<PAGE> 1
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 [ ] Confidential, For Use of the
[X] Definitive Proxy Statement Commission Only (as Permitted by
[ ] Definitive Additional Materials Rule 14a-6(e)(2))
[ ] 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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(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> 2
[OLD KENT LOGO]
FINANCIAL CORPORATION
111 Lyon Street N.W.
Grand Rapids, Michigan 49503
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
- - --------------------------------------------------------------------------------
<TABLE>
<S> <C>
DATE: Monday, April 19, 1999
TIME: 10:00 a.m., local time
PLACE: Ambassador Ballroom
Amway Grand Plaza Hotel
187 Monroe Avenue N.W.
Grand Rapids, Michigan 49503
</TABLE>
March 1, 1999
Dear Fellow Shareholder:
You are cordially invited to attend Old Kent's Annual Meeting of Shareholders on
April 19, 1999. At the meeting, we will:
(1) Elect Directors;
(2) Vote on the proposed Stock Incentive Plan of 1999;
(3) Vote on the proposed Employee Stock Purchase Plan of 1999; and
(4) Conduct such other business as may properly come before the meeting.
You can vote at the annual meeting if you were a shareholder of record on
February 19, 1999. Your board of directors recommends that you vote in favor of
the proposals outlined in this proxy statement.
We look forward to seeing you at the meeting.
By Order of the Board of Directors,
/s/ Mary E. Tuuk
------------------------------------
Mary E. Tuuk
Secretary and Senior Vice President
YOUR VOTE IS IMPORTANT TO US. PLEASE VOTE NOW - EVEN IF YOU PLAN TO ATTEND THE
MEETING - BY SIGNING, DATING, AND MAILING YOUR PROXY CARD IN THE ENCLOSED
ENVELOPE.
<PAGE> 3
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
PROXY STATEMENT........................ 1
Time and Place....................... 1
Purposes of the Meeting.............. 1
How to Vote Your Proxy............... 1
Required Vote........................ 2
ELECTION OF DIRECTORS.................. 2
OLD KENT'S BOARD OF DIRECTORS.......... 3
Nominees for Terms Expiring in
2002.............................. 3
Continuing Directors with Terms
Expiring in 2000.................. 3
Continuing Directors with Terms
Expiring in 2001.................. 4
Committees........................... 5
Board Meeting Attendance............. 5
Compensation of Directors............ 5
Shareholder Nominations.............. 6
OWNERSHIP OF OLD KENT STOCK............ 7
Ownership of Old Kent Stock by
Directors and Executive
Officers.......................... 7
Five Percent Shareholder............. 8
PROPOSAL NO. 1: APPROVAL OF THE STOCK
INCENTIVE PLAN OF 1999............... 9
Purpose of the Plan.................. 9
Shares Available to Issue Under the
Plan.............................. 9
Eligibility.......................... 10
Administration of the Plan........... 10
Stock Options........................ 10
Restricted Stock..................... 11
Stock Appreciation and Tax Benefit
Rights............................ 13
</TABLE>
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Tax Treatment of Awards Under the
Plan.............................. 13
Amendment and Termination of the
Plan.............................. 13
Effective Date of the Plan........... 13
PROPOSAL NO. 2: APPROVAL OF THE
EMPLOYEE STOCK PURCHASE PLAN OF
1999................................. 14
Purpose of the Plan.................. 14
Purchase of Old Kent Stock........... 14
Tax Treatment Under the Plan......... 15
Administration of the Plan........... 15
OLD KENT'S STOCK PERFORMANCE........... 16
EXECUTIVE COMPENSATION................. 18
Introduction......................... 18
Summary of Executive Compensation.... 19
Equity-Based Compensation Program.... 20
Retirement Plans..................... 22
Executive Severance Agreements....... 23
Compensation Committee Report on
Executive Compensation............ 24
RELATED MATTERS........................ 27
Proposals of Shareholders............ 27
1998 Annual Report................... 27
Solicitation of Proxies.............. 27
Certain Relationships and Related
Transactions...................... 27
Section 16(a) Beneficial Ownership
Reporting Compliance.............. 27
Independent Public Accountants....... 28
</TABLE>
i
<PAGE> 4
[OLD KENT LOGO]
111 Lyon Street N.W.
Grand Rapids, Michigan 49503
March 1, 1999
PROXY STATEMENT
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- - --------------------------------------------------------------------------------
TIME AND PLACE
You are cordially invited to attend the annual meeting of shareholders of Old
Kent Financial Corporation that will be held on April 19, 1999 in the Ambassador
Ballroom of the Amway Grand Plaza Hotel, 187 Monroe Avenue N.W., Grand Rapids,
Michigan, 49503, at 10:00 a.m. local time.
This proxy statement and the enclosed proxy card are being furnished to you in
connection with the solicitation of proxies by the Old Kent board of directors
for use at the annual meeting. In this proxy statement, "we," "us," "our" and
"Old Kent" refer to Old Kent Financial Corporation and "you" and "your" refer to
Old Kent shareholders.
PURPOSES OF THE MEETING
The purpose of the annual meeting is to consider and vote upon:
(1) Election of Directors;
(2) Approval of the Stock Incentive Plan of 1999;
(3) Approval of the Employee Stock Purchase Plan of 1999; and
(4) Such other business as may properly come before the meeting.
Your board of directors recommends that you vote for each of the nominees and
each of the proposals discussed in this proxy statement.
You may vote at the meeting if you were a shareholder of record of Old Kent on
February 19, 1999. Each such shareholder is entitled to one vote per share on
each matter presented.
As of February 19, 1999, there were 103,990,035 shares of Old Kent common stock
issued and outstanding.
HOW TO VOTE YOUR PROXY
If you properly sign and return the proxy in the form we have provided, the
shares represented by that proxy will be voted at the annual meeting and at any
adjournment of that meeting.
If you specify a choice, the shares represented by your proxy will be voted as
specified. If you do not specify a choice, your shares will be voted for the
election as directors of the nominees named in this proxy statement, for the
proposals set forth in this proxy statement and, with respect to any other
matter that may come before the meeting, in the discretion of the individuals
named as proxies on the proxy card.
You may revoke your proxy at any time prior to its exercise by delivering
written notice of revocation to the Secretary of Old Kent or by attending and
voting at the annual meeting.
If you hold Old Kent shares in the name of a bank, broker, or other nominee (a
"broker"), you must obtain a proxy - executed in your favor - from the broker to
enable you to vote at the annual meeting.
<PAGE> 5
REQUIRED VOTE
A plurality of the shares voting is required to elect directors. This means that
if there are more nominees than positions to be filled, the nominees for whom
the most votes are cast will be elected.
Each other matter voted upon at the meeting will be approved if a majority of
the votes cast are in favor of such matter.
The presence of the holders of a majority of the votes entitled to be cast at
the meeting is necessary to constitute a quorum. If you return your proxy card
or attend the meeting in person, your shares will be counted towards the quorum,
even if you abstain from voting on some or all of the matters introduced at the
meeting. Broker "non-votes" also count for quorum purposes, although we do not
count them as votes for or against any proposal. A broker non-vote occurs when a
shareholder holds his or her stock through a broker, the broker has not received
voting instructions from that shareholder, and the broker does not have
discretionary voting power for the particular item upon which the vote is taken.
ELECTION OF DIRECTORS
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- - --------------------------------------------------------------------------------
The board of directors proposes that the following nominees be elected as
directors for terms expiring at the annual meeting to be held during 2002:
Richard L. Antonini
William G. Gonzalez
Hendrik G. Meijer
Percy A. Pierre
Marilyn J. Schlack
Peter F. Secchia
The board of directors presently consists of 19 persons divided into three
classes - two classes of six individuals and one class of seven. Each class has
a term of office of three years, with the term of office of one class expiring
at the annual meeting in each successive year.
Each proposed nominee is willing to be elected and serve as a director. However,
if a nominee is unable to serve or is otherwise unavailable for election - which
we do not anticipate - the incumbent board of directors may or may not select a
substitute nominee. If a substitute nominee is selected, your proxy (unless you
give alternative instructions) will be voted for the person so selected. If a
substitute nominee is not selected, your proxy 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.
Biographical information concerning nominees and current directors whose terms
of office will continue after the annual meeting is presented below. Except as
otherwise indicated, each director and nominee has had the same principal
employment for over five years and has been a director of Old Kent Bank - Old
Kent's principal banking subsidiary - since 1997.
2
<PAGE> 6
OLD KENT'S BOARD OF DIRECTORS
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NOMINEES FOR TERMS EXPIRING IN 2002
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RICHARD L. ANTONINI (age 56) 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 58) has been a director of Old Kent since 1997. He is
President and Chief Executive Officer of Spectrum Health, an integrated regional
healthcare network providing health and medical services and managed care
options. Previously, Mr. Gonzalez was Chief Health System Officer of Spectrum
Health from 1997 to March 1, 1999 and President and Chief Executive Officer of
Butterworth Health Corporation until 1997. Mr. Gonzalez has been a director of
Old Kent Bank since 1994.
HENDRIK G. MEIJER (age 47) 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 60) has been a director of Old Kent since 1992. He is
Professor of Electrical Engineering at Michigan State University. He was 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 62) 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 61) 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.
YOUR BOARD OF DIRECTORS RECOMMENDS THAT YOU
VOTE FOR THE ELECTION OF ALL NOMINEES AS DIRECTORS
CONTINUING DIRECTORS WITH TERMS EXPIRING IN 2000
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WILLIAM P. CRAWFORD (age 55) 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 43) 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.
ERINA HANKA (age 56) 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,
3
<PAGE> 7
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.
MICHAEL J. JANDERNOA (age 48) 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 was a director of Old Kent Bank from 1987 until his
appointment to the Old Kent board in 1993.
FRED P. KELLER (age 54) 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.
ROBERT H. WARRINGTON (age 51) is Vice Chairman and Chief Financial Officer 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 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.
CONTINUING DIRECTORS WITH TERMS EXPIRING IN 2001
------------------------------------------------------------
JOHN D. BOYLES (age 64) 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 43) has been a director of Old Kent since 1994. He is
President of Amway Corporation, a direct selling company that manufactures and
markets home care, personal care and health and fitness products. He is also
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 42) is Vice Chairman of Old Kent and President of Old Kent
Bank. He has been a director of Old Kent since February 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. 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 59) 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 A.M. Castle, Co. and Castle Energy Corporation.
DAVID J. WAGNER (age 44) 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 1994, the position of Chief Executive Officer effective March
1995, and the position of Chairman of the Board effective November 1995. He was
Executive Vice President of Old Kent from 1991 until 1994, President of Old Kent
Bank from 1986 until
4
<PAGE> 8
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 63) has been a director of Old Kent since 1997. She
is a Professor of Public Administration, School of Public and Nonprofit
Administration, at Grand Valley State University. Ms. Sellers Walker has been a
director of Old Kent Bank since 1993.
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COMMITTEES
The board of directors has established four standing committees. Each standing
committee (except the Executive Committee) is chaired by an outside director.
The AUDIT COMMITTEE recommends the appointment of independent public accountants
and reviews their fees for audit and non-audit services and the scope and
results of audits performed by them. The Audit Committee also reviews Old Kent's
internal accounting controls, the proposed form of its financial statements, the
results of internal audits and compliance programs, and the results of
examinations received from regulatory authorities. Directors who are also
employees of Old Kent or its subsidiaries may not serve on this committee.
Dr. Schlack, Ms. Sellers Walker, and Messrs. Antonini, Boyles, and Hackett
presently serve on this committee. It met four times during 1998.
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. Hackett, Holton, Jandernoa, and J. Keller serve on this committee. It
met four times during 1998.
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. The
Committee on Directors will consider candidates suggested by shareholders for
nomination by the board of directors.
Dr. Pierre and Messrs. Crawford, DeVos, Holton, Jandernoa, Secchia, and Wagner
serve on this committee. The Committee on Directors met one time during 1998.
The EXECUTIVE COMMITTEE exercises the authority of the board of directors during
the intervals between meetings of the board. Messrs. Holton, Jandernoa, Kabat,
J. Keller, Wagner, and Warrington presently serve on this committee. The
Executive Committee did not meet during 1998.
BOARD MEETING ATTENDANCE
During 1998, the Old Kent board of directors held eight 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 Mr. DeVos who attended 56%.
COMPENSATION OF DIRECTORS
Old Kent pays each non-employee director an annual retainer of $20,000 and a fee
of $1,000 for each meeting of the board of directors attended. Old Kent pays
directors who serve on committees $1,000 for each committee meeting attended and
each committee chairman who is
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<PAGE> 9
not an employee of Old Kent 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 will be paid commencing on March 1 of the year following the
expiration of the director's term in a lump-sum or annual installments over a
period of up to ten years. One-half of each director's annual retainer is
deferred and credited to the Old Kent common stock fund under the Old Kent
Directors' Deferred Compensation Plan.
SHAREHOLDER NOMINATIONS
A shareholder of record may nominate an individual for a directorship provided
such shareholder is entitled to vote at the applicable annual meeting or special
meeting of shareholders called for election of directors (an "election
meeting"). To make such nomination, a shareholder must deliver - not less than
120 days prior to the date of the election meeting in the case of an annual
meeting and not more than seven 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: 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 Old Kent
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.
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<PAGE> 10
OWNERSHIP OF OLD KENT STOCK
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OWNERSHIP OF OLD KENT STOCK BY DIRECTORS AND EXECUTIVE OFFICERS
The following table shows the number of shares of Old Kent stock beneficially
owned on December 31, 1998 by each of Old Kent's directors and nominees for
director, each of the officers named in the Summary Compensation Table below,
and all of Old Kent's directors and executive officers as a group. None of these
individuals beneficially owned more than 1% of the shares of Old Kent stock
outstanding on December 31, 1998. As a group, Old Kent's directors and executive
officers owned 2.17% of Old Kent's outstanding stock on December 31, 1998.
<TABLE>
<CAPTION>
AMOUNT AND NATURE OF BENEFICIAL OWNERSHIP(1)
----------------------------------------------------------------
SOLE VOTING SHARED VOTING
AND OR TOTAL
DISPOSITIVE DISPOSITIVE STOCK DEFERRED BENEFICIAL
NAME OF BENEFICIAL OWNER POWER POWER(2) OPTIONS(3) STOCK(4) OWNERSHIP
- - -------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Richard L. Antonini -- 241 -- 4,068 4,309
John D. Boyles 68,834 -- -- 218 69,052
William P. Crawford -- 17,816 -- 218 18,034
Richard M. DeVos, Jr. 17,490 -- -- 218 17,708
William G. Gonzalez 2,503 -- -- 5,620 8,123
James P. Hackett 1,312 -- -- 709 2,021
Erina Hanka -- 4,921 -- 6,711 11,632
Earl D. Holton 9,699 5,263 -- 32,867 47,829
James A. Hubbard(5) 13,526 -- 29,156 -- 42,682
Michael J. Jandernoa 23,640 -- -- 10,006 33,646
Kevin T. Kabat(5) 34,448 11,427 81,154 -- 127,029
Fred P. Keller 15,366 -- -- 218 15,584
John P. Keller 13,475 -- -- 218 13,693
Kenneth C. Krei(5) 16,959 1,050 19,076 -- 37,085
Hendrik G. Meijer 3,192 22,233 -- 1,509 26,934
Percy A. Pierre 2,546 2,446 -- 218 5,210
Marilyn J. Schlack 2,370 -- -- 610 2,980
Peter F. Secchia 160,838 3,340 -- 10,017 174,195
David J. Wagner 92,502 21,338 290,747 59,857 464,444
Margaret Sellers Walker 300 -- -- 501 801
Robert H. Warrington(5) 35,038 16,615 76,528 -- 128,181
All directors and
executive officers as a
group 953,722 252,839 950,064 133,783 2,290,408
</TABLE>
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Explanatory footnotes begin following the next table.
7
<PAGE> 11
FIVE PERCENT SHAREHOLDER
The following table sets forth information concerning the number of shares of
Old Kent stock held by Old Kent Bank as of December 31, 1998. Old Kent Bank is
the only shareholder reported to us to have been the beneficial owner of more
than 5% of the outstanding shares of Old Kent stock on December 31, 1998.
<TABLE>
<CAPTION>
AMOUNT AND NATURE OF BENEFICIAL OWNERSHIP(1)
------------------------------------------------------
SOLE VOTING AND SHARED VOTING OR PERCENT
NAME AND ADDRESS OF DISPOSITIVE DISPOSITIVE OF
BENEFICIAL OWNER POWER POWER(2) TOTAL CLASS
- - -----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Old Kent Bank
111 Lyon Street N.W. 3,038,060 5,928,694 8,966,754 8.58%
Grand Rapids, Michigan 49503
</TABLE>
(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 that are considered to be otherwise beneficially owned by that
person. Under the rules of the Securities and Exchange Commission, 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, such as through the
exercise of a stock option. 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.
(2) These numbers of shares shown in this column 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.
(3) The stock options included in this column are only those options that are
exercisable within 60 days. Options that vest at later dates are not
reported in this table.
(4) The numbers of shares shown in this column for Old Kent officers represent
shares credited to the officer's account under the Old Kent 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 of Old Kent 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
over those shares.
(5) The numbers of shares shown include shares of restricted stock granted under
the Old Kent 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.
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PROPOSAL NO. 1: APPROVAL OF THE
STOCK INCENTIVE PLAN OF 1999
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- - --------------------------------------------------------------------------------
PURPOSE OF THE PLAN
Stock options have been an important component of Old Kent's executive incentive
programs for many years because they provide each executive a long-term
incentive to achieve the goal of increasing shareholder value, while protecting
against an overemphasis on short-term results. Stock ownership and stock-based
compensation of management aligns your interests and risks as a shareholder with
the incentives and risks of management.
Old Kent's Compensation Committee has analyzed its policies concerning awards of
stock options and has determined to award options to a much broader group of
employees to further these purposes. The Compensation Committee and the board of
directors believe that stock options are inherently performance-based
compensation in that they depend entirely on growth in stock price for their
value.
The Stock Incentive Plan of 1999 (the "Plan") - which has been unanimously
approved and is recommended by the Compensation Committee and the board of
directors - would replace Old Kent's ability to grant stock options and
restricted stock under all existing stock option and restricted stock plans and
permit the Compensation Committee to grant incentive awards to a broad group of
employees. Old Kent's existing, shareholder-approved stock option and restricted
stock plans have slightly more than 2,000,000 authorized shares still available
for future awards. However, because the Compensation Committee anticipates
granting a significantly greater number of options each year due to the increase
in the group of employees targeted for awards, the board of directors believes
that adoption of the Plan is now advisable to make additional shares available
for awards and stock options.
It is contemplated that the Plan would be used primarily to grant "nonqualified
stock options," consistent with the past practice of Old Kent. Almost all of the
options granted under Old Kent's existing plans have been nonqualified stock
options and the Compensation Committee anticipates no change in this practice.
The Committee will establish the option price, which price may not be less than
100% of the market value of the stock on the date of the grant. Options may not
be repriced.
The Plan would also permit the grant of other forms of long-term incentive
compensation, including "incentive stock options," restricted stock, stock
appreciation rights, and tax benefit rights (which, with stock options, are
referred to as "Incentive Awards").
By combining in a single plan many types of incentives commonly used in
long-term incentive compensation programs, the Plan would provide significant
flexibility for the Compensation Committee to design specific long-term
incentives that would best promote the objectives of the Plan and in turn
promote your interests as an Old Kent shareholder.
The following summarizes the principal features of the Plan. This summary is
qualified in its entirety by reference to the terms of the Plan set forth in
Appendix A to this proxy statement.
SHARES AVAILABLE TO ISSUE UNDER THE PLAN
Subject to certain antidilution adjustments, the total number of shares of Old
Kent common stock available for Incentive Awards under the Plan would be:
- - - For the initial plan year, 5,000,000 shares of common stock - representing
2,000,000 shares available for awards under Old Kent's existing stock option
and restricted stock plans and 3,000,000 newly authorized shares; plus
9
<PAGE> 13
- - - In each subsequent Plan year, an additional number of shares not to exceed 2%
of the number of shares of common stock outstanding on the December 31st
immediately before such Plan year.
Authorized stock not used for awards in any Plan year would carry forward to
subsequent Plan years.
ELIGIBILITY
Persons eligible to receive Incentive Awards under the Plan include corporate
executive officers (23 persons as of December 31, 1998) and other corporate and
subsidiary officers and employees (7,692 persons as of December 31, 1998) of Old
Kent and its subsidiaries. Additional individuals may become executive officers
or corporate or subsidiary officers or employees in the future and could
participate in the Plan.
ADMINISTRATION OF THE PLAN
The Plan would be administered by the Compensation Committee or such other
committee as the board may designate for that purpose (the "Committee"). The
Committee would make determinations, subject to the terms of the Plan, as to the
persons to receive Incentive Awards, the amount of Incentive Awards to be
granted to each person, the time of each grant, the terms and duration of each
grant and all other determinations necessary or advisable for administration of
the Plan.
The benefits payable under the Plan are presently not determinable and the
benefits that would have been payable had the Plan been in effect during the
most recent fiscal year are similarly not determinable. Because officers and
employees of Old Kent and its subsidiaries may receive Incentive Awards under
the Plan, they may be considered to have an interest in the Plan. The Plan would
not be qualified under Section 401(a) of the Internal Revenue Code, and would
not be subject to the Employee Retirement Income Security Act of 1974.
Old Kent could withhold from any cash otherwise payable to a participant or
require a participant to remit to Old Kent an amount sufficient to satisfy
federal, state, and local withholding taxes and employment-related tax
requirements. Tax withholding obligations may be satisfied by withholding stock
to be received upon exercise or vesting of an Incentive Award or by delivery to
Old Kent of previously owned shares of common stock.
STOCK OPTIONS
The principal stock option features of the Plan provide that Old Kent may grant
to participants options to purchase shares of its common stock at stated prices
for specified periods of time. Options may qualify as incentive stock options as
defined in Section 422 of the Internal Revenue Code ("Incentive Stock Options")
or not ("Nonqualified Stock Options"), as determined by the Committee.
Old Kent's present practice is to grant only Nonqualified Stock Options and it
presently anticipates no change in that practice. The Committee could award
options for any amount of consideration, or no consideration, as may be
determined by the Committee.
The Committee would set forth the terms of an individual grant of stock options
in a stock option agreement. The stock option agreement would contain such
terms, conditions, and restrictions (consistent with the provisions of the Plan)
as the Committee determines to be appropriate. A stock option agreement may also
provide for an automatic regrant of options with respect to shares surrendered
to Old Kent in connection with the exercise of an outstanding stock option.
The Committee will establish the option price, which price may not be less than
100% of the market value of the stock on the date of the grant. Options may not
be repriced. On February 18, 1999, the closing price of Old Kent stock on the
New York Stock Exchange was $44 15/16 per share.
When exercising all or a portion of a stock option, a participant could pay with
cash or, if
10
<PAGE> 14
permitted by the Committee, with shares of stock or other consideration. If
shares are used to pay the exercise price and the Committee permits, a
participant could use the value of shares received upon exercise for further
exercises in a single transaction, permitting him or her to fully exercise a
large stock option with no initial cash or stock payment. The Committee could
also authorize payment of all or a portion of the stock option price in the form
of a promissory note or installments on terms and collateral approved by the
Committee.
Although the term of each stock option would be determined by the Committee, no
stock option would be exercisable under the Plan after the expiration of ten
years from the date it was granted. As determined by the Committee, stock
options would be exercisable for limited periods of time in the event a stock
option holder dies or becomes disabled or if his or her employment is
terminated. If a stock option holder is terminated for cause, the stock option
holder would forfeit all rights to exercise any outstanding stock options.
Unless the Committee otherwise permits, stock options granted to participants
under the Plan generally could not be transferred except by will or by the laws
of descent and distribution.
For federal income tax purposes, a participant would not recognize income and
Old Kent would not receive a deduction at the time an Incentive Stock Option is
granted. A participant exercising an Incentive Stock Option would not recognize
income at the time of the exercise. The difference between the market value and
the exercise price would, however, be a tax preference item for purposes of
calculating alternative minimum tax. Upon sale of the stock, as long as the
participant held the stock for at least one year after the exercise of the stock
option and at least two years after the grant of the stock option, the
participant's basis would equal the exercise price, the participant would be
subject to tax on the difference between the sale proceeds and the exercise
price as capital gain and Old Kent would receive no deduction for federal income
tax purposes. If, before the expiration of either of the above holding periods,
the participant sold shares acquired under an Incentive Stock Option, the tax
deferral would be lost, the participant would recognize compensation income
equal to the difference between the exercise price and the fair market value at
the time of exercise, but not more than the maximum amount that would not result
in a loss on the disposition, and Old Kent would receive a corresponding
deduction for federal income tax purposes. Additional gains, if any, recognized
by the participant would result in the recognition of short- or long-term
capital gain.
Under current federal income tax laws, a participant would not recognize any
income and Old Kent would not receive a deduction at the time a Nonqualified
Stock Option is granted. If a Nonqualified Stock Option is exercised, the
participant would recognize compensation income in the year of exercise equal to
the difference between the exercise price and the fair market value on the date
of exercise, and Old Kent would receive a corresponding deduction for federal
income tax purposes. The participant's tax basis in the shares acquired would be
increased by the amount of compensation income recognized. Sale of the stock
after exercise would result in recognition of short- or long-term capital gain
or loss.
RESTRICTED STOCK
Old Kent has also in the past used restricted stock as a form of long-term
incentive for executives. Its present practice is to use restricted stock only
for special purposes, such as hiring grants and special awards. The Plan would
allow the Committee to continue to award restricted stock, subject to such terms
and conditions that the Committee from time to time determines. The Compensation
Committee presently anticipates no change in the near future in its policies
concerning awards of restricted stock.
The Committee would set forth the terms of an individual award of restricted
stock in a restricted stock agreement. Vesting of restricted stock would be
determined by the Committee. Unless the Committee provides otherwise in
11
<PAGE> 15
the restricted stock agreement, if a participant's employment is terminated
during the restricted period set by the Committee for any reason other than
death, disability, early retirement (as defined in the Plan), normal retirement
(as defined in the Plan), or consensual severance (as defined in the Plan); the
participant's restricted stock would be entirely forfeited. If the participant's
employment terminates during the restricted period by reason of disability or
early retirement, the restrictions on the participant's shares would terminate
automatically with respect to that number of shares (rounded to the nearest
whole number) equal to the total number of shares of restricted stock awarded to
the participant multiplied by the number of full months that have elapsed since
the date of grant divided by the total number of full months in the restricted
period. All remaining shares would be forfeited and returned to Old Kent unless
the Committee provides otherwise. If the participant's employment is terminated
for cause, the participant's restricted stock would be automatically forfeited
unless the Committee determines otherwise.
If a participant's employment terminates during the restricted period because of
consensual severance, the Committee may, in its sole discretion, waive the
restrictions remaining on any or all remaining shares of restricted stock either
before or after the consensual severance of employment of the participant. If a
participant's employment terminates during the restricted period because of
death or normal retirement, the participant's right to receive all shares of
restricted stock granted to the participant shall vest as of the date of the
termination of employment and the participant's restricted stock may be
transferred free of the restrictions under the Plan.
A recipient of restricted stock would not be allowed to sell, pledge, or
otherwise transfer the restricted stock other than to Old Kent or by will or the
laws of descent and distribution without Committee authorization. In addition,
the Committee could impose other restrictions on shares of restricted stock. A
holder of restricted stock would enjoy all other rights of a shareholder with
respect to restricted stock, including the right to vote restricted shares at
shareholders' meetings and the right to receive all dividends paid with respect
to the restricted shares. Any securities received by a holder of restricted
stock pursuant to a stock dividend, stock split, recapitalization, merger,
consolidation, combination, or exchange of shares would be subject to the same
terms, conditions, and restrictions that are applicable to the restricted stock
for which the shares are received.
Generally, a participant would not recognize income upon the award of restricted
stock. However, a participant would be required to recognize compensation income
on the value of restricted stock at the time the restricted stock vests (i.e.,
when the restrictions lapse). At the time the participant recognizes
compensation income, Old Kent would be entitled to a corresponding deduction for
federal income tax purposes. If restricted stock is forfeited by a participant,
the participant would not recognize income and Old Kent would not receive a
deduction. Prior to the lapse of restrictions, dividends paid on restricted
stock would be reported as compensation income to the participant and Old Kent
would receive a corresponding deduction.
A participant could, within 30 days after the date of an award of restricted
stock, elect to report compensation income for the tax year in which the award
of restricted stock occurs. If the participant makes such an election, the
amount of compensation income would be the value of the restricted stock at the
time of the award. Any later appreciation in the value of the restricted stock
would be treated as capital gain and realized only upon the sale of the
restricted stock. Dividends received after such an election would be taxable as
dividends and not treated as additional compensation income. If, however,
restricted stock is forfeited after the participant makes such an election, the
participant would not be allowed any deduction for the amount earlier taken into
income. Upon the sale of restricted stock, a participant would realize capital
gain (or loss) in the amount of the difference between the sale price and the
12
<PAGE> 16
value of the stock previously reported by the participant as compensation
income.
STOCK APPRECIATION AND TAX BENEFIT RIGHTS
In addition to stock options and restricted stock, the Committee could also
grant stock appreciation rights and tax benefit rights that would be subject to
such terms and conditions as the Committee determines. A stock appreciation
right could relate to a particular option and could be granted at the same time
or after a related option is granted. A stock appreciation right granted in
tandem with an option would permit a participant to receive, in exchange for the
right to exercise a related option, a payment from Old Kent in cash, stock or
other consideration equal to the difference between the market value of the
shares at the time of exercise of the stock appreciation right and the exercise
price of such option.
A tax benefit right is a cash payment received by a participant upon exercise of
a stock option. The amount of the payment would not exceed the amount determined
by multiplying the ordinary income realized by the participant (and deductible
by Old Kent) upon exercise of a Nonqualified Stock Option, or upon a
disqualifying disposition of an Incentive Stock Option, by the maximum federal
income tax rate (including any surtax or similar charge or assessment) for
corporations plus the applicable state and local tax imposed on the exercise of
the stock option or disqualifying disposition. Unless the Committee provides
otherwise, the net amount of a tax benefit right, subject to withholding, could
be used to pay a portion of the stock option price.
It is not Old Kent's present practice to grant stock appreciation rights or tax
benefit rights, and it does not presently anticipate adopting such a practice.
TAX TREATMENT OF AWARDS UNDER THE PLAN
Old Kent anticipates granting incentive awards primarily as stock options
expected to qualify as performance-based compensation exempt from possible loss
of tax deduction under Section 162(m) of the Internal Revenue Code. Section
162(m) limits to $1,000,000 the annual income tax deduction that may be claimed
by a publicly held corporation for compensation paid to its chief executive
officer and to the four most highly compensated officers other than the chief
executive officer.
Qualified "performance-based" compensation is exempt from the $1,000,000 limit
and may be deducted even if other compensation exceeds $1,000,000. The proposed
Plan is intended to provide performance-based compensation under Section 162(m)
to permit compensation associated with stock options awarded under the Plan to
be tax deductible, similar to Old Kent's existing Executive Stock Incentive Plan
of 1997. No participant in the Plan may be granted, with respect to any Plan
year, awards representing more than 25% of the total number of shares of Old
Kent common stock available for awards under the Plan for that Plan year.
AMENDMENT AND TERMINATION OF THE PLAN
The board of directors may terminate the Plan at any time and may from time to
time amend the Plan. No termination, amendment, or modification may become
effective with respect to any Incentive Award outstanding under the Plan without
the prior written consent of the participant holding the award unless the
amendment or modification operates to the benefit of the participant.
EFFECTIVE DATE OF THE PLAN
If approved by the shareholders, the Plan would take effect on April 19, 1999,
and, unless previously terminated by the board of directors, no awards could be
made under the Plan after April 18, 2009.
No Incentive Awards will be granted under the Plan unless it is approved by the
shareholders.
YOUR BOARD OF DIRECTORS RECOMMENDS THAT YOU
VOTE FOR THE APPROVAL OF THE STOCK INCENTIVE PLAN
13
<PAGE> 17
PROPOSAL NO. 2: APPROVAL OF THE
EMPLOYEE STOCK PURCHASE PLAN OF 1999
- - --------------------------------------------------------------------------------
- - --------------------------------------------------------------------------------
PURPOSE OF THE PLAN
The purpose of the Employee Stock Purchase Plan of 1999 (the "Purchase Plan") is
to encourage employees of Old Kent and its subsidiaries to promote the best
interests of Old Kent and align the interests of employees with those of Old
Kent's shareholders by permitting employees to purchase shares of Old Kent
common stock at a price less than the market price. The purchase of stock
through the Purchase Plan would qualify as the exercise of an option granted
under an employee stock purchase plan, as defined in Section 423 of the Internal
Revenue Code.
Subject to certain antidilution adjustments, 2,000,000 shares of Old Kent common
stock would be authorized for purchase under the Purchase Plan.
The following summarizes the principal features of the Purchase Plan. This
summary is qualified in its entirety by reference to the terms of the Purchase
Plan set forth in Appendix B to this proxy statement.
All active employees of Old Kent or its subsidiaries working 17 1/2 hours or
more per week would be eligible to participate in the Purchase Plan. Presently,
corporate executive officers (23 persons as of December 31, 1998) and active
employees (approximately 7,692 persons) could participate in the Purchase Plan.
PURCHASE OF OLD KENT STOCK
A participating employee will authorize Old Kent to make regular payroll
deductions from the employee's compensation to be used for the purchase of stock
pursuant to the terms of the Purchase Plan and would also be enrolled in Old
Kent's Dividend Reinvestment Plan. Once payroll deductions begin, all such
deductions would be credited to the employee's individual purchase account under
the Purchase Plan.
During each option period (each calendar month), the participant would be
granted an option as of the next business day following the "stock purchase
date" (as defined by the Purchase Plan) to purchase as many shares of stock as
may be purchased with the funds in the participant's individual purchase
account. This option would be automatically exercised unless the participant
terminates participation in the Purchase Plan. Any option that is not exercised
would automatically expire. Options would be non-transferable except by
operation of law.
All funds accumulated in the participant's purchase account during the period
before a stock purchase date would be transferred to the administrator of the
Dividend Reinvestment Plan, who would then purchase shares of Old Kent stock on
behalf of the participant in accordance with the terms of the Dividend
Reinvestment Plan. The purchase price of each share is 85% of the market value
of the Old Kent stock. After the transfer of any amounts held in a purchase
account to the administrator of the Dividend Reinvestment Plan, the terms and
conditions of the Dividend Reinvestment Plan would apply.
The Compensation Committee will determine the maximum level of individual
participation annually, in its discretion. Initially, no participant may invest
more than $1,000 per year under the Purchase Plan.
In no event may a participant receive any option that would permit the
participant's rights to purchase Old Kent stock under the Purchase Plan to
accrue at a rate that exceeds $25,000 of fair market value of the stock in any
one calendar year, and in no event could such option rights accrue at a rate to
exceed that permitted by the Internal Revenue Code.
14
<PAGE> 18
In addition, no participant would be granted option rights under the Purchase
Plan if such participant - immediately after receiving the grant of such option
rights - would own stock possessing 5% or more of the total combined voting
power or value of all classes of stock of Old Kent or any of its subsidiaries.
A participant could elect at any time to terminate his or her participation in
the Purchase Plan and permanently withdraw the balance accumulated in his or her
purchase account upon proper notice to Old Kent. In the event of a participant's
retirement, death or termination of employment, the balance in the participant's
purchase account would be paid to the participant or, in the event of the
participant's death, the participant's estate.
TAX TREATMENT UNDER THE PLAN
A participating employee is not taxed at the time of the grant of the option or
the purchase of stock, nor is Old Kent entitled to a deduction in connection
with either of those events. However, if the employee transfers his or his stock
prior to the two-year holding period, the employee would be taxed on the
difference between the fair market value of the stock on the day that the option
was granted and the option price.
ADMINISTRATION OF THE PLAN
The Purchase Plan would be administered by the Compensation Committee of the
board of directors or such other committee as the board may designate. The
committee or the board could amend the Purchase Plan at any time and could also
terminate the Purchase Plan at any time.
The benefits payable under the Purchase Plan are presently not determinable and
the benefits that would have been payable had the Purchase Plan been in effect
during the most recent fiscal year are similarly not determinable. Because
officers and employees of Old Kent and its subsidiaries may elect to participate
in the Purchase Plan, they may be considered to have an interest in the Purchase
Plan. The maximum annual benefit that any participant could realize under the
Purchase Plan under the $1,000 initial investment limit set by the Compensation
Committee would be $177.
If approved by shareholders, the Purchase Plan would become effective on April
19, 1999.
YOUR BOARD OF DIRECTORS RECOMMENDS THAT YOU
VOTE FOR THE APPROVAL OF THE EMPLOYEE STOCK PURCHASE PLAN
15
<PAGE> 19
OLD KENT'S STOCK PERFORMANCE
- - --------------------------------------------------------------------------------
- - --------------------------------------------------------------------------------
As shown in the following two graphs, the short and long run total return on an
investment in Old Kent stock compares favorably with the short and long run
total returns on both a broad-based stock market index and an index comprised of
bank holding companies. The total return, as shown on both of these graphs, is
measured using both stock price appreciation and the effect of continuous
reinvestment of dividends.
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 financial services industry. The KBW 50 Index is
composed of 50 money center and regional bank holding companies, including 22 of
the 24 bank holding companies in the peer group used by Old Kent for
compensation purposes (see the Compensation Committee Report on Executive
Compensation below).
The first graph below compares the December 31, 1998 value of a $100 investment
in Old Kent stock, the KBW 50, and the S&P 500 made one, three, five, and ten
years prior to December 31, 1998. In each of the four time periods, the total
return on an investment in Old Kent stock surpassed that of the KBW 50. In three
of the four time periods, it exceeded the S&P 500, and for the one year time
period, it was essentially the same as the S&P 500. The second graph compares
the cumulative total shareholder return on an investment in Old Kent stock to
total return of the S&P 500 and KBW 50 Indices over a five year period.
The dollar values plotted in the bar graph above are as follows:
ONE, THREE, FIVE AND TEN YEAR RETURNS
<TABLE>
<CAPTION>
OLD KENT KBW 50 S&P 500 INDEX
-------- ------ -------------
<S> <C> <C> <C>
1 Year 126.00 108.00 129.00
3 Years 282.00 224.00 211.00
5 Years 438.00 340.00 294.00
10 Years 1017.00 619.00 580.00
</TABLE>
16
<PAGE> 20
FIVE YEAR CUMULATIVE RETURN
LINE GRAPH
The dollar values plotted in the above graph are as follows:
<TABLE>
<CAPTION>
OK KBW 50 S&P 500
- - -----------------------------------
<S> <C> <C> <C>
1993 $100.0 $100.0 $100.0
1994 104.9 94.9 101.3
1995 155.2 152.0 139.4
1996 195.2 215.0 171.4
1997 348.4 314.3 228.6
1998 437.6 340.3 293.9
</TABLE>
17
<PAGE> 21
EXECUTIVE COMPENSATION
- - --------------------------------------------------------------------------------
- - --------------------------------------------------------------------------------
INTRODUCTION
Old Kent's compensation and benefit programs for its executive officers include
the five 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. Old Kent may pay a cash bonus 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 nonqualified stock options. It may
also award deferred stock 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: (1) reward
executives for achieving longer-term strategic goals, (2) retain executives,
(3) protect against too much emphasis on short-term results, (4) provide a
means for capital accumulation, and (5) promote stock ownership by executives.
- - - 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.
18
<PAGE> 22
SUMMARY OF EXECUTIVE COMPENSATION
The following table shows selected information regarding the compensation of
each of Old Kent's five most highly compensated executive officers (including
Mr. Wagner as Chief Executive Officer) during 1998 for services rendered during
1996 - 1998.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
ANNUAL LONG-TERM
COMPENSATION COMPENSATION AWARDS
-------------------- ----------------------- ALL
RESTRICTED SECURITIES OTHER
NAME AND STOCK UNDERLYING COMPEN-
PRINCIPAL POSITION (1) YEAR SALARY(2) BONUS(2) AWARDS(3) OPTIONS(4) SATION(5)
- - ----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
David J. Wagner 1998 $700,000 $806,250 -- 132,300 $46,368
Chairman of the Board, 1997 650,000 783,000 $313,950 66,150 38,590
President and CEO 1996 600,000 575,700 277,095 21,934 27,169
of Old Kent
Robert H. Warrington 1998 325,000 316,875 146,475 66,150 19,619
Vice Chairman and CFO 1997 300,000 291,750 128,822 33,075 17,327
of Old Kent and Chairman 1996 247,000 201,360 101,400 7,522 12,745
and CEO of Old Kent
Mortgage Company
Kevin T. Kabat 1998 325,000 285,188 -- 66,150 17,909
Vice Chairman of Old 1997 265,000 223,050 284,375 33,075 13,312
Kent and President of 1996 200,000 129,340 82,095 6,098 9,279
Old Kent Bank
James A. Hubbard 1998 275,000 233,269 -- 55,125 5,837
Senior Executive Vice 1997(6) 184,615 116,000 510,449 10,781 5,423
President of Old Kent 1996 -- -- -- -- --
Kenneth C. Krei 1998 235,000 160,000 -- 44,100 10,300
Executive Vice President 1997 220,000 82,688 -- 4,376 8,091
of Old Kent Bank 1996(6) 42,740 -- 250,688 -- 101
</TABLE>
(1) Capacities indicated are those in which a majority of compensation was paid
in 1998.
(2) The "Annual Compensation" column includes compensation deferred under the
Old Kent Thrift Plan, the Old Kent Executive Thrift Plan, and the Old Kent
Deferred Compensation Plan.
(3) Awards under the Deferred Stock Compensation Plan vest at the date of grant
but participants have no right to the shares until five 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 awarded and
the earnings are credited as if reinvested in shares. Restricted stock
awards vest after a number of years - but not less than four - 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
19
<PAGE> 23
or credited to the account of each named individual under these plans and
the aggregate value of those shares as of December 31, 1998, are as follows:
<TABLE>
<CAPTION>
DEFERRED STOCK RESTRICTED STOCK AGGREGATE VALUE
- - ---------------------------------------------------------------------
<S> <C> <C> <C>
Mr. Wagner 59,857 -- $2,754,685
Mr. Warrington -- 33,696 1,566,864
Mr. Kabat -- 30,938 1,438,617
Mr. Hubbard -- 13,526 628,959
Mr. Krei -- 11,025 512,663
</TABLE>
(4) The number of shares shown is adjusted to reflect annual stock dividends and
a stock split.
(5) 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:
<TABLE>
<CAPTION>
EXECUTIVE
THRIFT PLAN THRIFT PLAN LIFE INSURANCE
- - ------------------------------------------------------------
<S> <C> <C> <C>
Mr. Wagner $1,875 $43,377 $1,116
Mr. Warrington 1,875 16,628 1,116
Mr. Kabat 1,875 14,918 1,116
Mr. Hubbard 4,800 -- 1,037
Mr. Krei 4,800 4,610 890
</TABLE>
(6) Based on partial-year employment.
EQUITY-BASED COMPENSATION PROGRAM
It is Old Kent's practice to award stock options annually to key policy-making
members of management. Stock options have been an important component of Old
Kent's executive compensation program for many years. Stock options are believed
to help align the interests and risks of senior management with the interests
and risks of shareholders by promoting stock ownership by executive officers and
rewarding them for appreciation in the price of Old Kent's stock. Stock options
that were granted, exercised, or outstanding during 1998 were granted under
various stock option plans, all of which have been approved by Old Kent's
shareholders.
Stock options entitle an executive to buy shares of Old Kent common stock during
a specified time period at a specified price. Subject to restrictions imposed by
the plans, the Compensation Committee determines who will be granted options,
how many shares will be the subject of options, the form of consideration that
may be paid upon the exercise of an option, and the vesting terms of options.
Although Old Kent's stock plans authorize stock appreciation rights, no stock
appreciation rights were outstanding at the date of this proxy statement.
20
<PAGE> 24
INDIVIDUAL OPTION GRANTS IN 1998. The following table provides information on
options to purchase Old Kent stock granted in 1998 to the specified officers:
OPTION GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
% OF TOTAL
NUMBER OF OPTIONS GRANT
SECURITIES GRANTED TO EXERCISE PRICE DATE
UNDERLYING OPTIONS EMPLOYEES IN ($ PER SHARE) EXPIRATION PRESENT
GRANTED(1) 1998 (1) DATE VALUE(2)
- - ----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Mr. Wagner 132,300 13.58% $36.04 06/15/08 $1,295,217
Mr. Warrington 66,150 6.79 36.04 06/15/08 647,609
Mr. Kabat 66,150 6.79 36.04 06/15/08 647,609
Mr. Hubbard 55,125 5.66 36.04 06/15/08 539,674
Mr. Krei 44,100 4.53 36.04 06/15/08 431,739
</TABLE>
(1) The per share exercise price of each option is equal to the market value of
Old Kent stock on the date each option is granted. All outstanding options
were granted for a term of ten years. Options terminate, subject to certain
limited exercise provisions, in the event of death, retirement, or other
termination of employment. Options granted to each individual in 1998 vest
in three equal installments, on the date of grant and the first and second
anniversary of the date of grant. All options permit the option price to be
paid by delivery of cash or other shares of Old Kent 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 the 5% stock dividend paid in July 1998.
(2) Based on the Black-Scholes option pricing model expressed as a ratio 9.79
multiplied by 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:
- A stock price volatility of 22.9%, calculated using monthly stock prices
for the three years prior to the grant date;
- A risk free rate of return of 5.42%;
- An expected average dividend yield of 2.0% (the dividend yield at the
date of the grant); and
- An expected average option holding period of six years, which period
approximates Old Kent's historical experience.
No adjustments were made for the non-transferability of the options or to
reflect any risk of forfeiture prior to vesting. Disclosure of grant date
present value is presented pursuant to Securities and Exchange Commission
regulations. 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.
21
<PAGE> 25
OPTION EXERCISES IN 1998. The following table shows year end option values for
the specified executive officers. No options were exercised by these individuals
in 1998.
AGGREGATE OPTION EXERCISES AND YEAR END OPTION VALUES
<TABLE>
<CAPTION>
NUMBER OF SHARES
UNDERLYING VALUE OF UNEXERCISED,
UNEXERCISED OPTIONS IN-THE-MONEY OPTIONS
AT YEAR END(1) AT YEAR END
SHARES ------------------------- -------------------------
ACQUIRED VALUE UN- UN-
ON EXERCISE(1) REALIZED EXERCISABLE EXERCISABLE EXERCISABLE EXERCISABLE
- - --------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Mr. Wagner -- -- 290,747 110,250 $8,038,413 $1,377,309
Mr. Warrington -- -- 76,528 55,125 1,737,953 688,655
Mr. Kabat -- -- 81,154 55,125 1,963,636 688,655
Mr. Hubbard -- -- 29,156 36,750 489,821 384,405
Mr. Krei -- -- 19,076 29,400 244,376 307,524
</TABLE>
(1) The number of shares shown is the gross number of shares covered by options,
adjusted to reflect the July 1998 5% stock dividend. 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.
RETIREMENT PLANS
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. A participant in the Executive Retirement Income
Plan will receive supplemental retirement benefits equal to the difference
between the benefits to which he or she is entitled under the Old Kent
Retirement Income Plan and the benefits to which he or she would have been
entitled under that plan formula 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.
22
<PAGE> 26
The following table illustrates the combined benefit levels of the Old Kent
Retirement Income Plan and the Old Kent Executive Retirement Income Plan for
executive officers if they retire at age 65 at the annual levels of average
remuneration and years of service indicated:
<TABLE>
<CAPTION>
YEARS OF SERVICE
AVERAGE REMUNERATION, -------------------------------------------
AGE 65 10 15 20 25 OR MORE
--------------------------------------------------------------------------
<S> <C> <C> <C> <C>
$ 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
1,500,000 360,000 540,000 720,000 900,000
1,800,000 432,000 648,000 864,000 1,080,000
</TABLE>
The benefits shown in the table above will be reduced by 50% of primary social
security payments. Benefits are based on the executive's years of service and
his or her five highest consecutive years of compensation over the last ten
years of service, subject to certain limits. 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, 1998, Mr. Wagner had 22
years of service; Mr. Warrington, 11; Mr. Kabat, 17; Mr. Hubbard, 2; and Mr.
Krei, 2.
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 six months before a "Change in Control" of Old Kent, Old Kent
terminates the executive officer for reasons other than "cause," or the
executive officer terminates the employment for good reason or because the
successor company breaches the severance agreement.
A "Change in Control" of Old Kent is deemed to have occurred if (1) any person
or entity acquires beneficial ownership of 25% or more of the combined voting
securities of Old Kent; (2) 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; (3) 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; (4)
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 (5)
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 severance agreement at least six months prior to its expiration. The
agreements (with one exception) provide severance benefits of a lump-sum payment
equal to three years' salary and bonuses; health, life, and disability benefits
for the 3-year period; augmented executive retirement benefits; accelerated
payment of all deferred compensation benefits; and, if applicable, an amount
that will offset the excise tax consequences of
23
<PAGE> 27
any excess parachute amounts under Section 280G of the Internal Revenue Code.
For Mr. Krei, the severance benefits are the same except limited to two years'
salary and bonuses and extension of the other benefits for only a two-year
period.
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. For
comparison purposes, the companies with the highest and lowest returns on equity
for the year are eliminated. Members of the peer group may also be eliminated
if, as a result of an acquisition or other extraordinary transaction, they are
no longer representative. The peer group selected for 1998 initially included 26
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. Two
members of the original peer group were merged into other companies during the
year. Of the 24 companies remaining in the peer group at year-end, 22 are
included among the companies comprising the KBW 50 Index presented in the stock
performance table above. For the year ended December 31, 1998, Old Kent's return
on equity, compared to the companies included in its peer group, was in the
second quartile when computed on the basis of reported earnings ("GAAP" basis).
When computed on the basis of operating income, which eliminates merger-related
charges and the effects of other material nonrecurring transactions ("operating
basis"), Old Kent's return on equity was in the first quartile of the peer
group.
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 perform more
24
<PAGE> 28
effectively, and focus executives' attention on specific areas of major
importance. Annual cash incentive bonuses may be paid based on performance
against specific corporate, business unit and individual criteria. Corporate
performance is measured entirely by return on equity. For 1998, as discussed
above, return on equity was computed on an operating basis, except under the
Executive Incentive Bonus Plan (which determined the bonus payable to the Chief
Executive Officer in 1998). 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 1998 were equal to 75% of base compensation for the Chief Executive
Officer and 45 - 65% 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 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. No executive officer may be paid a bonus under the short term
incentive plan that is greater than 150% of his or her target bonus.
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.
Normal long-term performance awards in 1998 consisted entirely of nonqualified
stock options that vest over time. Old Kent maintains a capacity to award
restricted stock and deferred stock compensation. Its present practice is to use
restricted stock and deferred stock awards only for special purposes, such as
hiring grants and special awards. However, annual long term performance awards
have in the past included, and may in the future include, restricted stock and
deferred stock compensation awards. The Compensation Committee reviews 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, 1998 was a year of management transition. In 1998, two of the
senior executive officers previously named in the Summary Compensation Table
retired, and the board of directors appointed their successors. Stock option
awards to the senior executive officers promoted in 1998 were determined by the
Compensation Committee, with the advice of its consulting firm, based on a
judgmental analysis of peer group practice, recognition of
25
<PAGE> 29
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 and vest in three equal annual installments.
Mr. Wagner's base salary for 1998 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 paid to Mr. Wagner for 1998 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, computed on a GAAP basis, 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 1998 under the
Executive Incentive Bonus Plan was 125% of his target bonus, reflecting the fact
that Old Kent had a return on equity computed on a GAAP basis that was in the
second quartile of its peer group in 1998. The Compensation Committee also
awarded Mr. Wagner a discretionary bonus of $150,000, recognizing that the
corporation's earnings per share, disregarding the effect of large nonrecurring
transactions, exceeded the corporation's profit plan goal; that earnings per
share for 1998, disregarding the effect of large nonrecurring transactions, were
up 23% compared to 1997; that total return to shareholders for 1998 was 26%,
compared to an average of 10% for Old Kent's peer group and an average of 8% for
companies comprising the KBW 50 Index; and that the company had achieved its
40th consecutive year of increases in earnings per share.
Long-term incentive compensation awarded to Mr. Wagner in 1998 consisted
entirely of a grant of stock options. The stock options granted permit him to
purchase 126,000 shares of Old Kent common stock (before adjustment for the
stock dividend paid in 1998) 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.
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).
During 1998, all recommendations of the Compensation Committee were unanimously
approved by the board of directors without modification.
Respectfully submitted,
Michael J. Jandernoa, Chairman
James P. Hackett
Earl D. Holton
John P. Keller
26
<PAGE> 30
RELATED MATTERS
- - --------------------------------------------------------------------------------
- - --------------------------------------------------------------------------------
PROPOSALS OF SHAREHOLDERS
Under Old Kent's Bylaws, certain procedures are provided that a shareholder must
follow to introduce an item of business at a meeting of shareholders. These
procedures provide that an item of business to be introduced at a meeting of
shareholders must be submitted in writing to Old Kent's Secretary and, in the
case of an annual meeting, no later than 120 days prior to the anniversary date
of the prior year's proxy statement being released to shareholders if the annual
meeting being held is within 30 days of the anniversary date of the previous
year's meeting, or if not within such 30 days, not more than seven days after
the earlier of the date of the notice of the meeting or public disclosure of the
date of the meeting.
For a special meeting of shareholders, the item of business must be received by
the seventh day following the date of notice of the meeting or public disclosure
of the date of meeting.
Notice of a proposed item of business must include: (1) a brief description of
the matter the shareholder desires to present for shareholder action; (2) the
name and record address of the shareholder proposing the matter for shareholder
action; (3) the class and number of shares of stock of Old Kent that are
beneficially owned by the shareholder; (4) any material interest of the
shareholder in the matter proposed for shareholder action; and (5) the exact
text of any resolution the shareholder proposes to present for action at the
meeting.
Under the rules of the Securities and Exchange Commission, shareholder proposals
intended to be presented at Old Kent's 2000 Annual Meeting of Shareholders must
be received by us (attention: Corporate Secretary) at our principal executive
offices by November 2, 1999 for inclusion in the proxy statement and form of
proxy relating to that meeting.
1998 ANNUAL REPORT
We have attached our 1998 Annual Report. Under the rules of the Securities and
Exchange Commission, it is not technically part of this proxy statement.
SOLICITATION OF PROXIES
We will initially seek proxies by mail. Old Kent 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.
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, 1998 and February 26, 1999. 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.
27
<PAGE> 31
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 Old Kent (or
written representations from certain reporting persons that no Forms 5 were
required for those persons), we believe that, from January 1 through December
31, 1998, our directors and officers complied with all applicable filing
requirements.
INDEPENDENT PUBLIC ACCOUNTANTS
The board of directors has selected Arthur Andersen LLP as Old Kent's principal
accountant for 1999. 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.
28
<PAGE> 32
APPENDIX A
OLD KENT FINANCIAL CORPORATION
STOCK INCENTIVE PLAN OF 1999
SECTION 1
ESTABLISHMENT OF PLAN; PURPOSE OF PLAN
1.1 Establishment of Plan. The Company hereby establishes the STOCK
INCENTIVE PLAN OF 1999 (the "Plan") for its corporate and Subsidiary officers
and employees. The Plan permits the grant and award of Stock Options, Stock
Appreciation Rights, Tax Benefit Rights and Restricted Stock.
1.2 Purpose of Plan. The purpose of the Plan is to provide officers and
employees of the Company and its Subsidiaries with an increased incentive to
contribute to the long-term performance and growth of the Company and its
Subsidiaries, to join the interests of officers and employees with the interests
of the Company's shareholders through the opportunity for stock ownership and to
attract and retain officers and employees. The Plan is further intended to
provide flexibility to the Company in structuring long-term incentive
compensation to best promote the foregoing objectives. Within that context, the
Plan is intended to provide performance-based compensation under Section 162(m)
of the Code and shall be interpreted, administered and amended if necessary to
achieve that purpose.
SECTION 2
DEFINITIONS
The following words have the following meanings unless a different meaning
is plainly required by the context:
2.1 "Act" means the Securities Exchange Act of 1934, as amended.
2.2 "Board" means the Board of Directors of the Company.
2.3 "Change in Control," unless otherwise defined in an Incentive
Award agreement, means an occurrence of a nature that would be required to
be reported in response to Item 6(e) of Schedule 14A of Regulation 14A
issued under the Act. Without limiting the inclusiveness of the definition
in the preceding sentence, a Change in Control of the Company shall be
deemed to have occurred as of the first day that any one or more of the
following conditions is satisfied: (a) any Person is or becomes the
"beneficial owner" (as defined in Rule 13d-3 under the Act), directly or
indirectly, of securities of the Company representing 25% or more of the
combined voting power of the Company's then outstanding securities; (b) the
failure at any time of the Continuing Directors to constitute at least a
majority of the Board; or (c) any of the following occur: (i) any merger or
consolidation of the Company, other than a merger or consolidation in which
the voting securities of the Company immediately prior to the merger or
consolidation continue to represent (either by remaining outstanding or
being converted into securities of the surviving entity) 60% or more of the
combined voting power of the Company or surviving entity immediately after
the merger or consolidation with another entity; (ii) any sale, exchange,
lease, mortgage, pledge, transfer or other disposition (in a single
transaction or a series of related transactions) of assets or earning power
aggregating more than 50% of the assets or earning power of the Company on
a consolidated basis; (iii) any complete
A-1
<PAGE> 33
liquidation or dissolution of the Company; (iv) any reorganization, reverse
stock split or recapitalization of the Company that would result in a
Change in Control as otherwise defined in this Plan; or (v) any transaction
or series of related transactions having, directly or indirectly, the same
effect as any of the foregoing.
2.4 "Code" means the Internal Revenue Code of 1986, as amended.
2.5 "Committee" means the Compensation Committee of the Board or such
other committee as the Board shall designate to administer the Plan. The
Committee shall consist of at least two members of the Board and all of its
members shall be "non-employee directors" as defined in Rule 16b-3 issued
under the Act and "outside directors" as defined in the regulations under
Section 162(m) of the Code.
2.6 "Common Stock" means the Common Stock, par value $1 per share, of
the Company.
2.7 "Company" means Old Kent Financial Corporation, a Michigan
corporation, and its successors and assigns.
2.8 "Consensual Severance" means the voluntary termination of all
employment by the Participant with the Company or any of its Subsidiaries
that the Committee determines to be in the best interests of the Company.
2.9 "Continuing Directors" means the individuals who were either (a)
first elected or appointed as a director before the effective date of the
Plan, or (b) subsequently appointed as a director, if appointed or
nominated by at least a majority of the Continuing Directors in office at
the time of the nomination or appointment, but specifically excluding any
individual whose initial assumption of office occurs as a result of either
an actual or threatened "election contest" (as the term is used in Rule
14a-11 of Regulation 14A issued under the Act) or other actual or
threatened solicitation of proxies or consents by or on behalf of a Person
other than the Board.
2.10 "Early Retirement" means the voluntary termination of all
employment by the Participant after the Participant has attained 55 years
of age and completed 5 years of service with the Company or any of its
Subsidiaries or as otherwise may be set forth in the Incentive Award
agreement or other grant document with respect to a Participant and a
particular Incentive Award.
2.11 "Employee Benefit Plan" means any plan or program established by
the Company or a Subsidiary for the compensation or benefit of employees of
the Company or any of its Subsidiaries.
2.12 "Incentive Award" means the award or grant of a Stock Option,
Stock Appreciation Right, Tax Benefit Right or Restricted Stock to a
Participant pursuant to the Plan.
2.13 "Market Value" shall equal the mean of the highest and lowest
sale prices of shares of Common Stock reported on the New York Stock
Exchange (or any successor exchange or system that is the primary stock
exchange or system for trading of Common Stock) on the date of grant or
exercise, or if the New York Stock Exchange (or any such successor) is
closed on that date, the last preceding date on which the New York Stock
Exchange (or any such successor) was open for trading and on which shares
of Common Stock were traded.
2.14 "Normal Retirement" means the voluntary termination of all
employment by the Participant after the Participant has attained 65 years
of age or as otherwise may be set forth in
A-2
<PAGE> 34
the Incentive Award agreement or other grant document with respect to a
Participant and a particular Incentive Award.
2.15 "Participant" means a corporate officer or any employee of the
Company or its Subsidiaries who is granted an Incentive Award under the
Plan.
2.16 "Person" has the same meaning as set forth in Sections 13(d) and
14(d)(2) of the Act.
2.17 "Plan Year" means the 12-month period beginning on January 1 of
each year, except that the Plan Year for purposes of the year in which the
Plan becomes effective shall be that period between the effective date of
the Plan and December 31 of such year.
2.18 "Prior Plans" mean the Company's (a) Restricted Stock Plan of
1987; (b) Stock Option Incentive Plan of 1992; and (c) Executive Stock
Incentive Plan of 1997.
2.19 "Restricted Period" means the period of time during which
Restricted Stock awarded under the Plan is subject to restrictions. The
Restricted Period may differ among Participants and may have different
expiration dates with respect to shares of Common Stock covered by the same
Incentive Award.
2.20 "Restricted Stock" means Common Stock awarded to a Participant
pursuant to Section 8 of the Plan.
2.21 "Stock Appreciation Right" means any right granted to a
Participant pursuant to Section 6 of the Plan.
2.22 "Stock Option" means the right to purchase Common Stock at a
stated price for a specified period of time. For purposes of the Plan, a
Stock Option may be either an incentive stock option within the meaning of
Section 422(b) of the Code or a non-qualified stock option.
2.23 "Subsidiary" means any corporation or other entity of which 50%
or more of the outstanding voting stock or voting ownership interest is
directly or indirectly owned or controlled by the Company or by one or more
Subsidiaries of the Company.
2.24 "Tax Benefit Right" means any right granted to a Participant
pursuant to Section 7 of the Plan.
SECTION 3
ADMINISTRATION
3.1 Power and Authority. The Committee shall administer the Plan. The
Committee may delegate record keeping, calculation, payment and other
ministerial administrative functions to individuals designated by the Committee,
who may be officers or employees of the Company or its Subsidiaries. Except as
limited in this Plan or as may be necessary to ensure that this Plan provides
performance-based compensation under Section 162(m) of the Code, the Committee
shall have all of the express and implied powers and duties set forth in the
Bylaws of the Company and in this Plan, shall have full power and authority to
interpret the provisions of the Plan and Incentive Awards granted under the Plan
and shall have full power and authority to supervise the administration of the
Plan and Incentive Awards granted under the Plan and to make all other
determinations considered necessary or advisable for the administration of the
Plan. All determinations, interpretations and
A-3
<PAGE> 35
selections made by the Committee regarding the Plan shall be final and
conclusive. The Committee shall hold its meetings at such times and places as it
deems advisable. Action may be taken by a written instrument signed by a
majority of the members of the Committee and any action so taken shall be fully
as effective as if it had been taken at a meeting duly called and held. The
Committee shall make such rules and regulations for the conduct of its business
as it deems advisable.
3.2 Grants or Awards to Participants. In accordance with and subject to
the provisions of the Plan, the Committee shall have the authority to determine
all provisions of Incentive Awards as the Committee may deem necessary or
desirable and as are consistent with the terms of the Plan, including, without
limitation, the following: (a) the persons who shall be selected as
Participants; (b) the nature and, subject to the limitation set forth in Section
4.2 of the Plan, extent of the Incentive Awards to be made to each Participant
(including the number of shares of Common Stock to be subject to each Incentive
Award, any exercise price, the manner in which an Incentive Award will vest or
become exercisable and the form of payment for the Incentive Award); (c) the
time or times when Incentive Awards will be granted; (d) the duration of each
Incentive Award; and (e) the restrictions and other conditions to which payment
or vesting of Incentive Awards may be subject.
3.3 Amendments or Modifications of Awards. The Committee shall have the
authority to amend or modify the terms of any outstanding Incentive Award in any
manner, provided that the amended or modified terms are not prohibited by the
Plan as then in effect, including, without limitation, the authority to: (a)
modify the number of shares or other terms and conditions of an Incentive Award;
(b) extend the term of an Incentive Award; (c) accelerate the exercisability or
vesting or otherwise terminate any restrictions relating to an Incentive Award;
(d) accept the surrender of any outstanding Incentive Award; and (e) to the
extent not previously exercised or vested, authorize the grant of new Incentive
Awards in substitution for surrendered Incentive Awards; provided, that
Incentive Awards issued under the Plan may not be repriced, replaced, regranted
through cancellation or modified if the effect of such repricing, replacement,
regrant or modification would be to reduce the exercise price of then
outstanding Incentive Awards to the same Participants.
3.4 Indemnification of Committee Members. Neither any member or former
member of the Committee nor any individual to whom authority is or has been
delegated shall be personally responsible or liable for any act or omission in
connection with the performance of powers or duties or the exercise of
discretion or judgment in the administration and implementation of the Plan.
Each person who is or shall have been a member of the Committee shall be
indemnified and held harmless by the Company from and against any cost,
liability or expense imposed or incurred in connection with such person's or the
Committee's taking or failing to take any action under the Plan. Each such
person shall be justified in relying on information furnished in connection with
the Plan's administration by any appropriate person or persons.
SECTION 4
SHARES SUBJECT TO THE PLAN
4.1 Number of Shares. Subject to adjustment as provided in Section 4.3 of
the Plan, the total number of shares of Common Stock available for Incentive
Awards under the Plan shall be: (a) for the initial Plan Year, 5,000,000 shares
of Common Stock consisting of 2,000,000 shares of Common Stock available for
awards under the Prior Plans and 3,000,000 newly authorized shares; plus (b) in
each subsequent Plan Year, an additional number of shares of Common Stock not to
exceed two percent of the number of shares of Common Stock outstanding as
reported in the Company's Annual
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Report on Form 10-K for the fiscal year ending immediately before such Plan
Year; plus (c) there shall be carried forward and available for Incentive Awards
under the Plan all of the following: (i) shares subject to Incentive Awards that
are canceled, surrendered, modified, exchanged for substitute Incentive Awards
or expire or terminate prior to the exercise or vesting of the Incentive Award
in full; (ii) with respect to any succeeding Plan Year, any unused portion of
the amounts set forth in Subsections (a) and (b) above; and (iii) shares that
are surrendered to the Company in connection with the exercise or vesting of an
Incentive Award, whether previously owned or otherwise subject to such Incentive
Award. Such shares shall be authorized and may be either unissued or treasury
shares or shares repurchased by the Company, including shares purchased on the
open market.
4.2 Limitation Upon Incentive Awards. No Participant shall be granted,
during any Plan Year, Incentive Awards with respect to more than one quarter of
the total number of shares of Common Stock available for Incentive Awards for
that Plan Year under the Plan set forth in Section 4.1 of the Plan, subject to
adjustment as provided in Section 4.3 of the Plan. The purpose of this Section
4.2 is to ensure that the Plan provides performance-based compensation under
Section 162(m) of the Code and this Section 4.2 shall be interpreted,
administered and amended if necessary to achieve that purpose.
4.3 Adjustments.
(a) Stock Dividends and Distributions. If the number of shares of
Common Stock outstanding changes by reason of a stock dividend, stock
split, recapitalization or other general distribution of Common Stock or
other securities to holders of Common Stock, the number and kind of
securities subject to Incentive Awards and reserved for issuance under the
Plan, together with applicable exercise prices, as well as the number of
shares available for issuance under the Plan, shall be adjusted
appropriately. No fractional shares shall be issued pursuant to the Plan
and any fractional shares resulting from such adjustments shall be
eliminated from the respective Incentive Awards.
(b) Other Actions Affecting Common Stock. If there occurs, other than
as described in the preceding subsection, any merger, business combination,
recapitalization, reclassification, subdivision or combination approved by
the Board that would result in the Persons who were shareholders of the
Company immediately prior to the effective time of any such transaction
owning or holding, in lieu of or in addition to shares of Common Stock,
other securities, money and/or property (or the right to receive other
securities, money and/or property) immediately after the effective time of
such transaction, then the outstanding Incentive Awards and reserves for
Incentive Awards under this Plan shall be adjusted in such manner and at
such time as shall be equitable under the circumstances. It is intended
that in the event of any such transaction, Incentive Awards under this Plan
shall entitle the holder of each Incentive Award to receive (upon exercise
in the case of Stock Options and Stock Appreciation Rights), in lieu of or
in addition to shares of Common Stock, any other securities, money and/or
property receivable upon consummation of any such transaction by holders of
Common Stock with respect to each share of Common Stock outstanding
immediately prior to the effective time of such transaction; upon any such
adjustment, holders of Incentive Awards under this Plan shall have only the
right to receive in lieu of or in addition to shares of Common Stock such
other securities, money and/or other property as provided by the
adjustment. If the agreement, resolution or other document approved by the
Board to effect any such transaction provides for the adjustment of
Incentive Awards under the Plan in connection with such transaction, then
the adjustment provisions contained in such agreement, resolution or other
document shall be final and conclusive.
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SECTION 5
STOCK OPTIONS
5.1 Grant. A Participant may be granted one or more Stock Options under
the Plan. The Committee, in its discretion, may provide in the initial grant of
a Stock Option for the subsequent automatic grant of additional Stock Options
for the number of shares that are subject to the initial Stock Option and
surrendered to the Company in connection with the exercise of the initial or any
subsequently granted Stock Option. Stock Options shall be subject to such terms
and conditions, consistent with the other provisions of the Plan, as may be
determined by the Committee in its sole discretion. In addition, the Committee
may vary, among Participants and among Stock Options granted to the same
Participant, any and all of the terms and conditions of the Stock Options
granted under the Plan. Subject to the limitation imposed by Section 4.2 of the
Plan, the Committee shall have complete discretion in determining the number of
Stock Options granted to each Participant. The Committee may designate whether
or not a Stock Option is to be considered an incentive stock option as defined
in Section 422(b) of the Code; provided, that the number of shares of Common
Stock that may be designated as subject to incentive stock options for any given
Participant shall be limited to that number of shares that become exercisable
for the first time by the Participant during any Plan Year (under all plans of
the Company and its Subsidiaries) and have an aggregate Market Value less than
or equal to $100,000 (or such other amount as may be set forth in the Code) and
all shares subject to an Incentive Award that have a Market Value in excess of
such aggregate amount shall automatically be subject to Stock Options that are
not incentive stock options.
5.2 Stock Option Agreements. Stock Options shall be evidenced by stock
option agreements and/or certificates of award containing the terms and
conditions applicable to such Stock Options. To the extent not covered by the
stock option agreement, the terms and conditions of this Section 5 shall govern.
5.3 Stock Option Price. Except as set forth in Section 5.5, the per share
Stock Option price shall be determined by the Committee, but shall be a price
that is equal to or higher than 100% of the Market Value of the Company's Common
Stock on the date of grant.
5.4 Medium and Time of Payment. The exercise price for each share
purchased pursuant to a Stock Option granted under the Plan shall be payable in
cash or, if the Committee consents or provides in the applicable stock option
agreement, in shares of Common Stock (including Common Stock to be received upon
a simultaneous exercise of that or any other Stock Option) or other
consideration substantially equivalent to cash. The time and terms of payment
may be amended with the consent of a Participant before or after exercise of a
Stock Option. The Committee may from time to time authorize payment of all or a
portion of the Stock Option price in the form of a promissory note or other
deferred payment installments according to such terms as the Committee may
approve. The Board may restrict or suspend the power of the Committee to permit
such loans and may require that adequate security be provided.
5.5 Stock Options Granted to Ten Percent Shareholders. No Stock Option
granted to any Participant who at the time of such grant owns, together with
stock attributed to such Participant under Section 424(d) of the Code, more than
10% of the total combined voting power of all classes of stock of the Company or
any of its Subsidiaries may be designated as an incentive stock option, unless
such Stock Option provides an exercise price equal to at least 110% of the
Market Value of the Common Stock and the exercise of the Stock Option after the
fifth anniversary of the date of grant of the Stock Option is prohibited by its
terms.
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5.6 Limits on Exercisability. Except as set forth in Section 5.5, Stock
Options shall be exercisable for such periods, not to exceed 10 years from the
date of grant, as may be fixed by the Committee. At the time of the exercise of
a Stock Option, the holder of the Stock Option, if requested by the Committee,
must represent to the Company that the shares are being acquired for investment
and not with a view to the distribution thereof. The Committee may in its
discretion require a Participant to continue the Participant's service with the
Company and its Subsidiaries for a certain length of time prior to a Stock
Option becoming exercisable and may eliminate such delayed vesting provisions.
5.7 Restrictions on Transferability.
(a) General. Unless the Committee otherwise consents (before or after
the option grant) or unless the stock option agreement or grant provides
otherwise, Stock Options granted under the Plan may not be sold, exchanged,
transferred, pledged, assigned or otherwise alienated or hypothecated
except by will or the laws of descent and distribution and, as a condition
to any transfer permitted by the Committee or the terms of the stock option
agreement or grant, the transferee must execute a written agreement
permitting the Company to withhold from the shares subject to the Stock
Option a number of shares having a market value at least equal to the
amount of any federal, state or local withholding or other taxes associated
with or resulting from the exercise of the Stock Option. All provisions of
a Stock Option that are determined with reference to the Participant,
including without limitation those that refer to the Participant's
employment with the Company or its Subsidiaries, shall continue to be
determined with reference to the Participant after any transfer of a Stock
Option.
(b) Other Restrictions. The Committee may impose other restrictions on
any shares of Common Stock acquired pursuant to the exercise of a Stock
Option under the Plan as the Committee deems advisable, including, without
limitation, restrictions under applicable federal or state securities laws.
5.8 Termination of Employment. Unless the Committee otherwise consents
(before or after the option grant) or unless the stock option agreement or grant
provides otherwise:
(a) General. If a Participant is no longer employed by the Company or
its Subsidiary for any reason other than the Participant's Consensual
Severance, Early Retirement, Normal Retirement, death, disability or
termination for cause, the Participant may exercise his or her Stock
Options in accordance with their terms for a period of 3 months after such
termination of employment, but only to the extent the Participant was
entitled to exercise the Stock Options on the date of termination. For
purposes of the Plan the following shall not be considered a termination of
employment: (i) a transfer of an employee from the Company to any
Subsidiary; (ii) a leave of absence, duly authorized in writing by the
Company, for military service or for any other purpose approved by the
Company if the period of such leave does not exceed 90 days; and (iii) a
leave of absence in excess of 90 days, duly authorized in writing by the
Company, provided the employee's right to re-employment is guaranteed by
statute, contract or written policy of the Company. For purposes of the
Plan, termination of employment shall be considered to occur on the date on
which the employee is no longer obligated to perform services for the
Company or any of its Subsidiaries and the employee's right to
re-employment is not guaranteed by statute, contract or written policy of
the Company, regardless of whether the employee continues to receive
compensation from the Company or any of its Subsidiaries after such date.
(b) Consensual Severance. If a Participant ceases to be employed by
the Company or one of its Subsidiaries due to Consensual Severance, the
Committee may, in its sole discretion,
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permit the Participant to exercise his or her Stock Options in accordance
with their terms and to the extent that the Participant was entitled to
exercise the Stock Options on the date of termination for a period of time
after such termination of employment as may be determined by the Committee,
provided, that such period may not extend beyond the earlier of 3 years
after the date of termination or the dates on which such Stock Options
expire by their terms.
(c) Early Retirement or Normal Retirement. If a Participant ceases to
be employed by the Company or one of its Subsidiaries due to Early
Retirement or Normal Retirement, the Participant may exercise his or her
Stock Options in accordance with their terms for a period of 3 years after
such termination of employment unless such Stock Options earlier expire by
their terms, but only to the extent that the Participant was entitled to
exercise the Stock Options on the date of termination.
(d) Disability. If a Participant ceases to be employed by the Company
or one of its Subsidiaries due to the Participant's disability, he or she
may exercise his or her Stock Options in accordance with their terms for 1
year after he or she ceases to be employed unless such Stock Options
earlier expire by their terms, but only to the extent that the Participant
was entitled to exercise the Stock Options on the date of such termination.
(e) Death. If a Participant dies either while an employee or otherwise
during a time when the Participant could have exercised a Stock Option, the
Stock Options issued to such Participant shall be exercisable in accordance
with their terms by the personal representative of such Participant or
other successor to the interest of the Participant for a period of 1 year
after such Participant's death to the extent that the Participant was
entitled to exercise the Stock Options on the date of death but not beyond
the original term of the Stock Options.
(f) Termination for Cause. If a Participant's employment is terminated
for cause, the Participant shall have no further right to exercise any
Stock Options previously granted to him or her. The Committee or officers
designated by the Committee shall have absolute discretion to determine
whether a termination is for cause.
SECTION 6
STOCK APPRECIATION RIGHTS
6.1 Grant. A Participant may be granted one or more Stock Appreciation
Rights under the Plan and such Stock Appreciation Rights shall be subject to
such terms and conditions, consistent with the other provisions of the Plan, as
shall be determined by the Committee in its sole discretion. A Stock
Appreciation Right may relate to a particular Stock Option and may be granted
simultaneously with or subsequent to the Stock Option to which it relates. Stock
Appreciation Rights shall be subject to the same restrictions and conditions as
Stock Options under subsections 5.6, 5.7 and 5.8 of the Plan. To the extent
granted in tandem with a Stock Option, the exercise of a Stock Appreciation
Right shall, in exchange for the right to exercise a related Stock Option,
entitle a Participant to an amount equal to the appreciation in value of the
shares covered by the related Stock Option surrendered. Such appreciation in
value shall be equal to the excess of the Market Value of such shares at the
time of the exercise of the Stock Appreciation Right over the option price of
such shares.
6.2 Exercise; Payment. To the extent granted in tandem with a Stock
Option, Stock Appreciation Rights may be exercised only when a related Stock
Option could be exercised and only when the Market Value of the stock subject to
the Stock Option exceeds the exercise price of the
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Stock Option. The Committee shall have discretion to determine the form of
payment made upon the exercise of a Stock Appreciation Right, which may take the
form of shares of Common Stock.
SECTION 7
TAX BENEFIT RIGHTS
7.1 Grant. A Participant may be granted Tax Benefit Rights under the Plan
to encourage a Participant to exercise Stock Options and provide certain tax
benefits to the Company. A Tax Benefit Right entitles a Participant to receive
from the Company or a Subsidiary a cash payment not to exceed the amount
calculated by multiplying the ordinary income, if any, realized by the
Participant for federal tax purposes as a result of the exercise of a Stock
Option that is not an incentive stock option, or the disqualifying disposition
of shares acquired under an incentive stock option, by the maximum federal
income tax rate (including any surtax or similar charge or assessment) for
corporations, plus the applicable state and local tax imposed on the exercise of
the Stock Option or the disqualifying disposition.
7.2 Restrictions. A Tax Benefit Right may be granted only with respect to
a stock option issued and outstanding or to be issued under the Plan or any
other plan of the Company or its Subsidiaries that has been approved by the
shareholders as of the date of the Plan and may be granted concurrently with or
after the grant of the stock option. Such rights with respect to outstanding
stock options shall be issued only with the consent of the Participant if the
effect would be to disqualify an incentive stock option, change the date of
grant or the exercise price or otherwise impair the Participant's existing stock
options.
7.3 Terms and Conditions. The Committee shall determine the terms and
conditions of any Tax Benefit Rights granted and the Participants to whom such
rights will be granted with respect to stock options under the Plan or any other
plan of the Company. The Committee may amend, cancel, limit the term of or limit
the amount payable under a Tax Benefit Right at any time prior to the exercise
of the related Stock Option, unless otherwise provided under the terms of the
Tax Benefit Right. The net amount of a Tax Benefit Right, subject to
withholding, may be used to pay a portion of the Stock Option price, unless
otherwise provided by the Committee.
SECTION 8
RESTRICTED STOCK
8.1 Grant. A Participant may be granted Restricted Stock under the Plan.
Restricted Stock shall be subject to such terms and conditions, consistent with
the other provisions of the Plan, as shall be determined by the Committee in its
sole discretion. The Committee may impose such restrictions or conditions,
consistent with the provisions of the Plan, to the vesting of Restricted Stock
as it considers appropriate. The Committee may also require that certificates
representing shares of Restricted Stock be retained and held in escrow by a
designated employee or agent of the Company or any Subsidiary until any
restrictions applicable to such shares of Common Stock so retained have been
satisfied or have lapsed.
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8.2 Termination of Employment. Unless the Committee otherwise consents
(before or after the grant of Restricted Stock) or unless the restricted stock
agreement or grant provides otherwise:
(a) General. In the event of termination of employment during the
Restricted Period for any reason other than the Participant's Consensual
Severance, death, disability, Early Retirement, Normal Retirement or
termination for cause, then any shares of Restricted Stock still subject to
restrictions at the date of such termination shall automatically be
forfeited and returned to the Company. For purposes of the Plan the
following shall not be considered a termination of employment: (i) a
transfer of an employee from the Company to any Subsidiary; (ii) a leave of
absence, duly authorized in writing by the Company, for military service or
for any other purpose approved by the Company if the period of such leave
does not exceed 90 days; and (iii) a leave of absence in excess of 90 days,
duly authorized in writing by the Company, provided the employee's right to
re-employment is guaranteed by statute, contract or written policy of the
Company. For purposes of the Plan, termination of employment shall be
considered to occur on the date on which the employee is no longer
obligated to perform services for the Company or any of its Subsidiaries
and the employee's right to re-employment is not guaranteed by statute,
contract or written policy of the Company, regardless of whether the
employee continues to receive compensation from the Company or any of its
Subsidiaries after such date.
(b) Consensual Severance. If a Participant terminates employment with
the Company because of Consensual Severance during the Restricted Period,
the Committee may, in its sole discretion, waive the restrictions remaining
on any or all remaining shares of Restricted Stock either before or after
the Consensual Severance of the Participant.
(c) Disability or Early Retirement. If a Participant terminates
employment with the Company because of disability or Early Retirement
during the Restricted Period, the restrictions applicable to the shares of
Restricted Stock shall terminate automatically with respect to that number
of shares (rounded to the nearest whole number) equal to the total number
of shares of Restricted Stock granted to such Participant multiplied by the
number of full months that have elapsed since the date of grant divided by
the maximum original number of full months of the Restricted Period. All
remaining shares shall be forfeited and returned to the Company; provided,
that the Committee may, in its sole discretion, waive the restrictions
remaining on any or all such remaining shares of Restricted Stock either
before or after the disability or Early Retirement of the Participant.
(d) Death or Normal Retirement. If a Participant terminates employment
with the Company because of death or Normal Retirement during the
Restricted Period, the Participant's right to receive all shares of
Restricted Stock granted to the Participant shall vest as of the date of
termination of employment and the Participant's Restricted Stock may be
transferred free of the restrictions under the Plan.
(e) Termination for Cause. If a Participant's employment is terminated
for cause, the Participant shall have no further right to receive any
Restricted Stock and all Restricted Stock still subject to restrictions at
the date of such termination shall automatically be forfeited and returned
to the Company. The Committee or officers designated by the Committee shall
have absolute discretion to determine whether a termination is for cause.
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8.3 Restrictions on Transferability. Unless the Committee otherwise
consents (before or after the grant of Restricted Stock) or unless the terms of
the restricted stock agreement or grant provide otherwise:
(a) General. The following provisions shall apply: (i) no shares of
Restricted Stock may be sold, exchanged, transferred, pledged, assigned or
otherwise alienated or hypothecated during the Restricted Period except by
will or the laws of descent and distribution; and (ii) rights with respect
to Restricted Stock granted to a Participant under the Plan shall be
exercisable during the Participant's lifetime only by such Participant, his
guardian or legal representative.
(b) Other Restrictions. The Committee may impose other restrictions on
shares of Common Stock acquired pursuant to an award of Restricted Stock
under the Plan as the Committee considers advisable, including, without
limitation, restrictions intended to ensure compliance with federal or
state securities laws.
8.4 Legending of Restricted Stock. Any certificates evidencing shares of
Restricted Stock awarded pursuant to the Plan shall bear the following legend:
The shares represented by this certificate were issued subject to
certain restrictions under the Old Kent Financial Corporation Stock
Incentive Plan of 1999 (the "Plan"). This certificate is held subject to
the terms and conditions contained in a restricted stock agreement that
includes a prohibition against the sale or transfer of the stock
represented by this certificate except in compliance with that agreement
and that provides for forfeiture upon certain events. Copies of the Plan
and the restricted stock agreement are on file in the office of the
Secretary of the Company.
8.5 Rights as a Shareholder. A Participant shall have all voting,
dividend, liquidation and other rights with respect to Restricted Stock held of
record by such Participant as if the Participant held unrestricted Common Stock;
provided, that the unvested portion of any award of Restricted Stock shall be
subject to any restrictions on transferability or risks of forfeiture imposed
pursuant to Sections 8.2 and 8.3 of the Plan. Unless the Committee otherwise
determines or unless the terms of the restricted stock agreement or grant
provide otherwise, any noncash dividends or distributions paid with respect to
shares of unvested Restricted Stock shall be subject to the same restrictions as
the shares to which such dividends or distributions relate.
SECTION 9
CHANGE IN CONTROL
Without in any way limiting the Committee's discretion, the Committee may
include in any Incentive Award, resolution or other contract provisions for
acceleration of any vesting or other similar requirements or for the elimination
of any restrictions upon Incentive Awards upon a Change in Control of the
Company. The Committee may also include in any Incentive Award, resolution or
other contract provisions for Participants to receive cash in lieu of
outstanding Stock Options upon a Change in Control of the Company.
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SECTION 10
GENERAL PROVISIONS
10.1 No Rights to Awards. No Participant or other person shall have any
claim to be granted any Incentive Award under the Plan and there is no
obligation of uniformity of treatment of employees, Participants or holders or
beneficiaries of Incentive Awards under the Plan. The terms and conditions of
Incentive Awards of the same type and the determination of the Committee to
grant a waiver or modification of any Incentive Award and the terms and
conditions thereof need not be the same with respect to each Participant.
10.2 Withholding. The Company or a Subsidiary shall be entitled to (a)
withhold and deduct from future wages of a Participant (or from other amounts
that may be due and owing to a Participant from the Company or a Subsidiary), or
make other arrangements for the collection of, all amounts necessary to satisfy
any and all federal, state and local withholding and employment-related tax
requirements attributable to an Incentive Award or any action related to an
Incentive Award, including, without limitation, the grant, exercise or vesting
of, or payment of dividends with respect to, an Incentive Award or a
disqualifying disposition of Common Stock received upon exercise of an incentive
stock option; or (b) require a Participant promptly to remit the amount of such
withholding to the Company before taking any action with respect to an Incentive
Award. Unless the Committee determines otherwise, withholding may be satisfied
by withholding Common Stock to be received upon exercise of an Incentive Award
or by delivery to the Company of previously owned Common Stock. The Company may
establish such rules and procedures concerning timing of any withholding
election as it deems appropriate.
10.3 Compliance With Laws; Listing and Registration of Shares. All
Incentive Awards granted under the Plan (and all issuances of Common Stock or
other securities under the Plan) shall be subject to all applicable laws, rules
and regulations and to the requirement that if at any time the Committee shall
determine, in its discretion, that the listing, registration or qualification of
the shares covered thereby upon any securities exchange or under any state or
federal law, or the consent or approval of any governmental regulatory body, is
necessary or desirable as a condition of, or in connection with, the grant of
such Incentive Award or the issue or purchase of shares thereunder, such
Incentive Award may not be exercised in whole or in part, or the restrictions on
such Incentive Award shall not lapse, unless and until such listing,
registration, qualification, consent or approval shall have been effected or
obtained free of any conditions not acceptable to the Committee.
10.4 No Limit on Other Compensation Arrangements. Nothing contained in the
Plan shall prevent the Company or any Subsidiary from adopting or continuing in
effect other or additional compensation arrangements, including the grant of
stock options and other stock-based awards and such arrangements may be either
generally applicable or applicable only in specific cases.
10.5 No Right to Employment. The grant of an Incentive Award shall not be
construed as giving a Participant the right to be retained in the employ of the
Company or any Subsidiary. The Company or any Subsidiary may at any time dismiss
a Participant from employment, free from any liability or any claim under the
Plan, unless otherwise expressly provided in the Plan or in any written
agreement with a Participant.
10.6 Suspension of Rights under Incentive Awards. The Company, by written
notice to a Participant, may suspend a Participant's and any transferee's rights
under any Incentive Award for a period not to exceed 30 days while the
termination for cause of that Participant's employment with the Company and its
Subsidiaries is under consideration.
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10.7 Governing Law. The validity, construction and effect of the Plan and
any rules and regulations relating to the Plan shall be determined in accordance
with the laws of the State of Michigan and applicable federal law.
10.8 Severability. In the event any provision of the Plan shall be held
illegal or invalid for any reason, the illegality or invalidity shall not affect
the remaining provisions of the Plan and the Plan shall be construed and
enforced as if the illegal or invalid provision had not been included.
SECTION 11
TERMINATION AND AMENDMENT
The Board may terminate the Plan at any time, or may from time to time
amend the Plan as it deems proper and in the best interests of the Company,
provided that no such amendment may impair any outstanding Incentive Award
without the consent of the Participant, except according to the terms of the
Plan or the Incentive Award. No termination, amendment or modification of the
Plan shall become effective with respect to any Incentive Award previously
granted under the Plan without the prior written consent of the Participant
holding such Incentive Award unless such amendment or modification operates
solely to the benefit of the Participant.
SECTION 12
EFFECTIVE DATE AND DURATION OF THE PLAN
This Plan shall take effect April 19, 1999, subject to approval by the
shareholders at the 1999 Annual Meeting of Shareholders or any adjournment
thereof or at a Special Meeting of Shareholders. No Incentive Award shall be
granted under the Plan after April 18, 2009.
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APPENDIX B
OLD KENT FINANCIAL CORPORATION
EMPLOYEE STOCK PURCHASE PLAN OF 1999
SECTION 1
PURPOSE OF PLAN
The purpose of the Old Kent Financial Corporation Employee Stock Purchase
Plan of 1999 (the "Plan") is to encourage employees of the Company and the
Company's subsidiaries to promote the best interests of the Company and to align
the interests of employees with the Company's shareholders by permitting
employees to purchase shares of the Company's Stock, at a price less than the
market price of the Stock. The purchase of the Stock under the Plan is intended
to qualify as the exercise of an option granted under, and the Plan is intended
to qualify as, an employee stock purchase plan under Section 423 of the Code.
SECTION 2
DEFINITIONS
The following words have the following meanings unless a different meaning
is plainly required by the context:
2.1 "Board" means the Board of Directors of the Company.
2.2 "Code" means the Internal Revenue Code of 1986, as amended.
2.3 "Committee" means the Compensation Committee of the Board or such
other committee as the Board shall designate to administer the
Plan.
2.4 "Company" means Old Kent Financial Corporation, a Michigan
corporation, and its successors and assigns.
2.5 "Dividend Reinvestment Plan" means the Old Kent Financial
Corporation Dividend Reinvestment Plan.
2.6 "Election Form" means a notice (in a form approved by the
Company) that an Eligible Employee must complete to participate
in the Plan and authorize payroll deductions to be made on the
Eligible Employee's behalf under the Plan.
2.7 "Election Period" means the period between May 1 and May 31 of
each year during which Eligible Employees may elect to
participate in the Plan.
2.8 "Eligible Employees" means all active employees of the Company
and its subsidiaries except employees whose customary employment
by the Company or one of its subsidiaries is less than 17 1/2
hours per week.
2.9 "Market Value" as of any Stock Purchase Date means the price at
which Stock is purchased in accordance with the terms of the
Dividend Reinvestment Plan.
2.10 "Option Period" means each calendar month beginning on the first
day of each such month.
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2.11 "Participating Employee" means an Eligible Employee who has
elected to participate in the Plan.
2.12 "Purchase Account" means an account to which a Participating
Employee's payroll deductions are credited.
2.13 "Stock" means the Company's common stock, $1.00 par value.
2.14 "Stock Purchase Date" means the "Investment Date" as defined in
the Dividend Reinvestment Plan.
SECTION 3
ADMINISTRATION
The Plan shall be administered by the Committee. The Committee shall
consist of not less than three members. The Board from time to time may remove
members from, or add members to, the Committee. Vacancies on the Committee shall
be filled in the manner provided in the Company's bylaws. The Committee may
establish from time to time such regulations, provisions and procedures,
consistent with the terms of the Plan, as in the opinion of its members may be
advisable in the administration of the Plan.
SECTION 4
ELIGIBILITY
Participation under the Plan shall be open to all Eligible Employees of the
Company and its subsidiaries. No option rights may be granted under the Plan to
any person who is not an Eligible Employee, and no Eligible Employee shall be
granted option rights under the Plan if such employee, immediately after
receiving the grant of such option rights under the Plan, would own (under the
rules of Sections 423(b)(3) and 424(d) of the Code) stock possessing 5% or more
of the total combined voting power or value of all classes of stock of the
Company or any of its subsidiaries.
SECTION 5
STOCK SUBJECT TO THE PLAN
5.1 Number of Shares of Stock. Subject to adjustment as provided in
Section 5.2, the total number of shares of Stock that may be purchased under the
Plan is 2,000,000 shares. Such shares shall be authorized and may be either
unissued or treasury shares.
5.2 Adjustments. In the event of a stock dividend, stock split,
recapitalization, merger, reorganization, consolidation, combination or exchange
of shares of Stock during the term of the Plan, the number of shares of Stock
reserved and authorized to be issued under the Plan shall be adjusted
proportionately, and such other adjustment shall be made as may be considered
necessary or equitable by the Committee or the Board. In the event of any other
change affecting the Stock, such adjustments shall be made as may be considered
equitable by the Committee or the Board to give proper effect to such event.
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<PAGE> 47
SECTION 6
PARTICIPATION
Participation by any Eligible Employee in the Plan shall be entirely
voluntary. Any employee of the Company or any of its subsidiaries who is an
Eligible Employee during an Election Period in any Plan year may become a
participant as of the next Option Period beginning on July 1 following the
Election Period by completing and forwarding an Election Form to the Company.
Any Election Form received before or after the Election Period shall be
ineffective. The Election Form will direct a regular payroll deduction from the
Participating Employee's compensation to be made on the first two pay dates of
each month for the Participating Employee occurring during each Option Period in
which he or she is a Participating Employee. An Eligible Employee who elects to
participate in the Plan shall be enrolled in the Dividend Reinvestment Plan.
SECTION 7
PAYROLL DEDUCTIONS
7.1 Purchase Account. The Company and its subsidiaries will maintain a
Purchase Account for each Participating Employee. Authorized payroll deductions
shall begin with the first payroll date to occur on or after July 1 of the year
in which an Eligible Employee properly executes and returns an Election Form to
the Company. Payments made by Participating Employees through payroll deductions
shall be credited to each Participating Employee's Purchase Account. No amounts
other than payroll deductions authorized under the Plan may be credited to a
Participating Employee's Purchase Account.
7.2 Limits on Payroll Deductions. The amount of the payroll deduction
specified by a Participating Employee in his or her Election Form shall not be
less than $10 for each pay period. The Committee annually may determine, in its
sole discretion, to establish a maximum dollar amount or percentage of
compensation that Participating Employees are entitled to authorize for payroll
deductions during a calendar year, which limitations shall apply to all
Participating Employees during that calendar year. Any such limit established by
the Committee shall fall within the parameters of Section 423 of the Code.
7.3 Changes in Payroll Deductions. Payroll deductions shall be made for
each Participating Employee in accordance with the Election Form and shall
continue until the Participating Employee's participation terminates, the
Election Form is modified or the Plan terminates. A Participating Employee may,
on or between May 1 and May 31 of any year following enrollment in the Plan,
increase or decrease the Participating Employee's payroll deduction within the
limits specified in Section 7.2 above by filing a new Election Form. The Company
or an applicable subsidiary shall deduct the modified amount from the
Participating Employee's payroll beginning with the first payroll date to occur
on or after July 1 of the year in which the request to modify is properly
received.
SECTION 8
PURCHASE OF STOCK
8.1 Stock Option. Each Participating Employee during each Option Period
under the Plan shall be granted an option as of the next business day following
the Stock Purchase Date to purchase as
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<PAGE> 48
many shares of Stock, including partial shares, as may be purchased with the
funds in the Participating Employee's Purchase Account. This option
automatically shall be exercised as provided in this Section unless the
Participating Employee terminates participation as provided in Section 9.
Options that are not exercised automatically shall expire immediately. On the
next business day following each Stock Purchase Date, the Committee shall
transfer and pay over the funds accumulated in each Purchase Account to the
administrator of the Dividend Reinvestment Plan, who shall purchase shares of
Stock on behalf of the Participating Employees according to the terms of the
Dividend Reinvestment Plan. The purchase price for each share of Stock purchased
shall be 85% of the Market Value of the Stock for the Stock Purchase Date as
determined for purposes of the Dividend Reinvestment Plan. Following transfer of
any amounts held in a Purchase Account to a Participating Employee's account
maintained under the Dividend Reinvestment Plan, the terms and conditions of the
Dividend Reinvestment Plan shall apply.
8.2 Limitation on Value of Stock to be Purchased. A Participating Employee
shall not have and may not exercise any option that would permit the
Participating Employee's rights to purchase Stock under the Plan to accrue at a
rate that exceeds $25,000 of fair market value of the Stock in any one calendar
year, and in no event may such option rights accrue at a rate which exceeds that
permitted by Section 423(b)(8) of the Code.
SECTION 9
TERMINATION OF PARTICIPATION, WITHDRAWAL OF FUNDS
A Participating Employee may elect at any time to terminate his or her
participation in the Plan and permanently withdraw the balance accumulated in
his or her Purchase Account on written notice given to the Company 15 days
before the Participating Employee's second pay date in any Option Period, or by
such other time as the Company may from time to time determine. Upon any
termination by a Participating Employee, the Participating Employee shall cease
to be a Participating Employee, his or her Election Form shall be revoked
insofar as subsequent payroll deductions are concerned and the amount in the
Participating Employee's Purchase Account that is not payable in respect of the
exercise of any option to purchase Stock previously granted under the Plan, as
well as any unauthorized payroll deductions made after such revocation, shall be
refunded to the former Participating Employee as soon as practicable, but in any
event within 45 days after such termination. An Eligible Employee who has
terminated participation in the Plan may begin participation in the Plan again
only during subsequent Election Periods. Partial withdrawals of funds will not
be permitted.
SECTION 10
RIGHTS ON RETIREMENT, DEATH OR TERMINATION OF EMPLOYMENT
In the event of a Participating Employee's retirement, death or termination
of employment for any reason, the Participating Employee or his or her legal
representative shall be considered to have terminated his or her participation
in the Plan in the manner provided in Section 9 and shall receive an amount of
cash payable in the same manner and at the same time as if the Participating
Employee had withdrawn from the Plan by giving notice of withdrawal effective as
of the date of retirement, death or as of the date on which the Participating
Employee's employment terminates.
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<PAGE> 49
SECTION 11
GENERAL PROVISIONS
11.1 Rights Not Transferable. No right or interest of any Participating
Employee under the Plan or in the Participating Employee's Purchase Account
shall be assignable or transferable in full or in part, except by will, by the
laws of descent or distribution or by other operation of law.
11.2 Amendment of the Plan. The Committee or the Board may at any time,
and from time to time, amend the Plan in any respect.
11.3 Termination of the Plan. The Company may, by action of the Committee
or the Board, terminate the Plan at any time. Notice of termination shall be
given to all Participating Employees, but any failure to give notice shall not
impair the termination. Upon termination of the Plan, all amounts in Purchase
Accounts of Participating Employees shall be refunded as soon as practicable,
but no more than 45 days after such termination, to the Participating Employees.
11.4 Governmental Regulations. If at any time shares of Stock deliverable
under the Plan are required to be registered or qualified under any applicable
law, delivery of certificates for such shares may be deferred for a reasonable
time until such registrations or qualifications are effected or obtained.
11.5 Effective Dates. Subject to shareholder approval at the 1999 Annual
Meeting of Shareholders, the first Option Period under the Plan shall commence
on July 1, 1999 and end on July 31, 1999. If the Company's shareholders do not
approve the Plan at the 1999 Annual Meeting of Shareholders, the Plan shall
terminate.
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<PAGE> 50
[FRONT]
OLD KENT FINANCIAL CORPORATION
PROXY 111 LYON STREET N.W.
GRAND RAPIDS, MICHIGAN 49503
ANNUAL MEETING OF SHAREHOLDERS - APRIL 19, 1999
The undersigned shareholder appoints David J. Wagner, Robert H. Warrington, and
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 PROPOSALS
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_______________________, 1999
<PAGE> 51
[BACK]
1. Election of Directors.
[ ] FOR all nominees listed below [ ] WITHHOLD AUTHORITY to vote
(except as indicated below) for all nominees listed below
Richard L. Antonini
William G. Gonzalez
Hendrik G. Meijer
Percy A. Pierre
Marilyn J. Schlack
Peter F. Secchia
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.)
2. Proposal to Approve the Stock Incentive Plan of 1999.
[ ] VOTE FOR
[ ] VOTE AGAINST
[ ] ABSTAIN
YOUR BOARD OF DIRECTORS RECOMMENDS
THAT YOU VOTE FOR THIS PROPOSAL.
3. Proposal to Approve the Employee Stock Purchase Plan of 1999.
[ ] VOTE FOR
[ ] VOTE AGAINST
[ ] ABSTAIN
YOUR BOARD OF DIRECTORS RECOMMENDS
THAT YOU VOTE FOR THIS PROPOSAL.
IMPORTANT! PLEASE DATE AND SIGN THE OTHER SIDE
