52) has been nominated for a two-year term ex-
piring in 1997. Ms. Hanka is President of Suspa Inc., a manufacturer of
gas cylinders for various applications within the automotive, office fur-
niture and electronics industries. Ms. Hanka has been a director of Old
Kent Bank since 1988.
Earl D. Holton (age 61) has been a director since 1985. He is
President of Meijer, Inc., a food and general merchandise retailer.
Mr. Holton is also a director of CMS Energy Corporation.
Michael J. Jandernoa (age 44) has been a director since 1993. He
is Chairman of the Board and Chief Executive Officer, and a director, of
Perrigo Company, a manufacturer and marketer of store brand health and per-
sonal care products. Prior to 1991, he was President and Chief Executive
Officer of Perrigo Company. Mr. Jandernoa served as a director of Old Kent
Bank from 1987 until his appointment to the Old Kent board.
Jerry K. Myers (age 54) has been a director since 1991. He is a
private investor. Previously he was President and Chief Executive Officer
of Steelcase Inc., a manufacturer of office systems from 1990 until 1994,
and Executive Vice President and General Manager of the Automotive Sector
of TRW, Inc., a manufacturer of automotive parts, and space and defense
information systems, from 1987 until 1990. Mr. Myers is also a director of
Autocam Corporation.
B. P. Sherwood, III (age 59) is Vice Chairman of the Board and
Treasurer of Old Kent. He is also Chairman of the Board of Old Kent Bank
(Illinois) (since July 1, 1994). He has been an Old Kent director since
1985 and an officer since 1983. Prior to 1989, he served Old Kent in
various other executive capacities.
The Old Kent board of directors has four standing committees:
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Executive Committee. The Executive Committee may exercise all
powers and authority of the board of directors in the management of the
business and affairs of Old Kent, except to the extent that delegation is
prohibited by law. Messrs. Bissell, Canepa, Holton, Keller, Sadler and
Sherwood presently serve on this committee. The Executive Committee did
not meet during 1994.
Audit Committee. The duty of the Audit Committee is to cause
suitable examinations of the financial records and operations of Old Kent
and its subsidiaries to be made by the internal auditor of Old Kent through
a program of continuous internal audits, to recommend to the board of di-
rectors the employment of independent certified public accountants to audit
the financial statements of Old Kent and its subsidiaries and make such
additional examinations as the committee deems advisable, to review reports
of examination of Old Kent and its subsidiaries received from regulatory
authorities, and to report to the board of directors at least once each
calendar year the results of examinations made and such conclusions and
recommendations as the committee deems appropriate. Messrs. Boyles, DeVos,
Jandernoa, Keller and Secchia, and Dr. Pierre serve on this committee. The
Audit Committee met 4 times during 1994.
Personnel Committee. The Personnel Committee administers Old
Kent's various officer and employee compensation, benefit and retirement
plans. This committee also reviews key personnel policies and programs,
including individual salaries of executive officers, and submits recommen-
dations to the board of directors. Directors who are also employees of Old
Kent or its subsidiaries and who may participate in the plans which this
committee administers may not serve on this committee. Messrs. Bissell,
Holton, Myers and Parfet are presently members of this committee. The
Personnel Committee met 5 times during 1994.
Committee on Directors. The Committee on Directors proposes and
considers suggestions as to candidates for the board of directors, reviews
and recommends to the board modifications to the directors' retirement
policy and proposes to the board a slate of directors for submission to the
shareholders at each annual meeting. Messrs. Boyles and Holton presently
serve on this committee. The Committee on Directors met one time during
1993. The Committee on Directors will consider candidates suggested by
shareholders for nomination by the board of directors. A shareholder
wishing to make a suggestion should submit that suggestion in writing to
Mr. John C. Canepa, Chairman of the Board.
A shareholder of record of shares of a class entitled to vote at
any annual meeting of shareholders or at any special meeting of share-
holders called for election of directors (an "Election Meeting") may make a
nomination at the Election Meeting if, and only if, that shareholder has
first delivered, not less than 120 days prior to the date of the Election
Meeting in the case of an annual meeting, and not more than 7 days follow-
ing the date of notice of the Election Meeting in the case of a special
meeting, a notice to the Secretary of the Corporation setting forth with
-8-
respect to each proposed nominee: the name, age, business address and
residence address of the nominee; the principal occupation or employment of
the nominee; the number of shares of capital stock of the Corporation that
are beneficially owned by the nominee; a statement that the nominee is
willing to be nominated and to serve; and such other information concerning
the nominee as would be required under the rules of the Securities and
Exchange Commission to be included in a proxy statement soliciting proxies
for the election of the nominee.
During 1994, the Old Kent board of directors held 7 meetings.
All incumbent directors attended at least 75% of the aggregate number of
meetings of the board of directors and meetings of committees on which they
served during the year, except for Mr. DeVos who attended 2 of the 3
meetings held during the period he has served as a director.
Personnel Committee Report on Executive Compensation
The Personnel Committee of Old Kent's board of directors reviews
the Corporation's key personnel policies and programs, including individual
salaries of executive officers, and submits recommendations to the board of
directors. Directors who are also employees of Old Kent or its subsidiar-
ies do not serve on this committee.
The Corporation has engaged a nationally recognized compensation
consulting firm to assist the Personnel Committee and the board of direc-
tors to formulate compensation policies and determine appropriate compensa-
tion levels. This firm reports directly to the Personnel Committee.
Superior financial performance is Old Kent's primary business
objective. Long-term relative total return to shareholders is considered
by Old Kent to be the primary measure of financial performance. Old Kent
focuses on maintaining and improving its return on equity as a means to
achieve the highest possible relative total return to shareholders.
For compensation purposes, Old Kent compares itself to a peer
group of companies which is selected annually at the beginning of the year
based on the recommendations of its consulting firm and may change from
year to year. The peer group selected for 1994 included 16 regional bank
holding companies with assets in the $7 billion to $21 billion range, with
emphasis placed on midwest regional bank holding companies. Ten of these
16 companies are included among the companies comprising the KBW 50 Index
presented in the Stock Performance Table below. Old Kent's return on
equity has consistently exceeded that of the peer group. For the year
ended December 31, 1994, Old Kent's return on equity was 16.04% compared to
a median return on equity of 15.65% for other members of the peer group.
Old Kent's return on equity was the 8th highest of the 16 companies in its
peer group.
The Personnel Committee has broad discretionary authority to
determine and recommend compensation and benefits. The Personnel Committee
-9-
intends base cash compensation and benefits to be competitive. Base com-
pensation is considered to be competitive if it is at or near the 50th
percentile. To attract and retain management talent, the Personnel Commit-
tee generally seeks to provide base compensation and benefits at or near
the 50th percentile of the peer group, although the Personnel Committee may
approve higher or lower compensation or benefits if it considers deviation
from the norm to be appropriate. During 1994, the base compensation of
executive officers named in this proxy statement was intended to approxi-
mate the 50th percentile of the peer group.
The Corporation also provides short- and long-term incentive
compensation programs to encourage superior performance. It is the Corpo-
ration's policy that above average compensation will be paid for above
average performance.
Annual incentive bonuses are intended to reward executives for
achieving specific goals, to motivate executives to work more effectively,
and to focus executives' attention on specific areas of major importance.
Annual incentive bonuses may be paid, in cash, based on performance against
specific corporate, business unit and individual criteria. Corporate per-
formance is measured entirely by return on equity. Business unit perfor-
mance is measured against specific criteria which vary widely from unit to
unit. These criteria are recommended by senior management and approved by
the Personnel Committee at the beginning of each year, and may include
factors such as net income growth, loan quality improvement, achieving in-
creases in operating efficiency, and completion of specified strategic
actions. Individual performance criteria are tailored to an individual's
job description and relate to achieving specified goals in that position.
Individual performance criteria are determined at the beginning of each
year in a dialogue between the individual and a senior officer, and gen-
erally involve highly specific individual goals and tasks that vary widely
from individual to individual.
The Chief Executive Officer's annual incentive bonus is based
entirely on corporate performance. The annual incentive bonuses of other
senior executive officers are based on allocations of corporate, business
unit, and individual performance components which vary from individual to
individual based on position and function. The annual incentive bonuses of
other executive officers named in this Proxy Statement are based on corpo-
rate performance (50-75%), business unit performance (25% if applicable),
and individual performance (25%).
Each executive officer is assigned a target bonus amount at the
beginning of each year. The amount of the target bonus is recommended by
the Personnel Committee, in its discretion, based in part on consultation
with the Corporation's compensation consultants. Target bonuses in 1994
were equal to 50% of base compensation for the Chief Executive Officer and
45% of base compensation for all other executive officers named in this
proxy statement. At the end of each year, a bonus may be awarded to each
executive officer in an amount which is equal to, greater than, or less
-10-
than the target bonus based on a discretionary assessment of performance
against the criteria previously specified for that officer. This evalua-
tion considers corporate performance and, if applicable to an officer's
specified performance criteria, business unit performance and individual
performance. Under the Corporation's present policies, no executive
officer may be paid a bonus which is greater than 150% of his or her target
bonus, and no incentive bonuses will be paid if the Corporation's return on
equity is below the 25th percentile of the Corporation's peer group.
Long-term incentives are provided to reward executives for
achieving the long-term goal of increasing shareholder value and to protect
against too much emphasis on short-term results. All of the Corporation's
long-term incentive programs involve stock options or stock awards. Stock
ownership by senior executives is considered to be very important. Through
use of stock as a basis for compensation, executives' long-term incentives
are tied to shareholder value. It is the Corporation's practice to grant
deferred stock compensation awards and stock option grants to senior of-
ficers annually at levels determined with reference to fixed percentages of
base salary. The Chief Executive Officer generally has received an award
of deferred stock having a value equal to 45% of his base salary and a
grant of stock options having an aggregate exercise price equal to 60% of
his base salary. Other executive officers named in this Proxy Statement
generally have received awards of deferred stock having values of up to 40%
of their base salaries and grants of stock options having aggregate exer-
cise prices of up to 50% of their base salaries. All stock options are
granted at prices equal to the fair market value of the subject stock at
the date of grant. The Personnel Committee considers the level of such
awards annually and generally seeks to maintain awards at consistent levels
relative to cash compensation from year to year, although it retains dis-
cretion to alter those levels in any particular year.
During 1994, the Personnel Committee recommended and the Board of
Directors approved an extraordinary award of stock options to Mr. Wagner in
connection with his appointment to the position of President of the Corpo-
ration. That award was intended by the Committee and the Board to provide
a stock-based stake in the future performance of the Corporation which
would be appropriate to his new position, and was consistent with the
Corporation's past practice.
Mr. Canepa's base salary for 1994 was fixed at a level which was
intended to approximate the 50th percentile of base compensation paid to
chief executive officers by other bank holding companies in Old Kent's peer
group.
Mr. Canepa's annual incentive bonus is based entirely on corpo-
rate performance. For this purpose, corporate performance is determined
with reference to a comparison of the Corporation's return on equity to
that of Old Kent's peer group. The bonus paid to Mr. Canepa for 1994 was
125% of his target bonus, reflecting the fact that the Corporation's return
on equity exceeded the median return on equity of the peer group.
-11-
Mr. Canepa's long-term incentive compensation included an award
under the Deferred Stock Compensation Plan and a grant of stock options.
His award under the Deferred Stock Compensation Plan was set at a level
equal in value to 45% of his annual salary. The stock options granted to
Mr. Canepa permit him to purchase shares which had an aggregate market
value equal to 60% of his annual salary on the date of grant. These
levels, which are consistent with the Corporation's established practice,
were recommended by the Personnel Committee in its discretion after con-
sidering corporate performance, measured by return on equity, in the pre-
ceding year and the levels of such awards made to Mr. Canepa in prior
years.
In 1993, Congress amended the federal Internal Revenue Code to
add Section 162(m). This new section provides that publicly held corpora-
tions may not deduct compensation paid to certain executive officers in
excess of $1 million annually, with certain exemptions. Old Kent has ex-
amined its executive compensation policies in light of Section 162(m) and
the regulations that have currently been proposed by the Internal Revenue
Service to implement that section. If the Internal Revenue Service adopts
regulations under Section 162(m) substantially as they have been proposed,
it is not expected that any portion of the Corporation's deduction for em-
ployee remuneration will be disallowed in 1995 or in future years by reason
of awards granted in 1995. The Personnel Committee intends to review the
Corporation's executive compensation policies at a later date, when final
regulations have been adopted, and to propose appropriate modifications to
the Corporation's executive compensation plans and program with a view
toward implementing the Corporation's compensation policy in a manner that
avoids or minimizes any disallowance of tax deductions under
Section 162(m).
During 1994, all recommendations of the Personnel Committee were
unanimously approved by the board of directors without modification.
Respectfully submitted,
John M. Bissell, Chairman
Earl D. Holton
Jerry K. Myers
William U. Parfet
-12-
Stock Performance
The following graph compares the cumulative total shareholder
return on Old Kent Common Stock to the Standard & Poor's 500 Stock Index
and the KBW 50 Index. The Standard & Poor's 500 Stock Index is a broad
equity market index published by Standard & Poor's. The KBW 50 Index is a
market capitalization weighted bank stock index published by Keefe,
Bruyette & Woods, Inc., an investment banking firm which specializes in the
banking industry. The KBW 50 Index is composed of 50 money center and
regional bank holding companies, including 10 of the 16 regional bank
holding companies in the peer group used by Old Kent for compensation
purposes (see the Personnel Committee Report above). The Standard & Poor's
500 Stock Index and the KBW 50 Index both assume dividend reinvestment.
Cumulative total return is measured by dividing the sum of the cumulative
amount of dividends for the measurement period, assuming dividend
reinvestment, and the difference between the share price at the end and the
beginning of the measurement period by the share price at the beginning of
the measurement period.
[STOCK PERFORMANCE GRAPH]
-13-
The dollar values for total shareholder return plotted in the
graph above are shown in the table below:
<TABLE>
<CAPTION>
OKEN KBW 50 S&P 500
<S> <C> <C> <C> <C>
1989 $100.0 $100.0 $100.0
1990 87.0 71.8 96.9
1991 135.6 113.7 126.4
1992 205.2 144.8 136.1
1993 189.3 152.9 149.8
1994 196.4 144.8 151.7
</TABLE>
Compensation of Executive Officers and Directors
Old Kent's compensation and benefit programs for its senior
executive officers include the following components:
Salary. Old Kent's objective is to provide base pay at levels
which are competitive with its peer group of bank holding
companies.
Bonus. All executive officers are participants in an annual
incentive plan. Under that plan, the Personnel Committee and
senior management establish a target award and a set of perfor-
mance factors, which may include various elements of corporate,
business unit and individual performance for each executive
officer. A bonus may be paid in cash at the end of the year
based on an assessment of performance against the designated
factors.
Long-term Incentives. To provide senior executive officers with
long-term incentives, it is the practice of the Corporation to
grant stock options and share awards under the Corporation's De-
ferred Stock Compensation Plan. Annual awards are determined by
the Personnel Committee based on a percentage of each officer's
base compensation and a discretionary evaluation of performance.
All stock options are granted at prices equal to the fair market
value of the subject stock at the date of grant. The purposes of
these long-term incentives are to reward executives for achieving
longer-term strategic goals, to retain executives, to protect
against too much emphasis on short-term results, to provide a
means for capital accumulation and to promote stock ownership.
Retirement Benefits. Old Kent provides all eligible employees
retirement benefits under the qualified Old Kent Retirement In-
come Plan. In addition, employees are offered an opportunity to
save for retirement, with savings supplemented by the Corpora-
tion, under the qualified Old Kent Thrift Plan. Supplemental,
nonqualified programs are provided for executive officers. The
-14-
objective of these programs is to provide retirement benefits and
savings opportunities for executives in proportion to compensa-
tion without the constraints imposed by law on qualified plans.
Perquisites. Old Kent's practice is to maintain a conservative
level of perquisites and personal benefits. The dollar value of
perquisites and personal benefits provided to executive officers
does not exceed the lesser of either $50,000 or 10% of each
executive officer's respective annual salary and bonus.
Old Kent's various compensation and benefit programs, and the levels of
compensation and benefits provided under those programs, are described in
more detail below.
The following table shows certain information concerning the com-
pensation of each of Old Kent's five most highly compensated executive of-
ficers for services rendered during each of the three years in the period
ended December 31, 1994:
<TABLE>
SUMMARY COMPENSATION TABLE
<CAPTION>
Long Term
Compensation
Annual Compensation Awards
All
Name and Restricted Shares Other
Principal Stock Underlying Compen-
Position(1) Year Salary(2) Bonus(2) Awards(3) Options(#) sation(4)
<S> <C> <C> <C> <C> <C> <C>
John C. Canepa 1994 $610,000 $381,250 $273,541 10,765 $19,726
Chairman of 1993 570,000 356,250 253,474 10,690 18,084
the Board, and 1992 530,000 397,500 240,786 11,925 17,946
Chief Executive
Officer of
Old Kent
David J. Wagner 1994 325,000 186,469 145,663 50,000 10,945
President of Old 1993 275,000 160,875 108,790 4,295 9,175
Kent and and 1992 240,000 163,900 96,912 4,500 8,182
Chairman of the
Board and Chief
Executive Officer
of Old Kent Bank
B. P. Sherwood, III 1994 315,000 177,188 125,507 4,635 10,613
Vice Chairman of 1993 295,000 165,938 116,696 4,610 9,826
the Board and 1992 270,000 173,137 109,026 5,063 9,205
Treasurer
-15-
Robert L. Sadler 1994 274,000 151,045 109,247 4,030 9,359
Vice Chairman of 1993 257,000 144,563 101,674 4,015 8,647
the Board of 1992 240,000 273,500 96,912 4,500 8,182
Old Kent and
President of Old
Kent Bank
Thomas D. Wisnom 1994 214,000 120,380 85,365 3,150 7,269
Executive Vice 1993 198,000 109,148 78,272 3,095 6,633
President 1992 182,000 108,518 73,492 3,413 6,205
<FN>
(1) Capacities indicated are with Old Kent unless otherwise stated.
Capacities indicated are those in which a majority of compensation was
paid if capacities changed during the year.
(2) Includes compensation deferred under the Old Kent Thrift Plan, the Old
Kent Executive Thrift Plan and the Old Kent Deferred Compensation
Plan.
(3) All reported awards were under the Deferred Stock Compensation Plan.
These awards vest at the date of grant. Participants in this plan
also accrue earnings equal to dividends which would have been paid on
shares deferred. The numbers of shares credited to the account of
each named individual under this plan and the aggregate value of those
shares as of December 31, 1994, are:
Aggregate
Deferred Stock Value
<S> <C> <C> <C>
Mr. Canepa 51,015 $1,543,204
Mr. Wagner 20,735 627,234
Mr. Sherwood 22,125 669,281
Mr. Sadler 19,940 603,185
Mr. Wisnom 15,408 466,092
(4) All other compensation includes: (a) Corporation matching contri-
butions under the Old Kent Thrift Plan; (b) Corporation matching
contributions under the Old Kent Executive Thrift Plan; and
(c) amounts paid by the Corporation for term life insurance. The
amounts included for each such factor are:
Executive Life
Thrift Plan Thrift Plan Insurance
<S> <C> <C> <C> <C>
Mr. Canepa $1,733 $16,748 $1,245
Mr. Wagner 1,733 8,046 1,166
Mr. Sherwood 1,733 7,750 1,130
Mr. Sadler 2,772 5,510 1,077
Mr. Wisnom 1,733 4,736 800
</TABLE>
-16-
It is the Corporation's practice to award stock options annually
to key policy-making members of management. Stock options have been an
important component of the Corporation's executive compensation program for
many years. Stock options are believed to help align the interests of
senior management with the interests of shareholders by promoting stock
ownership by senior executive officers and by rewarding them for apprecia-
tion in the price of the Corporation's Common Stock. Stock options which
were granted, exercised or outstanding during 1994 were granted under
various stock option plans. All of the Corporation's stock option plans
have been approved by the Corporation's shareholders.
Stock options entitle an executive to buy shares of Old Kent
Common Stock during a specified time period at a specified price. Subject
to restrictions imposed by the plans, the Personnel Committee in its dis-
cretion determines who will be granted options, how many shares will be the
subject of options, and the form of consideration that may be paid upon the
exercise of an option. Although plan documents authorize stock apprecia-
tion rights, no stock appreciation rights were outstanding at the date of
this Proxy Statement.
The following tables set forth information concerning stock
options granted to and exercised by the specified individuals during the
last fiscal year:
<TABLE>
OPTION GRANTS IN LAST FISCAL YEAR
<CAPTION>
% of
Total
Number Options Potential
of Shares Granted Realizable Value
Under- to Em- at Assumed Annual
lying ployees Exercise Rates of Stock
Options In Fiscal Price Expiration Price Appreciation
Name Granted(1) Year ($/Share) Date for Option Term
0% 5% 10%
<S> <C> <C> <C> <C> <C> <C> <C>
John C. Canepa 10,765 5.8% $33.875 6-20-04 0 $ 229,348 $ 581,149
David J. Wagner 50,000 27.0 33.875 6-20-04 0 1,065,250 2,699,250
B. P. Sherwood, III 4,635 2.5 33.875 6-20-04 0 98,749 250,220
Robert L. Sadler 4,030 2.2 33.875 6-20-04 0 85,859 217,560
Thomas D. Wisnom 3,150 1.7 33.875 6-20-04 0 67,111 170,053
<FN>
(1) The per share exercise price of each option is equal to the market
value of Common Stock on the date each option is granted. All
outstanding options were granted for a term of 10 years. Options
-17-
terminate, subject to certain limited exercise provisions, in the
event of death, retirement or other termination of employment. All
options are currently exercisable. All options permit the option
price to be paid by delivery of cash or other shares of Common Stock
owned by the option holder, including shares acquired through the
exercise of options.
</TABLE>
<TABLE>
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND YEAR END OPTION VALUES
<CAPTION>
Number of
Shares Value of
Underlying Unexercised
Unexercised In-the-Money
Options at Options at
Number of Year End Year End
Shares Acquired Value Exercisable/ Exercisable/
Name on Exercise(1) Realized Unexercisable Unexercisable
<S> <C> <C> <C> <C>
John C. Canepa -- -- 33,380/0 $ 39,710/0
David J. Wagner 689 $ 18,103 87,113/0 390,531/0
Robert L. Sadler -- -- 19,293/0 94,814/0
B. P. Sherwood, III -- -- 14,307/0 16,856/0
Thomas D. Wisnom 11,500 $252,696 24,387/0 199,072/0
_________________________
<FN>
(1) The number of shares shown is the gross number of shares covered by
options exercised. Officers may deliver other shares owned in payment
of the option price, resulting in a smaller net increase in their
share holdings.
</TABLE>
All officers and employees of Old Kent who satisfy eligibility
requirements are participants in the Old Kent Retirement Income Plan, a
qualified defined benefit plan. The Internal Revenue Code limits the maxi-
mum annual pension from a qualified plan. The executive officers named
above and certain other management employees also participate in the Old
Kent Executive Retirement Income Plan, a nonqualified retirement plan.
Participants in the Executive Retirement Income Plan will receive supple-
mental retirement benefits equal to the difference between the benefits to
which they are entitled under the Old Kent Retirement Income Plan and the
benefits to which they would have been entitled under that plan as in
effect on December 31, 1988, if those benefits were based on compensation
including compensation deferred by the executive and if the annual limits
on compensation and benefits and other applicable limits specified in the
Internal Revenue Code did not apply.
-18-
The following table illustrates the combined benefit levels of
the Old Kent Retirement Income Plan and the Old Kent Executive Retirement
Income Plan for Old Kent's executive officers if they retire at age 65 at
the annual levels of average remuneration and years of service indicated:
<TABLE>
PENSION PLAN TABLE
<CAPTION>
Average Years of Benefit Service
Remuneration, Age 65 10 15 20 25 or more
<S> <C> <C> <C> <C> <C>
$ 100,000 $ 24,000 $ 36,000 $ 48,000 $ 60,000
300,000 72,000 108,000 144,000 180,000
500,000 120,000 180,000 240,000 300,000
700,000 168,000 252,000 336,000 420,000
900,000 216,000 324,000 432,000 540,000
1,100,000 264,000 396,000 528,000 660,000
1,300,000 312,000 468,000 624,000 780,000
</TABLE>
The benefits shown in the table above will be reduced by 50% of
primary social security payments. The annual compensation shown in the
Summary Compensation Table above is representative of the most recent
calendar year compensation used in calculating average remuneration for the
Old Kent Retirement Income Plan and the Old Kent Executive Retirement
Income Plan. As of December 31, 1994, Mr. Sherwood, Mr. Sadler and
Mr. Wisnom had 25 credited years of service (the maximum) under those
plans, Mr. Canepa had 24 and Mr. Wagner had 17.
Executive Severance Agreements
Old Kent has entered into executive severance agreements with the
executive officers named above. These agreements provide severance
benefits if the officer's employment is terminated within 36 months after a
change in control or within 12 months before a change in control if the
Corporation terminates his employment in contemplation of a change in con-
trol and to avoid the agreement. For the purposes of these agreements, a
"change in control" is any occurrence reportable as such in a proxy state-
ment under applicable rules of the Securities and Exchange Commission, and
would include, without limitation, the acquisition of beneficial ownership
of 25% of the Corporation's voting securities by any person or an extraor-
dinary change in the composition of the board of directors. Severance
benefits will not be payable if the Corporation terminates the employment
for cause, if employment terminates due to the executive officer's death or
disability, or if the executive officer resigns without good reason. An
executive officer may resign with "good reason" after a change in control
and retain benefits if the Corporation reduces the officer's salary or
bonus, assigns duties inconsistent with the officer's prior position, or
shifts the officer's job location more than 50 miles. Executive severance
agreements are for self-renewing terms of 3 years unless the Corporation
-19-
takes action to stop further extensions. The agreement is automatically
extended for a 3-year term from the date of a change in control. These
executive severance agreements provide a severance benefit of a lump-sum
payment equal to 3 years' salary and bonus, and continuation of health,
life and disability insurance coverage for 3 years. Severance benefits are
capped to avoid tax penalties.
Compensation of Directors
Each director of Old Kent who is not compensated as an officer is
paid an annual retainer of $15,000 and a fee of $800 for each meeting of
the board of directors attended. Directors who serve on committees
appointed by the board of directors are paid $800 for each committee
meeting attended, and each committee chairman who is not compensated as an
officer is paid an additional retainer of $2,000 per year. Directors are
reimbursed for travel expenses for meetings attended. Each director of Old
Kent or any of its subsidiary banks may participate in the Old Kent
Directors' Deferred Compensation Plan, a nonqualified deferred compensation
program. This plan permits deferral of all or any portion of current
directors' fees. Amounts deferred are credited with earnings as if the
amounts had been invested as directed by plan participants from time to
time among four funds substantially identical to the four funds available
in the Old Kent Thrift Plan. One of those four funds is an Old Kent Common
Stock Fund. The amount accumulated by a director in the Old Kent
Directors' Deferred Compensation Plan is paid upon the expiration of the
director's term in a lump-sum or annual installments over a period of up to
10 years.
Certain Relationships and Related Transactions
Directors and officers of Old Kent and their associates were
customers of and had transactions with subsidiaries of Old Kent in the
ordinary course of business between January 1, 1994, and March 1, 1995.
All loans and commitments included in such transactions 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.
Compliance with Section 16(a) of the Exchange Act
Section 16(a) of the Securities Exchange Act of 1934 requires Old
Kent's directors and officers to file reports of ownership and changes in
ownership of shares of Common Stock with the Securities and Exchange Com-
mission. Directors and officers are required by Securities and Exchange
Commission regulations to furnish the Corporation with copies of all Sec-
tion 16(a) reports they file. Based on its review of the copies of such
reports received by it, or written representations from certain reporting
-20-
persons that no Forms 5 were required for those persons, Old Kent believes
that, from January 1 through December 31, 1994, its directors and officers
complied with all applicable filing requirements.
Independent Certified Public Accountants
The board of directors has selected Arthur Andersen & Co. as Old
Kent's principal accountant for 1995. Representatives of Arthur Andersen &
Co. will be present at the annual meeting, will have an opportunity to make
a statement, and will be available to respond to appropriate questions.
Proposals of Shareholders
Proposals of shareholders intended to be presented at the annual
meeting scheduled to be held on April 15, 1996, must be received by the
Corporation by November 2, 1995, to be considered for inclusion in its
proxy statement and form of proxy relating to that meeting. Proposals of
shareholders should be made in accordance with Securities and Exchange
Commission Rule 14a-8.
-21-
[FRONT]
OLD KENT FINANCIAL CORPORATION
P R O X Y One Vandenberg Center, Grand Rapids, Michigan 49503
Annual Meeting of Shareholders - April 17, 1995
The undersigned shareholder appoints John C. Canepa,
B. P. Sherwood, III, Martin J. Allen, Jr., or any of them, each with the
power to appoint his substitute, attorneys and proxies to represent the
shareholder and to vote and act with respect to all shares that the share-
holder would be entitled to vote on all matters which come before the
annual meeting of shareholders of Old Kent Financial Corporation referred
to above or any adjournment of that meeting.
This proxy is solicited on behalf of the Board of Directors. If
this proxy is properly executed, the shares represented by this proxy will
be voted as specified. If no specification is made, the shares will be
voted for election of all nominees named on this proxy as directors. The
shares represented by this proxy will be voted in the discretion of the
proxies on any other matters which may come before the meeting.
[Space for sticker] Please sign exactly as your name appears on
this proxy. If signing for estates, trusts
or corporations, title or capacity should be
stated. If shares are held jointly, each
holder should sign.
Signature x___________________________________
Signature x___________________________________
Date ___________________________________, 1995
[Space reserved for coding]
[BACK]
1. Election of Directors.
[ ] FOR all nominees listed [ ] WITHHOLD AUTHORITY to
below (except as indi- vote for all nominees
cated below) listed below
John D. Boyles John P. Keller
Richard M. DeVos, Jr. Robert L. Sadler
James P. Hackett David J. Wagner
Erina Hanka
Your Board of Directors recommends that you vote FOR all nominees
(Instruction: To withhold authority for any individual nominee, write that
nominee's name in the space provided below.)
IMPORTANT! - PLEASE DATE AND SIGN THE OTHER SIDE
___________________________________________________________________________
[ ] Please check here if you plan to attend the annual meeting in person.
