<PAGE>
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
Filed by the registrant [X]
Filed by a party other than the registrant [_]
Check the appropriate box:
[_] Preliminary proxy statement
[X] Definitive proxy statement
[_] Definitive additional materials
[_] Soliciting material pursuant to Rule 14a-11(c) or Rule 14a-12
FIRST USA, INC.
- --------------------------------------------------------------------------------
(NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
FIRST USA, INC.
- --------------------------------------------------------------------------------
(NAME OF PERSON(S) FILING PROXY STATEMENT)
Payment of Filing Fee (check the appropriate box):
[X] $125 per Exchange Act Rule 0-11(c)(1)(ii), 14a-6(j)(2).
[_] $500 per each party to the controversy pursuant to Exchange Act Rule 14a-
6(i)(3).
[_] Fee computed on table per Exchange Act Rules 14a-6(i)(4) and 0-11.
<PAGE>
LOGO
FIRST USA, INC.
1601 ELM STREET
DALLAS, TEXAS 75201
----------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
The 1996 Annual Meeting of the Stockholders of First USA, Inc. will be held
at the Hotel Crescent Court, 400 Crescent Court, in Dallas, Texas on
Wednesday, November 6, 1996, at 10:30 a.m., for the following purposes:
1. To elect three Class II directors to serve until the expiration of their
terms and until their successors are elected and qualify;
2. To authorize the adoption of the First USA, Inc. Deferred Compensation
Plan;
3. To authorize the adoption of an amendment to the First USA, Inc.
Employee Stock Purchase Plan that would increase the number of shares of
Common Stock available for purchase under such plan and would increase
the maximum percentage of compensation that each employee is eligible to
allocate for participation under such plan; and
4. To transact whatever other business may properly be brought before the
meeting.
Stockholders of record at the close of business on September 13, 1996 by
order of the Board of Directors are entitled to notice of and to vote at the
meeting.
/s/ John C. Tolleson
John C. Tolleson
Chairman and Chief Executive Officer
/s/ Richard W. Vague
Richard W. Vague
President
September 30, 1996
----------------
Please mark, sign, date and return promptly the enclosed proxy in the enclosed
envelope even if you plan to attend the meeting. If you attend the meeting and
wish to vote in person, you may then withdraw your proxy.
<PAGE>
FIRST USA, INC.
1601 ELM STREET
DALLAS, TEXAS 75201
PROXY STATEMENT
First USA, Inc. (the "Company"), incorporated in 1989, is a Delaware
corporation, which, through its wholly-owned subsidiary, First USA Bank, is
the fourth largest issuer of Visa and MasterCard credit cards in the United
States. The Company's majority-owned subsidiary, First USA Paymentech, Inc.
("First USA Paymentech"), engages in the credit card industry primarily as a
payment processor of merchant bankcard transactions. The Company conducts its
credit card business through its wholly owned subsidiary, First USA Financial,
Inc., which is the parent company of First USA Bank, and the majority
stockholder of First USA Paymentech. First USA Federal Savings Bank ("First
USA FSB"), a wholly-owned subsidiary of the Company and its newest operating
unit, is focused on expanding the Company's relationship with its Cardmembers.
It expects to offer financial products related to significant life events of
the typical household by using the Company's existing distribution system as a
conduit for delivering multiple financial products.
This Proxy Statement is furnished in connection with the solicitation by the
Company of proxies to be voted at its Annual Meeting of Stockholders to be
held at 10:30 a.m. on November 6, 1996, at the Hotel Crescent Court, 400
Crescent Court, in Dallas, Texas and at any adjournment thereof. This Proxy
Statement was first mailed or given to stockholders on September 30, 1996.
Solicitation of proxies may be made by mail, personal interview, telephone
and telegraph by directors, officers and employees of the Company. In
addition, the Company has retained Georgeson & Company Inc. ("Georgeson") to
solicit proxies at an estimated fee of $10,000 plus expenses. Expenses for
such solicitation will be borne by the Company. Brokers and others will be
reimbursed for their reasonable expenses in forwarding the proxy material to
their customers who have beneficial interests in stock of the Company
registered in names of nominees.
Any proxy may be revoked by a stockholder at any time prior to its use by
execution of another proxy bearing a later date, by written notice to the
Secretary of the Company at the address set forth above or by oral or written
statement at the meeting. Shares represented by any proxy properly executed
and received prior to the meeting will be voted at the meeting in accordance
with the proxy or, if the proxy does not specify, in accordance with the
recommendation of the Board of Directors.
Stockholders of record at the close of business on September 13, 1996 are
entitled to notice of and to vote at the meeting. On the record date, the
Company had 60,877,820 shares of common stock (the "Common Stock") outstanding
and 5,750,000 shares of Mandatory Convertible Preferred Stock ("Preferred
Stock") outstanding. Each share of Common Stock outstanding on the record date
is entitled to one vote and each share of Preferred Stock outstanding on the
record date is entitled to 4/5 of one vote, all shares of Common Stock and
Preferred Stock voting together as a single class. There is no provision for
cumulative voting.
A quorum for the meeting requires the presence in person or by proxy of
stockholders entitled to cast a majority of the votes entitled to be cast at
the meeting. The election of directors requires a plurality of the votes cast
by the holders of Common Stock and Preferred Stock at the meeting. The
approval of the First USA, Inc. Deferred Compensation Plan (the "Deferred
Compensation Plan") and the amendment to the First USA, Inc. Employee Stock
Purchase Plan (the "Purchase Plan") each require the affirmative vote of the
holders of a majority of the voting power of the shares of Common Stock and
Preferred Stock present or represented and entitled to vote at the meeting.
Stockholders will vote at the meeting by ballot and votes cast at the
meeting in person or by proxy will be tallied by the Company's Transfer Agent
and Registrar, the Bank of New York. Shares held by stockholders present at
the meeting in person who do not vote and ballots marked "abstain" or
"withheld" will be counted as present at the meeting for quorum purposes. With
respect to the items submitted for approval, abstentions will have the effect
of a vote against the proposal and broker non-votes will be disregarded and
will have no effect on the outcome of the vote. There are no rights of
appraisal or similar dissenter's rights with respect to any matter to be acted
upon pursuant to this Proxy Statement.
<PAGE>
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information believed by the Company
to be accurate based on information provided to it concerning the beneficial
ownership of Common Stock and Preferred Stock by each stockholder who is known
by the Company to own beneficially in excess of 5% of the outstanding
securities in either class as of the latest practicable date, and by each
director, the Company's Chief Executive Officer, each of the Company's other
four most highly compensated executive officers and all officers and directors
as a group, as of September 1, 1996. Except as otherwise indicated, all
persons listed below have (i) sole voting power and investment power with
respect to their shares, except to the extent that authority is shared by
spouses under applicable law, and (ii) record and beneficial ownership with
respect to their shares. The shares and percentages set forth below with
respect to the Common Stock include shares of Common Stock which are
outstanding or issuable within 60 days upon the exercise of options
outstanding as of September 1, 1996 and shares of restricted stock and exclude
shares issuable upon conversion of Preferred Stock.
<TABLE>
<CAPTION>
COMMON STOCK PREFERRED STOCK
-------------------- --------------------
NUMBER OF PERCENTAGE NUMBER OF PERCENTAGE
NAME OF BENEFICIAL OWNER SHARES OF CLASS SHARES OF CLASS
------------------------ --------- ---------- --------- ----------
<S> <C> <C> <C> <C>
Harris Associates L.P. (a).......... 6,375,455 10.0% -- --
Neuberger & Berman L.P. (b)......... 5,396,270 8.4% -- --
Provident (Kommerstad) Investment
Counsel, Inc. (c).................. 4,695,208 7.3% -- --
D.E. Shaw Investments, L.P. (d)..... -- -- 766,800 13.3%
Highbridge Capital Corporation (e).. -- -- 564,500 9.8%
Salomon Inc (f)..................... -- -- 324,900 5.7%
Gerald S. Armstrong (g)(h)(i)....... 119,231 * -- --
Gene H. Bishop (g)(h)............... 35,000 * -- --
Charles T. Russell (g)(h)........... 15,100 * -- --
Rupinder S. Sidhu (g)(h)(j)......... 397,041 * -- --
Roger T. Staubach (g)(h)............ 15,000 * 4,000 *
John C. Tolleson (g)(h)(k)(l)....... 1,853,246 2.9% -- --
Richard W. Vague (g)(h)(m).......... 729,992 1.1% -- --
Carl H. Westcott (g)(h)(m).......... 15,000 * -- --
Randy L. Christofferson (h)(l)...... 140,524 * -- --
Jack M. Antonini (h)(l)............. 60,147 * -- --
Pamela H. Patsley (h)(l)............ 248,210 * -- --
All executive officers and directors
as a group
(20 persons) (h)(n)................ 4,536,416 7.1% 4,000 *
</TABLE>
- --------
* Less than 1.0%
(a) Harris Associates L.P. ("Harris") is a registered investment advisor of
which Harris Associates, Inc. (the "General Partner") is the sole general
partner. Harris is deemed to be the beneficial owner of the shares of
Common Stock by reason of advisory and other relationships with persons
who own such shares. Harris shares the power to vote or direct the vote of
each of the shares listed above. Harris has sole dispositive power as to
2,782,655 shares of Common Stock and shares dispositive power as to
3,592,800 shares of Common Stock. In addition, Harris serves as investment
advisor to Harris Associates Investment Trust (the "Harris Trust"), and
various officers and directors of Harris are also officers of the Harris
Trust. The series of the Harris Trust designated The Oakmark Fund
beneficially owns 3,548,000 shares of Common Stock, which shares are
included in the total number of shares over which Harris has shared voting
and dispositive power and as beneficially owned by Harris, because of
Harris' power to manage the Harris Trust's investments. The address for
Harris and the General Partner is Two North LaSalle Street, Suite 500,
Chicago, Illinois 60602.
(b) Neuberger & Berman L.P. ("N&B") is a registered investment advisor. In its
capacity as investment advisor, N&B may share discretionary authority to
dispose of or vote shares of numerous unrelated clients that are under its
management. As a result, N&B may be deemed to have beneficial ownership of
such
2
<PAGE>
shares. N&B does not, however, have any economic interest in the shares.
The clients are the actual owners of the shares and have the sole right to
receive and the power to direct the receipt of dividends or proceeds from
the sale of such shares. N&B has shared dispositive power with respect to
all of the shares of Common Stock, sole voting power with respect to
1,674,600 shares of Common Stock and shared voting power with respect to
2,448,500 shares of Common Stock. Partners of N&B own 22,900 shares in
their personal securities accounts. N&B disclaims beneficial ownership of
such shares since each partner has exclusive dispositive and voting power
with such partner's respective shares. No single N&B client has an interest
at N&B that amounts to 5% or more of the shares of the Company. The address
for N&B is 605 Third Avenue, New York, New York 10158-3698.
(c) Provident (Kommerstad) Investment Counsel, Inc., a registered investment
advisor ("Provident"), is the successor to Provident Investment Counsel, a
registered investment advisor. Provident is a wholly-owned subsidiary of
United Asset Management Holdings, itself a wholly owned subsidiary of
United Asset Management Corporation. Provident's beneficial ownership of
the Common Stock is direct as a result of Provident's discretionary
authority to buy, sell and vote the shares for its investment advisory
clients. Provident has sole voting power as to 3,648,244 shares and sole
dispositive power as to all of the shares. The address for Provident is
300 North Lake Avenue, Pasadena, California 91101.
(d) D.E. Shaw Investments, L.P. is a registered broker-dealer ("D.E. Shaw"),
of which David E. Shaw ("Shaw") is the President and sole stockholder of
D.E. Shaw & Co., Inc. ("Shaw & Co."), the general partner of D.E. Shaw.
D.E. Shaw is the record owner of the these shares of Preferred Stock. D.E.
Shaw and Shaw & Co. are the beneficial owners of the these shares of
Preferred Stock. By virtue of Shaw's positions in Shaw & Co., the general
partner of D.E. Shaw, Shaw may be deemed to share the power to vote or
direct the vote of, and share the power to dispose or direct the
disposition of, these shares of Preferred Stock. Shaw disclaims beneficial
ownership of such shares. The address for D.E. Shaw, Shaw and Shaw & Co.
is 120 West 45th Street, 39th Floor, New York, New York 10036.
(e) Highbridge Capital Corporation ("Highbridge") is a hedge fund engaged in
the business of investing in securities. Highbridge shares dispositive
power with respect to these shares of Preferred Stock with Highbridge
Capital Management, its investment advisor. The address for Highbridge
Capital Corporation is P.O. Box 30554-SMB, Grand Cayman, Cayman Islands,
British West Indies.
(f) Salomon Brothers Inc ("SBI") is a registered broker-dealer. SBI is a
wholly-owned subsidiary of Salomon Brothers Holding Company ("SBHC"),
itself a wholly-owned subsidiary of Salomon Inc ("Salomon"). SBI is the
direct beneficial owner of these shares of Preferred Stock and SBHC and
Salomon are indirect beneficial owners. The address for SBI, SBHC and
Salomon is Seven World Trade Center, New York, New York 10048.
(g) Gerald S. Armstrong, Gene H. Bishop, Charles T. Russell, Rupinder S.
Sidhu, Roger T. Staubach, John C. Tolleson, Richard W. Vague and Carl H.
Westcott are directors of the Company.
(h) The shares listed include shares subject to options exercisable within 60
days of September 1, 1996 as follows: Mr. Armstrong, 15,000 shares; Mr.
Bishop, 15,000 shares; Mr. Russell, 15,000 shares; Mr. Sidhu, 15,000
shares, Mr. Staubach, 15,000 shares; Mr. Tolleson 925,536 shares; Mr.
Vague, 399,460 shares; Mr. Westcott, 15,000 shares; Mr. Christofferson,
90,000 shares; Mr. Antonini, 55,000 shares; and Ms. Patsley, 157,496
shares; all executive officers and directors as a group, 2,275,344 shares.
The address for Messrs. Armstrong, Bishop, Russell, Sidhu, Staubach,
Tolleson, Westcott and Antonini and Ms. Patsley is c/o First USA, Inc.,
1601 Elm Street, Dallas, Texas 75201. The address for Messrs. Vague and
Christofferson is c/o First USA Bank, Three Christina Centre, 201 North
Walnut, Wilmington, Delaware 19801.
(i) Excludes 12,000 shares held by Mr. Armstrong's spouse as custodian on
behalf of Mr. Armstrong's three children. Mr. Armstrong disclaims
beneficial ownership of such shares.
(j) Excludes 20,000 shares held by Merion Partners, L.P. ("Merion"), which has
sole voting power and investment power with respect to such shares. Mr.
Sidhu is President of the General Partner of Merion. Mr. Sidhu disclaims
beneficial ownership of such shares.
(k) Excludes 20,000 shares held by The Tolleson 1994 Descendants Trust under
Agreement dated September 7, 1994 for the benefit of Mr. Tolleson's
children. Mr. Tolleson disclaims beneficial ownership of such shares.
3
<PAGE>
(l) Messrs. Tolleson, Vague, Christofferson and Antonini and Ms. Patsley are
executive officers of the Company.
(m) Excludes 600 shares held by Mr. Westcott's spouse. Mr. Westcott disclaims
beneficial ownership of such shares.
(n) Excludes 2,800 shares held by one of the executive officers in Uniform
Gift to Minors Act accounts for the benefit of his children, as well as
113 shares held by an executive officer's spouse. Each of these executive
officers disclaims beneficial ownership of such shares.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), requires the Company's officers and directors and persons who
own more than ten percent (10%) of a registered class of the Company's equity
securities (collectively, the "Reporting Persons") to file reports of
ownership and changes in ownership with the Securities and Exchange Commission
(the "Commission") and to furnish the Company with copies of these reports.
The Company believes that all filings required to be made by the Reporting
Persons during the fiscal year ended June 30, 1996 were made on a timely basis
other than Form 3 filings with respect to five new executive officers of the
Company (Messrs. Antonini, Christofferson, Peter W. Atwater, Jeffrey G.J.
Chittenden and Gary J. Marino) and a Form 5 filing by Mr. James W. Stewart, an
executive officer of the Company.
4
<PAGE>
ELECTION OF DIRECTORS
The Board of Directors has proposed Gene H. Bishop, John C. Tolleson and
Carl H. Westcott as nominees for reelection as Class II directors to serve for
three-year terms and until their successors are elected and qualify. A
plurality of the votes cast at the meeting is required to elect each nominee.
Shares represented by proxies will be voted for the election of the nominees
named below unless authority to do so is withheld. If, at the time of the
annual meeting, any nominee should be unable to serve, the shares represented
by a proxy may be voted for a substitute nominee to be designated by the Board
of Directors.
<TABLE>
<CAPTION>
NAME AGE POSITION
- ---- --- --------
<S> <C> <C>
Gene H. Bishop............ 66 Director of the Company
John C. Tolleson.......... 48 Chairman of the Board and Chief Executive Officer
of the Company and First USA Financial; Director
of First USA Bank and First USA FSB;
Chairman of the Board of First USA Paymentech
Carl H. Westcott.......... 56 Director of the Company
</TABLE>
Gene H. Bishop. Mr. Bishop has been a Director of the Company since
September 1992. Mr. Bishop has been a Director of First USA Paymentech since
December 1995. Mr. Bishop also served as Chairman and Chief Executive Officer
of Life Partners Group, Inc. from November 1991 until October 1994. From
October 1990 to November 1991, he was Vice Chairman and Chief Financial
Officer of Lomas Financial Corporation and President and Chief Operating
Officer of Lomas Mortgage USA, a wholly owned subsidiary of Lomas Financial
Corporation. From March 1975 to July 1990, he was Chairman and Chief Executive
Officer of MCorp, a bank holding company. Mr. Bishop is also a Director of
Southwest Airlines Co., Liberte Investors, Southwestern Public Service Co. and
Drew Industries, Inc.
John C. Tolleson. Mr. Tolleson has been Chairman of the Board and Chief
Executive Officer of the Company and First USA Financial since August 1989,
and of the Company's predecessor since its formation in May 1985. Mr. Tolleson
has been a Director of First USA Bank since May 1985. Mr. Tolleson has been
Chairman of the Board of First USA Paymentech since December 1995 and a
Director of First USA FSB since March 1996. Mr. Tolleson currently serves on
the Boards of Visa USA, Inc., Visa International, Inc., Capstead Mortgage
Corporation, Jayhawk Acceptance Corporation and on the Executive Board of the
Cox School of Business at Southern Methodist University.
Carl H. Westcott. Mr. Westcott was appointed to the Board of Directors of
the Company in May 1994. Mr. Westcott served as Chairman and Chief Executive
Officer of Westcott Communications, Inc. from May 1986 through May 1996. Mr.
Westcott served as Chairman of Jayhawk Acceptance Corp. from July 1993 through
August 1994. Mr. Westcott serves on the Board of Jayhawk Acceptance
Corporation and on the Executive Board of the Cox School of Business at
Southern Methodist University.
A plurality of the votes cast by the holders of Common Stock and Preferred
Stock at the meeting will be required to reelect the nominees as Class II
directors.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR EACH NOMINEE FOR CLASS II
DIRECTOR.
5
<PAGE>
INCUMBENT DIRECTORS
<TABLE>
<CAPTION>
NAME AGE POSITION
- ---- --- --------
<S> <C> <C>
Gerald S. Armstrong......... 53 Director of the Company
Charles T. Russell.......... 66 Director of the Company
Rupinder S. Sidhu........... 40 Director of the Company
Roger T. Staubach........... 54 Director of the Company
Richard W. Vague............ 40 President and Director of the Company and
First USA Financial; Chairman of the Board and
Chief Executive Officer of First USA Bank;
Chairman of the Board of First USA FSB;
Director of First USA Paymentech
</TABLE>
Gerald S. Armstrong. Mr. Armstrong has been a Director of the Company since
August 1989. He has been a Partner and a Director of Stonington Partners, Inc.
(formerly known as First Capital Partners, Inc.), a private investment firm,
since 1993. Mr. Armstrong has also been a member of the Board of Directors of
Merrill Lynch Capital Partners, Inc., a private investment firm affiliated
with Merrill Lynch & Co., since 1988. Mr. Armstrong is also a Director of Ann
Taylor Stores Corporation, Wherehouse Entertainment, Inc. and World Color
Press, Inc.
Charles T. Russell. Mr. Russell has been a Director of the Company since May
1994. Mr. Russell was President and Chief Executive Officer of Visa
International Inc. from May 1984 to December 1993. Mr. Russell held various
other executive positions with Visa International Inc. from January 1971 to
May 1984. Mr. Russell is also a Director of First Data Corporation.
Rupinder S. Sidhu. Mr. Sidhu has been a Director of the Company since August
1989. Mr. Sidhu has been a Director of First USA Paymentech since December
1995. Mr. Sidhu has been President of Merion Capital Management LLC, a private
investment company, since 1994. From 1993 to 1994, he was a Partner of
Stonington Partners, Inc. (formerly known as First Capital Partners, Inc.), a
private investment firm. Mr. Sidhu has been a member of the Board of Directors
of Merrill Lynch Capital Partners, Inc., a private investment firm affiliated
with Merrill Lynch & Co., since 1987. He is also a Director of Eckerd
Corporation, Wherehouse Entertainment, Inc, and CMI Industries, Inc.
Roger T. Staubach. Mr. Staubach has been a Director of the Company since
March 1993. He has been Chairman and Chief Executive Officer of The Staubach
Company, a commercial real estate company, since 1983. Mr. Staubach is also a
Director of Brinker International, Halliburton Company, Columbus Realty Trust
and American AAdvantage Funds.
Richard W. Vague. Mr. Vague has been President of the Company and First USA
Financial since June 1990 and a Director of the Company and First USA
Financial since August 1989. Mr. Vague has also been Chairman of the Board and
Chief Executive Officer of First USA Bank since October 1995 and was a
Director from May 1985 through October 1995. Mr. Vague also served as
President and Chief Executive Officer of First USA Bank from 1987 through
October 1995. Mr. Vague has also been a Director of First USA Paymentech since
December 1995 and Chairman of the Board of First USA FSB since March 1996. Mr.
Vague serves on the Visa Marketing Committee, the Visa International Card
Products Committee and the MasterCard Marketing Committee, and was co-founder
of the Company's predecessor with Mr. Tolleson. Mr. Vague is also a Director
of Physician Support Systems, Inc.
The Board of Directors of the Company is divided into three classes serving
staggered three-year terms. Directors for each class will be elected at the
annual meeting of stockholders held in the year in which the term for such
class expires and will serve for three years. The terms of Gene H. Bishop,
John C. Tolleson and Carl H. Westcott will expire at the 1996 annual meeting
and, if reelected, at the 1999 annual meeting; the terms of Gerald S.
Armstrong and Rupinder S. Sidhu will expire at the 1997 annual meeting; and
the terms of Charles T. Russell, Roger T. Staubach and Richard W. Vague will
expire at the 1998 annual meeting. The Board of Directors held four meetings
during the last fiscal year. Messrs. Armstrong, Bishop, Russell, Sidhu,
Staubach and Westcott serve on the Company's Compensation Committee (the
"Compensation Committee") and Audit Committee (the "Audit Committee"). The
Company has no nominating committee.
6
<PAGE>
The Audit Committee reviews and evaluates the Company's internal accounting
and auditing procedures, recommends to the Board of Directors the firm to be
appointed as independent accountants to audit the Company's financial
statements, reviews with management and the independent accountants the
Company's year-end and quarterly operating results, and reviews the scope and
results of the audit with the independent accountants. The Audit Committee met
four times in fiscal 1996.
The Compensation Committee reviews compensation arrangements for executive
officers. The Compensation Committee also administers the Company's stock
option and restricted stock plans, and except with respect to grants of
options to outside directors, has full authority to determine the persons to
whom and the times at which options and restricted stock shall be granted, the
number of option shares and shares of restricted stock to be granted and the
price and other terms of options and restricted stock. The Compensation
Committee met five times in fiscal 1996.
7
<PAGE>
EXECUTIVE COMPENSATION
The following table sets forth certain information concerning compensation
of, and stock options and restricted stock granted to, the Company's Chairman
and Chief Executive Officer and the other four most highly paid officers in
respect of fiscal 1996, 1995 and 1994.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG TERM
COMPENSATION
ANNUAL COMPENSATION AWARDS
---------------------------------------- ---------------------------------------
NUMBER OF SECURITIES
RESTRICTED UNDERLYING OPTIONS ALL OTHER
NAME AND FISCAL OTHER ANNUAL STOCK (FIRST USA COMPEN-
PRINCIPAL POSITION YEAR SALARY BONUS(1) COMPENSATION(2) AWARDS(3) (COMPANY)(4) PAYMENTECH)(5) SATION(6)(7)
- ------------------ ------ -------- -------- --------------- ----------- ------------ -------------- ------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
John C. Tolleson........ 1996 $750,000 $937,500 $110,633 $825,000 125,000 125,000 $4,750
Chairman and Chief 1995 620,000 620,000 65,773 665,625 125,000 -- 5,916
Executive Officer 1994 520,000 520,000 -- 575,625 100,000 -- 4,297
Richard W. Vague........ 1996 587,500 750,000 85,914 825,000 100,000 125,000 5,932
Chairman and Chief 1995 425,000 425,000 53,631 665,625 100,000 -- 5,579
Executive Officer of 1994 325,000 325,000 -- 575,625 100,000 -- 4,550
First USA Bank
Randy L. Christofferson
(7)(8)................. 1996 356,250 475,000 95,284 550,000 50,000 47,000 750,000
President of First (2,200,000) (200,000) --
USA Bank --
Jack M. Antonini (7)(8). 1996 333,333 400,000 -- 550,000 50,000 47,000 109,373
Vice Chairman, Chief (550,000) (75,000) --
Financial Officer --
Pamela H. Patsley....... 1996 280,000 300,000 -- 550,000 -- 275,000 3,388
President and Chief 1995 225,000 168,750 -- 443,750 25,000 -- 3,617
Executive Officer 1994 170,000 127,500 -- 383,750 20,000 -- 2,425
of Paymentech
</TABLE>
- --------
(1) Bonuses for fiscal 1996, 1995 and 1994 were approved by the Board of
Directors on July 17, 1996, July 19, 1995 and July 20, 1994, respectively,
and paid on July 31, 1996, July 31, 1995 and July 31, 1994, respectively.
(2) The stated amounts for fiscal 1996 and 1995 include $84,104 and $40,406
for transportation by Mr. Tolleson and $72,952 and $42,170 for
transportation by Mr. Vague, respectively, and $76,343 in relocation
expenses for Mr. Christofferson. Where no amount is stated, the aggregate
values of perquisites and other personal benefits provided to such
executive officer did not exceed the lesser of $50,000 or 10% of such
executive officer's salary and bonus.
(3) Restricted stock awards for fiscal 1996, 1995 and 1994 were approved by
the Board of Directors on July 17, 1996, July 19, 1995 and July 20, 1994,
respectively. The awards were made in recognition of the Company's
performance and as incentive for future performance, and entitle the
recipient to all dividends paid on such shares. The values shown for
restricted stock awards are shown by multiplying the number of shares
granted by: (i) $55.00, with respect to awards of restricted stock
approved on July 17, 1996; (ii) $44.375, with respect to awards of
restricted stock approved on July 19, 1995; or (iii) $38.375, with respect
to awards of restricted stock approved on July 20, 1994. Each of such
prices is the closing price of the Common Stock on the last trading day of
the applicable fiscal year. The number and value of shares of restricted
stock held by the named executive officers on the last day of fiscal 1996
(based upon the closing price of $55 for the Common Stock on the last
trading day of fiscal 1996) were: Mr. Tolleson, 45,000 shares, $2,475,000;
Mr. Vague, 45,000 shares, $2,475,000; Mr. Christofferson, 50,000 shares,
$2,750,000; Mr. Antonini, 20,000 shares, $1,100,000; and Ms. Patsley,
30,000 shares, $1,650,000. Amounts in parentheses
8
<PAGE>
indicate the value of the 40,000 and 10,000 shares of restricted stock
granted to Messrs. Christofferson and Antonini, respectively, as a portion
of their signing compensation (based upon the closing price of $55 for the
Common Stock on the last trading day of fiscal 1996).
(4) Annual stock option grants for fiscal 1996, 1995 and 1994 were approved by
the Board of Directors on July 17, 1996, July 19, 1995 and July 20, 1994,
respectively. The awards were made in recognition of the Company's
performance and as incentive for future performance. Amouns in parentheses
indicate options to purchase 200,000 and 75,000 shares of Common Stock
granted to Mr. Christofferson and Mr. Antonini, respectively, as a portion
of their signing compensation. The Company did not previously include
option grants awarded in July following the completion of a fiscal year in
the "Summary Compensation" table and in the "Option Grants With Respect to
Last Fiscal Year" table until the end of the fiscal year in which such
options were granted. However, due to the fact that the Company's annual
option grants awarded in July following each June 30 fiscal year end are
made in recognition of the Company's past performance and as incentive for
future performance, the Company believes that treating such option grants
as having been made during the previous fiscal year provides more accurate
disclosure regarding the compensation granted to its executive officers
with respect to a particular fiscal year. Accordingly, the Company has
elected to include in the "Summary Compensation" table and in the "Option
Grants With Respect to Last Fiscal Year" tables option grants awarded in
July following completion of a fiscal year as having been made during such
completed fiscal year.
(5) The options listed for each of the named executives represent grants made
in connection with the March 1996 initial public offering of the First USA
Paymentech common stock (the "Paymentech IPO") and a subsequent grant in
July 1996 to Ms. Patsley.
(6) The amounts for fiscal years 1996, 1995 and 1994 represent employer
matching contributions to the First USA Savings Restoration Plan, except
for Messrs. Christofferson and Antonini.
(7) As noted above, Mr. Christofferson and Mr. Antonini received signing
bonuses, restricted stock grants and option grants during fiscal 1996 upon
joining the Company. Such bonuses and grants were made in consideration of
compensation and benefits such executive officers were required to forego
as a result of leaving their previous positions to join the Company.
(8) Messrs. Antonini and Christofferson joined the Company in September and
October 1995, respectively.
9
<PAGE>
OPTION GRANTS
The following table sets forth information concerning stock option grants
made with respect to fiscal 1996 to the named executive officers to purchase
Common Stock.
OPTION GRANTS WITH RESPECT TO LAST FISCAL YEAR -- COMMON STOCK
<TABLE>
<CAPTION>
POTENTIAL REALIZABLE VALUE AT
ASSUMED ANNUAL RATES OF
STOCK PRICE APPRECIATION FOR
INDIVIDUAL GRANTS OPTION TERM (3)
--------------------------------------------- ------------------------------
NUMBER OF
SECURITIES % OF TOTAL
UNDERLYING OPTIONS EXERCISE
OPTIONS GRANTED TO PRICE PER EXPIRATION
NAME GRANTED EMPLOYEES (1) SHARE DATE (2) 5% 10%
- ---- ---------- ------------- --------- ---------- -------------- ---------------
<S> <C> <C> <C> <C> <C> <C>
John C. Tolleson........ 125,000 6.74% $50.25 7/17/2006 $3,951,250 $10,012,500
Richard W. Vague........ 100,000 5.40% 50.25 7/17/2006 3,161,000 8,010,000
Randy L. Christofferson. 200,000 10.79% 44.25 8/18/2005 5,566,000 14,106,000(4)
50,000 2.70% 50.25 7/17/2006 1,580,500 4,005,000
Jack M. Antonini........ 75,000 4.05% 43.00 8/15/2005 2,028,750 5,140,500(4)
50,000 2.70% 50.25 7/17/2006 1,580,500 4,005,000
Pamela H. Patsley....... 0 -- -- -- -- --
</TABLE>
- --------
(1) Represents percentage of total options granted to employees of the Company
with respect to the fiscal year.
(2) The options listed for each of the executive officers vest in increments
of 20% on the date of grant and each anniversary of the date of grant, or,
if earlier, upon a change in control of the Company.
(3) The dollar amounts under these columns are the result of calculations at
5% and 10% compounded annual rates set by the Commission, and therefore
are not intended to forecast future appreciation, if any, in the price of
the Common Stock. The potential realizable values illustrated at 5% and
10% compound annual appreciation of the options which expire on July 17,
2006 assume that the price of the Common Stock increases to $81.86 or
$130.35 per share, respectively, over the 10-year term of the options; the
potential realizable values illustrated at 5% and 10% compound annual
appreciation of the options which expire on August 15, 2005 assume that
the price of the Common Stock increases to $70.05 and $111.54 per share,
respectively, over the 10-year term of the options; and the potential
realizable values illustrated at 5% and 10% compound annual appreciation
of the options which expire on August 18, 2005 assume that the price of
the Common Stock increases to $72.08 and $114.78 per share, respectively,
over the 10-year term of the options.
(4) The options listed were granted to the named executive officer upon
commencement of employment.
10
<PAGE>
The following table sets forth information concerning stock option grants
made with respect to fiscal 1996 to the named executive officers to purchase
First USA Paymentech common stock.
OPTION GRANTS WITH RESPECT TO LAST FISCAL YEAR --
FIRST USA PAYMENTECH COMMON STOCK
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS
-----------------------------------------------
POTENTIAL REALIZABLE VALUE AT
NUMBER OF ASSUMED ANNUAL RATES OF
SECURITIES % OF TOTAL STOCK PRICE APPRECIATION FOR
UNDERLYING OPTIONS EXERCISE OPTION TERM (2)
OPTIONS GRANTED TO PRICE PER EXPIRATION ------------------------------
NAME GRANTED EMPLOYEES (1) SHARE DATE 5% 10%
- ---- ---------- ------------- --------- ------------ -------------- ---------------
<S> <C> <C> <C> <C> <C> <C>
John C. Tolleson........ 50,000 2.40% $19.53 3/22/2006(3) $ 614,000 $1,556,500
75,000 3.60% 19.53 4/21/1996(4) N/A N/A
Richard W. Vague........ 50,000 2.40% 19.53 3/22/2006(3) 614,000 1,556,500
75,000 3.60% 19.53 4/21/1996(4) N/A N/A
Randy L. Christofferson. 22,000 1.06% 19.53 3/22/2006(3) 270,160 684,860
25,000 1.20% 19.53 4/21/1996(4) N/A N/A
Jack M. Antonini........ 22,000 1.06% 19.53 3/22/2006(3) 270,160 684,860
25,000 1.20% 19.53 4/21/1996(4) N/A N/A
Pamela H. Patsley....... 100,000 4.80% 19.53 3/22/2006(3) 1,228,000 3,113,000
100,000 4.80% 19.53 4/21/1996(4) N/A N/A
75,000 3.60% 36.00 7/16/2006(3) 1,698,000 4,303,500
</TABLE>
- --------
(1) Represents percentage of total options granted to employees of the Company
with respect to the fiscal year.
(2) The dollar amounts under these columns are the result of calculations at
5% and 10% compounded annual rates set by the Commission, and therefore
are not intended to forecast future appreciation, if any, in the price of
the First USA Paymentech common stock. The potential realizable values
illustrated at 5% and 10% compound annual appreciation of the options
which expire on March 22, 2006 assume that the price of the Common Stock
increases to $31.81 or $50.66 per share, respectively, over the 10-year
term of the options; and the potential realizable values illustrated at 5%
and 10% compound annual appreciation of the options which expire on July
16, 2006 assume that the price of the Common Stock increases to $58.64 and
$93.38 per share, respectively, over the 10-year term of the options.
(3) The first set of options listed for each of the named executive officers
and the options granted to Ms. Patsley which expire on July 16, 2006 vest
in increments of 20% on the date of grant and each anniversary of the date
of grant, or earlier, upon a change in control of First USA Paymentech.
The options listed for Ms. Patsley which expire on July 16, 2006 represent
an annual option grant in recognition of First USA Paymentech's
performance and as incentive for future performance. Each of the other
options represent grants made in connection with the Paymentech IPO.
(4) The second set of options listed for each of the named officers were
special 30-day options granted pursuant to a stock loan program in
connection with the Paymentech IPO and vested 100% on the date of grant.
The Company made loans to the named executive officers in connection with
the exercise of such options. Each loan is evidenced by an eight-year,
full recourse promissory note to the Company that bears interest at 5.38%
per annum. See "Certain Transactions." These options expired on April 21,
1996. The closing price of the First USA Paymentech common stock on the
New York Stock Exchange on April 19, 1996, the last trading day prior to
the option expiration date, was $39.50. Because the term of such options
has expired and all such options were exercised prior to their expiration,
the potential realizable values illustrated at 5% and 10% compound annual
appreciation of the options has not been provided.
11
<PAGE>
EXERCISE OF OPTIONS
The following table sets forth information concerning the exercise of stock
options to purchase Common Stock by the named executive officers during fiscal
1996.
AGGREGATED OPTION EXERCISES IN
LAST FISCAL YEAR AND FISCAL YEAR END OPTION VALUE -- COMMON STOCK
<TABLE>
<CAPTION>
NUMBER OF UNEXERCISED VALUE OF UNEXERCISED IN-
OPTIONS THE-MONEY OPTIONS AT
AT FISCAL YEAR END FISCAL YEAR END (1)
------------------------- -------------------------
VALUE REALIZED
SHARES (MARKET PRICE AT
ACQUIRED ON EXERCISE LESS
NAME EXERCISE EXERCISE PRICE) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- ---- ----------- ---------------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
John C. Tolleson........ 200,000 $9,497,538 900,536 320,000 $41,414,484 $4,963,750
Richard W. Vague........ 200,000 9,348,745 389,460 260,000 15,914,869 3,935,000
Randy L. Christofferson. 0 0 50,000 200,000 477,500 1,910,000
Jack M. Antonini........ 0 0 25,000 100,000 227,500 910,000
Pamela H. Patsley....... 22,592 1,144,600 140,496 48,000 6,319,691 1,033,500
</TABLE>
- --------
(1) Calculated on the basis of the closing sale price per share for the Common
Stock on the New York Stock Exchange of $55 on June 28, 1996.
The following table sets forth information concerning the exercise of stock
options to purchase First USA Paymentech common stock by the named executive
officers during fiscal 1996.
AGGREGATED OPTION EXERCISES IN
LAST FISCAL YEAR AND FISCAL YEAR END OPTION VALUE --
FIRST USA PAYMENTECH COMMON STOCK
<TABLE>
<CAPTION>
NUMBER OF UNEXERCISED VALUE OF UNEXERCISED IN-
OPTIONS THE-MONEY OPTIONS AT
AT FISCAL YEAR END FISCAL YEAR END (2)
------------------------- -------------------------
VALUE REALIZED
SHARES (MARKET PRICE AT
ACQUIRED ON EXERCISE LESS
NAME EXERCISE(1) EXERCISE PRICE) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- ---- ----------- ---------------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
John C. Tolleson........ 75,000 $0 10,000 40,000 $204,700 $818,800
Richard W. Vague........ 75,000 0 10,000 40,000 204,700 818,800
Randy L. Christofferson. 25,000 0 4,400 17,600 90,068 360,272
Jack M. Antonini........ 25,000 0 4,400 17,600 90,068 360,272
Pamela H. Patsley....... 100,000 0 35,000 140,000 469,400 1,877,600
</TABLE>
- --------
(1) The options listed for each of the named officers were special 30-day
options granted pursuant to a stock loan program in connection with the
Paymentech IPO. See "Certain Transactions."
(2) Calculated on the basis of the closing sale price per share for the First
USA Paymentech common stock on the New York Stock Exchange of $40 on June
28, 1996.
PENSION PLANS
First USA Pension Plan. The Company has a noncontributory, tax qualified
defined benefit, "cash balance" retirement plan (the "Pension Plan") that
provides retirement benefits for substantially all employees. The Company's
funding policy is to annually contribute the minimum amount required under the
Employee Retirement Income Security Act of 1974. Contributions are intended to
provide not only for benefits attributed to compensation to date, but also for
compensation increases to be earned in the future. Each participant's cash
balance account is credited with an amount equal to 4% of the participant's
compensation plus interest. Each participant becomes fully vested in benefits
under the Pension Plan after 5 years of employment. Prior to that time, no
portion of a participant's benefits is vested. Benefits may be paid under the
Pension Plan, subject to limitations and conditions imposed by the Internal
Revenue Code of 1986, as amended (the "Code"), upon a
12
<PAGE>
participant's termination of employment, retirement (early, normal or late) or
death. The Pension Plan specifies various options that participants may select
for the distribution of their accrued balance, including forms of annuity
payments and lump sum distributions. The Pension Plan does not permit loans or
in-service withdrawals by participants. Contributions to the Pension Plan will
be actuarially determined and therefore cannot be attributed to individual
participants. As of July 1, 1996, the estimated annual benefit payable under
the Pension Plan to the named executive officers upon normal retirement age
(assuming the executive continues to work to age 65 at the same rate of
compensation) for Messrs. Tolleson, Vague, Christofferson and Antonini and Ms.
Patsley was $72,480, $76,251, $38,967, $29,188 and $65,547, respectively.
First USA Supplemental Executive Retirement Plan. The First USA Supplemental
Executive Retirement Plan (the "SERP") operates in conjunction with the
Pension Plan to provide eligible employees with benefits that cannot be
provided under the terms and conditions of the Pension Plan due to Code
limitations on the amount of compensation that may be considered under the
Pension Plan and Code limitations on the annual benefits that may be provided
under the Pension Plan. Contributions to the SERP will be actuarially
determined and therefore cannot be attributed to individual participants. As
of July 1, 1996, the estimated annual benefit payable upon normal retirement
age (assuming the executive continues to work to age 65 at the same rate of
compensation) for Messrs. Tolleson, Vague, Christofferson and Antonini and Ms.
Patsley was $214,538, $243,307, $278,803, $57,243 and $84,009, respectively.
Management Security Plan of First USA Financial. The Management Security
Plan (the "MSP") provides supplemental retirement income benefits to members
of the Company's management selected by the Board of Directors of the Company.
The MSP is an unfunded plan and is not designed as a tax-qualified plan.
Individuals selected to participate in the MSP are eligible to receive a
supplemental monthly retirement allowance in the amount of 100% of final
compensation payable for 12 months, and 50% of final compensation payable for
the next 108 months, commencing at the age 65. Final compensation for this
purpose is base pay for the most recent completed calendar year. In addition,
a death benefit is provided under the MSP in an amount equal to the actuarial
equivalent of an eligible employee's accrued benefit under the MSP at the time
of the employee's death.
Each year, the Company determines actuarial projections of the annual
increase in benefits under the MSP. Based on those projections, the Company
establishes reserves for future benefits due under the MSP. Upon a change of
control of the Company, eligible employees may require the Company to set
aside funds in a trust to satisfy existing and future benefits accrued under
the MSP. The present value of the benefits accrued as of June 30, 1996 since
the inception of the MSP were as follows: Mr. Tolleson, $329,459 and Mr.
Vague, $116,920.
EMPLOYMENT AGREEMENTS
In August 1989, the Company entered into employment agreements (the
"Employment Agreements") with John C. Tolleson and Richard W. Vague (the
"Executives"). Unless otherwise indicated, the provisions of the Employment
Agreements are substantially similar. The respective Employment Agreements
provide that Mr. Tolleson will serve as Chairman and Chief Executive Officer
of First USA Financial and the Company and Mr. Vague will serve as President
and Chief Executive Officer of First USA Bank. The Employment Agreements
automatically renew each year for one-year periods unless the Company notifies
the respective Executive of an intent not to renew 90 days prior to August 8
of each year. Base salary under the Employment Agreements is currently
$750,000 for Mr. Tolleson and $630,000 for Mr. Vague, which amounts may be
increased during the term of the Employment Agreements but not reduced. The
Executives are also entitled to receive an annual bonus which may be awarded
in accordance with the provisions of any bonus plan approved by the Board of
Directors. If the Executive is terminated for Cause or resigns without Good
Reason (as such terms are defined in the Employment Agreements), the Company
is not obligated to continue base salary or bonus payments (except such
payments as were incurred prior to such termination). The Employment
Agreements also obligate the Company to provide for certain other fringe
benefits. As consideration for entering into the Employment Agreements, the
Executives have agreed not to disclose confidential information and not to
compete with the Company during their respective terms of employment and, in
certain cases, for the two-year period following their termination.
13
<PAGE>
In the event that a "reorganization event" (as defined in the Employment
Agreements) occurs, or is proposed by the Company's Board of Directors, the
Executives are entitled to terminate their employment with the Company for any
reason. In the event the Executive so terminates employment, the Executive
will be entitled to receive (i) a lump sum amount equal to his salary for the
remainder of the term and (ii) a lump sum amount equal to the amount of the
bonus for the remainder of the term (calculated based upon the Company's
attainment of its fiscal objectives for the four quarters preceding the
reorganization event). Under the Employment Agreements, a reorganization event
is defined as having occurred when (i) the Company becomes the subject of a
merger, consolidation, reorganization, dissolution or liquidation, (ii) the
Company sells a division, subsidiary or all or substantially all of its
assets, (iii) one "person" becomes the "beneficial owner" (as such terms are
defined in Section 13(d) of the Exchange Act) of all of the outstanding equity
securities of the Company, and (iv) any person or group acquires 25% or more
of the Common Stock.
COMPENSATION OF OUTSIDE DIRECTORS
Outside Directors Option Plan. In August 1992, the Company adopted the
Outside Directors Option Plan (the "Outside Director Plan"). Under the Outside
Director Plan, members of the Board of Directors of the Company who are not
employees of the Company or affiliates on the date they become a Director,
receive an option to purchase 10,000 shares of Common Stock at an option price
equal to the fair market value of the Common Stock on the date of grant. The
option is granted on the date the Director joins the Board. The Outside
Director Plan was amended in 1994 to provide that directors who are not
employees of the Company also receive annual grants of options to purchase
2,500 shares of Common Stock at an option price equal to the fair market value
of the stock on the date of the grant. The options terminate 10 years from the
date of grant. In addition, options terminate if not exercised within 90 days
after the Director ceases to be a member of the Board.
Cash Compensation for Outside Directors. Members of the Board of Directors
of the Company who are not employees of the Company receive cash compensation
as follows: a $30,000 annual retainer and $1,000 for each Board meeting
attended and $1,000 for each committee meeting attended (chairpersons receive
$2,000 per committee meeting).
Directors who are employees of the Company do not receive any compensation
for serving on the Board of Directors of the Company. Messrs. Tolleson and
Vague are the only Directors not eligible for awards under the Outside
Director Plan or for cash compensation for attendance at Board or committee
meetings.
14
<PAGE>
COMPENSATION COMMITTEE REPORT
The compensation of the Company's executive officers is determined by the
Compensation Committee, consisting of six members, all of whom are non-
employee directors and independent of management. Underlying the Compensation
Committee's decisions is the firm belief that the actions of the Company's
executive officers directly impact the short-term and long-term performance of
the Company, and should be rewarded in a manner commensurate with its results.
The Compensation Committee, in support of this belief and the parallel
objective of making decisions that are in the best interests of the Company's
stockholders, places significant emphasis on the development, design and
ongoing administration of the Company's executive compensation program.
EXECUTIVE COMPENSATION PHILOSOPHY
The Company's executive compensation program has been developed to link an
executive's compensation to the performance of the Company and provide
competitive compensation for its executive officers. The primary objectives of
the Company's executive compensation program are to ensure that the
compensation levels provided to the Company's executive officers align with
the Company's annual and long-term performance objectives, to reward for
superior financial performance and to assist the Company in attracting,
motivating and retaining executives with exceptional leadership and management
abilities.
Consistent with this philosophy, the Compensation Committee establishes a
competitive and appropriate total compensation package for each executive
officer generally consisting of two components: (1) an annual component, i.e.,
base salary and annual bonus, and (2) a long-term component, i.e., stock
options and restricted stock awards. These components comprise the Company's
executive compensation program and the resulting compensation mix reflects a
balance of annual awards, including cash incentives and equity-based awards
that provide opportunities to earn above average compensation when performance
warrants it.
Annually, a thorough review of the executive compensation program has been
conducted for the Compensation Committee. This review includes a comprehensive
analysis provided by an independent compensation and benefits consulting firm
covering the design and competitiveness of the compensation programs. The
various components of the Company's executive compensation program are
reviewed by the Compensation Committee and analyzed individually and in the
aggregate, to ensure overall competitiveness relative to other credit card
companies and companies of similar size in the financial services industry
("comparable companies"). Some of the comparable companies are part of the
peer group companies used for comparison in the performance graph and some are
excluded from that group. The peer group of companies used in the performance
graph covers a broader universe of financial service companies. Because the
Company's executive compensation program is weighted toward components that
are contingent upon the Company's performance, an executive's actual
compensation level in a particular year may be more or less than that paid to
executives of competitors depending on performance of the Company. The
specific elements of the executive compensation program are described below.
EXECUTIVE COMPENSATION PROGRAM COMPONENTS
Annual Component: Base Salary. The Compensation Committee establishes base
salaries each year at a level intended to be between the median and 75th
percentile range ("market range") of comparable companies. In addition to the
competitive market range, many factors are considered in determining actual
base salaries, including the duties and responsibilities assumed by the
executive, the scope of the executive's position, length of service,
individual performance and internal equity considerations. Based on the
compensation study conducted for the Compensation Committee to evaluate the
Company's competitive position, base salary levels for most of the Company's
executive officers were found to be at the lower end of the competitive market
range for comparable companies. To ensure that the Compensation Committee
maintains the Company's competitive positioning and in an effort to retain the
talent and leadership necessary to meet the challenges in the credit card
industry, the Compensation Committee evaluates the results of the competitive
analysis and makes appropriate
15
<PAGE>
adjustments. The Compensation Committee also reviews relevant financial
results and the success of the management team in areas of performance that
are not easily captured through accounting measures, i.e., business
strategies, introductions of new products and services and other matters.
During fiscal 1996, as recommended by the Compensation Committee, base salary
increases for the executive officer group increased an average of 12%.
Annual Component: Annual Incentive. The second annual component of the
Company's executive compensation program is the Company's cash-based incentive
compensation programs, the First USA, Inc. Annual Incentive Plan and, with
respect to certain key executives, the First USA, Inc. Incentive Bonus Plan
(the "Incentive Bonus Plan"). Under each plan, executive officers are eligible
to receive cash awards based on the extent to which aggressive earnings goals
are attained during the fiscal year. If earnings goals are not achieved,
awards are not paid to the executive officer group. The Compensation Committee
establishes the individual bonus awards at levels intended to be between the
median and 75th percentile range of comparable companies. The Compensation
Committee also makes an assessment of performance by considering such factors
as the economic environment, performance comparisons against competitors, the
quality of earnings, the balance between the short and long term objectives
and the stability of the Company. For fiscal 1996, the Company far exceeded
its goals for the performance year and the Compensation Committee believed it
was important to grant the executive officers annual bonuses near or at the
maximum individual bonus opportunity levels.
Long-Term Component: Stock Options and Restricted Stock Awards. One of the
Compensation Committee's priorities is for executive officers to be
stockholders so that their interests are aligned with the interests of the
Company's other stockholders. The Compensation Committee continues to believe
that this strategy motivates executives to remain focused on the overall long-
term performance of the Company. Consequently, stock options are granted under
the First USA 1991 Stock Option Plan (the "1991 Option Plan") and restricted
stock awards are granted under the First USA 1994 Restricted Stock Plan (the
"1994 Restricted Stock Plan").
Under the 1991 Option Plan, stock options may be granted to executive
officers with an exercise price equal to the fair market value of the Common
Stock on the date of the grant. If there is no appreciation in the Common
Stock, the option holders receive no benefit from the stock options. Such
stock options are generally exercisable between the date granted and ten years
from the date granted, and generally vest 20% upon grant and each anniversary
following the grant of the options. Stock options are normally granted
annually to the executive officer group and, in support, of the Compensation
Committee's ownership objectives, are intended to be granted at levels at the
75th percentile or higher of the practices for the comparable companies.
Under the 1994 Restricted Stock Plan, restricted stock may be granted to
executive officers with such performance criteria as set by the Compensation
Committee. The performance criteria is based on financial goals of the
Company. If the goals are not achieved, then the executive officer forfeits
the restricted stock.
Stock options and restricted stock were granted to the executive officer
group during fiscal 1996 at levels that have positioned total compensation
competitively.
DEDUCTIBILITY OF EXECUTIVE COMPENSATION
Section 162(m) of the Code generally precludes a publicly held corporation
from a federal income tax deduction for a taxable year for compensation in
excess of $1 million paid to the chief executive officer or any of the four
most highly compensated other executive officers. Exceptions are made for,
among other things, qualified performance-based compensation. Qualified
performance-based compensation means compensation paid solely on account of
attainment of objective performance goals, provided that (i) performance goals
are established by a compensation committee consisting solely of two or more
outside directors, (ii) the material terms of the performance-based
compensation are disclosed to and approved by a separate stockholder vote
prior to payment and (iii) prior to payment, the compensation committee
certifies that the performance goals were attained and other material terms
were satisfied.
16
<PAGE>
The 1991 Option Plan, 1994 Restricted Stock Plan and the Incentive Bonus
Plan are designed to be fully deductible for income tax purposes and are in
compliance with Section 162(m) of the Code.
CHIEF EXECUTIVE OFFICER COMPENSATION
During fiscal 1996, the Company's most highly compensated executive officer
was John C. Tolleson, Chairman and Chief Executive Officer. Mr. Tolleson
participates in the executive compensation program provided to the other
executive officers as described above. The Compensation Committee's approach
to establishing Mr. Tolleson's compensation is to be competitive with
comparable companies and to have a major and significant portion of his
compensation depend on the achievement of financial and non-financial
performance criteria. All compensation actions relating to Mr. Tolleson are
subject to the approval of the Board of Directors. Those actions which are
described in this report have been approved.
Mr. Tolleson's cash compensation for fiscal 1996 was $1,687,500. Of this
amount 55% was earned under the Incentive Bonus Plan. Mr. Tolleson's annual
base salary was increased during fiscal 1996 to $750,000, a 21% increase from
his former base salary. Based on the Compensation Committee's review of the
results of the compensation study conducted by a compensation consulting firm,
the Compensation Committee recognized that Mr. Tolleson's base salary was
below the competitive market range. The Chief Executive Officer's salary is
now within the competitive market range. In fiscal 1996, Mr. Tolleson earned
an annual bonus award under the Incentive Bonus Plan of $937,500 or 125% of
his base salary due to excellent financial results and individual performance
for the year. The Compensation Committee believes that Mr. Tolleson's annual
bonus is appropriate given the Company's strong earnings growth of 38% from
fiscal 1995 to fiscal 1996, and its continued attainment of key financial
goals.
Under the 1991 Option Plan and the 1994 Restricted Stock Plan and in
connection with the Compensation Committee's strategy of motivating executives
to remain focused on the long-term performance of the Company, a total of
125,000 stock options and a total of 15,000 shares of restricted stock were
granted to Mr. Tolleson with respect to fiscal 1996. In addition, Mr. Tolleson
received 50,000 stock options in First USA Paymentech, which were granted as
part of the Paymentech IPO. At the same time an additional 75,000 stock
options were granted under the First USA Paymentech stock loan program.
CONCLUSION
The Compensation Committee believes the mix of market-based salaries,
competitive variable cash incentives for short-term performance and the
potential for equity-based rewards for long-term performance represents an
appropriate balance of total compensation. This balanced executive
compensation program provides a competitive and motivational compensation
package to the executive officer team required to produce the results the
Company has historically achieved and strives to achieve in the future. The
Compensation Committee further believes that the executive compensation
program strikes an appropriate balance between the interests of the
stockholders, the needs of the Company in operating its business and the
executive team.
The Compensation Committee
Rupinder S. Sidhu, Chairman
Gerald S. Armstrong
Gene H. Bishop
Charles T. Russell
Roger T. Staubach
Carl H. Westcott
17
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COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
During fiscal 1996, Messrs. Sidhu, Armstrong, Bishop, Russell, Staubach and
Westcott served as members of the Compensation Committee. No member of the
Compensation Committee is an employee, officer, or former officer of the
Company, and, except as described below with respect to Mr. Staubach, no such
member had a relationship with the Company during fiscal 1996 requiring
disclosure under Item 404 of Regulation S-K. No relationship existed during
fiscal 1996 that constituted a "Compensation Committee Interlock" within the
meaning of Item 402(j) of Regulation S-K.
During fiscal 1996, the Company retained The Staubach Company, of which Mr.
Staubach is a principal, to represent the Company in connection with certain
lease transactions related to the Company's principal corporate office space.
In connection with such transactions, The Staubach Company received
approximately $1 million in fees from the owners of such office space.
STOCK PERFORMANCE GRAPH
The following chart compares the total stockholder return (stock price
growth plus dividends) on the Common Stock from May 31, 1992 through June 30,
1996 with the total stockholder return for the same period of the S&P
Financial Composite Index and the S&P 500. The graph assumes that the value of
the investment in the Company's Common Stock and each index was $100 on May
31, 1992 and that all dividends were reinvested. The Company notes that the
Company's initial public offering occurred on May 27, 1992 and that the
initial offering price of $4.75 was used as the beginning price for the
Company's stock price on the performance graph. The Company also notes that
the initial offering price of $4.75 is different from the Company's initial
trading price of $5.50.
[GRAPH APPEARS HERE]
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------
First USA, Inc S&P Financial Composite Index S&P 500
- --------------------------------------------------------------------------------
<S> <C> <C> <C>
6/30/92 100 100 100
- --------------------------------------------------------------------------------
6/30/93 370 122.58364 110.38614
- --------------------------------------------------------------------------------
6/30/94 682.2 133.09177 108.85235
- --------------------------------------------------------------------------------
6/30/95 788.9 162.56847 133.47136
- --------------------------------------------------------------------------------
6/30/96 977.8 224.88413 164.31372
- --------------------------------------------------------------------------------
</TABLE>
On June 30, 1996, the total stockholder return on the Common Stock had
increased from May 31, 1992 (using the initial offering price of $4.75) by
978%, compared to increases in the total returns on the S&P Financial
Composite Index and the S&P 500 of 225% and 164%, respectively.
18
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ADOPTION OF THE FIRST USA, INC.
DEFERRED COMPENSATION PLAN
GENERAL
The Company has adopted the Deferred Compensation Plan, effective as of June
1, 1996, with respect to its eligible employees and directors, subject to
approval of its stockholders. The Deferred Compensation Plan provides that
eligible employees and directors of the Company and of affiliates of the
Company may participate in the Deferred Compensation Plan upon its adoption
pursuant to the terms of the Deferred Compensation Plan. The affirmative vote
of a majority of the shares of Common Stock and Preferred Stock present or
represented and entitled to vote at the annual meeting will be required to
approve such adoption.
The purpose of the Deferred Compensation Plan is to recognize the value to
the Company and other participating entities of the past and present services
of individuals covered thereby and to encourage and assure their continued
service with the Company or other participating entities, as the case may be,
by making more adequate provision for their future retirement security. The
Company has reserved 70,000 shares of Common Stock and First USA Paymentech
has reserved 70,000 shares of First USA Paymentech common stock for issuance
pursuant to the Deferred Compensation Plan. The Deferred Compensation Plan is
intended to constitute an unfunded, unsecured plan of deferred compensation
for a select group of management or highly compensated employees.
DESCRIPTION OF DEFERRED COMPENSATION PLAN
The Deferred Compensation Plan will be administered by a plan administrator
(the "Administrator") appointed by the Board of Directors of the Company. The
Administrator will supervise the administration and enforcement of the
Deferred Compensation Plan according to the terms and provisions thereof and
will have such powers as are necessary to accomplish the purposes of the
Deferred Compensation Plan.
Officers and directors of the Company and its affiliates earning cash
compensation of at least $125,000 are eligible to participate in the Deferred
Compensation Plan. However, for the Deferred Compensation Plan's initial
period (June 1, 1996 to July 1, 1996) and for the Deferred Compensation Plan's
first full year, directors and otherwise eligible officers of the Company and
its affiliates may become participants only if so designated by the
Administrator. For the initial year, the Administrator has designated 22
directors and officers of the Company and its affiliates as participants.
Under the Deferred Compensation Plan, participants may voluntarily elect to
defer all or a portion of their salaries and/or annual bonuses (or, in the
case of participants who are directors, of their annual fees). An election to
defer must generally be made prior to the commencement of the fiscal year in
which it will be earned. Once made, the election is generally irrevocable for
the duration of the deferral, which must be for a period of no less than five
years. Amounts deferred are credited to participants' accounts.
The deferred amounts will be deemed to be invested, pursuant to the election
of the participant, in such funds as the Administrator may from time to time
make available, including a fund investing in the Common Stock and a fund
investing in First USA Paymentech common stock. Investment designations for
future amounts to be deferred and for amounts already deferred may be changed,
subject to the terms and conditions of the Deferred Compensation Plan.
Additional restrictions may apply to investment decisions of participants who
are subject to the reporting requirements of Section 16(a) of the Exchange
Act. At least annually, the Administrator will determine the net income or
loss equivalents of each fund for the period elapsed since the next preceding
valuation date and allocate such equivalents to participants' accounts.
Because the amounts to be deferred under the Deferred Compensation Plan are
selected pursuant to the individual elections of participants, such amounts
are not currently determinable.
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Each deferral election will indicate the time (not less than five years
following the deferral) and form of payment for the amounts to be deferred
during the applicable fiscal year (and any net income or loss equivalents
allocated in respect of such amounts). Distributions will be made in cash to
the participant at the time irrevocably selected on the deferral form, or, in
the event of the participant's death, to the participant's designated
beneficiary. Early withdrawals are subject to a 10% penalty, except in the
event of unforeseeable financial emergencies. The Company may defer payment of
all or any portion of a distribution that it determines is likely not to be
deductible by the Company under applicable income tax provisions.
Each participant or beneficiary will be an unsecured general creditor with
respect to any payments due and owing to such participant pursuant to the
Deferred Compensation Plan.
The Board of Directors of the Company can amend or terminate the Deferred
Compensation Plan at any time, except that no amendment may be made that would
impair the rights of a participant with respect to amounts already deferred or
otherwise allocated to such participant's account.
CERTAIN FEDERAL INCOME TAX CONSEQUENCES
The following is a brief summary of the principal federal income tax
consequences of the Deferred Compensation Plan based upon current federal
income tax laws. The summary is not intended to be exhaustive and, among other
things, does not describe state, local or foreign tax consequences.
Amounts voluntarily deferred pursuant to the Deferred Compensation Plan
should not be taxable to the participant until a distribution is made to the
participant or to his or her beneficiary. A participant will recognize
ordinary income in an amount equal to the amount of cash received. The Company
will generally be entitled to take a corresponding tax deduction for the tax
year in which the participant recognizes ordinary income.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR APPROVAL OF THE ADOPTION OF THE
FIRST USA, INC. DEFERRED COMPENSATION PLAN.
20
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AMENDMENT TO THE FIRST USA EMPLOYEE STOCK PURCHASE PLAN
The Board of Directors proposes and recommends that the stockholders approve
an amendment to the Purchase Plan to increase the number of shares of Common
Stock that may be acquired pursuant to the Purchase Plan from 200,000 to
700,000 and to increase the percentage of compensation that an employee can
contribute under the Purchase Plan from 10% to 20% of such employee's annual
base salary. As of September 1, 1996, an aggregate of 194,177 shares of Common
Stock had been acquired pursuant to the Preferred Stock Purchase Plan. The
affirmative vote of a majority of the voting power of the shares of Common
Stock and Preferred Stock present or represented and entitled to vote at the
annual meeting will be required to approve such amendment.
The Purchase Plan provides a means for full time employees of the Company to
purchase shares of Common Stock through payroll deductions at 85% of the
current market price of the Common Stock. The Purchase Plan is intended to
satisfy the applicable requirements of Section 423 of the Code, which are
briefly summarized below. The Purchase Plan is administered by the
Compensation Committee.
If the proposed amendment is approved, each eligible employee may have
payroll deductions of any whole percentage amount up to 20% of their annual
base salary (up to $21,250 per year) used to purchase shares of Common Stock,
provided that no employee may purchase Common Stock through the Purchase Plan
with a fair market value greater than that permitted by law in any calendar
year. The amounts deducted will be accumulated, and at the end of each
designated three-month period the accumulated amounts will be applied to the
purchase of shares of Common Stock at 85% of the fair market value thereof.
Accumulated payroll deductions which are insufficient to purchase a whole
share of Common Stock will be carried into the next purchase period.
The Purchase Plan will remain in effect until all shares authorized to be
paid under the Purchase Plan have been sold. An aggregate of 200,000 shares of
Common Stock have been authorized for issuance under the Purchase Plan,
194,177 shares of which have been acquired pursuant to the Purchase Plan. If
the amendment to the Purchase Plan is approved by stockholders at the annual
meeting, an additional 500,000 shares of Common Stock will be authorized for
issuance under the Purchase Plan.
The Board of Directors may from time to time amend or terminate the Purchase
Plan, provided that (i) no such amendment or termination may adversely affect
the rights of any participant without the consent of such participant and (ii)
to the extent required by Rule 16b-3 under the Exchange Act or any other law,
regulation or stock exchange rule, no such amendment shall be effective
without the approval of the Company's stockholders.
CERTAIN FEDERAL INCOME TAX CONSEQUENCES
The following discussion is a brief summary of the principal United States
federal income tax consequences under current federal income tax laws relating
to awards under the Purchase Plan. This summary is not intended to be
exhaustive and, among other things, does not describe state, local or foreign
income and other tax consequences. For purposes of this discussion the right
to purchase shares under the Purchase Plan is described as an option.
The Purchase Plan is intended to qualify as an "employee stock purchase
plan" as defined in Section 423 of the Code. Assuming such qualification, a
participant will not recognize any taxable income as a result of participating
in the Purchase Plan, exercising options granted pursuant to the Purchase Plan
or receiving shares of Common Stock purchased pursuant to such options. A
participant may, however, be required to recognize taxable income as described
below.
If a participant disposes of any share of Common Stock purchased pursuant to
the Purchase Plan after the later to occur of (i) two years from the grant
date for the related option and (ii) one year after the exercise date for the
related option (such disposition, a "Qualifying Transfer"), or if he dies
(whenever occurring) while owning any share purchased under the Purchase Plan,
the participant generally will recognize compensation income, for the taxable
year in which such disposition occurs or the taxable year which closes upon
the
21
<PAGE>
participant's death, in an amount equal to the lesser of (i) the excess of the
market value of the disposed share at the time of such disposition over its
purchase price, and (ii) 15% of the market value of the disposed share on the
grant date for the option to which such disposed share relates. In the case of
a Qualifying Transfer, (a) the basis of the disposed share will be increased
by an amount equal to the amount of compensation income so recognized, and (b)
the participant will recognize a capital gain or loss, as the case may be,
equal to the difference between the amount realized from the disposition of
the shares and the basis for such shares.
If the participant disposes of any share other than by a Qualifying
Transfer, the participant generally will recognize compensation income in an
amount equal to the excess of the market value of the disposed share on the
date of purchase over its purchase price. In such event, the Company will be
entitled to a tax deduction equal to the amount of compensation income
recognized by the participant. Otherwise, the Company will not be entitled to
any tax deduction with respect to the grant or exercise of options under the
Purchase Plan or the subsequent sale by participants of shares purchased
pursuant to the Purchase Plan. A transfer of shares purchased under the
Purchase Plan after the death of a participant by the estate of the decedent
has the same federal income tax effects on the Company as a Qualifying
Transfer.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR APPROVAL OF THE AMENDMENT OF
THE FIRST USA, INC. EMPLOYEE STOCK PURCHASE PLAN.
22
<PAGE>
CERTAIN TRANSACTIONS
In connection with the Paymentech IPO, First USA Paymentech granted special
stock options under its stock option plan. All of such special stock options
were exercisable for a period of 30 days from the date of consummation of the
Paymentech IPO. The Company made loans in connection with the exercise of the
special stock options to the recipients of such options. Each such loan is
evidenced by an eight-year, full recourse promissory note to the Company that
bears interest at 5.38% per annum. The notes provide that the then outstanding
principal amount thereof and all accrued interest thereunder will become due
and payable 60 days following the optionee's termination of employment by the
Company or any of its subsidiaries (other than upon Retirement, as defined in
the notes) or immediately upon demand following such employee's termination
for Cause, as defined in the notes (or, if earlier, on the maturity date of
the notes). The notes also provide that the outstanding principal amount
thereof and all accrued interest thereunder will be forgiven ratably over a
period of four years, beginning with the fifth anniversary of the consummation
of the Paymentech IPO or, if earlier, upon the optionee's death or disability,
the termination of the optionee's employment upon Retirement or upon a change
of control of the Company or First USA Paymentech. Furthermore, the notes
contain a noncompete provision. The following executive officers of the
Company received loans from the Company in connection with their exercise of
special First USA Paymentech stock options in the amounts indicated, each of
which was outstanding as of August 31, 1996: Mr. Tolleson, $1,464,750; Mr.
Vague, $1,464,750; Mr. Christofferson, $488,250; Mr. Antonini, $488,250; Ms.
Patsley, $1,953,000; Daniel C. Barr, $195,300; Robert A. Bowie, $459,375;
George P. Hubley, $292,950; Gary J. Marino, $390,600; Kevin D. Murphy,
$195,300; James W. Stewart, III, $195,300; and Catherine G. West, $195,300.
During fiscal 1996, the Company retained The Staubach Company, of which Mr.
Staubach is a principal, to represent the Company in connection with certain
lease transactions related to the Company's principal corporate office space.
In connection with such transactions, The Staubach Company received
approximately $1 million in fees from the owners of such office space.
INDEPENDENT AUDITORS
The Company retained Ernst & Young LLP as the Company's independent auditors
for fiscal 1996. Representatives of Ernst & Young LLP will attend the meeting
and, while they do not intend to make a statement, they will respond to
appropriate questions directed to them.
STOCKHOLDER PROPOSALS FOR 1997 ANNUAL MEETING
Stockholder proposals to be included in the Company's proxy material for the
1997 annual meeting of stockholders must be received at the Company's
principal executive offices not later than May 30, 1996.
A Company By-law provides that a nomination for election as a director may
be brought before an annual or special meeting of stockholders by any
stockholder provided the stockholder has given written notice of the business
to the Company's Secretary not less than 60 days nor more than 90 days prior
to the anniversary date of the immediately preceding annual stockholders
meeting. If the annual meeting is not within 30 days before or after such
anniversary date, the stockholder notice must be received within 10 days
following notice or publication of the date of the meeting. The notice must
include certain information concerning the nomination for director. A copy of
the By-law may be obtained from the Secretary of the Company at the address
set forth in the accompanying notice. The By-law will apply to the 1997 annual
meeting of stockholders.
23
<PAGE>
OTHER MATTERS
As of the date of this Proxy Statement, the Company does not intend to bring
any other matters before the meeting requiring action of the stockholders, nor
does it have any information that other matters will be brought before the
meeting. However, if any other matters requiring the vote of the stockholders
properly come before the meeting, it is the intention of the persons named in
the enclosed form of proxy to vote the proxy in accordance with their best
judgment in the interest of the Company.
/s/ John C. Tolleson
John C. Tolleson
Chairman and Chief Executive Officer
/s/ Richard W. Vague
Richard W. Vague
President
September 30, 1996
24
<PAGE>
Votes must be indicated (X) in Black or Blue ink. [ ]
The Board of Directors recommends a vote FOR each item.
1. Election of FOR all nominees [ ] WITHHOLD AUTHORITY [ ] EXCEPTIONS [ ]
Directors listed below to vote for all
nominees listed
below.
(Nominees: Gene H. Bishop, John C. Tolleson and Carl H. Westcott
(INSTRUCTIONS: To withhold authority to vote for any individual nominee, mark
the "Exception" box and write that nominee's name in the space provided below.)
"Exceptions ____________________________________________________________________
2. Proposal to authorize the adoption 3. Proposal to amend the First USA,
of the First USA Inc. Deferred Inc. Employee Stock Purchase Plan
Compensation Plan. to increase the number of shares
of Common Stock available for
FOR [ ] AGAINST [ ] ABSTAIN [ ] purchase under such plan and to
increase the maximum percentage of
compensation that each employee is
eligible to allocate for
participation under such plan.
4. The proxy is authorized to FOR [ ] AGAINST [ ] ABSTAIN [ ]
transact such other business as may
properly come before the meeting.
Change of Address
Mark Here [ ]
(Please sign exactly as name appears
hereon. Joint owners should each sign.
When signing as attorney, executor,
administrator, trustee, guardian or other
fiduciary, please add that title.)
Dated:_____________________________, 1996
_________________________________________
Signature of Stockholder
_________________________________________
Signature of Stockholder
Please Mark, Date, Sign and Mail Your Proxy Promptly in the Envelope Provided.
FIRST USA, INC.
Proxy solicited by the Board of Directors for the
Annual Meeting of Stockholders, to be held on November 6, 1996
The undersigned hereby appoints John C. Tolleson, Richard W. Vague and
Pamela H. Patsley, and each of them, the true and lawful agents and proxies with
full power of substitution, to represent the undersigned at the Annual Meeting
of Stockholders of First USA, Inc. to be held at the Hotel Crescent Court, 400
Crescent Court, Dallas, Texas, on November 6, 1996 at 10:30 a.m., and at any
adjournments thereof, for the transaction of the business described on the
opposite side of this card.
The Shares represented by this proxy will be voted as indicated on the
opposite side. If no indication has been made, the Shares represented by this
proxy will be voted in favor of Proposals 1 through 3 and as the named proxies
deem advisable on such other business as may properly come before the meeting.
Please sign, date and return this proxy promptly, using the enclosed return
envelope.
FIRST USA, INC.
P.O. BOX 11093
NEW YORK, N.Y. 10203-0083
