<PAGE>
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
----------------
FORM 10-K/A
(AMENDMENT NO. 1)
(MARK ONE)
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE
ACT OF 1934 [FEE REQUIRED]
For the fiscal year ended December 31, 1994
OR
[_] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
EXCHANGE ACT OF 1934 [NO FEE REQUIRED]
For the transition period from to
COMMISSION FILE NUMBER 1-10102
----------------
SHAWMUT NATIONAL CORPORATION
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
DELAWARE 06-1212629
(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER IDENTIFICATION NO.)
INCORPORATION OR ORGANIZATION)
777 MAIN STREET, HARTFORD, CONNECTICUT 06115
ONE FEDERAL STREET, BOSTON, 02211
MASSACHUSETTS (ZIP CODES)
(ADDRESSES OF PRINCIPAL EXECUTIVE
OFFICES)
Registrant's telephone numbers, including area codes (203) 986-2000 AND (617)
292-2000
----------------
SECURITIES REGISTERED PURSUANT TO SECTION 12(B) OF THE ACT:
<TABLE>
<CAPTION>
NAME OF EACH EXCHANGE ON
TITLE OF EACH CLASS WHICH REGISTERED
------------------- ------------------------
<S> <C>
Common Stock, par value $0.01 New York Stock Exchange
Common Stock Subscription Warrants New York Stock Exchange
Depositary Shares representing a one-tenth interest
in a share of 9.30% cumulative preferred stock
($250 stated value) New York Stock Exchange
Depositary Shares representing a one-tenth interest
in a share of 9.35% cumulative preferred stock
($250 stated value) New York Stock Exchange
</TABLE>
SECURITIES REGISTERED PURSUANT TO SECTION 12(G) OF THE ACT:
NONE
(TITLE OF CLASS)
Indicate by check mark whether the registrant: (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes [X] No .
--
Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to
the best of registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K. [X]
The aggregate market value of the voting stock held by nonaffiliates of the
registrant was $3,123,458,975.89 on March 7, 1995.
As of March 7, 1995, 121,867,303 shares of the registrant's common stock,
$0.01 par value, were outstanding.
DOCUMENTS INCORPORATED BY REFERENCE
NONE
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<PAGE>
Shawmut National Corporation (the "Corporation") has prepared this Amendment
No. 1 ("Amendment No. 1") on Form 10-K/A to the Corporation's Annual Report on
Form 10-K for the year ended December 31, 1994 (the "Annual Report") for the
purposes of providing information required to be disclosed pursuant to Part III
of the Annual Report. Amendment No. 1 does not modify any part of the Annual
Report other than Part III and "DOCUMENTS INCORPORATED BY REFERENCE."
Accordingly, the portions of the Annual Report other than Part III are not
included herein.
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT.
DIRECTORS OF THE REGISTRANT
Under the Corporation's by-laws, the board of directors can increase the
number of directorships between annual meetings by not more than eight and fill
any vacancy thus created. All of the persons named below are members of the
present board and, with the exception of Dr. Thier, were elected by the
Corporation's shareholders at the last annual meeting, held April 26, 1994.
Directors are elected for a term of one year, and hold office until the
expiration of their terms and until their successors are elected and qualified.
JOEL B. ALVORD, 56, is chairman and chief executive officer of the
Corporation, chairman and a director of Shawmut Bank, National Association
("SBM") and a director of Shawmut Bank Connecticut, National Association
("SBC"). He has served as a director of the Corporation since 1987, and
additionally as a director of SBC since 1978, and SBM since 1988.
Mr. Alvord began his 31-year SBC tenure in 1963. He became an officer in
1965, a vice president in 1967, and executive vice president in 1976. In
January 1978, he was elected president and director of both the bank and its
parent holding company, Hartford National Corporation ("HNC"). From 1986 to
1988, he was president, chief executive officer, and director of HNC and
chairman, chief executive officer, and director of SBC. In February 1988, when
Shawmut Corporation ("SC") and HNC merged and became subsidiaries of the
Corporation, Mr. Alvord was named president and chief executive officer of the
new combined corporation. In August 1988, he additionally assumed his current
title of chairman of the Corporation. In September 1994, Mr. Alvord was
appointed chairman of SBM. He is also a member of the community affairs, trust,
and loan and investment committees of SBC and SBM. Mr. Alvord is active in
numerous community, civic, and industry organizations. He is director of the
Hartford Steam Boiler Inspection and Insurance Company, and Jobs for
Massachusetts. He also serves as a trustee of the Wadsworth Atheneum, and is a
member of the Museum of Fine Arts (Boston), the Wang Center for Performing
Arts, the Massachusetts Business Roundtable, The Bankers Roundtable and the
Boston Symphony Orchestra.
A native of Manchester, Connecticut, Mr. Alvord is a graduate of Dartmouth
College where he received his undergraduate degree and earned a Master of
Business Administration from the Amos Tuck School of Business Administration in
1961. He is a member of the community affairs committee of the Corporation.
STILLMAN B. BROWN, 61, is President of Harcott Corporation (investments),
Lake Worth, Florida.
Before joining Harcott Corporation (formerly Harcott Associates), Mr. Brown
was executive vice president, chief financial officer and a director of United
Technologies Corporation, where he served in a variety of executive positions
from 1978 to 1986. He is a director of The Stanley Works, and former chairman
of the board of regents of the University of Hartford.
Mr. Brown has served as a director of the Corporation since 1987 and SBC from
1979 to 1988. He is chairman of the audit committee and a member of the human
resources committee of the Corporation, and a member of the loan and investment
committees of SBC and SBM.
2
<PAGE>
JOHN T. COLLINS, 48, is chairman and chief executive officer of The Collins
Group, Inc. (acquisition company), Boston, Massachusetts.
Previously, Mr. Collins was president and chief executive officer of Quebecor
Printing, (USA) Corp. Mr. Collins joined Quebecor Printing, (USA) Corp in 1990.
From 1986 to 1990 he served as president and chief executive officer of
Quebecor America, Inc. (printing). Mr. Collins is an advisory board member of
Pell Rudman Venture Partners (investments), board member of the National
Association of Printers and Lithographers, vice chairman of the board of
trustees of Bentley College, and a trustee of Beth Israel Hospital and the
Massachusetts Chapter of the Leukemia Society of America. Mr. Collins is also
on the advisory council of Junior Achievement of Northern New England.
Mr. Collins has served as a director of the Corporation and SBC since 1992,
and SBM since 1987. He is a member of the audit committee and the human
resources committee of the Corporation, and a member of the loan and investment
committees of SBC and SBM.
FERDINAND COLLOREDO-MANSFELD, 55, is chairman and chief executive officer of
Cabot Partners (investment management company), Boston, Massachusetts.
Mr. Colloredo-Mansfeld has held his present position since 1990. From 1986
through October 1990 he served as chairman and chief executive officer of
Cabot, Cabot & Forbes Realty Advisors, Inc. (predecessor of Cabot Partners) and
chairman, chief executive officer and president of the development company
Cabot, Cabot & Forbes. He is also a director of Data General Corporation and
Raytheon Company.
Mr. Colloredo-Mansfeld has served as a director of the Corporation since 1988
and SC from 1983 to 1988. He is a member of the nominating committee of the
Corporation.
BERNARD M. FOX, 52, is president and chief executive officer and trustee of
the Northeast Utilities System, Hartford, Connecticut.
Mr. Fox has held his present position since July 1993. From June 1987 to July
1993, he served as president and chief operating officer and financial officer.
He is a director of The Dexter Corporation (specialties materials), CIGNA
Corporation, The Connecticut Business and Industry Association, the Institute
of Nuclear Power Operations, Mount Holyoke College, the Institute of Living and
Hartford Hospital. In addition, Mr. Fox is a fellow and founder of the American
Leadership Forum.
Mr. Fox has served as a director of the Corporation since January 1993, SBC
from 1988 to 1994, and SBM from 1992 to 1994. He is a member of the audit
committee of the Corporation.
ROBERT J. MATURA, 61, is chairman and chief executive officer of Robert J.
Matura Associates and its subsidiary, Treefort Fellows (consulting firms
specializing in textiles and apparel), Stamford, Connecticut.
Mr. Matura has held his present position since June 1992. From July 1988 to
May 1992 he served as chairman, president and chief executive officer of The
William Carter Company (manufacturer of infants' and childrens' apparel). From
July 1986 through June 1988 he served, pro bono, as chief executive officer and
chancellor of Sacred Heart University. From March 1976 to June 1986 Mr. Matura
was chief executive officer and chairman of the board of Warnaco, Inc. (an
international diversified apparel company). He is a director, investor and
consultant at Unisa, Inc. (women's shoe manufacturer) and a director of EMI and
Ed Mitchell's, Inc. (clothing retailer). Mr. Matura is chairman of the
executive committee of the board of trustees and a trustee of Sacred Heart
University and a regent of St. Peter's College.
Mr. Matura has served as a director of the Corporation and SBM since 1992 and
SBC since 1984. He is a member of the audit committee and the human resources
committee of the Corporation.
GUNNAR S. OVERSTROM, JR., 52, is president and chief operating officer of the
Corporation, chairman, chief executive officer and a director of SBC and
president, chief executive officer and a director of SBM. He has served as a
director of the Corporation since 1987, SBC since 1986 and SBM since 1989.
3
<PAGE>
Mr. Overstrom joined SBC in 1975 as vice president and was promoted to senior
vice president in 1977. In 1979 he was appointed SBC's executive vice president
and chief financial officer. That same year he was named chief financial
officer of HNC and became a director and its executive vice president in 1982.
From 1986 to October 1992, Mr. Overstrom served as president of SBC. In 1988,
he also served as chief executive officer of SBC; and in October 1992, he
became chairman of SBC and chief executive officer of SBM. From October 1992 to
September 1994, Mr. Overstrom also served as chairman of SBM. In February 1988,
when SC and HNC merged and became subsidiaries of the Corporation, he was
appointed vice chairman and chief financial officer of the Corporation,
responsible for Connecticut operations. In August 1988, he assumed his current
title of president and chief operating officer of the Corporation. Mr.
Overstrom is also a member of the community affairs, trust, and loan and
investment committees of SBC and SBM. An active supporter of numerous
organizations, Mr. Overstrom is a corporator of Hartford Hospital, Saint
Francis Hospital, Mount Sinai Hospital and the Institute of Living. He is a
trustee of Babson College and of the Museum of Science, a director of
Connecticut Health Systems, Inc., president of the Old State House in Hartford,
and a member of the Emerging Issues Committee of The Bankers Roundtable. He is
also a member of Boston's Private Industry Council and serves on its Corporate
Diversity Committee.
Mr. Overstrom received his undergraduate degree from Babson College, a law
degree from Suffolk University, and a master's degree in economics from Trinity
College. He is a member of the community affairs committee of the Corporation.
LOIS D. RICE, 62, is a guest scholar at the Brookings Institution, Program in
Economic Studies, in Washington, D.C.
Mrs. Rice joined the Brookings Institution in 1991. From 1981 to 1991 she was
a director and senior vice president of Government Affairs at Control Data
Corporation. She is a director of Bell Atlantic-Washington, D.C., International
Multifoods, McGraw Hill, The Hartford Steam Boiler Inspection and Insurance
Company, Unum Corp. (insurance company) and the Center for Naval Analysis. Mrs.
Rice is a trustee of The Urban Institute and The Harry Frank Guggenheim
Foundation, and is a member of the President's Foreign Intelligence Advisory
Board.
Mrs. Rice has served as a director of the Corporation since 1992. She is a
member of the nominating committee and the community affairs committee of the
Corporation.
MAURICE SEGALL, 65, is a senior lecturer at the MIT-Sloan School of
Management, Cambridge, Massachusetts.
Previously, Mr. Segall was chairman, chief executive officer, president and a
director of Zayre Corporation (department stores), Framingham, Massachusetts.
He retired from Zayre Corporation in June 1989. Mr. Segall joined Zayre
Corporation as president and chief executive officer in 1978. He is a director
of AMR Corporation and Harcourt General Corporation (publishing and specialty
retailing), and a trustee of Beth Israel Hospital, Massachusetts General
Hospital and the Museum of Fine Arts (Boston).
Mr. Segall has served as a director of the Corporation since 1987 and SC from
1983 to 1988. He is a member of the audit committee and the human resources
committee of the Corporation.
SAMUEL O. THIER, 57, is president of Massachusetts General Hospital, Boston,
Massachusetts, and professor of medicine at Harvard Medical School, Boston,
Massachusetts.
Dr. Thier has held his present position since May 1994. Prior to that, he
served as president of Brandeis University from 1991 to 1994. From 1985 to
1991, Dr. Thier was president of the Institute of Medicine, National Academy of
Sciences. He is a director of Merck & Company and National Health Labs, and a
trustee of Johns Hopkins University and the Museum of Science (Boston).
Dr. Thier has served as a director of the Corporation since July 1994.
4
<PAGE>
PAUL R. TREGURTHA, 59, is chairman, chief executive officer and a director of
Mormac Marine Group, Inc. (marine shipping), Stamford, Connecticut and chairman
of Moran Transportation Company (tug/barge shipping), Greenwich, Connecticut.
Mr. Tregurtha joined Mormac Marine Group in 1988 and Moran Transportation in
July 1994. Prior to that, he had served as chairman, president and chief
executive officer of Moore McCormack Resources, Inc. (construction materials
and oil and gas exploration). He is a director and vice chairman of Interlake
Holding Company and Lakes Shipping Company, Inc. (marine shipping) and a
director of Brown & Sharpe Manufacturing Company and FPL Group, Inc. (Florida
utilities). Mr. Tregurtha is a trustee of Teachers Insurance and Annuity
Association of America.
Mr. Tregurtha has served as a director of the Corporation since 1987 and SBC
from 1979 to 1988. He is chairman of the human resources committee of the
Corporation.
WILSON WILDE, 67, is chairman of the executive committee and a director of
The Hartford Steam Boiler Inspection and Insurance Company, Hartford,
Connecticut.
Mr. Wilde joined Hartford Steam Boiler in 1953, and served as president from
November 1971 until September 1993, and as chief executive officer from
November 1971 to May 1994. From November 1993 to May 1994, he served as
chairman. In April 1994, Mr. Wilde assumed his current title of chairman of the
executive committee. He is a director of Phoenix Home Life Mutual Insurance
Company and PXRE Corporation (reinsurance company).
Mr. Wilde has served as a director of the Corporation since 1987 and HNC and
SBC from 1972 to 1988. He is chairman of the nominating committee of the
Corporation, and a member of the trust committees of SBC and SBM.
EXECUTIVE OFFICERS OF THE REGISTRANT
The information required with respect to executive officers appears under the
caption "Executive Officers of the Registrant" in Part I of the Corporation's
Annual Report on Form 10-K for the fiscal year ended December 31, 1994.
ITEM 11. EXECUTIVE COMPENSATION.
The tables and descriptive information set forth below are being furnished
with respect to those persons who, at December 31, 1994, were the Corporation's
chief executive officer, its four most highly compensated executive officers,
other than the chief executive officer, as well as a former executive officer,
whose salary and bonus exceeded $100,000 for the most recent fiscal year
(together, the "named executive officers").
5
<PAGE>
TABLE I
Table I sets forth certain information concerning the annual and long-term
compensation for services in all capacities to the Corporation for the fiscal
years ended December 31, 1994, 1993 and 1992 of the named executive officers.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
ANNUAL COMPENSATION LONG-TERM COMPENSATION
--------------------------------------- --------------------------------
AWARDS PAYOUTS
--------------------- --------
RESTRICTED SECURITIES ALL OTHER
OTHER ANNUAL STOCK UNDERLYING LTIP COMPENSATION
NAME AND SALARY BONUS COMPENSATION AWARDS OPTIONS PAYOUTS (5)(6)(7)
PRINCIPAL POSITION YEAR ($) ($) (1) ($) (2)($) (3) (#) (4) ($) ($)
------------------ ---- -------- -------- ------------ ---------- ---------- -------- ------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Joel B. Alvord.......... 1994 $650,000 $850,000 $ 39,314 $ 0 102,562 $504,987 $ 18,263
Chairman and Chief 1993 650,000 650,000 9,663 0 117,558 0 19,827
Executive Officer 1992 650,000 200,000 255,753 276,250 50,000 0 33,750
Gunnar S. Overstrom, 1994 $510,000 $525,000 $ 32,160 $ 0 68,946 $252,483 $ 8,832
Jr. .................... 1993 510,000 400,000 9,640 0 83,047 0 12,803
President and Chief 1992 510,000 150,000 127,544 212,500 40,000 0 19,672
Operating Officer
David L. Eyles.......... 1994 $330,000 $250,000 $ 25,366 $ 0 35,946 $125,146 $ 7,613
Vice Chairman and Chief 1993 330,000 230,000 13,099 0 35,740 0 9,016
Credit Policy Officer 1992 258,300(8) 155,000(9) 81,624 154,000 16,000(9) 0 94,305
Eileen S. Kraus......... 1994 $330,000 $220,000 $ 3,924 $ 0 35,852 $125,146 $ 9,413
Vice Chairman; President 1993 330,000 210,000 4,259 0 35,142 0 13,109
of 1992 310,000 100,000 36,871 148,750 16,000 0 23,138
SBC
Michael J. 1994 $260,000 $210,000 $ 10,848 $ 0 20,000 $ 87,821 $ 3,217
Rothmeier(10)...........
Executive Vice President
of
SBC and SBM
Allen W. Sanborn(11).... 1994 $360,000 $180,000 $ 3,077 $ 0 30,000 $125,146 $ 6,754
Vice Chairman; President 1993 360,000 180,000 3,033 0 20,000 0 8,897
of 1992 240,000(8) 180,000(9) 1,235 146,250 30,000(9) 0 125,498
SBM
</TABLE>
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(1) Amounts reported represent payments or reimbursements of tax liabilities
imputed to the named executive officers. Aggregate perquisite amounts less
than $50,000 or 10% of salary and bonus are excluded, in accordance with
the rules of the Securities and Exchange Commission (the "Commission").
(2) Based upon the closing price per share on date of grant. The number and
value of the aggregate restricted stock holdings at December 31, 1994 of
the named executive officers, based upon the closing price per share on
such date, are as follows: Mr. Alvord, 8,666 shares, $141,906; Mr.
Overstrom, 6,666 shares, $109,156; Mr. Eyles, 0 shares, $0; Mrs. Kraus,
4,666 shares, $76,406; Mr. Rothmeier, 2,666 shares, $43,656; and Mr.
Sanborn, 3,333 shares, $54,578. Dividends are paid on restricted shares at
the same rate as on other shares of the Corporation's common stock. 1992
grants vest in thirds at one-year intervals from the date of grant. Under
the Corporation's Stock Option and Restricted Stock Award Plan (the
"Option Plan"), which authorizes grants of restricted stock to employees
of the Corporation and its subsidiaries, all restrictions on shares of
restricted stock will lapse upon a change of control (as defined therein).
The approval of the Merger (as defined below) by the holders of the
Corporation's common stock will constitute a change in control for
purposes of such plan.
Such aggregate holdings at December 31, 1994 also include the following
number and value of performance equity share units granted in 1994 (see
Table IV), based upon the closing price per share on such date: Mr.
Alvord, 69,000 shares and $1,129,875; Mr. Overstrom, 34,500 shares and
$564,938; Mr. Eyles, Mrs. Kraus and Mr. Sanborn each, 17,100 shares and
$280,013; and Mr. Rothmeier, 13,100 shares and $214,513. Dividend
equivalent units accrue on performance equity share units at the same
6
<PAGE>
rate as on shares of the Corporation's common stock. The maturation of all
performance equity share units granted and dividend equivalent units
accrued from the date of grant is contingent upon corporate performance.
Under the Option Plan, which authorizes grants of restricted stock units
(including awards under the Corporation's Performance Equity Plan) to
employees of the Corporation and its subsidiaries, all restrictions on
outstanding performance equity share units will lapse upon a change in
control (as defined therein). The approval of the Merger by the holders of
the Corporation's common stock will constitute a change in control for
purposes of such plans.
(3) Includes both original options and restoration options granted during
1994. See Table II.
(4) Represents earnout of the initial performance equity award reflecting 1994
performance inclusive of dividend equivalent units accrued from the date
of grant.
(5) 1994 amounts represent (a) Corporation matching contributions to
employees' thrift plan, (b) aggregate insurance premiums (executive group
life and split-dollar life policies), respectively, as follows; Mr.
Alvord, (a) $5,400, (b) $6,413; Mr. Overstrom, (a) $5,400, (b) $3,432; Mr.
Eyles, (a) $3,600, (b) $4,013; Mrs. Kraus, (a) $5,400, (b) $4,013; Mr.
Rothmeier (a) $1,800, (b) $1,417; and Mr. Sanborn, (a) $3,600, (b) $3,154.
Payout of discontinued stock equivalent plan for Mr. Alvord of $6,450 is
also included.
(6) 1993 amounts represent (a) Corporation matching contributions to
employees' thrift plan and (b) aggregate insurance premiums (executive
group life and split-dollar life policies), respectively, as follows; Mr.
Alvord, (a) $5,392, (b) $14,435; Mr. Overstrom, (a) $5,392, (b) $7,411;
Mr. Eyles, (a) $3,598, (b) $5,418; Mrs. Kraus (a) $5,392, (b) $7,717; and
Mr. Sanborn, (a) $3,598, (b) $5,299.
(7) 1992 amounts represent (a) Corporation matching contributions to
employees' thrift plan and (b) aggregate insurance premiums (executive
group life and split-dollar life policies), respectively, as follows; Mr.
Alvord, (a) $5,237, (b) $28,513; Mr. Overstrom, (a) $5,237, (b) $14,435;
Mr. Eyles, (a) $0, (b) $4,294; Mrs. Kraus (a) $5,237, (b) $17,901; and Mr.
Sanborn, (a) $0, (b) $498. Also includes (i) payments of $90,011 to Mr.
Eyles for services rendered and expenses incurred as a consultant during
the first two months of 1992, and (ii) relocation payment of $125,000 to
Mr. Sanborn.
(8) Salary is pro rata from hire date.
(9) Incentive commitments made upon hiring in 1992.
(10) Mr. Rothmeier was not an executive officer prior to 1994.
(11) Mr. Sanborn ceased to be an executive officer of the Corporation effective
September 17, 1994.
7
<PAGE>
TABLE II
Table II sets forth certain information concerning options granted during
1994 by the Corporation to the named executive officers. The hypothetical
present value on date of grant shown below for Corporation options granted in
1994 are presented pursuant to the rules of the Commission and are calculated
under the modified Black-Scholes model for pricing options. The actual before-
tax amount, if any, realized upon the exercise of stock options will depend
upon the excess, if any, of the market price of the Corporation common stock
(or, if the Merger is consummated, the Fleet common stock) over the exercise
price per share of such common stock of the Corporation option at the time the
stock option is exercised. There is no assurance that the hypothetical present
values of the options reflected in this table will be realized. Pursuant to the
Merger Agreement, each stock option that is outstanding immediately prior to
consummation of the Merger will be converted automatically at such time into,
and will become, a stock option to purchase Fleet common stock and will
continue to be governed by the terms of the Option Plan which will be assumed
by Fleet. The number of shares of Fleet common stock subject to, and the
exercise price of, such stock options will be adjusted to give effect to the
exchange ratio specified in the Merger Agreement. (See "Agreement and Plan of
Merger" contained in Item 13, below.)
OPTION GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS
-------------------------------------------------------------------------
NUMBER OF SECURITIES PERCENT OF TOTAL GRANT DATE
UNDERLYING OPTIONS GRANTED EXERCISE OR PRESENT
OPTIONS GRANTED TO EMPLOYEES BASE PRICE EXPIRATION VALUE (3)
NAME (1) (#) IN FISCAL YEAR (2) ($/SHARE) DATE (1) ($)
- ---- -------------------- ------------------ ----------- ---------- ----------
<S> <C> <C> <C> <C> <C>
Joel B. Alvord.......... 85,000 3.4% $23.125 1/27/2004 $452,094
17,562* 0.7% 23.375 1/17/1999 86,207
Gunnar S. Overstrom, 55,000 2.2% $23.125 1/27/2004 $292,531
Jr. .................... 13,946* 0.6% 23.875 1/17/1999 69,922
David L. Eyles.......... 30,000 1.2% $23.125 1/27/2004 $159,563
5,946* 0.2% 20.625 1/28/1999 25,754
Eileen S. Kraus......... 30,000 1.2% $23.125 1/27/2004 $159,563
5,852* 0.2% 20.750 1/17/1999 25,500
Michael J. Rothmeier.... 20,000 0.8% $23.125 1/27/2004 $106,375
Allen W. Sanborn........ 30,000 1.2% $23.125 1/27/2004 $159,563
</TABLE>
- --------
* Restoration options replace shares tendered to exercise prior options and
shares withheld for tax liability.
(1) Ten year stock options granted in 1994 will become exercisable in annual
one-third increments, beginning one year from the date of grant.
Restoration options will become exercisable one year after grant and will
expire at the same time as the original option. All options will become
exercisable upon a change in control of the Corporation which will be
deemed to include the approval and adoption of the Merger Agreement by the
holders of the Corporation's common stock.
(2) During 1994 a total of 2,472,746 options were granted.
(3) The hypothetical present values on grant date are calculated under the
modified Black-Scholes Model, which is a mathematical formula used to value
options traded on stock exchanges. This formula considers a number of
factors in hypothesizing an option's present value. Factors used to value
options include the stock's expected volatility rate (28%), risk free rate
of return (6%), dividend yield (4%), projected time of exercise (7 years)
and projected risk of forfeiture rate for vesting period (5% per annum).
Restoration option values are calculated using the same model and factors
as original options, except that the projected date of exercise is the
remaining term of the original grant (5 years) and the assumed risk free
rate of return is 5%.
8
<PAGE>
TABLE III
Table III sets forth certain information concerning options exercised during
1994 by the named executive officers and the number and value of specified
options at December 31, 1994. The value of unexercised in-the-money stock
options at December 31, 1994 shown below are presented pursuant to the
Commission's rules. The actual amount, if any, realized upon exercise of stock
options will depend upon the excess, if any, of the market price of the
Corporation's common stock (or, if the Merger is consummated, the Fleet common
stock) over the exercise price per share of such common stock of the stock
option at the time the option is exercised. There is no assurance that the
values of unexercised in-the-money options reflected in this table will be
realized.
AGGREGATED OPTION EXERCISES IN LAST YEAR AND FISCAL YEAR-END OPTION VALUES
<TABLE>
<CAPTION>
NUMBER OF SECURITIES
UNDERLYING VALUE OF UNEXERCISED
UNEXERCISED OPTIONS IN-THE-MONEY OPTIONS
AT FISCAL YEAR-END AT FISCAL YEAR-END(2)
SHARES ACQUIRED VALUE ------------------------- -------------------------
ON EXERCISE REALIZED EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
NAME (1) (#) ($) (#) (#) ($) (#)
- ---- --------------- -------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Joel B. Alvord.......... 25,000 $318,750 120,558 172,562 $ 0 $0
Gunnar S. Overstrom,
Jr. ................... 20,000 265,000 95,047 113,946 0 0
David L. Eyles.......... 8,000 77,000 5,740 65,946 0 0
Eileen S. Kraus......... 8,000 81,000 30,642 55,852 0 0
Michael J. Rothmeier.... 0 0 14,000 29,000 36,750 0
Allen W. Sanborn........ 0 0 30,000 50,500 52,500 0
</TABLE>
- --------
(1) The named executive officers used already owned shares to pay the exercise
price of options exercised during 1994. The options noted above were
exercised under the restoration option program, pursuant to which such
officers are required to retain, for a minimum of three years, the number
of newly acquired shares equal in value to the after-tax value realized on
the option exercise.
(2) Based upon the difference between exercise price and closing price per
share at December 31, 1994.
9
<PAGE>
TABLE IV
Table IV sets forth certain information concerning long-term incentive awards
granted to the named executive officers during 1994.
LONG-TERM INCENTIVE PLAN-AWARDS IN LAST FISCAL YEAR(1)
<TABLE>
<CAPTION>
ESTIMATED FUTURE PAYOUTS UNDER
NON-STOCK PRICE-BASED PLANS(3)
-----------------------------------
NUMBER OF
SHARE UNITS PERFORMANCE OR THRESHOLD TARGET MAXIMUM
MATURATION OR PAYMENT NAME (2) (#) OTHER PERIOD UNTIL (#) (#) (#)
- -------------------------- ----------- ------------------ ----------- ----------- -----------
<S> <C> <C> <C> <C> <C>
Joel B. Alvord.......... 23,000 12/31/96 0 23,000 23,000
Gunnar S. Overstrom,
Jr. ................... 11,500 12/31/96 0 11,500 11,500
David L. Eyles.......... 5,700 12/31/96 0 5,700 5,700
Eileen S. Kraus......... 5,700 12/31/96 0 5,700 5,700
Michael J. Rothmeier.... 5,100 12/31/96 0 5,100 5,100
Allen W. Sanborn........ 5,700 12/31/96 0 5,700 5,700
</TABLE>
- --------
(1) The performance equity plan was adopted during 1993 to provide significant
and fully competitive long-term reward opportunities for key senior members
of management. Participants have the opportunity to earn their target
performance equity share units if predetermined strategic business goals
are achieved, and shareholder value is thereby created.
(2) Under the 1994-1996 cycle, the named executive officers received awards of
target performance equity share units based on individual performance as
determined by the human resources committee.
(3) Awards are earned, based on an accelerating scale, if the Corporation
achieves a preestablished threshold return on average common equity. If the
target return on average common equity is met, the number of shares of the
Corporation's common stock paid out will equal the number of performance
equity share units granted, plus dividend equivalents. Performance below
the threshold goal will result in no payout; there is no minimum payout
under the plan. Under the plan, all restrictions on outstanding performance
equity share units will lapse upon a change of control, which will be
deemed to include the approval of the Merger Agreement by the holders of
the Corporation's common stock.
TABLE V
PENSION TABLE
<TABLE>
<CAPTION>
YEARS OF CREDITED SERVICE
---------------------------------------
FINAL
COMPENSATION 15 20 25 30 35
- ------------ ------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C>
$ 400,000.............................. 120,000 160,000 200,000 240,000 240,000
500,000.............................. 150,000 200,000 250,000 300,000 300,000
600,000.............................. 180,000 240,000 300,000 360,000 360,000
700,000.............................. 210,000 280,000 350,000 420,000 420,000
800,000.............................. 240,000 320,000 400,000 480,000 480,000
900,000.............................. 270,000 360,000 450,000 540,000 540,000
1,000,000.............................. 300,000 400,000 500,000 600,000 600,000
1,100,000.............................. 330,000 440,000 550,000 660,000 660,000
1,200,000.............................. 360,000 480,000 600,000 720,000 720,000
1,300,000.............................. 390,000 520,000 650,000 780,000 780,000
</TABLE>
Table V sets forth information for determining the estimated annual
retirement benefits commencing at age 65 that would be payable to participants
under the Corporation's defined benefit plans pursuant to which benefits are
determined by final compensation and years of service ("retirement plans").
Compensation for
10
<PAGE>
purposes of the pension table means the final year's salary and the average of
the short-term incentive awards for the five highest consecutive calendar years
after 1984 (see summary compensation table for salary). The amounts set forth
in the table are offset by social security benefits and assume payment in the
form of a 50% joint and survivor annuity, but do not reflect the reduction for
tax payments discussed below. As of December 31, 1994, remuneration covered by
the retirement plans and years of credited service as defined therein are as
follows for the named executive officers: Mr. Alvord, $1,042,000 and 35 years;
Mr. Overstrom, $788,600 and 24 years; Mr. Eyles, $522,500 and 7 years; Mrs.
Kraus, $459,000 and 15 years; and Mr. Rothmeier, $406,667 and 2 years; and Mr.
Sanborn, $540,000 and 2 years.
The Corporation also maintains a split-dollar life insurance program which,
in addition to supplemental insurance benefits, provides a choice of
postretirement death benefits or supplemental retirement income. The formula by
which any retirement benefits for executive officers are determined under the
split-dollar life insurance program is 4% of cumulative base salary (6% for Mr.
Alvord) for all years of participation in the plan.
The retirement plans include a tax-qualified pension plan and a supplemental,
nonqualified pension plan. At the election of individual participants, the
Corporation funds the supplemental plan and the split-dollar life insurance
plan discussed above through contributions to an irrevocable trust (the
"trust'). Such contributions will constitute taxable income to an electing
participant to the extent and at the time that the participant's benefit
becomes vested; income of the trust may also constitute taxable income to such
participants. The trust provides for the distribution annually to each electing
participant (or the remittance by the Corporation to the appropriate tax
authority on behalf of the participant) of an amount sufficient to pay all
income taxes imposed on the participant in connection with the trust; the trust
also provides for the retirement benefits to which electing participants will
be entitled to be reduced to their after-tax equivalents.
Executive severance and employment agreements
Messrs. Alvord, Overstrom, Eyles, Mrs. Kraus, and Mr. Rothmeier have
severance agreements which provide that if termination of such executive's
employment occurs within the two-year period following a change in control of
the Corporation and such termination is by the Corporation for other than cause
(as defined in the agreements) or by the executive for good reason (as defined
in the agreements), the executive will be entitled to receive, among other
things, (i) an amount ("severance pay") equal to the sum of base salary and any
amount awarded under the short-term incentive plan for the year preceding the
year of termination (or, under the agreements of Mr. Eyles, Mrs. Kraus, and Mr.
Rothmeier, if greater, preceding the change in control) multiplied by three or
the number of years remaining to the executive's 65th birthday, whichever is
the shorter (the "applicable period"); (ii) a pro rata portion of any award
related to any uncompleted performance award period under the performance plan;
and (iii) under the agreements of Mr. Alvord and Mr. Overstrom, an amount in
cash generally equal to the aggregate difference between the exercise price of
certain stock options held by the executive and the higher of the closing price
of the Corporation's common stock on the date of termination of employment or
the highest per share price paid in connection with any change in control of
the Corporation. These agreements also provide for the continuation of health,
medical and life insurance coverage for each executive after termination of
employment until the expiration of the applicable period or, if sooner, until
such benefits are provided through the executive's reemployment, and provide
each executive with pension benefits equal to the amount which the executive
would have received under the applicable pension plans had said executive been
fully vested and remained employed for the applicable period, reduced by the
pension benefits the executive will actually receive under such pension plans.
These agreements confer no benefits prior to a change in control. In the event
that any payments received by Messrs. Alvord and Overstrom in connection with a
change in control are subjected to the excise tax imposed upon certain change
in control payments under federal tax laws, these agreements provide for an
additional payment sufficient to restore the executive to the same after-tax
position the executive would have had if the excise tax had not been imposed.
The agreements of Mr. Eyles, Mrs. Kraus, and Mr. Rothmeier provide that
payments received in connection with a change in control will be reduced to the
extent necessary to avoid the imposition of any such excise tax.
11
<PAGE>
The Corporation has entered into an employment agreement with each of Mr.
Alvord and Mr. Overstrom, effective as of February 24, 1994, each of which
contains the following terms and conditions: (i) an initial term of three
years, subject to extension for an additional one-year period on each
successive anniversary of the effective date unless the Corporation gives
notice of nonrenewal at least 60 days prior to such anniversary, (ii) annual
salary at least equal to that in effect on the effective date, (iii)
participation in all compensation and employee benefit arrangements available
to other executive officers of the Corporation, and (iv) noncompetition and
confidentiality covenants by the officers. In the event that the executive is
terminated by the Corporation without cause (as defined in the agreements) or
the executive terminates his employment for good reason (as defined in the
agreements), then the affected executive will be entitled to receive, for the
then remaining term of the agreement, salary, short- and long-term incentive
compensation and coverage or credited service, as applicable, under the
Corporation's employee benefit plans. In addition, if any of such events
occurs, the outstanding equity awards for the affected executive would vest,
but would continue to become exercisable or nonrestricted, as applicable, as
originally scheduled.
The Corporation entered into two-year employment agreements with Messrs.
Eyles and Sanborn on March 1, 1992 and May 11, 1992, respectively, providing
for annual salaries of $310,000 and $360,000, respectively. These agreements
also prescribe the 1993 grants of stock options, awards of restricted stock
and awards of short-term bonuses made to the executives for 1993, as disclosed
above on the summary compensation table. In the event of termination of
employment by the Corporation other than for cause (as defined in the
agreements) or by the executive for good reason (as defined in the
agreements), these agreements provide for the continuation of salary payments
for the remainder of their terms and, with respect to other matters, generally
provide as set forth in the employment agreements described above. On May 11,
1994, Mr. Sanborn's employment agreement expired in accordance with its terms.
On May 16, 1994, Mr. Eyles's employment agreement with the Corporation was
amended to provide for a termination date of May 15, 1997, subject to
automatic one year extension periods unless written notice to the contrary is
provided by either party on or before the March 17th immediately prior to such
May 16th renewal date. In the event of a termination of Mr. Eyles's employment
after a change in control of the Corporation, any benefits payable to Mr.
Eyles as a result of such termination will be paid pursuant to Mr. Eyles's
existing severance agreement described above, and no amounts will be payable
in such circumstance pursuant to Mr. Eyles's employment agreement.
The Corporation entered into a letter agreement (the "Letter Agreement")
with Mr. Sanborn as of September 16, 1994 in connection with his termination
of employment. Pursuant to the Letter Agreement, the Corporation has agreed to
provide to Mr. Sanborn (1) continued base salary and certain welfare benefits
until December 31, 1995, (2) his bonus with respect to 1994, (3) the payment
to which he would have been entitled under the Corporation's Performance
Equity Plan, with respect to the performance cycle ended on December 31, 1994,
had his employment continued until December 31, 1994, and (4) an election,
exercisable only at the times specified in the Letter Agreement, to receive a
cash payment with respect to all options held by him in an amount equal to the
fair market value of the stock subject thereto on the date of such election
over the exercise price thereof. The Letter Agreement also includes covenants
relating to non-competition and confidential information, as well as mutual
releases.
Compensation committee interlocks and insider participation
Mr. Alvord is chairman of the compensation committee of the board of
directors of The Hartford Steam Boiler Inspection and Insurance Company
("HSB"). Mr. Wilde, who is chairman of the executive committee and a director
of HSB, is a director of the Corporation; however, Mr. Wilde does not serve on
the Corporation's human resources committee. The following directors, all of
whom are nonemployees of the Corporation, serve on the human resources
committee of the Corporation: Stillman B. Brown, John T. Collins, Robert J.
Matura, Maurice Segall, and Paul R. Tregurtha (chairman).
12
<PAGE>
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.
The ownership of the Corporation's common stock is widely diversified. On
March 31, 1995, approximately 30,259 shareholders of record owned 121,942,840
shares, excluding 137,732 shares that are reserved for issuance in connection
with the completion of the exchange of the securities of certain previously
acquired companies. The following table sets forth information as to the only
persons known to the Corporation's board to be the beneficial owners of 5% or
more of the Corporation's Common Stock:
<TABLE>
<CAPTION>
NAME AND ADDRESS OF AMOUNT AND NATURE PERCENT OF
BENEFICIAL OWNER OF BENEFICIAL OWNERSHIP CLASS
------------------- ----------------------- ----------
<S> <C> <C>
Fleet Financial Group, Inc. ........... 30,017,492(1) 20.6%(1)
50 Kennedy Plaza
Providence, RI 02903
FMR Corp. ............................. 8,614,167(2) 7.16%(2)
82 Devonshire Street
Boston, MA 02109
</TABLE>
- --------
(1) Based upon information contained in a Schedule 13D dated February 20, 1995
and filed under the Exchange Act by Fleet Financial Group, Inc. ("Fleet").
In connection with the execution of the Agreement and Plan of Merger, dated
as of February 20, 1995, by and between the Corporation and Fleet, the
Corporation granted Fleet an option (the "Option") to purchase up to
24,195,625 shares (the "Option Shares") of the Corporation's common stock
upon the occurrence of certain events, none of which has occurred as of the
date hereof. Because the Option is not currently exercisable, Fleet has
disclaimed beneficial ownership of the Option Shares. Other than the Option
Shares, Fleet beneficially owns and has sole voting and sole dispositive
power with respect to 5,811,900 shares of the Corporation's common stock.
Certain directors and executive officers of Fleet beneficially own and have
sole voting and sole dispositive power with respect to, in the aggregate,
4,950 shares of the Corporation's common stock. Terrence Murray, the
Chairman, Chief Executive Officer and President of Fleet, beneficially owns
17 currently exercisable warrants, each warrant representing the right to
purchase one share of the Corporation's common stock at an exercise price
of $22.11.
(2) Based upon information contained in a Schedule 13G dated February 13, 1995
and filed under the Exchange Act by FMR Corp. ("FMR"). Based upon the
information contained in the Schedule 13G, FMR is a beneficial owner of
these shares as a result of various of its subsidiaries and affiliates
providing investment advisory and management services and has sole voting
power with respect to 232,455 of the shares, shared voting power with
respect to 2,000 of the shares, sole dispositive power with respect to
8,612,167 of the shares and shared dispositive power with respect to 2,000
of the shares.
13
<PAGE>
The table below sets forth beneficial ownership of the Corporation's common
stock by each director, and by all directors and executive officers as a group
as of March 31, 1995. As of that date all directors and executive officers as a
group (21 in number) controlled 547,995 shares directly and controlled 3,100
shares indirectly, or a total of 551,095 shares representing .45% of the
outstanding shares. No director or executive officer beneficially owns or
controls directly or indirectly more than 1% of the outstanding shares. The
group (21 in number) would have beneficially owned or controlled 945,752
shares, representing .78% of outstanding shares, if all stock options
exercisable within 60 days of March 31, 1995 had been exercised. Except as may
be indicated below, each director possesses sole voting and investment power
with respect to the number of shares described as beneficially owned. Except as
set forth below, no director or executive officer reported any ownership of any
shares of any series of the Corporation's preferred stock.
<TABLE>
<CAPTION>
AMOUNT AND NATURE OF
NAME OF BENEFICIAL OWNER BENEFICIAL OWNERSHIP
------------------------ --------------------
<S> <C>
Joel B. Alvord........................................ 278,762(1)(2)
Stillman B. Brown..................................... 27,316
John T. Collins(5).................................... 32,911
Ferdinand Colloredo-Mansfeld.......................... 10,666
Bernard M. Fox........................................ 4,270
Robert J. Matura(6)................................... 9,435
Gunnar S. Overstrom, Jr. ............................. 249,712(2)(3)
Lois D. Rice(7)....................................... 3,410
Maurice Segall........................................ 28,768
Samuel O. Thier....................................... 283
Paul R. Tregurtha..................................... 25,666
Wilson Wilde.......................................... 13,410
Directors and executive officers as a group........... 945,752(2)(4)
</TABLE>
- --------
(1) Includes 159,786 shares that are subject to unexercised stock options which
are exercisable within 60 days of March 31, 1995, none of which are at
option prices in excess of the market price of the Corporation's common
stock on March 31, 1995; and 30,016 shares held in the employees' thrift
plan.
(2) Does not include unexercised stock options to acquire an aggregate of
834,186 shares which are not exercisable within 60 days of March 31, 1995
and 232,850 restricted stock units awarded under the Corporation's
Performance Equity Plan as follows: options to acquire 233,334 shares at an
average exercise price of $22.07 and 70,000 restricted stock units held by
Mr. Alvord; options to acquire 141,667 shares at an average exercise price
of $22.14 and 37,250 restricted stock units held by Mr. Overstrom; options
to acquire 90,946 shares at an average exercise price of $21.22 and 18,650
restricted stock units held by Mr. Eyles; options to acquire 69,186 shares
at an average exercise price of $21.25 and 17,400 restricted stock units
held by Mrs. Kraus; options to acquire 49,334 shares at an average exercise
price of $22.42 and 15,100 restricted stock units held by Mr. Rothmeier;
and with respect to all other executive officers, options to acquire an
aggregate of 249,669 shares at an average exercise price of $22.01 and
74,450 restricted stock units. The approval of the Merger by the holders of
the Corporation's common stock will cause all such options to become fully
exerciseable and all restrictions on such restricted stock units to lapse.
(3) Includes 119,826 shares that are subject to unexercised stock options which
are exercisable within 60 days of March 31, 1995, none of which are at
option prices in excess of the market price of the Corporation's common
stock on March 31, 1995; 28,848 shares held in the employees' thrift plan;
and 3,100 shares held in the names of his wife and children.
(4) With respect to executive officers other than Messrs. Alvord and Overstrom,
this number includes (i) shares that are subject to unexercised stock
options which are exerciseable within 60 days of March 31, 1995, none of
which are at option prices in excess of the market price of the
Corporation's common stock on March 31, 1995, as follows: Mr. Eyles, 25,740
shares, Mrs. Kraus, 38,308 shares, Mr. Rothmeier, 23,666 shares, and for
all other executive officers, 27,331 shares; (ii) shares held in the
14
<PAGE>
employees' thrift plan as follows: Mr. Eyles, 0 shares, Mrs. Kraus, 20,388
shares, Mr. Rothmeier, 986 shares, and for all other executive officers,
2,199 shares; (iii) shares of restricted stock as follows: Mr. Eyles, 0
shares, Mrs. Kraus, 0 shares, Mr. Rothmeier, 2,666 shares, and for all other
executive officers, 30,998 shares; and (iv) with respect to Mr. Eyles, Mrs.
Kraus, Mr. Rothmeier, and all other executive officers, 0 shares held in the
name of family members. The approval of the Merger by the holders of the
Corporation's common stock will cause all such options to become fully
exercisable and all restrictions on shares of restricted stock to lapse.
(5) In addition, Mr. Collins owns 10,000 of the Corporation's 9.35% Depositary
Shares.
(6) In addition, Mr. Matura owns 1,000 of the Corporation's 9.30% Depositary
Shares.
(7) In addition, Mrs. Rice owns 124 of the Corporation's 9.30% Depositary
Shares and 1,000 of the Corporation's 9.35% Depositary Shares.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.
Certain directors and executive officers of the Corporation and their
associates are customers of and have had transactions with SBC and SBM and
their subsidiaries and affiliates in the ordinary course of business during the
last fiscal year. 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 normal risk of collectibility or present other
unfavorable features. Additional transactions may be expected to take place
between such persons and these banks in the ordinary course of business.
Agreement and Plan of Merger
On February 20, 1995, the Corporation and Fleet Financial Group, Inc.
("Fleet") entered into an agreement and plan of merger (the "Merger Agreement")
pursuant to which the Corporation will merge with and into Fleet (the
"Merger"). As a result of the Merger, each share of the Corporation's $.01 par
value common stock outstanding will be converted into the right to receive
.8922 shares of $1.00 par value Fleet common stock. Each share of the various
series of the Corporation's preferred stock will be converted into the right to
receive a share of an equivalent series of Fleet preferred stock. The Merger is
expected to be completed in the fourth quarter of 1995, and is subject to the
approval of the common stock shareholders of Fleet and the Corporation, the
receipt of various regulatory approvals, and the satisfaction (or, where
permissible, waiver) of certain other standard closing conditions.
Directors' remuneration
Directors' remuneration for 1994 was fixed by the board of directors at the
board meeting following the annual meeting of shareholders. Each nonemployee
director elected at the 1994 annual meeting of shareholders received an annual
retainer of $25,000, payable in common stock of the Corporation pursuant to the
restricted stock plan described below, and a fee of $1,500 per meeting
attended. In addition, the chairmen of the audit, human resources and
nominating committees each received an additional cash retainer of $5,000.
Employees who are also directors do not receive any compensation for service as
directors other than salary and related benefits. Pursuant to the Corporation's
deferred compensation plan for directors, directors may elect to defer all of
their compensation as directors in any one year.
On April 25, 1989, the shareholders of the Corporation approved the adoption
of a restricted stock plan for nonemployee members of the board of directors,
which plan is administered by the human resources committee. The maximum number
of shares of common stock of the Corporation that may be granted under the plan
is 125,000. Awards of restricted stock were made automatically, on the date of
the 1994 annual meeting of shareholders, to each nonemployee director who was
elected at the 1994 meeting or otherwise continued in office. The number of
shares of restricted stock awarded to each nonemployee director so elected
15
<PAGE>
equalled the amount payable to the nonemployee director as an annual retainer
for the calendar year within which the award date fell, divided by the fair
market value of each such share on the award date. Effective December 15, 1994,
the board of directors amended the restricted stock plan to allow nonemployee
directors to elect to receive the annual retainer in shares of restricted stock
of the Corporation, in cash, or in a combination thereof. The annual retainer
does not include fees paid for attendance at any board or committee meeting or
for chairing a committee of the board. In 1994, a total of 10,390 shares of the
common stock of the Corporation were awarded to nonemployee directors under the
amended plan. Directors who are not employees are not eligible to participate
in any of the plans presently in effect for employees of the Corporation.
In January 1995, as part of the Corporation's policy of providing support for
charitable institutions and in order to retain and attract qualified directors,
the board of directors established a charitable giving program, which will be
funded by life insurance on the lives of the members of the board of directors.
Each director is permitted to recommend up to three tax-exempt charities to
receive contributions. Under the program, directors of the Corporation will be
paired up based upon similar life expectancies. When the first director of the
pair of directors dies, the Corporation will make a charitable contribution of
$1 million, paid out over a period of ten years. Upon the death of the second
director of the pair of directors, the insurance company reimburses the
Corporation for the money the Corporation has paid out, pays out any balance
due for the remaining ten year period from the death of the first director, and
pays out the charitable contribution of $1 million over a period of ten years
following the death of the second director. Directors derive no financial
benefit from the program. Because of the deductibility to the Corporation of
contributions and the use of insurance, the long-term cost to the Corporation
is not expected to be material.
16
<PAGE>
SIGNATURES
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES EXCHANGE ACT OF 1934, THE
REGISTRANT HAS DULY CAUSED THIS REPORT TO BE SIGNED ON ITS BEHALF BY THE
UNDERSIGNED HEREUNTO DULY AUTHORIZED.
Shawmut National Corporation
/s/ Joel B. Alvord
By: _________________________________
Joel B. Alvord
Chairman and Chief Executive
Officer
Dated: April 28, 1995
17
