<PAGE>
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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:
[X] Preliminary Proxy Statement [ ] Confidential, For Use of the
Commission Only (as Permit-
[ ] Definitive Proxy Statement ted by Rule 14a-6(e) (2))
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
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] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1)
and 0-11.
(1) Title of each class of securities to which transaction
applies:
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(2) Aggregate number of securities to which transaction applies:
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(3) Per unit price or other underlying value of transaction
computed pursuant to Exchange Act Rule 0-11 (set forth the
amount on which the filing fee is calculated and state how
it was determined):
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(4) Proposed maximum aggregate value of transaction:
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<PAGE>
(5) Total fee paid:
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[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by
Exchange Act Rule 0-11(a)(2) and identify the filing for which the
offsetting fee was paid previously. Identify the previous filing by
registration statement number, or the form or schedule and the date of its
filing.
(1) Amount previously paid:
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(2) Form, schedule or registration statement no.:
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(3) Filing party:
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(4) Date filed:
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<PAGE>
[OLD KENT LOGO]
FINANCIAL CORPORATION
111 LYON STREET N.W.
GRAND RAPIDS, MICHIGAN 49503
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
- ---------------------------------------------------------------------------
The annual meeting of shareholders of Old Kent Financial Corporation will
be held in the Ambassador Ballroom of the Amway Grand Plaza Hotel, 187
Monroe Avenue N.W., Grand Rapids, Michigan, on Monday, April 20, 1998, at
10 a.m. local time, to consider and vote upon: (i) election of directors;
(ii) approval of an amendment to the Restated Articles of Incorporation to
increase the number of authorized shares of Common Stock; and (iii) such
other business as may properly come before the meeting.
Shareholders of record at the close of business on February 20, 1998, are
entitled to notice of and to vote at the meeting or any adjournment of the
meeting. The following proxy statement and enclosed proxy are being
furnished to shareholders on and after March 2, 1998.
By Order of the Board of Directors,
Mary E. Tuuk
Secretary
March 2, 1998
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.
<PAGE>
PROXY STATEMENT
ANNUAL MEETING OF SHAREHOLDERS
OLD KENT FINANCIAL CORPORATION
APRIL 20, 1998
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") on and after March 2, 1998, 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 20, 1998, and
at any adjournment of that meeting. The annual meeting will be held in the
Ambassador 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:
(i) election of directors; (ii) approval of an amendment to the Restated
Articles of Incorporation to increase the number of authorized shares of
Common Stock; and (iii) such other business as may properly come before the
meeting. 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, for approval of the amendment to Old Kent's
Restated Articles of Incorporation to increase the number of authorized
shares of Common Stock, 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
written notice delivered to the Secretary of Old Kent or by attending and
voting at the annual meeting.
Solicitation of proxies will be made initially by mail. Old
Kent's directors, officers and employees may also solicit proxies in
person, by telephone, or by facsimile without additional compensation.
Proxies may be solicited by nominees and other fiduciaries who may mail
materials to or otherwise communicate 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.
<PAGE>
ELECTION OF DIRECTORS
The board of directors proposes that the following nominees
be elected as directors for terms expiring at the annual meeting to be held
during the year indicated below:
<TABLE>
<CAPTION>
NOMINEE TERM EXPIRING IN
------- ----------------
<S> <C> <C>
John D. Boyles 2001
Richard M. DeVos, Jr. 2001
Kevin T. Kabat 2001
John P. Keller 2001
David J. Wagner 2001
Margaret Sellers Walker 2001
Robert H. Warrington 2000
</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
AMENDMENT TO THE RESTATED ARTICLES OF INCORPORATION
The board of directors proposes to amend Article III of Old
Kent's Restated Articles of Incorporation to increase Old Kent's authorized
capital. The proposed amendment would increase the number of authorized
shares of Common Stock, $1 par value ("Common Stock"), from 150 million
shares to 300 million shares. The board of directors believes that an
increase in Old Kent's authorized shares of Common Stock is in the best
interests of Old Kent and its shareholders.
-2-
<PAGE>
As of December 31, 1997, Old Kent had 92,779,772 shares of Common
Stock outstanding, and 6,180,119 shares of Common Stock reserved for
issuance under a variety of existing authorizations. A total of
51,040,109 shares of authorized Common Stock, representing 51.6% of issued
and reserved shares and 34.0% of the total number of authorized shares of
Common Stock, remained unissued and unreserved at December 31, 1997.
The board of directors believes that it is in the best interests
of Old Kent and its shareholders to have an adequate pool of authorized but
unissued shares for use in stock dividends, stock splits, acquisitions,
employee compensation and incentive programs, stock offerings and other
corporate purposes. Old Kent has an established history of regular annual
stock dividends and occasional stock splits. Most recently, Old Kent paid
a two-for-one stock split on December 15, 1997. This stock split reduced
Old Kent's pool of authorized but unissued and unreserved shares of Common
Stock to a considerable degree. Although the board of directors has no
present plans or expectations as to if and when further stock splits would
be declared, the present pool of authorized but unissued and unreserved
shares of Common Stock would be inadequate for it to declare another
comparable stock split in the future. Additional authorized shares are now
requested so that further stock dividends and stock splits could be
declared and paid, when, as and if declared by the board of directors in
the future.
Growth through acquisition has been and continues to be an
important element of Old Kent's strategy. Old Kent also has an established
history of acquiring other bank holding companies, banks and other
businesses in transactions in which Old Kent Common Stock is issued as
consideration. Old Kent management regularly considers further business
acquisitions. Old Kent management believes that it is in the best
interests of Old Kent and its shareholders to have an adequate pool of
authorized but unissued Common Stock available to be used as consideration
in future business acquisitions.
The board of directors has no present plans with respect to
issuing the increased authorized shares of Common Stock if this proposal is
approved. Except in limited circumstances, no further shareholder
authorization would be required prior to the issuance of such shares by Old
Kent.
All of the additional shares resulting from the increase would be
Common Stock of the same class, and with the same dividend, voting and
liquidation rights, as the shares of Common Stock presently outstanding.
Shareholders have no preemptive rights to acquire Common Stock issued by
Old Kent. Issuance of additional shares of Common Stock under some
circumstances could dilute the voting rights, equity and earnings per share
of existing shareholders.
-3-
<PAGE>
An affirmative vote of the shareholders holding a majority of all
outstanding shares is required to approve the proposed amendment to the
Restated Articles of Incorporation. For the purpose of counting votes on
this proposal, abstentions, broker non-votes and other shares not voted
have the same effect as a vote against the proposal.
YOUR BOARD OF DIRECTORS RECOMMENDS A VOTE
FOR APPROVAL OF THIS PROPOSED AMENDMENT
VOTING SECURITIES
Holders of record of Old Kent Common Stock at the close of
business on February 20, 1998, will be entitled to vote at the annual
meeting of shareholders on April 20, 1998, and any adjournment of that
meeting. As of February 20, 1998, there were _____________ 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, 1997, by the only
shareholder 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:
<TABLE>
<CAPTION>
AMOUNT AND NATURE OF BENEFICIAL OWNERSHIP<F1>
---------------------------------------------
SOLE VOTING SHARED VOTING TOTAL
NAME AND ADDRESS OF AND DISPOSITIVE OR DISPOSITIVE BENEFICIAL PERCENT
BENEFICIAL OWNER POWER POWER<F2> OWNERSHIP OF CLASS
- ----------------------------------- --------------- -------------- ---------- --------
<S> <C> <C> <C> <C>
Old Kent Bank
111 Lyon Street, N.W.
Grand Rapids, Michigan 49503 <F3>
</TABLE>
Footnotes begin on page __.
The following table shows certain information concerning the
number of shares of Common Stock held as of December 31, 1997, by each of
Old Kent's directors and nominees for director, each of the officers named
in the Summary Compensation Table on page ____, and all of Old Kent's
directors and executive officers as a group:
-4-
<PAGE>
<TABLE>
<CAPTION>
AMOUNT AND NATURE OF BENEFICIAL OWNERSHIP<F1>
----------------------------------------------------------------------
SOLE VOTING SHARED VOTING TOTAL
AND DISPOSITIVE OR DISPOSITIVE STOCK DEFERRED BENEFICIAL PERCENT
POWER POWER<F2> OPTIONS<F4> STOCK<F5> OWNERSHIP OF CLASS
--------------- -------------- ----------- --------- ---------- --------
NAME OF
BENEFICIAL OWNER
- ----------------
<S> <C> <C> <C> <C> <C> <C>
R. L. Antonini -- 230 -- _______ 3,824 <F*>
J. M. Bissell 17,673 -- -- _______ 23,192 <F*>
J. D. Boyles 77,176 -- -- -- 77,176 <F*>
W. P. Crawford -- 16,968 -- -- 16,968 <F*>
R. M. DeVos, Jr. 16,658 -- -- -- 16,658 <F*>
W. G. Gonzalez 793 -- -- _______ 5,165 <F*>
J. P. Hackett -- 858 -- -- 858 <F*>
E. Hanka -- 3,721 -- _______ 9,023 <F*>
E. D. Holton 7,748 12,124 -- _______ 49,841 <F*>
R. L. Hooker 5,703 5,353 -- -- 11,056 <F*>
M. J. Jandernoa 11,562 -- -- -- 11,562 <F*>
K. T. Kabat<F6> 35,102 8,456 45,792 -- 89,350 <F*>
F. P. Keller 14,636 -- -- -- 14,636 <F*>
J. P. Keller 12,834 -- -- -- 12,834 <F*>
H. G. Meijer 440 16,646 -- _______ 17,435 <F*>
P. A. Pierre 2,426 2,330 -- -- 4,756 <F*>
P. M. Quinn 1,831 -- -- -- 1,831 <F*>
R. L. Sadler 24,999 246,538 39,726 41,711 352,974 <F*>
M. J. Schlack 2,258 -- -- -- 2,258 <F*>
-5-
<PAGE>
P. F. Secchia 150,276 566 -- ______ _______ <F*>
B. P. Sherwood, III 124,772 380 -- 44,122 169,274 <F*>
D. J. Wagner 83,272 20,322 213,904 64,591 382,089 <F*>
M. Sellers Walker 100 -- -- -- 100 <F*>
R. H. Warrington<F6> 42,409 5,732 41,386 -- 89,527 <F*>
All directors and
executive officers
as a group _________ _______ _______ _______ _________ %
<FN>
______________________________
<F*> Less than 1%
<F1> 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 that are considered to be otherwise
beneficially owned by that person. A beneficial owner of a security
includes any person 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. Shares held in
fiduciary capacities by Old Kent Bank are not included in shares
beneficially owned by individuals unless otherwise indicated. The
directors and officers of Old Kent may, by reason of their positions,
be in a position to influence the voting or disposition of shares held
in trust by Old Kent Bank to some degree, but disclaim beneficial
ownership of these shares. Old Kent and Old Kent Bank disclaim
beneficial ownership of shares held by Old Kent Bank in fiduciary
capacities.
<F2> These numbers include shares over which the listed person is legally
entitled to share voting or dispositive power by reason of joint
ownership, 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.
-6-
<PAGE>
<F3> These numbers consist of shares held in various fiduciary capacities
through the trust department of Old Kent Bank. Old Kent Bank also
holds in various fiduciary capacities through its trust department a
total of ______ shares over which it does not have or share voting or
dispositive power. Old Kent, Old Kent Bank, and their respective
directors and officers disclaim beneficial ownership of these shares.
<F4> These numbers include shares that may be acquired through the exercise
of stock options. All stock options shown may be exercised within 60
days.
<F5> The numbers shown in this column for officers represent 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 numbers of shares shown in
this column for directors who are not officers represent shares
credited to the director's account under the Old Kent Directors'
Deferred Compensation Plan. Under that plan, the director is
unconditionally entitled to receive stock (or, at Old Kent's option,
cash of equivalent value) upon termination of board service, but has
no present voting or dispositive power of those shares.
<F6> The numbers shown include shares of restricted stock granted under the
Restricted Stock Plan of 1987 or similar special arrangements. The
indicated officer has no present dispositive power over these shares
and these shares are subject to forfeiture upon termination of
employment under certain circumstances.
</FN>
</TABLE>
BOARD OF DIRECTORS
The Old Kent board of directors presently consists of 22 persons.
The board of directors is divided into three classes that are as nearly
equal in number as possible. Except as provided below, each director is a
member of a class that 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. Mr. Warrington is nominated for election to a shorter
term to fill a vacancy in the class of directors with terms ending in 2000.
Biographical information concerning nominees for election to the
board of directors and existing directors whose terms of office will
continue after the annual meeting is presented below. Except as otherwise
indicated, all directors and nominees have had the same principal
employment for over 5 years. Each Old Kent Director has also been a
director of Old Kent Bank since 1997, unless otherwise indicated.
-7-
<PAGE>
NOMINEE FOR A TERM EXPIRING IN 2000
ROBERT H. WARRINGTON (age 50) is Vice Chairman of Old Kent and
Chairman and Chief Executive Officer of Old Kent Mortgage Services, Inc.
and Old Kent Mortgage Company. He has been a director of Old Kent and Old
Kent Bank since February 1, 1998. He was named Senior Executive Vice
President of Old Kent in 1997. Previously, Mr. Warrington was President
of Old Kent Mortgage Services, Inc. and Old Kent Mortgage Company from
1993 to 1997, Executive Vice President of Old Kent and Old Kent Bank from
1995 to 1997, and senior vice president of Old Kent Bank from 1988 to 1993.
NOMINEES FOR TERMS EXPIRING IN 2001
JOHN D. BOYLES (age 63) has been a director of Old Kent since
1985. He is an attorney with the firm of Verspoor, Waalkes, Lalley,
Slotsema & Talen, P.C.
RICHARD M. DEVOS, JR. (age 42) has been a director of Old Kent
since 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 Association franchise.
Mr. DeVos served as a director of Old Kent Bank from 1987 until his
appointment to the Old Kent board in 1994. He is also the President and a
director of Amway Asia Pacific Ltd. and Chairman and a director of Amway
Japan Limited.
KEVIN T. KABAT (age 41) is Vice Chairman of Old Kent and
President of Old Kent Bank. He has been a director of Old Kent since
February 1, 1998 and a director of Old Kent Bank since 1997. He was named
Senior Executive Vice President of Old Kent and Chief Operating Officer of
Old Kent Bank in February 1997. Previously, Mr. Kabat was Senior Vice
President of Old Kent from 1990 until 1995 and Executive Vice President of
Old Kent from 1995 to 1997.
JOHN P. KELLER (age 58) has been a director of Old Kent since
1988. He is President of Keller Group, Inc., a diversified manufacturer.
Mr. Keller is also a director of Castle Energy Corporation.
DAVID J. WAGNER (age 43) is Chairman of the Board, President and
Chief Executive Officer of Old Kent and Chairman of the Board and Chief
Executive Officer of Old Kent Bank. He has been a director of Old Kent
since 1992. Mr. Wagner was appointed by the board of directors to assume
the position of President effective March 1, 1994, the position of Chief
Executive Officer effective March 1, 1995, and the position of Chairman of
the Board effective November 1, 1995. He was Executive Vice President of
-8-
<PAGE>
Old Kent from 1991 until 1994, President of Old Kent Bank from 1986 until
1994, Chief Executive Officer of Old Kent Bank from 1989 until 1995, and he
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.
MARGARET SELLERS WALKER (age 62) has been a director of Old Kent
since 1997. She is a Professor of Public Administration at Grand Valley
State University. From 1987 to 1993, Ms. Sellers Walker was Assistant City
Manager of the City of Grand Rapids, Michigan. Ms. Sellers Walker has been
a director of Old Kent Bank since 1993.
CONTINUING DIRECTORS WITH TERMS EXPIRING IN 1999
RICHARD L. ANTONINI (age 55) has been a director of Old Kent
since 1997. He is the Chairman, President and Chief Executive Officer and
a director of Foremost Corporation of America, a specialty property and
casualty insurer. Mr. Antonini has been a director of Old Kent Bank since
1988.
WILLIAM G. GONZALEZ (age 57) has been a director of Old Kent
since 1997. He is Chief Health System Officer of Spectrum Health, an
integrated regional healthcare network providing health and medical
services and managed care options. Previously, Mr. Gonzalez was President
and Chief Executive Officer of Butterworth Health Corporation. Mr.
Gonzalez has been a director of Old Kent Bank since 1994.
HENDRIK G. MEIJER (age 46) has been a director of Old Kent since
1997. He is Co-Chairman of Meijer, Inc., a food and general merchandise
retailer. Mr. Meijer has been a director of Old Kent Bank since 1989.
PERCY A. PIERRE (age 59) has been a director of Old Kent since
1992. He is Professor of Electrical Engineering at Michigan State
University. He was previously Vice President for Research and Graduate
Studies at MSU until 1995. Dr. Pierre is also a director of CMS Energy
Corporation and Whitman Education Group, Inc.
MARILYN J. SCHLACK (age 61) has been a director of Old Kent since
1997. She is the President of Kalamazoo Valley Community College.
Dr. Schlack has been a director of Old Kent Bank since 1995.
PETER F. SECCHIA (age 60) has been a director of Old Kent 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.
-9-
<PAGE>
CONTINUING DIRECTORS WITH TERMS EXPIRING IN 2000
WILLIAM P. CRAWFORD (age 54) has been a director of Old Kent
since 1997. He is President and Chief Executive Officer of Steelcase
Design Partnership, a manufacturer of office systems, and subsidiary of
Steelcase Inc. Mr. Crawford has been a director of Old Kent Bank since
1988. Mr. Crawford is a director of Steelcase Inc.
JAMES P. HACKETT (age 42) has been a director of Old Kent since
1995. Mr. Hackett is President and Chief Executive Officer and a director
of Steelcase Inc., a manufacturer of office systems. He was Executive Vice
President and Chief Operating Officer of Steelcase U.S. from August 1994
until December 1994, Executive Vice President of Steelcase Ventures from
April 1994 until August 1994, and President of Turnstone Inc. (a Steelcase
subsidiary) from August 1993 until April 1994. Previously, he served
Steelcase in various other executive capacities.
ERINA HANKA (age 55) has been a director of Old Kent since 1995.
Ms. Hanka is President of Suspa Inc., a manufacturer of gas cylinders for
various applications within the automotive, office furniture, and
electronics industries. Ms. Hanka also served as a director of Old Kent
Bank from 1988 until her election to the Old Kent board in 1995.
EARL D. HOLTON (age 64) has been a director of Old Kent 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 47) has been a director of Old Kent
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 personal care products. Mr. Jandernoa also served as a director
of Old Kent Bank from 1987 until his appointment to the Old Kent board in
1993.
FRED P. KELLER (age 53) has been a director of Old Kent since
1997. He is Chairman and Chief Executive Officer of Cascade Engineering,
Inc., a manufacturer of plastic injection molded automotive, seating and
container products. Mr. Keller has been a director of Old Kent Bank since
1987.
The Old Kent board of directors has four standing committees:
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, Holton, Kabat, J. Keller, Wagner, and
Warrington presently serve on this committee. The Executive Committee met
1 time during 1997.
-10-
<PAGE>
AUDIT COMMITTEE. The duties of the Audit Committee are to
(i) 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 audits, (ii) recommend to the board
of directors 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,
(iii) review reports of examination of Old Kent and its subsidiaries
received from regulatory authorities, and (iv) 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. Mr. Boyles, Mr. Antonini, Mr. Hackett, Dr. Schlack, and
Ms. Sellers Walker serve on this committee. The Audit Committee met 4
times during 1997.
COMPENSATION COMMITTEE. The Compensation 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
recommendations to the board of directors. Directors who are also
employees of Old Kent or its subsidiaries and who may participate in the
plans that this committee administers may not serve on this committee.
Messrs. Bissell, Holton, Jandernoa and J. Keller are presently members of
this committee. The Compensation Committee met 3 times during 1997.
COMMITTEE ON DIRECTORS. The Committee on Directors proposes and
considers suggestions as to candidates for the board of directors, reviews
director attendance, reviews and recommends board policies and procedures,
and reviews and recommends to the board modifications to the directors'
compensation and retirement policy. Mr. Crawford, Mr. DeVos, Mr. Holton,
Mr. Jandernoa, Dr. Pierre and Mr. Wagner presently serve on this
committee. The Committee on Directors met 2 times during 1997. 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. David J. Wagner,
Old Kent's Chairman of the Board, President and Chief Executive Officer.
A shareholder of record of shares of a class entitled to vote at
any annual meeting of shareholders or at any special meeting of
shareholders 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
following the date of notice of the Election Meeting in the case of a
special meeting, a notice to the Secretary of Old Kent setting forth with
respect to each proposed nominee: (i) the name, age, business address and
residence address of the nominee; (ii) the principal occupation or
employment of the nominee; (iii) the number of shares of capital stock of
-11-
<PAGE>
Old Kent that are beneficially owned by the nominee; (iv) a statement that
the nominee is willing to be nominated and to serve; and (v) 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 1997, 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. Gonzalez who attended 67%.
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The Compensation Committee of Old Kent's board of directors
reviews Old Kent'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 subsidiaries do not serve on this committee.
Old Kent has engaged a nationally recognized compensation
consulting firm to assist the Compensation Committee and the board of
directors to formulate compensation policies and determine appropriate
compensation levels. This firm reports directly to the Compensation
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 of
achieving the highest possible relative total return to shareholders.
For compensation purposes, Old Kent compares itself to a peer
group of companies that 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 1997 included 30 bank holding
companies with assets in the $8 billion to $29 billion range as of December
31, 1997, with emphasis placed on regional bank holding companies. Of
these 30 companies, 22 are included among the companies comprising the KBW
50 Index presented in the Stock Performance Table below. For comparison
purposes, the companies with the highest and lowest returns on equity are
eliminated. Members of the group may also be eliminated if, as a result of
an acquisition or other extraordinary transaction, they are no longer
representative. For the year ended December 31, 1997, Old Kent's return on
equity was 17.55%, compared to a median return on equity of 16.54% for
other members of the peer group. Old Kent's return on equity was the 7th
highest of the 28 companies included in its peer group for comparison
purposes.
-12-
<PAGE>
The Compensation Committee has broad discretionary authority to
determine and recommend compensation and benefits. The Compensation
Committee intends base cash compensation and benefits to be competitive.
Base compensation is considered to be competitive if it is at or near the
50th percentile. To attract and retain management talent, the Compensation
Committee generally seeks to provide base compensation and benefits at or
near the 50th percentile of the peer group, although the Compensation
Committee may approve higher or lower compensation or benefits if it
considers deviation from the norm to be appropriate.
Old Kent also provides short- and long-term incentive
compensation programs to encourage superior performance. It is Old Kent's
policy that above average compensation will be paid for above average
performance.
Annual bonuses under Old Kent's short-term incentive compensation
program are intended to reward executives for achieving specific goals,
motivate executives to work more effectively, and 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 performance is measured
entirely by return on equity. Business unit performance is measured
against specific criteria that vary from unit to unit. These criteria are
recommended by senior management and approved by the Compensation Committee
at the beginning of each year, and may include factors such as net income
growth, loan quality improvement, increases 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 an executive officer, and generally 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 executive
officers named in this proxy statement are based on allocations of
corporate, business unit and individual performance components that vary
from individual to individual based on position and function.
Each executive officer is assigned a target bonus amount at the
beginning of each year. The amount of the target bonus is determined by
the Compensation Committee, in its discretion, based in part on
recommendations of senior management and consultation with Old Kent's
compensation consultants. Target bonuses in 1997 were equal to 60% of base
compensation for the Chief Executive Officer and 50% 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
that is equal to, greater than, or less than the target bonus based on an
assessment of performance against the criteria previously specified for
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<PAGE>
that officer. This evaluation considers corporate performance and, if
applicable to an officer's specified performance criteria, a discretionary
assessment of business unit performance and individual performance. Under
Old Kent's present policies, no executive officer may be paid a bonus that
is greater than 150% of his or her target bonus.
In 1995, Old Kent adopted a one-time incentive performance plan
in connection with its reengineering program. That plan was intended to
motivate the participants in the reengineering program and reward team
performance in achieving the goals of reengineering. Eligibility for this
plan was limited to officers participating in Old Kent's 1995 annual
short-term incentive plan. All executive officers named in the Summary
Compensation Table appearing in this proxy statement are participants in
the plan. Each participant is eligible to receive a supplemental cash
bonus based on his or her target award under the 1995 short-term annual
incentive plan. Each participant was awarded a bonus for 1997 equal to
150% of his or her 1995 reengineering incentive plan target award because
Old Kent's return on equity was in the first quartile of its peer group for
1997. No bonuses will be paid under this plan for years after 1997.
Long-term incentives are provided to reward executives for
increasing shareholder value and to counterbalance potential for
overemphasis on short-term results. All of Old Kent's long-term incentive
programs involve stock options or stock awards. Stock ownership by
executive officers is considered to be very important. Through use of
stock as a medium for compensation, executives' long-term incentives are
tied to shareholder value.
It has been Old Kent's historical practice to grant deferred
stock compensation awards, restricted stock awards, and stock options to
executive officers annually at levels determined with reference to fixed
percentages of base salary. The Compensation Committee believes, however,
that Old Kent's historical practice has become more heavily weighted toward
restricted stock and deferred stock grants and less heavily weighted toward
stock options than is the prevailing practice among comparable U.S.
corporations. The Compensation Committee has approved a shift in
compensation policy that will place greater emphasis on a portfolio
approach to equity-based compensation in the future. The Compensation
Committee intends to modify its historical practice so that executive
officers in general will receive and hold stock options and restricted and
deferred stock in the future in proportions that better reflect Old Kent's
increased emphasis on rewarding executive officers for corporate
performance and long-term enhancement of shareholder value.
In order to implement this shift in compensation policy, it is
expected that normal long-term performance awards in 1998 will consist
entirely of nonqualified stock options that vest over time. Old Kent will
continue to maintain its capacity to award restricted stock and deferred
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<PAGE>
stock compensation, but during a transitional period it is expected that
such awards will be used only for special purposes, such as hiring grants
and special awards. The Compensation Committee intends to review its
compensation policies and the results of those policies on a regular basis
to maintain an appropriate mix of stock-based compensation and to evaluate
Old Kent's ongoing competitiveness in the marketplace.
For Old Kent, 1997 was a year of management transition. In 1997,
two of the senior executive officers named in the Summary Compensation
Table announced that they would retire in 1998, and the Corporation has
announced their successors. Stock options and restricted stock awards to
Old Kent's recently promoted senior executive officers were determined by
the Compensation Committee, with the advice of its consulting firm, based
on a judgmental analysis of peer group practice, recognition of promotions,
and the increased emphasis on performance-based stock compensation. All
stock options were granted at prices equal to the fair market value of
Common Stock at the date of grant. Stock options awarded to the Chief
Executive Officer and certain other continuing senior executive officers
vest in three equal annual installments. Stock options awarded to other
executive officers were fully vested at the date of grant.
Mr. Wagner's base salary for 1997 was fixed at a level that 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. An annual incentive bonus was also paid for 1997 under the
Executive Incentive Bonus Plan. Under the Executive Incentive Bonus Plan,
bonuses are based entirely on corporate performance. Corporate performance
is determined with reference to a comparison of Old Kent's return on equity
to that of Old Kent's peer group and to predetermined target levels set by
the Compensation Committee. The bonus paid to Mr. Wagner for 1997 was 150%
of his target bonus, reflecting the fact that Old Kent had a return on
equity that was in the top quartile of its peer group in 1997.
Long-term incentive compensation awarded to Mr. Wagner in 1997
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 permit him to purchase 30,000 shares of Old Kent Common
Stock (before adjustment for the stock dividend and stock split paid in
1997) at market value as of the date of grant. These stock options vest in
three equal installments, on the date of grant and the first and second
anniversaries of the date of grant. These awards were determined by the
Compensation Committee in its discretion after considering corporate
performance, peer group practice, recommendations of compensation
consultants, and Old Kent's increased emphasis on performance-based stock
compensation.
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<PAGE>
Section 162(m) of the Internal Revenue Code provides that
publicly held corporations may not deduct compensation paid to certain
executive officers in excess of $1 million annually, with certain
exemptions. The Compensation Committee and the Board of Directors view
Section 162(m) as a consideration but not a constraint on compensation
policy and may approve compensation that is not tax deductible. Old Kent's
Executive Stock Incentive Plan of 1997 and Executive Incentive Bonus Plan,
both of which were approved by shareholders, have been designed to provide
performance based compensation that is not subject to a loss of deduction
under Section 162(m). Old Kent had no compensation deduction disallowed
for 1997 under Section 162(m).
During 1997, all recommendations of the Compensation Committee
were unanimously approved by the board of directors without modification.
Respectfully submitted,
John M. Bissell, Chairman
Earl D. Holton
Michael J. Jandernoa
John P. Keller
-16-
<PAGE>
STOCK PERFORMANCE
The long and short run total return on an investment in Old Kent
Common Stock compares favorably with the long and short run total returns
on both broad-based stock market indices and indices comprised of bank
holding companies. The following graphs compare the performance of Old
Kent Common Stock with the S&P 500 index and the KBW 50, an index comprised
of fifty large bank holding companies. The total return as shown on these
graphs is measured using both stock price appreciation and the effect of
continuous reinvestment of dividends. The first graph displays the
December 31, 1997 value of an initial $100 investment in Old Kent Common
Stock made one, five, and ten years prior to December 31, 1997. This graph
indicates that in each of these three time periods, the total return on an
investment in Old Kent Common Stock surpassed that of the S&P 500, was
similar to that of the KBW 50 in the five year measure, exceeded the
KBW 50 in 1997, and was 41% better than the KBW 50 for the past ten year
period.
[ONE, FIVE, AND TEN YEAR TOTAL RETURNS GRAPH]
-17-
<PAGE>
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 over a five year period, as required by Securities and
Exchange Commission regulations. 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 that specializes
in the banking industry. The KBW 50 Index is composed of 50 money center
and regional bank holding companies, including 22 of the 30 regional bank
holding companies in the peer group used by Old Kent for compensation
purposes (see the Compensation Committee Report on Executive Compensation
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]
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>
1992 100.0 100.0 100.0
1993 91.1 105.5 110.1
1994 95.6 100.2 111.5
1995 141.3 160.4 153.5
1996 177.8 226.9 188.7
1997 317.3 331.7 251.6
</TABLE>
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<PAGE>
COMPENSATION OF EXECUTIVE OFFICERS AND DIRECTORS
Old Kent's compensation and benefit programs for its executive
officers include the following components:
SALARY. Old Kent's objective is to provide base pay at levels
that 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 Compensation Committee and
senior management establish a target award and a set of
performance factors, that 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 executive officers with long-
term incentives, it is the practice of Old Kent to grant stock
options, and it has been the practice of Old Kent to award shares
as deferred stock compensation or restricted stock. 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
Income Plan. In addition, employees are offered an opportunity
to save for retirement, with savings supplemented by Old Kent,
under the qualified Old Kent Thrift Plan. Supplemental,
nonqualified programs are provided for executive officers. The
objective of these programs is to provide retirement benefits and
savings opportunities for executives in proportion to
compensation 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.
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<PAGE>
The following table shows certain information concerning the
compensation of each of Old Kent's five most highly compensated executive
officers (including its Chief Executive Officer) in the year ended
December 31, 1997, for services rendered during each of the three years in
the period then ended:
<TABLE>
SUMMARY COMPENSATION TABLE
<CAPTION>
LONG-TERM
COMPENSATION
ANNUAL COMPENSATION AWARDS
------------------- --------------------------
NUMBER OF
RESTRICTED SECURITIES
NAME AND STOCK UNDERLYING ALL OTHER
PRINCIPAL POSITION<F1> YEAR SALARY<F2> BONUS<F2> AWARDS<F3> OPTIONS<F4> COMPENSATION<F5>
---------------------- ---- ---------- --------- ---------- ----------- ----------------
<S> <C> <C> <C> <C> <C> <C>
David J. Wagner 1997 $650,000 $783,000 $313,950 63,000 $38,590
Chairman of the 1996 600,000 575,700 277,095 20,890 27,169
Board, President and 1995 480,000 264,000 235,813 21,172 16,113
Chief Executive Officer
of Old Kent
B.P. Sherwood, III 1997 385,000 390,315 165,506 7,632 22,435
Vice Chairman of the 1996 360,000 305,600 147,810 10,450 17,631
Board and Treasurer 1995 335,000 184,250 146,266 12,316 11,329
of Old Kent
Robert L. Sadler 1997 385,000 390,315 165,506 7,632 22,870
Vice Chairman of the 1996 360,000 298,175 147,810 10,450 17,757
Board of Old Kent and 1995 335,000 188,437 146,266 12,316 11,386
President and Chief
Executive Officer of
Old Kent Bank
Robert H. Warrington 1997 300,000 291,750 128,822 31,500 17,327
Senior Executive Vice 1996 247,000 201,360 101,400 7,164 12,745
President of Old Kent 1995 212,500 124,750 67,203 7,532 7,823
and Chairman and Chief
Executive Officer of Old
Kent Mortgage Company
Kevin T. Kabat 1997 265,000 223,050 284,375 31,500 13,312
Senior Executive Vice 1996 200,000 129,340 82,095 5,808 9,279
President of Old Kent 1995 170,000 72,875 171,875 6,248 6,008
and Chief Operating
Officer of Old Kent
Bank
-20-
<PAGE>
<FN>
- --------------------------
<F1> Capacities indicated are with Old Kent unless otherwise stated.
Capacities indicated are those in which a majority of compensation was
paid, and in the case of Messrs. Kabat and Warrington, do not reflect
the executive officer's current position.
<F2> Includes compensation deferred under the Old Kent Thrift Plan, the Old
Kent Executive Thrift Plan and the Old Kent Deferred Compensation
Plan. Bonus includes an annual incentive bonus and, for 1996 and
1997, a special incentive bonus in connection with Old Kent's
reengineering program.
<F3> Awards under the Deferred Stock Compensation Plan vest at the date of
grant but participants have no right to the shares until 5 years after
the date of grant. Participants in the Deferred Stock Compensation
Plan also accrue earnings equal to dividends that would have been paid
on shares deferred. Restricted stock awards vest after a number of
years, not less than 4, specified in the award, subject to
acceleration in certain circumstances. Officers who receive
restricted stock awards are issued shares subject to forfeiture and
receive dividends on those shares. The numbers of shares held or
credited to the account of each named individual under these plans and
the aggregate value of those shares as of December 31, 1997, are:
AGGREGATE
DEFERRED STOCK RESTRICTED STOCK VALUE
-------------- ---------------- ----------
Mr. Wagner 64,591 - - $2,559,424
Mr. Sherwood 44,122 - - 1,748,324
Mr. Sadler 41,711 - - 1,652,809
Mr. Warrington - - 38,546 1,527,385
Mr. Kabat - - 31,894 1,263,800
<F4> The number of shares shown is adjusted to reflect a 5% stock dividend
and a 2-for-1 stock split paid on December 15, 1997.
<F5> All other compensation includes (a) Old Kent's matching contributions
under the Old Kent Thrift Plan, (b) Old Kent's matching contributions
under the Old Kent Executive Thrift Plan, and (c) amounts paid by Old
Kent for term life insurance. The amounts included for each such
factor are:
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<PAGE>
EXECUTIVE LIFE
THRIFT PLAN THRIFT PLAN INSURANCE
----------- ----------- ---------
Mr. Wagner $1,781 $34,949 $1,860
Mr. Sherwood 1,781 18,917 1,737
Mr. Sadler 1,781 19,229 1,860
Mr. Warrington 1,781 14,278 1,268
Mr. Kabat 1,781 10,605 926
</FN>
</TABLE>
It is Old Kent's practice to award stock options annually to key
policy-making members of management. Stock options have been an important
component of Old Kent'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
executive officers and rewarding them for appreciation in the price of
Old Kent's Common Stock. Stock options that were granted, exercised or
outstanding during 1997 were granted under various stock option plans.
All of Old Kent's stock option plans have been approved by Old Kent'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 Compensation Committee in its
discretion determines who will be granted options, how many shares will be
the subject of options, the form of consideration that may be paid upon the
exercise of an option, and the vesting terms of options. Although plan
documents authorize stock appreciation 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:
-22-
<PAGE>
<TABLE>
OPTION GRANTS IN LAST FISCAL YEAR
INDIVIDUAL GRANTS
---------------------------------
<CAPTION>
NUMBER PERCENT OF TOTAL
OF SECURITIES OPTIONS
UNDER- GRANTED TO
LYING EMPLOYEES EXERCISE
OPTIONS IN FISCAL PRICE EXPIRATION GRANT DATE
NAME GRANTED <F1> YEAR (PER SHARE) <F1> DATE PRESENT VALUE<F2>
---- ------------ --------- ---------------- ---------- -----------------
<S> <C> <C> <C> <C> <C>
David J. Wagner 63,000 16.53% $27.171 6/16/2007 $393,435
B. P. Sherwood, III 7,632 2.00% $27.083 6/16/2007 $ 47,502
Robert L. Sadler 7,632 2.00% $27.083 6/16/2007 $ 47,502
Robert H. Warrington 31,500 8.27% $27.171 6/16/2007 $196,718
Kevin T. Kabat 31,500 8.27% $27.171 6/16/2007 $196,718
<FN>
___________________________
<F1> 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
terminate, subject to certain limited exercise provisions, in the
event of death, retirement, or other termination of employment.
Options granted to Messrs. Wagner, Warrington and Kabat in 1997 vest
in three equal installments, on the date of grant and the first and
second anniversary of the date of grant. Options granted to Messrs.
Sherwood and Sadler were fully vested at the date of grant. 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. The number of shares
underlying options and the exercise prices have been adjusted to
reflect a 5% stock dividend and a 2-for-1 stock split.
<F2> Based on the Black-Scholes option pricing model expressed as a ratio
6.245 (6.224 in the case of Messrs. Sadler and Sherwood) x exercise
price x number of shares. The actual value, if any, an option holder
may realize will depend on the excess of the stock price over the
exercise price on the date the option is exercised, so that there is
no assurance the value realized by an option holder will be at or near
the value estimated by the Black-Scholes model. The estimated values
under that model are based on assumptions that include (i) a stock
price volatility of 20.0%, calculated using monthly stock prices for
the three years prior to the grant date, (ii) a risk free rate of
return of 6.24%, (iii) a dividend yield of 2.5% and (iv) an expected
option holding period of 5 years. No adjustments were made for the
non-transferability of the options or to reflect any risk of
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<PAGE>
forfeiture prior to vesting. The Securities and Exchange Commission
requires disclosure of the potential realizable value or present value
of option grants. Old Kent's use of the Black-Scholes model to
indicate the present value of each grant is not an endorsement of this
valuation method.
</FN>
</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
YEAR END YEAR END
NUMBER OF ------------- -------------
SHARES ACQUIRED VALUE EXERCISABLE/ EXERCISABLE/
NAME ON EXERCISE <F1> REALIZED UNEXERCISABLE UNEXERCISABLE
---- ---------------- -------- ------------- -------------
<S> <C> <C> <C> <C>
David J. Wagner 27,392 $685,669 213,904/42,000 $5,154,447/523,068
Robert L. Sadler 35,336 746,447 39,726/0 863,393/0
B. P. Sherwood, III 18,082 186,914 0/0 0/0
Robert H. Warrington 0 0 41,386/21,000 899,246/261,534
Kevin T. Kabat 0 0 45,792/21,000 1,084,406/261,534
<FN>
_________________________
<F1> The number of shares shown is the gross number of shares covered by
options exercised, adjusted to reflect a 5% stock dividend and a
2-for-1 stock split. Officers may deliver other shares owned or
surrender shares receivable in payment of the option price and
withholding taxes, resulting in a smaller net increase in their share
holdings.
</FN>
</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
maximum 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
supplemental retirement benefits equal to the difference between the
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<PAGE>
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 Code did not apply.
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>
YEARS OF SERVICE
AVERAGE ---------------------------------------------------
REMUNERATION, AGE 65 10 15 20 25 OR MORE
- -------------------- -------- -------- -------- ----------
<S> <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. Compensation shown in the Summary
Compensation Table above under the caption "Annual Compensation" 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,
1997, Mr. Sherwood and Mr. Sadler each had 25 credited years of service
(the maximum) under those plans, Mr. Wagner had 21, Mr. Warrington had 10,
and Mr. Kabat had _____.
EXECUTIVE SEVERANCE AGREEMENTS
Old Kent has entered into executive severance agreements with the
executive officers named in the Summary Compensation Table in this proxy
statement. Each agreement provides severance benefits to the executive
officer if, within 24 months after or 6 months before a "change of control"
of Old Kent, Old Kent terminates the executive officer for reasons other
than "cause," or the executive officer terminates the employment for good
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<PAGE>
reason or because the successor company breaches the agreement. A "change
of control" of Old Kent is deemed to have occurred if (i) any person or
entity acquires beneficial ownership of 25% or more of the combined voting
securities of Old Kent, (ii) the board of directors is not comprised of a
majority of directors who were directors (or nominated to become directors)
prior to the effective date of the change of control, (iii) Old Kent merges
or consolidates with or into another entity where the voting securities of
Old Kent fail to represent at least 60% of the voting power of the
surviving entity, (iv) Old Kent sells or otherwise transfers assets or
earning power totaling more than 50% of the assets or earning power of Old
Kent (on a consolidated basis), or (v) Old Kent is completely liquidated
or dissolved. An executive officer's termination of employment is for
"good reason" if Old Kent or its successor assigns him duties materially
inconsistent with his present duties, shifts his job location more than
50 miles, or reduces his base salary or participation in short- and long-
term incentive, benefit and retirement plans. Each agreement has a 3-year
term and is self-renewing for additional 1-year terms unless Old Kent
notifies the executive officer of its termination of the agreement at
least 6 months prior to its expiration. The Agreements provide severance
benefits of a lump-sum payment equal to 3 years' salary and bonuses, plus
health, deferred compensation, and retirement benefits for the 3-year
period.
COMPENSATION OF DIRECTORS
Each director of Old Kent who is not compensated as an officer is
paid an annual retainer of $17,000 and a fee of $1,000 for each meeting of
the board of directors attended. Directors who serve on committees
appointed by the board of directors are paid $1,000 for each committee
meeting attended, and each committee chairman who is not compensated as an
officer is paid an additional retainer of $4,000 per year. Directors are
reimbursed for travel expenses for meetings attended. Each director of Old
Kent 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 five funds substantially
identical to the five funds available in the Old Kent Thrift Plan. One of
those five 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.
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<PAGE>
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, 1997, and February 28, 1998.
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.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
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
Commission. Directors and officers are required by Securities and Exchange
Commission regulations to furnish Old Kent with copies of all Section 16(a)
reports they file. Based on its review of the copies of such reports
received by it, or written representations from certain reporting persons
that no Forms 5 were required for those persons, Old Kent believes that,
from January 1 through December 31, 1997, its directors and officers
complied with all applicable filing requirements.
INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
The board of directors has selected Arthur Andersen LLP as Old
Kent's principal accountant for 1998. Representatives of Arthur Andersen
LLP will be present at the annual meeting, have an opportunity to make a
statement, and 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 19, 1999, must be received by Old
Kent by November 2, 1998, 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.
-27-
<PAGE>
[FRONT]
OLD KENT FINANCIAL CORPORATION
PROXY 111 LYON STREET, N.W.
GRAND RAPIDS, MICHIGAN 49503
ANNUAL MEETING OF SHAREHOLDERS - APRIL 20, 1998
The undersigned shareholder appoints David J. Wagner, William L.
Sanders, Mary E. Tuuk, or any of them, each with the power to appoint his
or her substitute, attorneys and proxies to represent the shareholder and
to vote and act with respect to all shares that the shareholder would be
entitled to vote on all matters that 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 AND FOR
APPROVAL OF THE PROPOSAL IDENTIFIED ON THIS PROXY. THE SHARES REPRESENTED
BY THIS PROXY WILL BE VOTED IN THE DISCRETION OF THE PROXIES ON ANY OTHER
MATTERS THAT MAY COME BEFORE THE MEETING.
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 ___________________________, 1998
<PAGE>
[BACK]
1. Election of Directors.
[ ] FOR all nominees listed below [ ] WITHHOLD AUTHORITY to
(except as indicated below) vote for all nominees
listed below
John D. Boyles David J. Wagner YOUR BOARD OF
Richard M. DeVos, Jr. Margaret Sellers Walker DIRECTORS RECOMMENDS
Kevin T. Kabat Robert H. Warrington THAT YOU VOTE FOR
John P. Keller ALL NOMINEES.
(Instruction: To withhold authority for any individual nominee, write that
nominee's name in the space provided below.)
2. Proposal to Approve an Amendment to the Restated Articles of
Incorporation to Increase the Number of Authorized Shares.
[ ] VOTE FOR YOUR BOARD OF DIRECTORS RECOMMENDS
[ ] VOTE AGAINST THAT YOU VOTE FOR THIS PROPOSAL.
[ ] ABSTAIN
IMPORTANT! PLEASE DATE AND SIGN THE OTHER SIDE
