SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
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<S> <C>
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[X] Preliminary Proxy Statement [ ] Confidential, For Use of the Commission
Only (as permitted by Rule 14a-6(e)(2))
[ ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
Bankers Trust New York Corporation
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(Name of Registrant as Specified in Its Charter)
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(Name of Person (s) Filing Proxy Statement, if Other Than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
(1) Title of each class of securities to which transaction applies:
- --------------------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
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(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing fee
is calculated and state how it was determined):
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(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid:
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[ ] Fee paid previously paid:
[ ] Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement number,
or the form or schedule and the date of its filing.
(1) Amount previously paid:
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(2) Form, Schedule or Registration Statement no.:
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(3) Filing Party:
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(4) Date Filed:
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[GRAPHIC OMITTED]
BANKERS TRUST
NEW YORK CORPORATION
PRELIMINARY COPY
FRANK N. NEWMAN, CHAIRMAN OF THE BOARD
March 9, 1998
Dear Shareholder:
You are cordially invited to attend the Annual Meeting of Shareholders, to
be held at 3:00 P.M. on Tuesday, April 21, 1998, at One Bankers Trust Plaza
(130 Liberty Street), New York, New York 10006.
We are asking you to vote for the election of directors, for the
ratification of the appointment of the independent auditor, and for
authorization and approval to amend the Certificate of Incorporation, as
described in the attached Notice of Meeting and Proxy Statement.
These matters, together with three shareholder proposals that may be
brought before the meeting, are more fully described in the accompanying Proxy
Statement. For the reasons set forth in the Proxy Statement, your Board of
Directors and Management recommend a vote FOR items 1, 2, 3A, 3B, 3C and 3D and
AGAINST items 4, 5 and 6, as set forth in the enclosed proxy card.
It is important that your shares be represented at the meeting, whether or
not you are able to personally attend. Accordingly, I urge you to vote your
shares, sign and date the enclosed proxy card and return it in the accompanying
envelope as promptly as possible.
Thank you for your interest in the Corporation's affairs.
Sincerely,
/s/ Frank N. Newman
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[GRAPHIC OMITTED]
BANKERS TRUST
NEW YORK CORPORATION
PRELIMINARY COPY
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
APRIL 21, 1998
The Annual Meeting of Shareholders of Bankers Trust New York Corporation (a
New York corporation) will be held at One Bankers Trust Plaza (130 Liberty
Street), New York, New York 10006, on Tuesday, April 21, 1998, at 3:00 P.M., for
the following purposes:
1. to elect directors;
2. to ratify the appointment of KPMG Peat Marwick LLP as the independent
auditor for 1998;
3. to authorize and approve recommended amendments of the Corporation's
Certificate of Incorporation to effect the following changes:
a) to permit the issuance of Series Preferred Stock with different rights
as to the payment of dividends and amounts upon liquidation,
dissolution and winding up and redeemable at the option of the holder
or upon the happening of an event;
b) to permit the distribution of one class or series of capital stock to
the holders of another class or series;
c) to count only the votes cast for or against a corporate action; and
d) to change the name of the Corporation; and
4. to consider and act upon three shareholder proposals, if introduced at the
meeting, as described in the attached Proxy Statement;
and to transact such other business as may properly come before the meeting or
adjournments thereof.
The Board of Directors has fixed the close of business on February 27,
1998, as the time as of which shareholders of record of Bankers Trust New York
Corporation who are entitled to notice of and to vote at such meeting shall be
determined.
By order of the Board of Directors
/s/ James T. Byrne, Jr.
---------------------------------------
JAMES T. BYRNE, JR.
Secretary
130 Liberty Street
New York, New York 10006
March 9, 1998
----------------
YOUR VOTE IS IMPORTANT
WE ENCOURAGE YOU TO COMPLETE, SIGN, DATE AND PROMPTLY RETURN YOUR PROXY
CARD IN THE ENCLOSED ENVELOPE, REGARDLESS OF WHETHER YOU PLAN TO ATTEND THE
MEETING.
<PAGE>
PRELIMINARY COPY
PROXY STATEMENT
This statement is submitted in connection with the solicitation of proxies
by and on behalf of the Board of Directors and Management of Bankers Trust New
York Corporation (the "Corporation"), 130 Liberty Street, New York, New York
10006, for the Annual Meeting of Shareholders on April 21, 1998, or adjournments
thereof (the "Annual Meeting"). There were outstanding at the close of business
on February 27, 1998 (the "Record Date"), 97,873,138 shares of the common stock
of the Corporation (the "Common Stock") entitled to vote at this meeting, each
share being entitled to one vote. Only shareholders whose names appear of record
on the books of the Corporation at that time will be entitled to vote at the
Annual Meeting. The presence, in person or by proxy, of the holders of a
majority of the shares entitled to vote constitutes a quorum for the Annual
Meeting. This Proxy Statement and the enclosed proxy card were mailed commencing
on or about March 9, 1998.
If you are a participant in the Corporation's Dividend Reinvestment and
Common Stock Purchase Plan, your proxy card will represent both the number of
shares registered in your name and the number of whole shares credited to your
Dividend Reinvestment Plan account as of the Record Date, and all such shares
will be voted in accordance with the instructions on the proxy card.
If you "abstain" on any matter on the proxy card, your shares will be
treated as present for purposes of determining a quorum for the Annual Meeting,
but they will not be counted in the vote on that matter. A "broker non-vote"
(i.e., when a broker is not authorized to vote on a specific issue) on any
matter will be similarly treated.
PART I. ELECTION OF DIRECTORS
The directors of the Corporation are elected annually to serve until the
next Annual Meeting of Shareholders and until their respective successors have
been elected and duly qualified. Directors are elected by a plurality of the
votes cast. Unless you indicate on your proxy card that you withhold authority
to vote for a nominee, your shares will be voted for each of the nominees
listed. If any of those nominees unexpectedly shall be unable to serve as a
director, your shares will be voted for the person or persons as shall be
nominated by the Board's Committee on Directors.
A. B. Krongard, who was Chairman of the Board and Chief Executive Officer
of Alex. Brown Incorporated, which was merged with and into a subsidiary of the
Corporation on September 1, 1997, and who served as Vice Chairman of the Board
of the Corporation and Bankers Trust Company, its principal subsidiary (the
"Bank") since that time, retired effective January 31, 1998, to take a position
in public service, and will not stand for reelection at the Annual Meeting.
Following are the nominees, all of whom are currently directors of the
Corporation and, with the exception of Messrs. Ault, Austrian and Thoman, were
elected to their present terms of office at the 1997 Annual Meeting of
Shareholders. Messrs. Ault, Austrian (formerly directors of Alex. Brown
Incorporated) and Thoman were elected as directors of the Corporation and the
Bank, effective September 1, 1997. Information concerning each of the nominees,
showing the year when first elected as a director, the age, principal occupation
and principal affiliations, is as follows:
<PAGE>
Nominees and Year
Each Became
a Director Principal Occupation and Other Information
- ----------------- -----------------------------------------------------------
[GRAPHIC OMITTED] PRIVATE INVESTOR. Director of Bankers Trust Company. Former
Chairman and Chief Executive Officer, Telecredit, Inc. Also
a director of Equifax, Inc., Sunrise Medical Inc., Viking
Office Products, Inc. and Pacific Crest Outward Bound
School. Age 61.
Lee A. Ault III
1997
[GRAPHIC OMITTED] PRESIDENT AND CHIEF OPERATING OFFICER, NATIONAL FOOTBALL
LEAGUE. Director of Bankers Trust Company. Also a director
of Rafac Technology and Viking Office Products, Inc.; and
trustee of Swarthmore College. Age 58.
Neil R. Austrian
1997
[GRAPHIC OMITTED] DIRECTOR OF VARIOUS CORPORATIONS. Director of Bankers Trust
Company. Retired Senior Vice President and Director,
International Business Machines Corporation. Also a
director of Computer Task Group, Phillips Petroleum
Company, Rohm and Haas Company and TIG Holdings; chairman
emeritus of Amherst College; and chairman of the Colonial
Williamsburg Foundation. Age 69.
George B. Beitzel
1977
[GRAPHIC OMITTED] DIRECTOR, INSTITUTE FOR ADVANCED STUDY. Director of Bankers
Trust Company. Chairman, Committee on Science, Engineering
and Public Policy of the National Academies of Sciences and
Engineering & the Institute of Medicine; member, National
Academy of Sciences, American Academy of Arts and Sciences
and American Philosophical Society; and trustee of North
Carolina School of Science and Mathematics and the Woodward
Academy. Former member of the board of directors, Research
Triangle Institute. Age 59.
Phillip A. Griffiths
1994
2
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Nominees and Year
Each Became
a Director Principal Occupation and Other Information
- ----------------- ----------------------------------------------------------
[GRAPHIC OMITTED] CHAIRMAN EMERITUS, J.C. PENNEY COMPANY, INC. Director of
Bankers Trust Company. Also a director of Exxon
Corporation, Halliburton Company, Warner-Lambert Company,
Williams, Inc., Central & South West Corp., and the
National Retail Federation. Age 62.
William R. Howell
1986
[GRAPHIC OMITTED] SENIOR PARTNER, AKIN, GUMP, STRAUSS, HAUER & FELD, LLP,
ATTORNEYS-AT-LAW, WASHINGTON, D.C. AND DALLAS, TEXAS.
Director of Bankers Trust Company. Former President of the
National Urban League, Inc. Also a director of American
Express Company, Chancellor Media Corporation, Dow Jones,
Inc., J.C. Penney Company, Inc., Revlon Group Incorporated,
Ryder System, Inc., Sara Lee Corporation, Union Carbide
Corporation and Xerox Corporation; and a trustee of
Brookings Institution, The Ford Foundation and Howard
University. Age 62.
Vernon E. Jordan, Jr.
1972
[GRAPHIC OMITTED] RETIRED CHAIRMAN AND CHIEF EXECUTIVE OFFICER, PHILIP MORRIS
COMPANIES INC. Director of Bankers Trust Company. Also a
director of Sola International Inc., and chairman of WPP
Group plc. Age 71.
Hamish Maxwell
1984
[GRAPHIC OMITTED] CHAIRMAN OF THE BOARD, CHIEF EXECUTIVE OFFICER AND
PRESIDENT OF THE CORPORATION AND BANKERS TRUST COMPANY.
Former Deputy Secretary of the United States Treasury and
former Vice Chairman of the Board and director of
BankAmerica Corporation and Bank of America NT&SA. Also a
director of Dow Jones, Inc.; trustee of Carnegie Hall; and
member, Board of Overseers of Cornell University Medical
College and the Graduate School of Medical Sciences. Age
55.
Frank N. Newman
1995
3
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Nominees and Year
Each Became
a Director Principal Occupation and Other Information
- ----------------- -----------------------------------------------------------
[GRAPHIC OMITTED] INVESTOR. Director of Bankers Trust Company. Former
Co-chief Executive Officer of Time Warner Inc. Also a
director of Boston Scientific Corporation and Xerox
Corporation. Age 58.
N.J. Nicholas Jr.
1989
[GRAPHIC OMITTED] CHAIRMAN AND CHIEF EXECUTIVE OFFICER, THE PALMER GROUP.
Director of Bankers Trust Company. Former Dean of The
Wharton School, University of Pennsylvania and former Chief
Executive Officer of Touche Ross & Co. (now Deloitte &
Touche). Also a director of Allied-Signal Inc., Federal
Home Loan Mortgage Corporation, GTE Corporation, The May
Department Stores Company and Safeguard Scientifics, Inc.;
and a trustee, the University of Pennsylvania. Age 63.
Russell E. Palmer
1988
[GRAPHIC OMITTED] RETIRED CHAIRMAN OF THE BOARD AND CHIEF EXECUTIVE OFFICER,
CONTINENTAL GRAIN COMPANY. Director of Bankers Trust
Company. Also a director of Continental Grain Company,
ContiFinancial Corporation, Prudential Insurance Company of
America, Fresenius Medical Care, A.G., National Committee
on United States-China Relations and America's Promise;
member, Council on Foreign Relations; and chairman of The
Points of Light Foundation. Age 66.
Donald L. Staheli
1996
[GRAPHIC OMITTED] FORMER VICE PRESIDENT, THE EDNA MCCONNELL CLARK FOUNDATION
(A CHARITABLE FOUNDATION). Director of Bankers Trust
Company. Also a director of CVS Corporation and of the
Community Foundation for Palm Beach and Martin Counties;
and a trustee emerita of Cornell University. Age 69.
Patricia Carry Stewart
1977
4
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Nominees and Year
Each Became
a Director Principal Occupation and Other Information
- ----------------- -----------------------------------------------------------
[GRAPHIC OMITTED] PRESIDENT, CHIEF OPERATING OFFICER AND DIRECTOR, XEROX
CORPORATION. Director of Bankers Trust Company. Also a
director of Fuji Xerox Company, Ltd. and Union Bancaire
Privee (Switzerland); member, General Electric Investments
Equity Advisory Board, Yale School of Management Advisory
Board, Fletcher School of Law and Diplomacy Advisory Board,
and the INSEAD U.S. Advisory Board; director, The Americas
Society; and member, Council on Foreign Relations. Age 53.
G. Richard Thoman
1997
[GRAPHIC OMITTED] VICE CHAIRMAN OF THE BOARD OF THE CORPORATION AND BANKERS
TRUST COMPANY. Also a director of Alicorp, S.A., Northwest
Airlines and Private Export Funding Corp.; member of the
New York State Banking Board; vice chairman of the Board of
Trustees of St. Luke's-Roosevelt Hospital Center; a partner
of New York City Partnership; chairman, Wharton Financial
Services Center; and a member of the Bretton Woods
Committee. Age 62.
George J. Vojta
1992
[GRAPHIC OMITTED] DIRECTOR OF VARIOUS CORPORATIONS. Director of Bankers Trust
Company. Former Chairman and Chief Executive Officer of
Wolfensohn & Co., Inc. and former Chairman of the Board of
Governors of the Federal Reserve System. Also a director of
the American Stock Exchange, Nestle S.A., Prudential
Insurance Company of America and UAL Corporation and an
overseer of TIAA-CREF; director of American Council on
Germany, Council on Foreign Relations and The Japan
Society; trustee of The American Assembly; and member of
the advisory boards of several international corporations.
Age 70.
Paul A. Volcker
1996
5
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SECURITY OWNERSHIP OF DIRECTORS AND MANAGEMENT
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<CAPTION>
Name of Beneficial Amount and Nature Percent of
Title of Class Owner of Beneficial Ownership1,2 Class3
- ------------------------ ------------------------- ----------------------------------- -----------
<S> <C> <C> <C>
Common Stock ........... Ault, Lee A. III 31,342 (D)4
Common Stock ........... Austrian, Neil R. 7,728 (D)4
Common Stock ........... Beitzel, George B. 5,870 (D)
6,000 (I)(As Trustee)
Common Stock ........... de Balmann, Yves C. 281,834 (D)4,5,6
Common Stock ........... Doherty, R. Kelly 186,986 (D)4,5,6
1,868 (I)(EBP)
Common Stock ........... Griffiths, Phillip A. 1,800 (D)
Common Stock ........... Howell, William R. 2,675 (D)
Common Stock ........... Jordan, Vernon E. Jr. 7,384 (D)
Common Stock ........... Krongard, A. B. 707,579 (D)6
Common Stock ........... Maxwell, Hamish 6,350 (D)
Common Stock ........... Newman, Frank N. 253,563 (D)4,5,6
Common Stock ........... Nicholas, N.J. Jr. 3,500 (D)
8,853 (I)(DCP)
Common Stock ........... Palmer, Russell E. 2,600 (D)
Common Stock ........... Shattuck, Mayo A. III 378,005 (D)
Common Stock ........... Staheli, Donald L. 1,000 (D)
Common Stock ........... Stewart, Patricia C. 6,300 (D)
Common Stock . ......... Thoman, G. Richard 1,533 (D)
Common Stock ........... Vojta, George J. 255,266 (D)4,5,6
44 (I)(EBP)
Common Stock ........... Volcker, Paul A. 283,394 (D)
Common Stock ........... Directors and Executive 3,286,892 (D)7 3.3%
Officers as a group 6,000 (I)(As Trustee)
1,912 (I)(EBP)
8,853 (I)(DCP)
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1 Ownership as of February 27, 1998. Shares of Common Stock have been rounded to
the nearest full share.
2 As noted next to share amount: (D) represents shares directly held; (I)
represents shares indirectly held; (EBP) represents shares held in the
Corporation's Qualified Employee Benefit Plans and/or in the Corporation's
Employee Stock Ownership Plan; (DCP) represents share equivalents accrued in
the Corporation's deferred compensation plan for non-officer directors.
3 Based on February 27, 1998, outstanding securities of 97,873,138 and the
exercisable options, vested PEP shares and vested EPP shares of each of the
Directors and Named Executive Officers set forth in footnotes 4, 5 and 6
below, the number of shares of Common Stock owned by any Director or member of
Management constitutes less than 1% of the total outstandings of the class.
4 Includes options now exercisable and those that become exercisable within 60
days for the following: Ault--9,335; Austrian-- 5,601; de Balmann--155,000;
Doherty--60,000; Newman--180,000; and Vojta--62,876. Messrs. Ault and Austrian
received options from Alex. Brown Incorporated in their capacity as directors
of Alex. Brown Incorporated. The Corporation does not provide an option plan
for non-officer directors.
5 Includes vested (non-forfeitable) shares which are mandatorily deferred for
five years (commencing with the end of the performance year) under PEP (as
defined on page 11), a component of the 1991, 1994 and 1997 Stock Option and
Stock Award Plans, for the following: de Balmann --110,330; Doherty--108,951;
Newman--67,685; and Vojta--81,421.
6 Includes vested (non-forfeitable) shares which are deferred for three years
(commencing with the end of the performance year) under EPP (as defined on
page 12) for the following: de Balmann--10,822; Doherty--10,822;
Krongard--8,859; Newman--5,878; and Vojta--2,939.
7 Includes 872,876 options that will be exercisable within 60 days, 738,147
vested shares under PEP and 72,931 vested shares under EPP.
6
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SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities and Exchange Act of 1934, as amended (the
"Exchange Act"), requires the Corporation's executive officers and directors and
holders of more than 10% of the Common Stock to file initial reports of
ownership and reports of changes in ownership of the Common Stock with the
Securities and Exchange Commission ("SEC"). Executive officers, directors and
holders of more than 10% of the Common Stock are required by SEC regulations to
furnish the Corporation with copies of all such reports.
Based on a review of the copies of the reports furnished to the Corporation
and written representations from the Corporation's executive officers and
directors, the Corporation believes that in 1997 all Section 16(a) requirements
applicable to its executive officers and directors were met, with the following
exceptions. One late Form 4 disclosing one transaction was filed for each of
Messrs. Krongard, Shattuck and Yellin. A Form 5 reporting the exempt acquisition
of phantom share equivalents earned by Mr. Nicholas for the year ended December
31, 1996 inadvertently was not filed. However, the phantom share equivalents
were included in a Form 5 filing for the year ended December 31, 1997.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
<TABLE>
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Title of Name and Address of Amount and Nature of
Class Beneficial Owner Beneficial Ownership Percent of Class
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<S> <C> <C> <C>
Common Stock The Capital Group Companies, Inc. 5,022,600(a) 5.1%
333 South Hope Street
Los Angeles, CA 90071
</TABLE>
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(a) In a Schedule 13G filed under the Exchange Act, The Capital Group Companies,
Inc. disclosed that, as of December 31, 1997, it had sole investment power
and no voting power with respect to all of said shares; that the shares were
acquired in the ordinary course of business, were not acquired for the
purpose of, and do not have the effect of, changing or influencing the
control of the Corporation; and that the shares were not acquired in
connection with or as a participant in any transaction having such purpose
or effect.
INTEREST OF DIRECTORS AND EXECUTIVE OFFICERS AND THEIR ASSOCIATES IN
TRANSACTIONS WITH THE CORPORATION
Some of the Corporation's directors and executive officers and their
associates, including affiliates and related interests, are customers of the
Corporation and/or subsidiaries of the Corporation, and some of the
Corporation's directors and executive officers and their associates, including
affiliates and related interests, are directors or officers of, or investors in,
corporations or members of partnerships or have an interest in other entities
which are customers of the Corporation and/or such subsidiaries. As such
customers, they have had transactions in the ordinary course of business with
the Corporation and/or such subsidiaries, including borrowings, all of which
were 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.
Vernon E. Jordan, Jr. is a senior partner of the law firm of Akin, Gump,
Strauss, Hauer & Feld, LLP, which performed legal services for a subsidiary of
the Corporation in 1997 and was paid its usual and customary fees for those
services. In addition, Mr. Jordan was paid a consultancy fee of $100,000 in 1997
by BT Wolfensohn, the mergers and acquisitions division of BT Alex. Brown
Incorporated. Mr. Jordan also is a member of the Fuji-Wolfensohn International
European Advisory Board, on which he served prior to the Corporation's
acquisition of Wolfensohn & Co. In 1997, he received a fee in the amount of
$25,000 in connection with his services to Fuji-Wolfensohn.
7
<PAGE>
In June of 1996, Paul A. Volcker entered into a consulting agreement with
the Corporation, pursuant to which he was paid a consultancy fee of $500,000 for
the year ended December 31, 1996. An additional $200,000 was made available for
setting up an office and for hiring an assistant, of which $111,162 was
submitted for reimbursement. The consultancy agreement was not renewed for 1997.
Mr. Volcker is also a member of the Fuji-Wolfensohn International board of
directors, a joint venture continued by the Corporation after the acquisition of
Wolfensohn & Co., and of the Fuji-Wolfensohn International European Advisory
Board. Mr. Volcker received a fee of $50,000 from each of these boards in 1997.
EXTENSION OF DIRECTORS AND OFFICERS LIABILITY INSURANCE POLICY
The Directors and Officers Liability Insurance Policy, which the
Corporation has maintained since June 1, 1972, was extended on July 1, 1997 to
July 1, 1998. This policy will reimburse the Corporation and/or any of its
subsidiaries for certain payments they may be required to make in indemnifying
their directors and officers, and covers directors and officers against certain
liabilities and expenses for which they may not or cannot be indemnified by the
Corporation and/or any of its subsidiaries. The policy also includes coverage
for a director or an officer who serves as a director of a non-subsidiary
corporation at the request of the Corporation. The policy is written by National
Union Fire Insurance Company of Pittsburgh and other independent insurance
companies at an annual premium of $2,915,448. No sums were paid by the insurers
under this policy in 1997.
COMMITTEES OF THE BOARD OF DIRECTORS
The Corporation and the Bank each maintains the Board Committees described
below. Included with the descriptions are the number of times each Committee met
during 1997 and a list of the current members of each such Committee:
EXECUTIVE COMMITTEE (ALSO FUNCTIONS AS THE DIVIDEND AND PRICE COMMITTEES)
- -- 1 MEETING. The Executive Committee acts for the Board of Directors when the
Board is not in session, subject to certain statutory limitations on its
authority. The Committee also considers and acts on matters which do not require
full Board consideration and approval and, upon the request of Management, it
considers some matters on a preliminary basis before their submission for full
Board consideration or approval. This Committee also serves as the Dividend
Committee to declare and set aside contractually required dividends (such as
those declared from time to time on preferred stock issues) which may become due
during the periods between scheduled Board meetings. Current Members: Frank N.
Newman, Chair; Vernon E. Jordan, Jr.; Hamish Maxwell; N.J. Nicholas Jr.; Russell
E. Palmer; Donald L. Staheli; Patricia C. Stewart; and Paul A. Volcker.
AUDIT COMMITTEE -- 7 MEETINGS. The Audit Committee is comprised entirely of
independent outside directors and is appointed annually by the Board of
Directors to oversee the accounting, reporting and audit practices established
by Management. The Committee, which meets at least quarterly, monitors the
effectiveness and quality of the system of internal accounting policies,
standards and controls designed to insure the accurate and efficient reporting
of financial activities, safeguarding of assets, proper exercise of fiduciary
powers and compliance with laws and regulations. The Committee meets regularly
with Management, the internal auditors, the internal credit auditors and the
independent auditors (the "Auditors") and reports regularly to the Board of
Directors on its activities and such other matters as it deems necessary. The
Auditors have free access to the Audit Committee without the presence of
Management. Current Members: Russell E. Palmer, Chair; Lee A. Ault III; Phillip
A. Griffiths; William R. Howell; G. Richard Thoman; and Paul A. Volcker.
COMMITTEE ON DIRECTORS -- 3 MEETINGS. The Committee on Directors is
comprised entirely of independent outside directors and is responsible for
nominating directors and reviewing the effectiveness and procedures of the
Board, the Board Committees and corporate governance. The Committee also has the
responsibility to make recommendations regarding these issues to the Board. The
Committee will consider a director nominee recommended by a shareholder by a
written notification to it,
8
<PAGE>
provided that such written notice is received by the Secretary of the
Corporation not later than 90 days before the Annual Meeting of Shareholders and
contains the name of such person, together with appropriate biographical data
and that person's written consent to submission of his or her name to the
Committee for its consideration. Current Members: Donald L. Staheli, Chair;
George B. Beitzel; William R. Howell; Vernon E. Jordan, Jr.; and N.J. Nicholas
Jr.
COMMITTEE ON PUBLIC RESPONSIBILITY AND CONCERN -- 3 MEETINGS. The Committee
on Public Responsibility and Concern reviews policy and audits the performance
of the Corporation in the discharge of its social responsibilities, which
include, but are not limited to, the Corporation's Equal Opportunity and Vendor
Outreach programs, community reinvestment activities, contributions program and
political action committee. Current Members: Paul A. Volcker, Chair; Neil R.
Austrian; Hamish Maxwell; Patricia C. Stewart; G. Richard Thoman; and George J.
Vojta.
FIDUCIARY COMMITTEE -- 6 MEETINGS. The Fiduciary Committee reviews the
quality and effectiveness of the organizational structure of the trust and
fiduciary business units of the Corporation and the Bank and its subsidiaries to
ensure the proper exercise of fiduciary policies. In addition, the Committee
monitors the activities of management fiduciary committees appointed from time
to time by the Board of Directors and reviews the effective implementation of
policies, practices and procedures to prevent conflicts of interest or improper
interrelation between the administration of the fiduciary and banking functions
of the Bank. Current Members: Patricia C. Stewart, Chair; Neil R. Austrian;
George B. Beitzel; Vernon E. Jordan, Jr.; Russell E. Palmer; and George J.
Vojta.
HUMAN RESOURCES COMMITTEE -- 6 MEETINGS. The Human Resources Committee is
comprised entirely of independent outside directors and reviews and evaluates,
in comparison with the Corporation's competitors, the Corporation's performance
and executive compensation and benefits. The Committee is updated periodically
with information provided to the Corporation by independent compensation and
benefit consultants and is responsible for approving and monitoring those
policies which support corporate strategic objectives and govern both cash
compensation and stock ownership programs. Key aspects of this process require
the Committee to compare the Corporation's pay practices to its long-term goals
and to assess ways in which compensation incentives support the creation of
value for the Corporation's shareholders. Current Members: N.J. Nicholas Jr.,
Chair; Lee A. Ault III; Phillip A. Griffiths; Donald L. Staheli; and Patricia C.
Stewart.
TRANSACTION AUTHORIZATION COMMITTEE -- 3 MEETINGS. The Transaction
Authorization Committee, which is comprised of the Chief Executive Officer and
the Vice Chairman of the Board, acts for the Board of Directors to approve
certain transactions, including securitizations. Current Members: Frank N.
Newman, Chair; and George J. Vojta.
In addition to the Committee meetings shown above, there were 11 regularly
scheduled and 2 special meetings of the Board of Directors during 1997. Director
attendance at Board meetings averaged 93% during the year; aggregate attendance
at Committee meetings also averaged 93%. Meeting attendance was below 75% for
Neil R. Austrian, who was elected a director in September 1997.
COMPENSATION OF NON-OFFICER DIRECTORS
Each director who is not also an employee (each, a "non-officer director")
receives an annual retainer, comprised of cash and the fair market value of 400
shares of Common Stock. The 1997 annual retainer, valued at $59,100, was
prorated for Messrs. Ault, Austrian and Thoman, who commenced their
directorships on September 1, 1997. For each Board meeting and Executive
Committee meeting he or she attends, a non-officer director receives a fee of
$1,000. Each such director who is a member of the Human Resources Committee, the
Committee on Public Responsibility and Concern, the Fiduciary Committee, or the
Committee on Directors receives a fee of $1,000 for each Committee meeting he or
she attends and the Chairman of each of those committees receives an additional
annual fee of $3,000. The Chairman of the Audit Committee receives an annual fee
of $15,000 and its other members receive an annual fee of $7,500.
Members of the Audit Committee do not receive meeting
9
<PAGE>
fees. No fees are paid to members of the Transaction Authorization Committee.
Travel and out-of-pocket expenses of the directors in connection with their
attendance at Board or Committee meetings are either paid for or reimbursed by
the Corporation.
Effective March 31, 1998, the Corporation will terminate the accrual of
pension benefits under the retirement program for non-officer directors. Under
the retirement program, a director who has served at least ten years as a
non-officer director is entitled upon retirement to receive an annual payment of
$20,000 for life. If at retirement the director's service is less than ten years
but more than five years, the annual benefit is prorated. No retirement benefit
is paid to a director retiring with less than five years' service. To terminate
these pension benefits, the accrued present value of each non-officer director's
benefit will be actuarially converted into a deferred award consisting of share
equivalents of the Common Stock and assigned to an account established for each
non-officer director. When they leave the Board, a cash only payment will be
made, at the director's discretion, either in a lump sum, or in annual
installments not to exceed ten years. Until paid, dividend equivalents will be
credited on the share equivalents and treated as investments in additional share
equivalents or fractional share equivalents. The present value calculation is
based on an assumed payout to commence at age 72 and benefit accrual
proportionate to years of service, rounded up to the next full year (up to ten
years of service), for each director as follows: Ault--$8,627; Austrian--$7,283;
Beitzel--$135,546; Griffiths--$30,823; Howell--$91,284; Jordan--$91,284;
Maxwell--$151,754; Nicholas--$72,826; Palmer--$96,588; Staheli--$22,884;
Stewart--$135,546; Thoman--$5,491; and Volcker--$28,684. Concurrent with the
termination of the pension benefit, annual total remuneration for non-officer
directors will be adjusted to a competitive level by crediting 150 deferred
share equivalents per year to each non-officer director's account.
From time to time, the Corporation has requested certain directors to
participate in client meetings and to give presentations on behalf of the
Corporation. In connection with these engagements, the Corporation has either
paid for or reimbursed the director for his or her travel and out-of-pocket
expenses and, in some cases, paid a speaking fee.
Directors may elect to defer receipt of all or a portion of their
directors' fees into an interest-bearing account or into Common Stock
equivalents until they leave the Board, at which time a cash only payment would
be made, at the director's discretion, either in a lump sum or in annual
installments over a period not to exceed ten years. Until paid, deferred fees
accrue interest at the same rate as the yield on one-year Treasury bills,
adjusted on a quarterly basis or, if deferred for Common Stock equivalents,
dividend equivalents are credited on the share equivalents and are treated as
investments in additional share equivalents or fractional share equivalents.
Upon a "Change of Control" of the Corporation (as defined on page 18), all
deferred compensation would be paid immediately to the non-officer directors.
1998 HUMAN RESOURCES COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The Human Resources Committee of the Board of Directors (the "Committee")
is comprised entirely of outside directors, none of whom is a former or current
officer or employee of Bankers Trust New York Corporation or its subsidiaries
(for purposes of this report, the "Corporation"). Following directly after this
report is a discussion of other relationships between these Board members and
the Corporation, entitled "Compensation Committee Interlocks and Insider
Participation."
The Committee reviews and approves all major policies relating to
compensation and benefits programs, to ensure that they are designed and carried
out to maximize individual and team performance. The Committee is authorized by
the Board to approve all compensation actions for the Chief Executive Officer,
members of the Management Committee and other key officers designated by the
Chairman of the Board (each, a "Key Officer"). In addition, the Committee is
authorized to review and approve bonus funding and spending for all annual
plans. The Committee is also charged with administering the Corporation's Stock
Option and Stock Award Plans.
10
<PAGE>
During 1997, the Committee met six times to review and evaluate executive
compensation and benefit programs, including information periodically provided
to the Corporation by independent compensation and benefit consultants.
COMPENSATION POLICIES
The Committee's executive compensation policies are designed to:
o attract and retain the best individuals available in each area of
global financial services in which the Corporation competes for
profits;
o motivate and reward such individuals based on corporate, business unit
and individual performance; and
o align executives' and shareholders' interests through equity-based
incentives. Key Officer pay, including that of the Chief Executive
Officer, is determined and administered by the Committee on the basis
of total compensation rather than as separate free-standing
components.
The determination of each Key Officer's total compensation level begins
with an evaluation by the Committee of the Corporation's annual and long-term
performance. Among the performance factors reviewed by the Committee are: level,
quality, consistency and growth of earnings, return on equity and total
shareholder return. The Committee also reviews the pay practices of a number of
investment and commercial banks. As part of this process, the Committee
considers quantitative as well as qualitative factors without assigning uniform
relative weights to them. The Corporation also considers the prevailing economic
conditions and the business opportunities available to firms in the financial
services industry.
In arriving at total compensation levels, the Committee evaluates each Key
Officer's contribution to the overall performance of the Corporation. Also, the
Committee takes into account such factors as leadership and technical skills,
potential, teamwork, recruiting and other management contributions to the
Corporation. In addition, the Committee recognizes that the Corporation's
long-term success is dependent on its key resource--highly talented
individuals--whom it must attract and retain in an extremely competitive
environment.
The Committee exercises its judgment in setting an appropriate balance of
current cash and equity within each individual's compensation package. This
approach reflects the Committee's commitment to increasing shareholder value
through significant management stock ownership.
It is the Committee's policy to maximize the effectiveness, as well as the
tax-efficiency, of the Corporation's executive compensation programs. In
addition, the Committee's policy is to maintain the flexibility to take actions
that it deems to be in the best interests of the Corporation and its
shareholders, but which may not necessarily qualify for tax deductibility under
Section 162(m) or other Sections of the Internal Revenue Code (the "Code").
COMPENSATION COMPONENTS
Salary levels, although reviewed annually by the Committee for
appropriateness, are not ordinarily adjusted each year. Salary levels for the
Key Officers are determined by the Committee on the basis of what, in its
discretion, it deems to be appropriate pay for the responsibilities involved.
Partnership Equity Plan ("PEP") Awards are granted in the form of
performance units, the dollar value of which is determined by a quantitative
formula directly related to the earnings of the Corporation.
Prior to or at the beginning of each year, the Committee reviews and
adjusts the formula in the context of the Corporation's strategic direction and
current business conditions. Also, prior to or at the beginning of the year, and
based on the sole discretion of the Committee, performance units are granted to
each participant under this plan. In determining the number of units granted,
the Committee
11
<PAGE>
considers each participant's level of responsibility, individual performance and
contributions to the long-term success of the Corporation without assigning
uniform relative weights to them. The number of units awarded multiplied by the
PEP formula's unit value results in a dollar amount that is converted into
book-entry shares.
Under the terms of PEP, book-entry shares are deferred for five additional
years. While deferred, the shares yield to participants the greater of the
equivalent of the quarterly earnings per share amount or the quarterly dividend
on common stock of the Corporation (the "Common Stock"). An amount equal to the
quarterly dividend is paid currently in cash and the balance, if any, is
deferred into additional PEP shares. At the end of the deferral period, all
book-entry shares are distributable in Common Stock. All book-entry shares under
PEP are subject to a floor equal to 75% of the fair market value as of the award
date.
Employee Stock Options ("Stock Options") are generally granted at
consistent share levels from year to year without reference to present holdings
of unexercised options or appreciation thereon. Individual share grant levels
are reviewed annually and are periodically adjusted to reflect a number of
factors, including the individual's current responsibilities and contributions
to the long-term success of the Corporation.
For compensation planning purposes, Stock Options are valued at one-fourth
of the option's exercise price. On June 17, 1997, Stock Options were granted at
an exercise price of $90.75. In determining total compensation, the Committee
values these options at $22.6875 per share.
Annual Bonus. As discussed above, the Committee uses a total compensation
approach in determining appropriate pay levels for each Key Officer. At the end
of each performance year, the annual bonus award is determined with reference to
the factors outlined above and by taking into consideration the value of all
other components of the executive's compensation. Annual bonuses may be paid in
cash, stock, or a combination of cash and stock, as determined by the Committee.
Bonuses are funded based on a formula using annual corporate net income under
the Incentive Bonus Plan for Corporate Officers. The Committee fixes specific
bonus awards based on its evaluation of an individual's annual performance and
contributions to the Corporation.
In 1995, the Corporation adopted the Equity Participation Plan ("EPP").
Under the terms of the EPP, a portion of each participant's bonus award is
granted as three-year deferred equity. While deferred, equity awarded earns and
pays the equivalent of the greater of the Corporation's quarterly earnings per
share amount or dividend and vests one-third per year. The value of the deferred
equity is also subject to a floor equal to 75% of the fair market value of the
equity awarded.
Long-Term Incentive Plan ("LTIP"). As part of a special initiative to
attract, retain and motivate approximately 35 senior executives of the
Corporation, with particular emphasis on increasing the share price of the
Common Stock, in December 1995, the Committee adopted a long-term stock based
incentive program, the Partnership for One-hundred Plan ("POP" or "the original
POP"). Under this plan, participants were granted units which were valued at $4
when the share price equaled $76 and increased by $4 for each additional $1
increase in the share price. At the time POP was adopted, the Common Stock was
trading at $67.00 per share. Under the provisions of the plan, the units vest
and payout at their maximum value of $100 each when the share price reaches
$100. Otherwise, plan units vest one-third per year on the third, fourth and
fifth anniversaries of the award date and payouts will occur at the end of the
five-year performance period.
In December 1996, POP was amended ("POP I") and the value of each unit was
fixed at $41.25 under the POP formula, based on the Common Stock's December 13,
1996 average trading price of $85.3125. Vesting and payout were to remain as
stated in the original plan unless the stock traded at $100 prior to December
31, 1997, in which event vesting and payout would be accelerated. Since the
stock traded at $100 during 1997, units are to vest and to be paid out annually
in one-quarter increments beginning December 31, 1997. In addition, the value of
outstanding units accrues interest at the rate of prime plus 1% until paid out.
12
<PAGE>
In June 1997, the Committee approved a new plan ("POP II") to renew the
original POP's incentive to increase the share price of the Common Stock. Units
under POP II will have a maximum potential benefit of $58.75. Under the terms of
POP II, if the share price trades at $100 for three consecutive days or five
non-consecutive days during the period January 1, 1998 to December 31, 2000, the
value of the units becomes fixed at this maximum. This condition was met in
January 1998. The combination of POP I and POP II produced a maximum potential
payout of $100 ($41.25 + $58.75), which equals the maximum potential payout of
the original POP. Participants were awarded the same number of units under POP
II as they held in the original POP and their POP II units will vest in
one-third increments on December 31, 1998, 1999, and 2000.
As a result of the acquisition of Alex. Brown Incorporated ("Alex. Brown"),
the Corporation assumed certain obligations of the Alex. Brown 1991 Equity
Incentive Plan (including the Year-End Convertible Debenture Plan (the
"Debenture Plan")) as those obligations applied to certain of the senior
officers of Alex. Brown. Certain benefits under the Debenture Plan were based on
the attainment of certain return on equity targets of Alex. Brown. As a result
of the acquisition, and by virtue of the fact that Alex. Brown ceased to exist
as a separate entity, the Debenture Plan equity targets are no longer relevant.
Further, the change of control feature of the Debenture Plan resulted in the
acceleration of certain benefits under the plan. In light of the foregoing, the
Committee terminated the Debenture Plan as of December 31, 1997. Accordingly,
and in line with the continuing integration of Alex. Brown compensation plans
with those of the Corporation, all remaining benefits under the Debenture Plan
were accelerated and closed out in 1997. (See footnote (g) in the Summary
Compensation Table on page 15.)
1997 CHIEF EXECUTIVE OFFICER COMPENSATION ACTIONS
Mr. Newman was employed in September 1995 as Senior Vice Chairman of the
Corporation. His employment contract provided for minimum compensation in 1997
to include the grant of a 50,000 share Stock Option, a 60,000 unit PEP award and
a guaranteed bonus of $2,500,000. In view of the additional responsibilities he
assumed in 1996 when he was elected Chairman of the Board, Chief Executive
Officer and President, as well as his outstanding 1997 performance, the
Committee awarded Mr. Newman total compensation in excess of these minimum
contractual amounts.
In determining Mr. Newman's 1997 annual incentive award, the Committee
focused on the Corporation's continued gain in profitability for the year. In
addition, the Committee noted Mr. Newman's vision, leadership and efforts in
overseeing the Corporation's expanding global presence through the addition of
Alex. Brown and the announced acquisition of NatWest Markets' European cash
equities business. The Committee also took into consideration the increase in
the Corporation's Common Stock, which began the year at $86.25 per share and
closed on December 31, 1997 at $112.4375, the resulting total return to
shareholders, including reinvested dividends, of 36% and the increase in diluted
earnings per share from $6.76 for 1996 to $7.66 for 1997.
In view of these achievements, the Committee awarded Mr. Newman cash and
stock awards of approximately $10,855,000.
Included in this sum is a base salary of $900,000. Also included is a
year-end bonus of $7,500,000, of which $5,750,000 was awarded in cash. The
balance, $1,750,000, was awarded as equity in the firm and, when added to his
PEP award of $2,454,650, totals to $4,204,650 of stock bonuses.
In addition, the Committee awarded Mr. Newman 80,000 Stock Options valued
at $1,815,000 (one-fourth of the exercise price multiplied by the number of
option shares awarded).
Of Mr. Newman's compensation described above, forty-eight percent (48%) was
awarded as equity of the Corporation. Not included are his retirement plan
benefits, earnings and appreciation on past PEP shares and payments pursuant to
POP I. (All such amounts are disclosed in the Summary Compensation Table on page
15.)
13
<PAGE>
The Committee deems Mr. Newman's compensation for 1997 to be appropriate,
particularly in view of the successful financial results of the Corporation's
1997 performance, his continuing leadership in fostering a client-focused
environment, and his leadership in building an integrated global investment
bank.
CONCLUSION
Through the program described above, a very significant portion of Key
Officer compensation is linked directly to individual and corporate performance
and to share price appreciation. As the Corporation moves forward to create
shareholder value in the future, the Committee will continue to monitor and
evaluate its strategy for Key Officer compensation.
The Committee believes that it has the responsibility to ensure that the
pay practices of the Corporation are internally effective in support of the
Corporation's current and long-term goals and objectives and are competitive in
the marketplace to attract, retain and motivate the talent needed to achieve
future success by the Corporation.
The Human Resources Committee*
William R. Howell, Chairman
Lee A. Ault III
Phillip A. Griffiths
Donald L. Staheli
Patricia C. Stewart
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The Human Resources Committee (the "HR Committee") currently consists of
the following persons: N. J. Nicholas Jr., Chairman (effective February 1,
1998), Lee A. Ault III, Phillip A. Griffiths, Donald L. Staheli and Patricia C.
Stewart, all of whom are non-officer directors and none of whom is an employee
or former or current officer of the Corporation or its subsidiaries.
Some of the directors who are members of the HR Committee and their
associates, including affiliates and related interests, from time to time may be
customers of the Corporation and/or subsidiaries of the Corporation, and some of
these directors and their associates, including affiliates and related
interests, from time to time may be directors or officers of, or investors in,
corporations or members of partnerships or have an interest in other entities
which are customers of the Corporation and/or such subsidiaries. As such
customers, they have had transactions in the ordinary course of business with
the Corporation and/or such subsidiaries, including borrowings, all of which
were 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.
- ------------
* Mr. Howell's term on the Committee expired January 31, 1998, and Mr. Nicholas
commenced his term as Chairman of the Committee on February 1, 1998.
14
<PAGE>
I. SUMMARY COMPENSATION TABLE ($000 OMITTED)
<TABLE>
<CAPTION>
Annual Compensation
----------------------------------------------------------------------------
Bonus
Named Executive ------------------------------------------------- Other Annual
Officers Cash Stock Total Compensation
(a) Year Salary (b) (c) Bonus (d)
- ------------------------- ------ ----------- ------------- + ------------- = ------------- --------------
<S> <C> <C> <C> <C> <C> <C>
Frank N. Newman ......... 1997 $ 900.0 $ 5,760.7 $ 4,204.6 $ 9,965.3 $ 72.1
Chairman of the ........ 1996 825.0 3,507.1 4,592.4 8,099.5 --
Board, Chief Exec- 1995 138.9 500.0 665.0 1,165.0 --
tive Officer & Pres-
ident ..................
Yves C. de Balmann. 1997 350.0 4,030.7 3,821.0 7,851.7 --
Vice Chairman .......... 1996 287.5 2,507.1 4,319.3 6,826.4 --
R. Kelly Doherty ........ 1997 350.0 4,700.7 4,151.0 8,851.7 --
Vice Chairman .......... 1996 287.5 2,507.1 4,319.3 6,826.4 --
A. B. Krongard .......... 1997 66.7 5,800.0 1,000.0 6,800.0 --
Vice Chairman of .......
the Board ..............
Mayo A. Shattuck III..... 1997 66.7 5,500.0 1,000.0 6,500.0 --
Vice Chairman ..........
<CAPTION>
Long-Term Compensation
------------------------------------------
Awards Payouts
---------------------------- -------------
Named Executive Restricted Shares LTIP All Other
Officers Stock Awards Underlying Payouts Compensation
(a) (e) Options (f) (g) (h)
- ------------------------- -------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
Frank N. Newman ......... -- 80,000 $ 1,031.3 $ 617.6
Chairman of the ........ -- 80,000 -- 1,341.7
Board, Chief Exec- -- 100,000 -- 222.2
tive Officer & Pres-
ident ..................
Yves C. de Balmann. -- 60,000 825.0 907.8
Vice Chairman .......... -- 60,000 -- 292.4
R. Kelly Doherty ........ -- 60,000 825.0 722.1
Vice Chairman .......... -- 60,000 -- 299.2
A. B. Krongard .......... -- 60,000 7,868.3 9.1
Vice Chairman of .......
the Board ..............
Mayo A. Shattuck III..... -- 80,000 6,572.7 9.0
Vice Chairman ..........
</TABLE>
- ----------
(a) Of the Named Executive Officers, only Messrs. Newman, de Balmann and Doherty
had executive officer status with the Corporation prior to 1997.
(b) Includes annual bonus and profit driven benefit payable in cash from the
Corporation's qualified defined contribution plan.
(c) Includes the value of book-entry shares awarded by formula based on
corporate earnings under PEP. Under the plan, shares vest at the end of the
performance year and are deferred for five additional years. While deferred,
shares are credited with the greater of the equivalent of the quarterly net
income or dividend per share of the Common Stock. The dividend equivalent
portion is paid currently in cash and the balance is deferred into
additional shares. Dividend equivalents on book-entry shares are paid at the
same rates as are paid on the Common Stock and are not included in the above
totals. No dividend equivalents were paid in 1997 on the 1997 Awards. The
value of the PEP Awards for each of the Named Executive Officers is as
follows: Newman-$2,454,650; de Balmann-$1,840,987; and Doherty-$1,840,987.
Messrs. Krongard and Shattuck did not participate in PEP in 1997. Also
includes the value of book-entry shares awarded under the EPP as part of the
annual bonus. Under this plan, shares are deferred and vest in equal
installments for three years. While deferred, shares earn the greater of the
Common Stock's quarterly net income per share or dividend. Share earnings
are paid in cash quarterly. For 1997, the value of the EPP Awards for each
of the Named Executive Officers is as follows: Newman-$1,750,000; de
Balmann-$1,980,000; and Doherty-$2,310,000; Krongard-$1,000,000; and
Shattuck-$1,000,000. On 2/1/98, upon his retirement, Mr. Krongard's EPP
shares vested.
(d) Other Annual Compensation for Mr. Newman reflects amounts for ground and air
transportation provided.
(e) None of the above Named Executive Officers held any shares of restricted
stock at the end of 1997.
(f) As part of their employment agreements, Messrs. Krongard and Shattuck were
granted 60,000 and 80,000 Stock Options, respectively, which were included
in the above total.
(g) Includes LTIP Payouts under POP I, as follows: Newman-$1,031,250;
Doherty-$825,000; and de Balmann-$825,000. The LTIP Payouts for Messrs.
Krongard and Shattuck reflect accelerated benefits under the Debenture Plan
(as defined on page 13) of $7,868,344 and $6,572,660, respectively.
(h) Includes earnings per share less cash dividends ("net E.P.S. credits")
earned on pre-1997 PEP Awards, net E.P.S. credits earned on the pre-1997 EPP
portion of annual bonuses, accrued interest as of December 31, 1997, on POP
I, non-elective company contributions to defined contribution plans and life
insurance premiums paid under a plan that is available generally to all
employees. For 1997, net E.P.S. credits earned on PEP Awards, net E.P.S.
credits earned on the pre-1997 EPP portion of annual bonuses, accrued
interest on POP I LTIP awards and non-elective company contributions to
defined contribution plans, respectively, for each of the above Named
Executive Officers are as follows: Newman-$156,283, $56,605, $168,560,
$189,000; de Balmann-$404,130, $92,489, $134,848, $79,000; Doherty-$414,772,
$92,489, $134,848, $79,000. Messrs. Krongard and Shattuck did not
participate in these plans in 1997. Net E.P.S. credits on the 1997 PEP
Awards and the EPP portion of 1997 annual bonuses begin in 1998. The amounts
shown for Messrs. Newman and de Balmann includes reimbursements for
relocation expenses of $44,486 and $195,496, respectively. The amounts shown
for Messrs. Krongard and Shattuck reflect non-elective company contributions
to old Alex. Brown defined contribution plans.
15
<PAGE>
II. OPTIONS/SAR GRANTS TABLE(A)
OPTIONS/SAR GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
% of Total
Number of Options
Securities Granted to
Underlying Employees Grant Date
Options in Fiscal Exercise Expiration Present
Named Executive Officers Granted (b) Year Price(c) Date(d) Value(e)
- --------------------------- ------------- ----------- ------------- ------------ -------------
<S> <C> <C> <C> <C> <C>
F.N. Newman ............... 80,000 1.17% $ 90.7500 06/17/07 $1,404,800
Y.C. de Balmann ........... 60,000 0.88% 90.7500 06/17/07 1,053,600
R.K. Doherty .............. 60,000 0.88% 90.7500 06/17/07 1,053,600
A.B. Krongard ............. 60,000 0.88% 102.6625 09/01/07 1,271,400
M.A. Shattuck III ......... 80,000 1.17% 102.6625 09/01/07 1,695,200
</TABLE>
- ----------
(a) No SARs were granted during 1997.
(b) Reflects awards granted on 6/17/97 by the Corporation to the Chief Executive
Officer and each of the other Named Executive Officers, other than the Stock
Options granted to Mr. Krongard and Mr. Shattuck on 9/1/97. The options
granted on 6/17/97 become exercisable one year after grant. For the options
granted on 9/1/97, one-third vests on the first, second and third
anniversary of the grant date and are exercisable on such dates. The options
granted to Mr. Krongard vested in full on 2/1/98, upon his retirement.
(c) The exercise price of the options granted on 6/17/97 was equal to the fair
market value of the Common Stock on the date of grant. The exercise price of
the options granted on 9/1/97 was equal to the average of the closing Common
Stock price for the five day trading period prior to the date of grant. The
exercise price may be paid in cash, or by delivery of already owned shares,
subject to certain conditions. Tax withholding obligations relating to the
exercise may be paid in cash or by offset of the underlying shares, subject
to certain conditions.
(d) Nonqualified Stock Options have a term of ten years and one day. Incentive
Stock Options have a term of ten years. Both are subject to earlier
termination in certain events related to termination of employment and are
subject to acceleration of vesting upon a "Change of Control" (as defined on
page 18).
(e) The hypothetical grant date present values are calculated under a modified
Black-Scholes Model, which is a mathematical formula used to value options
traded on the stock exchange. The assumptions used in hypothesizing the
above options' grant date present values include the stock's expected
volatility of 21.42% with respect to the grants made on 6/17/97 and 22.64%
with respect to the grants made on 9/1/97, risk free rate of return of 6.35%
with respect to the grants made on 6/17/97 and 6.27% with respect to the
grants made on 9/1/97, projected dividend yield of 4.41% with respect to the
grants made on 6/17/97 and 3.90% with respect to the grants made on 9/1/97,
projected time to exercise (seven years) and a 5% adjustment for
non-transferability or risk of forfeiture during vesting period for the
6/17/97 awards and 10% for the 9/1/97 awards.
III. OPTION EXERCISES AND YEAR END VALUE TABLE
AGGREGATE OPTION EXERCISES IN LAST FISCAL YEAR AND FISCAL YEAR END OPTION
VALUES
<TABLE>
<CAPTION>
Number of Shares Value of Unexercised
Underlying Unexercised In-The-Money Options
Options at Fiscal Year End at Fiscal Year End (b)
Shares Value ------------------------------- ------------------------------
Named Executive Officer Acquired Realized (a) Exercisable Unexercisable Exercisable Unexercisable
- --------------------------- ---------- ------------- ------------- --------------- ------------- --------------
<S> <C> <C> <C> <C> <C> <C>
F.N. Newman ............... -- $ -- 180,000 80,000 $7,217,500 $1,735,000
Y.C. de Balmann ........... -- $ -- 155,000 60,000 $6,387,500 $1,301,250
R.K. Doherty .............. 57,544 $2,191,068 77,456 60,000 $2,924,791 $1,301,250
A.B. Krongard ............. -- $ -- -- 60,000 $ -- $ 586,500
M.A. Shattuck III ......... -- $ -- -- 80,000 $ -- $ 782,000
</TABLE>
- ----------
(a) Market value of underlying securities at exercise minus option price.
(b) Market value of underlying securities at year-end minus option price. The
value of unexercised in-the-money Stock Options at December 31, 1997, shown
above are presented pursuant to SEC rules. The actual amount, if any,
realized upon exercise of Stock Options will depend upon the market value of
the Common Stock relative to the exercise price per share of Common Stock of
the Stock Option at the time the Stock Option is exercised. There is no
assurance that the values of unexercised in-the-money Stock Options
reflected in the table will be realized.
16
<PAGE>
IV. LONG-TERM INCENTIVE PLANS TABLE
LONG-TERM INCENTIVE PLANS AWARDS IN LAST FISCAL YEAR(A)
<TABLE>
<CAPTION>
Performance Period
Number Until Maturation Payout
Named Executive Offficers of Units or Payout Amounts
- --------------------------- ---------- ------------------- -------------
<S> <C> <C> <C>
F.N. Newman ............... 100,000 January 1, 2001 $5,875,000
Y.C. de Balmann ........... 80,000 January 1, 2001 $4,700,000
R.K. Doherty .............. 80,000 January 1, 2001 $4,700,000
A.B. Krongard ............. -- -- $ --
M.A. Shattuck III ......... -- -- $ --
</TABLE>
- ----------
(a) In June 1997, the Committee approved POP II to renew the original POP's
incentive to enhance or increase shareholder value. See "1998 Human
Resources Committee Report on Executive Compensation." Units under POP II
have a maximum potential benefit of $58.75. If the share price trades at
$100 for three consecutive days or five non-consecutive days during the
period January 1, 1998 to December 31, 2000, the value of the units becomes
fixed at this maximum. This condition was met in January 1998. The
combination of POP I and POP II produced a maximum potential payout of $100
($41.25 + $58.75), which equals the potential maximum payout of the original
POP. Participants were awarded the same number of units under POP II as they
held in the original POP and their POP II units vest in one-third increments
on December 31, 1998, 1999 and 2000.
EMPLOYMENT AGREEMENTS
The Corporation has an employment agreement with Frank N. Newman, who was
employed in 1995 as a Senior Vice Chairman of the Corporation, and was
subsequently named Chairman of the Board, Chief Executive Officer and President.
Under the employment agreement, Mr. Newman was entitled in 1996 and 1997 to a
minimum annual base salary of $500,000, a minimum annual bonus of $2,000,000 and
$2,500,000, respectively, as well as 50,000 Stock Options and 60,000 PEP units
in each year. Mr. Newman was entitled to the compensation provided by the
employment agreement unless he was terminated prior to December 31, 1997, for
"gross misconduct." All of the compensation payable to him under the employment
agreement would have been paid and all unvested compensation would have vested
upon occurrence of a "Change of Control" of the Corporation (as defined on page
18) during the time of the agreement. In connection with his employment, the
Corporation provides Mr. Newman with a car and driver.
In connection with the Corporation's contemplated acquisition of Alex.
Brown Incorporated ("Alex. Brown"), the Corporation entered into employment
agreements with certain Alex. Brown employees (the "Alex. Brown Executives"),
including A. B. Krongard (on April 21, 1997) and Mayo A. Shattuck III (on April
29, 1997). The term of the employment agreements runs from September 1, 1997
through December 31, 1999 (the "Employment Period"). In the event that an Alex.
Brown Executive's employment is terminated during the Employment Period by the
Corporation, other than for "Cause" (including on account of his or her death or
disability), or if the Alex. Brown Executive terminates his or her employment
for "Good Reason," the Corporation will make a lump sum payment to the Alex.
Brown Executive in cash within 30 days of the date of termination in an amount
equal to the aggregate of the Alex. Brown Executive's accrued but unpaid salary,
pro rata bonus and accrued deferred compensation. In addition, the Alex. Brown
Executive will receive an amount equal to the product of (1) the number of years
(including fractions thereof) remaining from the date of termination until
December 31, 1999 and (2) the sum of (x) the Alex. Brown Executive's annual base
salary and (y) the Alex. Brown Executive's guaranteed minimum bonus, which
product will be discounted to its present value at the applicable federal rate.
In addition, the Alex. Brown Executive's Stock Options and restricted stock will
become immediately vested.
17
<PAGE>
The employment agreements provide for a gross-up payment to be made to the
Alex. Brown Executives, if necessary, to eliminate the effects of the imposition
of the excise tax under Section 4999 of the U.S. Internal Revenue Code on the
payments made thereunder.
In the event that the Alex. Brown Executive's employment is terminated by
the Corporation for Cause or by the Alex. Brown Executive without Good Reason
during the Employment Period, the Employment Agreement will be terminated
without further obligation to the Alex. Brown Executive, other than to pay any
accrued and unpaid salary, accrued deferred compensation and any other benefits
provided under the Corporation's employee plans.
Under the terms of his employment agreement, Mr. Krongard was elected as a
Vice Chairman of the Board of the Corporation and received a prorated base
salary for 1997 of $350,000, a grant of 60,000 options to purchase the Common
Stock and a cash bonus in respect of the 1997 year on a basis consistent with
Alex. Brown's past practices.
On January 31, 1998, Mr. Krongard retired from the Corporation to take a
position in public service. Under the terms of the Corporation's 1997 Stock
Option and Stock Award Plan, all Stock Options and EPP shares previously awarded
to him vested in full on his retirement date.
Under the terms of his employment agreement, Mr. Shattuck was elected as a
Vice Chairman of the Corporation and received in 1997 a prorated base salary of
$350,000, a grant of 80,000 options to purchase the Common Stock and a cash
bonus for the year on a basis consistent with Alex. Brown's past practices. In
addition, Mr. Shattuck will receive an annual base salary of $350,000 and will
be awarded in respect of calendar years 1998 and 1999 an annual bonus of no less
than $3.5 million, payable in the same ratio of cash and equity as other of the
Corporation's peer executives. Mr. Shattuck will also receive in 1998 and 1999
additional grants of 60,000 options to purchase the Common Stock, which will
vest and become exercisable on the first anniversary of the date of grant, and a
grant of 75,000 PEP units. The exercise price of all of the options granted
under the employment agreement will be equal to the average closing price of the
Common Stock for the five trading days prior to the date of grant.
CHANGE OF CONTROL ARRANGEMENTS
Pursuant to the Corporation's Change of Control Severance Plan I, upon
termination of employment by the Corporation without "Cause" or by the executive
officer for "Good Reason" (as such terms are defined in the Change of Control
Severance Plan) during the two-year period immediately following a "Change of
Control" of the Corporation (as defined below), each of the Named Executive
Officers would be entitled to receive a severance benefit equal to three times
the sum of his base salary and the greater of average annual bonus paid during
the three-year period immediately preceding the Change of Control or annual
bonus paid in the year immediately preceding the Change of Control. Such
severance benefits may not exceed $7.5 million per employee. Under the
Corporation's stock option and stock award plans, upon a Change of Control, all
Stock Options become exercisable and all deferred stock, restricted stock and
other stock-based awards become vested and immediately payable. Similarly, upon
a Change of Control, the POP I and POP II units become vested and immediately
payable.
A Change of Control is defined generally as (i) the acquisition of 20% or
more of the outstanding voting securities of the Corporation by an individual,
entity, or group, other than from the Corporation; (ii) a change in the majority
of the board of directors of the Corporation that is not approved by at least a
majority of the current directors and those directors similarly approved
("incumbent directors"); (iii) the consummation of a merger, consolidation, or
similar transaction involving the Corporation, unless immediately following such
transaction: (A) more than 60% of the voting power of the resulting
corporation's voting securities are represented by the Corporation's voting
securities that were outstanding immediately prior to the transaction, (B) no
person becomes the beneficial owner of 20% or more of the outstanding voting
securities of the resulting corporation and (C) at least a majority of the board
of
18
<PAGE>
directors of the resulting corporation were incumbent directors of the
Corporation at the time of the approval of the transaction by the Corporation's
board of directors; or (iv) the sale or disposition of all or substantially all
of the assets of the Corporation or a liquidation of the Corporation.
In the event any of the Named Executive Officers is subject to the 20%
excise tax under Section 4999 of the Code, such individual would be reimbursed
in an amount sufficient to offset such excise tax unless such reimbursement
could be avoided by reducing the severance payments received by the Named
Executive Officer by an amount that is less than 10% of his severance payments.
The Change of Control Severance Policy also provides that, contingent on a
Change of Control, the Named Executive Officers would be entitled to certain
welfare benefits for up to three years following termination.
COMPARISON OF FIVE-YEAR CUMULATIVE TOTAL RETURN TO SHAREHOLDERS
In 1996, the HR Committee changed the composition of its self-constructed
peer index to attain a more appropriate competitor comparison, based on size and
business. The 1996 Peer Group consisted of only five reasonably similar
firms--The Bank of New York Company, Inc., The Bear Stearns Companies Inc.,
Merrill Lynch & Co. Inc., J.P. Morgan & Co. Incorporated and Salomon Inc--which
was further reduced in 1997 when Salomon Inc merged with Travelers Group Inc. In
light of the 1997 acquisition of Alex. Brown and merger activity among the firms
that comprise the Peer Group of companies used to evaluate the performance of
the Corporation, the HR Committee has determined that it is appropriate to
revise the Peer Group. The new Peer Group represents firms that reflect the
relative size and lines of business of the Corporation.
19
<PAGE>
Comparison of Five-Year Cumulative Total Return to Shareholders
[GRAPHIC OMITTED]
<TABLE>
<CAPTION>
YEAR ENDED
---------------------------------------------------------------------------------------------------
COMPOUND ANNUAL
1992 1993 1994 1995 1996 1997 RETURN RATE
----------- ----------- ---------- ----------- ----------- ----------- ----------------
<S> <C> <C> <C> <C> <C> <C> <C>
Bankers Trust ............ $ 100.0 $ 120.5 $ 89.3 $ 114.4 $ 156.3 $ 212.2 16.2%
New Peer Group* .......... 100.0 125.6 117.1 194.3 289.2 434.9 34.2%
S&P 500 .................. 100.0 110.0 111.5 153.3 188.5 251.4 20.2%
Old Peer Group** ......... 100.0 120.6 105.6 152.5 214.5 337.4 27.5%
</TABLE>
Notes:
o Total return to shareholders is stock price appreciation of a hypothetical
$100 investment on December 31, 1992, with all dividends reinvested.
o Bankers Trust and New and Old Peer Group returns calculated based on dividend
reinvestment on payment dates.
o S&P 500 information obtained from S&P CompuStat Services, Inc.
o Total return analysis for Salomon Inc extends through 10/31/97, the
approximate date of this company's acquisition by Travlers Group, Inc.
* Companies in New Peer Group are:
The Bank of New York Company, Inc.
The Bear Stearns Companies Inc.
The Chase Manhattan Bank Corporation (12/31/92 - 3/29/96 only)
The Chase Manhattan Bank Corporation (3/29/96 - 12/31/97)
Chemical Banking Corporation (12/31/92 - 3/29/96 only)
Citicorp
J.P. Morgan & Co. Incorporated
Lehman Brothers Holdings Inc.
Mellon Bank Corp.
Merrill Lynch & Co. Inc.
Morgan Stanley Group Inc. (12/31/92 - 5/30/97)
Morgan Stanley, Dean Witter, Discover & Co. (5/30/97 - 12/31/97)
PaineWebber Group, Inc.
State Street Boston Corp.
Travelers Group, Inc.
** Companies in Old Peer Group are:
The Bear Stearns Companies Inc.
Merrill Lynch & Co. Inc.
Salomon Inc
The Bank of New York Company, Inc.
J.P. Morgan & Co. Incorporated
Sources:
Bloomberg Data Service
The Value Line Investment Survey
CompuServe Data Service
Dow Jones Data Service
Standard & Poor's Stock Guide
20
<PAGE>
PENSION PLAN
The following table shows the estimated annual pension benefits payable at
normal retirement age to a covered participant who has attained the earnings and
years of service classifications indicated, under the Corporation's
tax-qualified defined benefit pension plan ("Pension Plan") based upon "Covered
Compensation" and "Credited Service," as such terms are defined below. Benefits
shown below are computed as a single life annuity and are not subject to
reduction for Social Security or other offset amounts.
<TABLE>
<CAPTION>
Years of Credited Service
---------------------------------------------------------------
Average Final Salary 15 20 25 30 35 or More
- --------------------------- ---------- ---------- ---------- ---------- -----------
<S> <C> <C> <C> <C> <C>
$100,000................... $21,000 $28,000 $35,000 $42,000 $49,000
$125,000................... $26,250 $35,000 $43,750 $52,500 $61,250
$160,000................... $33,000 $44,800 $56,000 $67,200 $78,400
$192,000 and above......... $40,320 $53,760 $67,200 $80,640 $94,080
</TABLE>
A participant's Covered Compensation is his or her average final salary.
"Average Final Salary" under the Pension Plan is the average annual base salary,
as reported in the Summary Compensation Table, during the 60 consecutive
calendar months in the last 120 calendar months of a participant's Credited
Service yielding the highest average annual salary (subject to certain
limitations on salary under the Internal Revenue Code with respect to
tax-qualified plans). Covered Compensation does not include any other
compensation included in the Summary Compensation Table. Credited Service under
the Pension Plan is the number of years and months worked for the Corporation
and certain of its subsidiaries after attaining age 21 and completing one year
of service and is limited to 35 years.
As of December 31, 1997, the years of Credited Service for Messrs. Newman,
de Balmann, Doherty, Krongard and Shattuck under the Pension Plan (in completed
years) was 1, 8, 14, 0 and 0, respectively. Messrs. de Balmann and Doherty are
fully vested; Mr. Newman has been employed by the Corporation for less than five
years and is not vested; since the Pension Plan has yet to be amended to include
any former Alex. Brown employees, Messrs. Krongard and Shattuck are not
participants in the Pension Plan. Alex. Brown did not maintain a defined benefit
retirement plan. Covered Compensation and Average Final Salary for each of
Messrs. de Balmann and Doherty for 1997 was $160,000 and $152,000, respectively.
PART II. RATIFICATION OF APPOINTMENT OF THE INDEPENDENT AUDITOR
The Board of Directors, upon the recommendation of its Audit Committee,
comprised entirely of independent outside directors, which reviewed the
professional competence and audit program of the firm of KPMG Peat Marwick LLP
("KPMG"), certified public accountants, appointed KPMG as the independent
auditor for 1997, which appointment was ratified by the shareholders at the
April 15, 1997 Annual Meeting of Shareholders. The Board of Directors has
appointed KPMG as independent auditor for 1998, subject to shareholder
ratification. KPMG succeeded the firm of Ernst & Young LLP ("E&Y"), which served
as the independent auditor for the Corporation and the Bank from 1987 through
1996. The audit reports of E&Y on the Corporation's financial statement for the
years ended December 31, 1995 and 1996 were unqualified, and in those two years
there were no disagreements with E&Y with respect to accounting principles and
practices, financial statement disclosure or auditing scope or procedure or
other events reportable pursuant to the rules and regulations of the SEC.
Representatives of E&Y and KPMG will be present at the Annual Meeting. They
will have the opportunity to make statements if they desire to do so and will be
available to respond to appropriate questions.
Ratification of the appointment of KPMG as the independent auditor would
require an affirmative vote of a majority of the votes cast by the holders of
the Common Stock at the Annual Meeting.
THE BOARD OF DIRECTORS AND MANAGEMENT RECOMMEND THAT THE SHAREHOLDERS
RATIFY THE APPOINTMENT OF KPMG PEAT MARWICK LLP AS THE INDEPENDENT AUDITOR FOR
1998. THIS IS IDENTIFIED AS ITEM 2 ON THE ENCLOSED PROXY CARD.
21
<PAGE>
PART III. AUTHORIZATION AND APPROVAL OF AMENDMENTS TO THE CORPORATION'S
CERTIFICATE OF INCORPORATION
The New York legislature recently adopted amendments (the "Amendments") to
update and modernize the New York Business Corporation Law ("BCL"). In the case
of an existing New York corporation, like the Corporation, many of the changes
are only effective if approved by the shareholders. After careful study and
review, the Board of Directors believes that it would be in the best interests
of the Corporation to adopt a number of the Amendments.
In general, the Board of Directors believes that the proposed amendments of
the Certificate of Incorporation will give the Corporation greater flexibility
to raise capital, to streamline corporate governance and to ensure that the
actions authorized by a voting majority prevail on a significant transaction.
Excerpts of the proposed amendments of the Certificate of Incorporation,
including an amendment to change the name of the Corporation to Bankers Trust
Corporation, are attached to this proxy statement as Annex A. The following is a
short summary of each amendment and the reasons that the Board believes that the
amendment is in the best interests of the Corporation.
A. AUTHORIZATION TO PERMIT THE ISSUANCE OF SERIES PREFERRED STOCK WITH
DIFFERENT RIGHTS.
Currently, all series of the Corporation's Series Preferred Stock must be
identical as to the payment of dividends and amounts upon liquidation,
dissolution and winding up. This restriction effectively prevents the
Corporation from issuing series of Series Preferred Stock with different
rankings. Also, the Corporation may not currently issue shares of Series
Preferred Stock redeemable at the option of the holder or another person or upon
the happening of an event. The Amendments permit the issuance of a series of
preferred stock with different rankings as to the payment of dividends and
amounts upon liquidation, dissolution and winding up and redeemable at the
option of the holder or another person, or upon the happening of an event for
cash, property, indebtedness or other securities.
The Board of Directors believes the current restrictions on the terms of
the Series Preferred Stock that may be issued unduly restricts the ability of
the Corporation to tailor the terms of a series of Series Preferred Stock to
meet market conditions and hampers the Board's ability to structure transactions
where capital stock is issued, such as in acquisitions. The Board believes that
the adoption of the proposed amendment of the Certificate of Incorporation will
enhance the Corporation's ability to raise capital in an efficient manner and
will provide the Board with more flexibility in structuring transactions where
capital stock is issued, such as in acquisitions.
The proposed amendments of the Certificate of Incorporation will not affect
the terms of any outstanding shares of Series Preferred Stock.
The affirmative vote of the holders of a majority of all outstanding shares
of Common Stock entitled to vote thereon will be required for approval of this
amendment.
THE BOARD OF DIRECTORS AND MANAGEMENT RECOMMEND A VOTE FOR THE PROPOSED
AMENDMENT OF THE CERTIFICATE OF INCORPORATION TO PERMIT THE ISSUANCE OF SERIES
PREFERRED STOCK WITH DIFFERENT RANKINGS AS TO THE PAYMENT OF DIVIDENDS AND
AMOUNTS UPON LIQUIDATION, DISSOLUTION AND WINDING UP AND REDEEMABLE AT THE
OPTION OF THE HOLDER OR ANOTHER PERSON OR UPON THE HAPPENING OF AN EVENT FOR
CASH, PROPERTY, INDEBTEDNESS OR OTHER SECURITIES. THIS IS IDENTIFIED AS ITEM 3A
ON THE ENCLOSED PROXY CARD.
B. AUTHORIZATION TO AMEND THE CERTIFICATE OF INCORPORATION TO PERMIT
DISTRIBUTION OF ONE CLASS OR SERIES OF CAPITAL STOCK TO THE HOLDERS OF
A DIFFERENT CLASS OR SERIES.
Currently, the Corporation may only distribute shares of a class or series
of capital stock to the holders of that class or series. This limits the
Corporation's ability to distribute shares of one class or series of capital
stock to the holders of another class or series. The Amendments permit the
distribution of shares of one class or series of capital stock to holders of
another class or series.
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<PAGE>
While the Board of Directors has no current plans to distribute any shares
of a class or series of capital stock to the holders of a different class or
series, the Board of Directors believes that the proposed amendment of the
Certificate of Incorporation will provide it greater flexibility in the future
to make distributions of shares of capital stock in a manner that benefits the
Corporation.
The affirmative vote of the holders of a majority of all outstanding shares
of Common Stock entitled to vote thereon will be required for approval of this
amendment.
THE BOARD OF DIRECTORS AND MANAGEMENT ACCORDINGLY RECOMMEND A VOTE FOR THE
AMENDMENT OF THE CERTIFICATE OF INCORPORATION TO PERMIT DISTRIBUTION OF ONE
CLASS OR SERIES OF CAPITAL STOCK TO THE HOLDERS OF ANOTHER CLASS OR SERIES. THIS
IS IDENTIFIED AS ITEM 3B ON THE ENCLOSED PROXY CARD.
C. AUTHORIZATION TO AMEND THE CERTIFICATE OF INCORPORATION TO COUNT ONLY
THE VOTES CAST FOR OR AGAINST A CORPORATE ACTION.
Currently, a majority of the votes cast of the shares of Common Stock is
generally necessary to approve a corporate action. While abstentions and
so-called "broker non-votes" are currently treated as present for purposes of
determining a quorum, they are not counted for any other purpose. The Amendments
permit the approval of a corporate action to be determined based only on the
votes for and against the action.
The Board of Directors believes that the Corporation's shareholders may not
understand how votes are currently counted. A shareholder may abstain from a
vote for a variety of reasons and may well be unaware as to the effect of the
abstention. Broker non-votes often are a result of the rules of the New York
Stock Exchange which limit the ability of brokers and dealers to exercise
discretionary voting authority. As a result, it may be unclear whether
shareholders who have abstained from a vote or whose votes are treated as broker
non-votes understand the implication of their actions. The Board of Directors
believes that the method of vote counting contemplated by the proposed amendment
of the Certificate of Incorporation is straightforward and will reduce the
existing confusion on how votes are counted. Accordingly, the Board of Directors
and Management recommend a vote for the proposed amendment of the Certificate of
Incorporation to clarify the method of vote counting.
The affirmative vote of the holders of a majority of all outstanding shares
of Common Stock entitled to vote thereon will be required for approval of this
amendment.
THE BOARD OF DIRECTORS AND MANAGEMENT RECOMMEND THAT THE SHAREHOLDERS
AUTHORIZE THE AMENDMENT OF THE CERTIFICATE OF INCORPORATION TO COUNT ONLY THE
VOTES CAST FOR OR AGAINST A CORPORATE ACTION. THIS IS IDENTIFIED AS ITEM 3C ON
THE ENCLOSED PROXY CARD.
D. APPROVAL TO CHANGE THE NAME OF THE CORPORATION TO BANKERS TRUST
CORPORATION
The Board of Directors has voted to recommend for approval of the
shareholders an amendment of the Certificate of Incorporation to change the name
of Bankers Trust New York Corporation to Bankers Trust Corporation.
The name Bankers Trust New York Corporation was originally approved by the
shareholders at the 1967 Annual Meeting as a means of giving easy recognition to
the network of retail banks owned by the Corporation in the State of New York,
all of which, with the exception of Bankers Trust Company, subsequently have
been sold. Since that time, the Corporation expanded into a truly global
institution, offering a wide range of financial products and services worldwide,
and the Board of Directors and Management believe the recommended name change
better reflects the international presence of the Corporation.
The affirmative vote of the holders of a majority of all outstanding shares
of Common Stock entitled to vote thereon will be required for approval of this
amendment.
23
<PAGE>
THE BOARD OF DIRECTORS AND MANAGEMENT RECOMMEND THAT THE SHAREHOLDERS
APPROVE THE NAME CHANGE OF THE CORPORATION TO BANKERS TRUST CORPORATION. THIS IS
IDENTIFIED AS ITEM 3D ON THE ENCLOSED PROXY CARD.
PART IV. SHAREHOLDER RESOLUTIONS
The affirmative vote of the holders of a majority of the votes cast at the
Annual Meeting will be necessary to adopt any of the following proposals.
SHAREHOLDER PROPOSAL RELATING TO TERM LIMITS FOR BOARD MEMBERS
Mrs. Evelyn Y. Davis, Watergate Office Building, 2600 Virginia Avenue,
N.W., Suite 215, Washington DC 20037, owner of 100 shares of Common Stock, has
stated her intention to submit the following resolution:
"RESOLVED: That the stockholders of Bankers Trust recommend that the Board
take the necessary steps so that future outside directors shall not serve for
more than six years."
"REASONS: The President of the U.S.A. has a term limit, so do Governors of
many states.
"Newer directors may bring in fresh outlooks and different approaches with
benefits to all shareholders.
"No director should be able to feel that his or her directorship is until
retirement.
"Last year the owners of 3,262,580 shares, representing approximately 5.4%
of shares voting, voted FOR this proposal.
"If you AGREE, please mark your proxy FOR this resolution."
THE BOARD OF DIRECTORS AND MANAGEMENT RECOMMEND THAT THE SHAREHOLDERS VOTE
AGAINST THIS PROPOSAL, WHICH IS IDENTIFIED AS ITEM 4 ON THE ENCLOSED PROXY CARD,
FOR THE FOLLOWING REASONS:
POSITION OF THE BOARD OF DIRECTORS AND MANAGEMENT
The Committee on Directors of the Board of Directors annually evaluates the
qualifications of all potential Board nominees, including incumbents, prior to
making its recommendation to the shareholders for election at the Annual
Meeting. Consistent among the criteria considered by the committee in this
process is a candidate's ability to make decisions affecting the Corporation
based on his or her broad knowledge and experience in the affairs of the
Corporation. An arbitrary limit on service would deprive the Corporation of the
benefits of the judgment and contributions of directors who have gained the
necessary knowledge and experience through years of dedicated service.
Accordingly, the Board of Directors and Management recommend a vote AGAINST this
proposal.
SHAREHOLDER PROPOSAL RELATING TO CUMULATIVE VOTING
Mr. John J. Gilbert and Mrs. Margaret R. Gilbert, of 29 East 64th Street,
New York, NY 10021-7043, who own 108 shares and 200 shares, respectively, have
stated their intention to submit the following resolution:
"RESOLVED: That the stockholders of Bankers Trust New York Corporation,
assembled in annual meeting in person and by proxy, hereby request the Board of
Directors to take the steps necessary to provide for cumulative voting in the
election of directors, which means each stockholder shall be entitled to as many
votes as shall equal the number of shares he or she owns multiplied by the
number of directors to be elected, and he or she may cast all of such votes for
a single candidate, or any two or more of them as he or she may see fit."
24
<PAGE>
"REASONS: Very strong support along the lines we suggest were shown at the last
annual meeting when 21,117,455 shares, approximately 34.7% of the votes cast (a
large increase over the previous year), were cast in favor of this proposal.
The vote against included 10,362,377 unmarked proxies.
"California law still requires that unless stockholders have voted not to have
cumulative voting they will have it. Ohio also has the same provision.
"The National Bank Act provides for cumulative voting. In many cases companies
get around it by forming holding companies without cumulative voting. Banking
authorities have the right to question the capability of directors to be on
banking boards. In many cases authorities come in after and say the director or
directors were not qualified. We were delighted to see the SEC has finally taken
action to prevent bad directors from being on boards of public companies. The
SEC should have hearings to prevent such persons becoming directors before they
harm investors.
"Many successful corporations have cumulative voting. Example, Pennzoil defeated
Texaco in that famous case. Texaco's recent problems might have also been
prevented with cumulative voting, getting directors on the board to prevent such
things. Ingersoll-Rand, also having cumulative voting, won two awards. FORTUNE
MAGAZINE ranked it second in its industry's "Americas Most Admired Corporations"
and the WALL STREET TRANSCRIPT noted "on almost any criteria used to evaluate
management, Ingersoll-Rand excels." In 1994 and 1995 they raised their dividend.
"Lockheed-Martin, as well as VWR Corporation, now have a provision that if
anyone has 40% or more of the shares cumulative voting applies; it does apply at
the latter company.
"In 1995 American Premier adopted cumulative voting. Allegheny Power System
tried to take away cumulative voting, as well as put in a stagger system
recently, and stockholders defeated it, showing stockholders are interested in
their rights. Hewlett Packard, a very successful company, has cumulative voting
also.
"The high price lawyers from the investment houses say the plan was fair.
However, they failed to see that the fractions were handled properly, instead of
just getting cash, in the recent merger with Alex. Brown. Another reason to have
cumulative voting is to see that the stockholders of both merging companies have
fair representation.
"If you agree, please mark your proxy for this resolution; otherwise it is
automatically cast against it, unless you have marked to abstain."
THE BOARD OF DIRECTORS AND MANAGEMENT RECOMMEND THAT THE SHAREHOLDERS VOTE
AGAINST THIS PROPOSAL, WHICH IS IDENTIFIED AS ITEM 5 ON THE ENCLOSED PROXY CARD,
FOR THE FOLLOWING REASONS:
POSITION OF THE BOARD OF DIRECTORS AND MANAGEMENT
The Board of Directors and Management continue to oppose this proposal,
which has been rejected by the shareholders at each of the last thirteen annual
meetings.
To be effective, the Board of Directors must be comprised of a cohesive
group of experienced, knowledgeable and talented individuals who work together
for the benefit of all of the Corporation's shareholders. Cumulative voting
potentially would introduce into this group individuals whose sole purpose on
the Board would be to represent and act in behalf of special interest groups,
rather than for the greater interests of the Corporation and the shareholders at
large. Accordingly, the Board of Directors and Management recommend a vote
AGAINST this proposal.
SHAREHOLDER PROPOSAL RELATING TO MERGER OF THE CORPORATION AND ITS
SUBSIDIARIES
Mr. John Jennings Crapo, P.O. Box 151, Cambridge, MA 02140-0002, who owns
122 shares, has stated his intention to submit the following resolution:
25
<PAGE>
"RESOLVED: Immediately prior to the approbation by the Board of Directors ("our
Board") of Bankers Trust New York Corporation ("BTNYC") of any merger of BTNYC
or subsidiary of it with another entity, part of a subsidiary with another
entity, in each instance our Board is requested to present to stockholders as a
shareholder proposal the proposal to merge for shareholder ratification by
Stockholders of BTNYC.
"Each proposal it is requested shall contain a balanced presentation of the
arguments in FAVOR and AGAINST said merger.
"`Merger' for purpose of this proposal it is requested shall include friendly
takeover, purchase of Corporation individually by a group or another entity,
hostile takeover or hostile bid, White Knight overtures, but shall not exclude
identical or similar demeanor which is described by other speech."
"REASONS: 1978-1994 inclusive there have been 1,576 bank failures per statistics
of the Federal Deposit Insurance Corporation. In 1977 there were no banks
assisted or closed. 1978 seven banks were assisted or closed; least number of 17
years in question. 1988 the assisted or closed banks of 221 was the most.
Ninety-two is the average for 1978-1994.
"Events in the banking industry in recent years emphasize the necessity of all
stockholders carefully scrutinizing acquisitions.
"Stockholders at Stockholder Meeting I am positive shall have other worthy
reasons, too, why this proposal may be adopted by BTNYC Stockholders."
THE BOARD OF DIRECTORS AND MANAGEMENT RECOMMEND THAT THE SHAREHOLDERS VOTE
AGAINST THIS PROPOSAL, WHICH IS IDENTIFIED AS ITEM 6 ON THE ENCLOSED PROXY
CARD, FOR THE FOLLOWING REASONS:
POSITION OF THE BOARD OF DIRECTORS AND MANAGEMENT
The Corporation is governed by the Business Corporation Law of the State of
New York (the "Business Corporation Law"), which states, in part, that: "[The]
Board of each corporation proposing to participate in a merger or consolidation
. . . shall adopt a plan of merger or consolidation. . . .The plan of merger or
consolidation shall be adopted at a meeting of shareholders by a vote of the
holders of two-thirds of all outstanding shares entitled to vote thereon." Thus,
proponent's proposal that such mergers be approved by vote of the shareholders
is redundant, since shareholder approval is already required under law.
Proponent goes further, however, in that he would have shareholders run the
ordinary business of the Corporation.
The Corporation currently has over 600 subsidiaries organized under the
laws of over 48 different jurisdictions worldwide, the existence of which enable
the Corporation to maximize its legal, tax, accounting and regulatory objectives
in the most efficient manner possible. To achieve those objectives, and in the
conduct of the ordinary business operations of the Corporation, Management must
have the flexibility to use the most effective legal means available to
consummate a transaction to maximize the effectiveness of the Corporation's
business operations. Depending upon the circumstances, Management might
determine that the most effective means is a purchase or sale of assets or
stock, or an acquisition or merger. Proponent's proposal would require that the
Corporation's Board of Directors bring each of these business transactions
before a meeting of the shareholders for approval. The preparation, solicitation
and distribution of the proxy statements required prior to each such meeting
would unnecessarily waste the Corporation's monetary assets and potentially
could diminish the return on stockholder equity. In addition, such meetings
would waste the valuable time of the Board of Directors, Management and the
Corporation's shareholders.
The Business Corporation Law specifies that business of a corporation shall
be managed by its board of directors. The shareholders entrust that
responsibility to the directors whom they elect each year at the annual meeting.
The effect of proponent's proposal would be to usurp the Board's legally
26
<PAGE>
mandated responsibility to manage the business operations of the Corporation and
impose that responsibility on the Corporation's shareholders. Accordingly, the
Board of Directors and Management recommend a vote AGAINST this proposal.
PART V. OTHER MATTERS
Management does not know of any other matters that may be presented. If
other matters should properly come before the Annual Meeting, or adjournments
thereof, it is the intention of the persons named in the enclosed proxy to vote
the stock represented by them in accordance with their best judgment pursuant to
the discretionary authority included in the proxy.
The cost of soliciting proxies will be paid by the Corporation. In addition
to solicitation by mail, proxies may be solicited personally or by telephone,
telegram or telecopier by regular employees of the Corporation and its
subsidiaries. Brokerage houses and other custodians, nominees and fiduciaries
will be requested to forward solicitation materials to their principals and the
Corporation will reimburse them for the expense of doing so. Kissel-Blake Inc.,
New York, New York, has been retained to aid in the solicitation of proxies for
a fee of $17,500 plus out-of-pocket expenses.
Any shareholder executing the enclosed form of proxy may revoke it at any
time before it is exercised. You may revoke your proxy by delivering to the
Corporation a written revocation or a duly signed proxy bearing a later date or
by attending the Annual Meeting and voting in person. If you specify a choice
with respect to any matter to be acted upon, the shares represented by your
proxy will be voted in accordance with your specifications. If not otherwise
specified in the proxy, your shares will be voted in the election of directors
for the nominees listed in Part I, for ratification of the appointment of the
independent auditor, as described in Part II, for authorization and approval to
amend the Corporation's Certificate of Incorporation to permit the issuance of
Series Preferred Stock with different rights as to the payment of dividends and
amounts upon liquidation, dissolution and winding up and redeemable at the
option of the holder or upon the happening of an event, as described in Part III
A, for authorization to amend the Certificate of Incorporation to permit the
distribution of one class or series of capital stock to the holders of a
different class or series, as described in Part III B, for authorization to
count only the votes cast for or against a corporate action, as described in
Part III C, and to change the name of the Corporation, as described in Part III
D, and will be voted against each of the shareholder proposals described in Part
IV. If you do not return your duly signed proxy card, your shares cannot be
voted unless you attend the Annual Meeting and vote in person or present a duly
signed proxy at the Annual Meeting.
SHAREHOLDER PROPOSALS FOR THE 1999 ANNUAL MEETING OF SHAREHOLDERS
A shareholder proposal must be received by the Corporation by November 9,
1998, to be eligible for inclusion in the Proxy Statement for the 1999 Annual
Meeting of Shareholders.
By order of the Board of Directors
/s/ James T. Byrne, Jr.
----------------------------------------
JAMES T. BYRNE, JR.
Secretary
27
<PAGE>
ANNEX A
EXCERPTS OF THE PROPOSED AMENDED CERTIFICATE OF INCORPORATION
OF
BANKERS TRUST NEW YORK CORPORATION
UNDER SECTION 807 OF THE BUSINESS CORPORATION LAW
<TABLE>
<CAPTION>
<S> <C>
CERTIFICATE OF INCORPORATION including, but without limiting the
OF generality of the foregoing, the
BANKERS TRUST NEW YORK following:
CORPORATION
FIRST: The name of the corporation is (i) The number of shares to
BANKERS TRUST CORPORATION. constitute such series (which number may
* * * * at any time, or from time to time, be
increased or decreased by the Board of
Directors, notwithstanding that shares
FOURTH: The aggregate number of of the series may be outstanding at the
shares which the corporation shall have time of such increase or decrease,
the authority to issue is 310,000,000 unless the Board of Directors shall have
divided into 10,000,000 shares without otherwise provided in creating such
par value designated as Series Preferred series) and the distinctive designation
Stock and 300,000,000 shares of the par thereof;
value of $1 each designated as Common
Stock. (ii) The dividend rate on the
shares of such series, whether or not
(a) Series Preferred Stock dividends on the shares of such series
shall be cumulative, and the date or
1. Board Authority: The Series dates, if any, from which dividends
Preferred Stock may be issued from time thereon shall be cumulative;
to time by the Board of Directors as
herein provided in one or more series. (iii) Whether or not the shares of
The designations, relative rights, such series shall be redeemable, at the
preferences and limitations of the option of the corporation, the holder or
Series Preferred Stock, and particularly another person or upon the happening of
of the shares of each series thereof, a specified event and, if redeemable,
may, to the extent permitted by law, be the date or dates upon which or after
similar to or may differ from those of which they shall be redeemable, the
any other series. The Board of Directors cash, property, indebtedness or
of the corporation is hereby expressly securities for which each share shall be
granted authority, subject to the redeemable and the redemption prices or
provisions of this Article FOURTH, to rates and adjustments thereto;
issue from time to time Series Preferred
Stock in one or more series and to fix (iv) The right, if any, of holders
from time to time before issuance of shares of such series to convert the
thereof, by filing a certificate same into, or exchange the same for,
pursuant to the Business Corporation Common Stock or other stock as permitted
Law, the number of shares in each such by law, and the terms and conditions of
series of such class and all such conversion or exchange, as well as
designations, relative rights (including provisions for adjustment of the
the right, to the extent permitted by conversion rate in such events as the
law, to convert into shares of any class Board of Directors shall determine;
or into shares of any series of any
class), preferences and limitations of (v) The amount per share payable on
the shares in each such series, the shares of such series upon the
voluntary
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A-1
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<TABLE>
<CAPTION>
<S> <C>
and involuntary liquidation, dividends shall be declared and paid or
dissolution or winding up of the set apart for payment on the Common
corporation; Stock with respect to the same quarterly
dividend period. Dividends on any shares
(vi) Whether the holders of of Series Preferred Stock shall be
shares of such series shall have cumulative only if and to the extent set
voting power, full or limited, in forth in a certificate filed pursuant to
addition to the voting powers law. After dividends on all shares of
provided by law, and in case Series Preferred Stock (including
additional voting powers are cumulative dividends if and to the
accorded to fix the extent thereof; extent any such shares shall be entitled
and thereto) shall have been declared and
paid or set apart for payment with
(vii) Generally to fix the respect to any quarterly dividend
other rights and privileges and any period, then and not otherwise so long
qualifications, limitations or as any shares of Series Preferred Stock
restrictions of such rights and shall remain outstanding, dividends may
privileges of such series, be declared and paid or set apart for
provided, however, that no such payment with respect to the same
rights, privileges, qualifications, quarterly dividend period on the Common
limitations or restrictions shall Stock out of the assets or funds of the
be in conflict with the Certificate corporation legally available therefor.
of Incorporation of the corporation
or with the resolution or With respect to all shares of
resolutions adopted by the Board of Series Preferred Stock issued prior to
Directors providing for the issue April __, 1998, all shares of Series
of any series of which there are Preferred Stock of all series shall be
shares outstanding. of equal rank, preference and priority
as to dividends irrespective of whether
With respect to all shares of or not the rates of dividends to which
Series Preferred Stock issued prior to the same shall be entitled shall be the
April __, 1998, all Series Preferred same and when the stated dividends are
Stock of the same series shall be not paid in full, the shares of all
identical in all respects, except that series of the Series Preferred Stock
shares of any one series issued at shall share ratably in the payment
different times may differ as to dates, thereof in accordance with the sums
if any, from which dividends thereon may which would be payable on such shares if
accumulate. With respect to all shares all dividends were paid in full,
of Series Preferred Stock issued prior provided, however, that any two or more
to April __, 1998, all shares of Series series of the Series Preferred Stock may
Preferred Stock of all series shall be differ from each other as to the
of equal rank and shall be identical in existence and extent of the right to
all respects except that to the extent cumulative dividends, as aforesaid.
not otherwise limited in this Article
FOURTH any series may differ from any With respect to all shares of
other series with respect to any one or Series Preferred Stock authorized or
more of the designations, relative issued on or after April __, 1998, the
rights, preferences and limitations Board of Directors may authorize and
described or referred to in issue series of Series Preferred Stock
subparagraphs (i) to (vii) inclusive that do not share ratably in the payment
above. of dividends and may fix the relative
rights of each series of Series
With respect to any series of Preferred Stock to receive dividends.
Series Preferred Stock authorized or
issued on or after April __, 1998, 3. Voting Rights: Except as
except to the extent otherwise required otherwise specifically provided in the
by law, shares of any series of Series certificate filed pursuant to law with
Preferred Stock may have the same or respect to any series of the Series
different relative rights, preferences Preferred Stock, or as otherwise
and limitations and each series of provided by law, the Series Preferred
Series Preferred Stock may have the same Stock shall not have any right to vote
or different relative rights, for the election of directors or for any
preferences and limitations, in each other purpose and the Common Stock shall
case, as determined by the Board of have the exclusive right to vote for the
Directors. election of directors and for all other
purposes.
2. Dividends: Dividends on the
outstanding Series Preferred Stock of
each series shall be declared and paid
or set apart for payment before any
</TABLE>
A-2
<PAGE>
<TABLE>
<CAPTION>
<S> <C>
4. Liquidation: In the event of any redemption price fixed by the Board of
liquidation, dissolution or winding up Directors as provided herein, plus an
of the corporation, whether voluntary or amount equal to accrued and unpaid
involuntary, each series of Series dividends to the date fixed for
Preferred Stock shall have preference redemption, upon such notice and terms
and priority over the Common Stock for as may be specifically provided in the
payment of the amount to which each certificate filed pursuant to law with
outstanding series of Series Preferred respect to the series.
Stock shall be entitled in accordance
with the provisions thereof and each 6. Preemptive Rights: No holder of
holder of Series Preferred Stock shall Series Preferred Stock of the
be entitled to be paid in full such corporation shall be entitled, as such,
amount, or have a sum sufficient for the as a matter of right, to subscribe for
payment in full set aside, before any or purchase any part of any new or
payments shall be made to the holders of additional issue of stock of any class
the Common Stock. With respect to all or series whatsoever, any rights or
shares of Series Preferred Stock issued options to purchase stock of any class
prior to April __, 1998, if, upon or series whatsoever, or any securities
liquidation, dissolution or winding up convertible into, exchangeable for or
of the corporation, the assets of the carrying rights or options to purchase
corporation or proceeds thereof, stock of any class or series whatsoever,
distributable among the holders of the whether now or hereafter authorized, and
shares of all series of the Series whether issued for cash or other
Preferred Stock shall be insufficient to consideration, or by way of dividend.
pay in full the preferential amount
aforesaid, then such assets, or the * * * *
proceeds thereof, shall be distributed
among such holders ratably in accordance (c) General Provisions
with the respective amounts which would
be payable if all amounts payable 1. A consolidation or merger of the
thereon were paid in full. After the corporation with or into another
payment to the holders of Series corporation or corporations or a sale,
Preferred Stock of all such amounts to whether for cash, shares of stock,
which they are entitled, as above securities or properties, of all or
provided, the remaining assets and funds substantially all of the assets of the
of the corporation shall be divided and corporation, shall not be deemed or
paid to the holders of the Common Stock. construed to be a liquidation,
dissolution or winding up of the
With respect to all shares of corporation within the meaning of this
Series Preferred Stock authorized or Article.
issued on or after April __, 1998, the
Board of Directors may authorize and 2. The corporation may distribute
issue series of Series Preferred Stock authorized but unissued shares of any
that do not share ratably in the payment class or series of capital stock to the
of amounts upon the voluntary or holders of the same or any other class
involuntary liquidation, dissolution or or series of capital stock.
winding up of the corporation.
3. Whenever any corporate action,
5. Redemption: In the event that other than the election of directors, is
the Series Preferred Stock of any series required or permitted by law or this
shall be made redeemable as provided in certificate of incorporation or the
clause (iii) of paragraph 1 of section by-laws to be taken by a vote of the
(a) of this Article FOURTH, the shareholders, such action shall be
corporation, at the option of the Board authorized by a majority of the votes
of Directors, may redeem at any time or cast in favor of or against such action
times, and from time to time, all or any at a meeting of the shareholders by the
part of any one or more series of Series holders of shares entitled to vote
Preferred Stock outstanding by paying thereon and for the purpose of any such
for each share the then applicable vote abstentions and broker non-votes
shall not constitute a vote cast.
* * * *
</TABLE>
A-3
<PAGE>
[GRAPHIC OMITTED]
Printed on recycled paper
<PAGE>
PRELIMINARY COPY
BANKERS TRUST NEW YORK CORPORATION
PLEASE MARK VOTE IN OVAL IN THE FOLLOWING MANNER USING DARK INK ONLY.
This proxy, when properly executed, will be voted in the manner described
herein. If no direction is made, this proxy will be voted FOR the election of
directors and FOR items 2 and 3 and AGAINST items 4, 5 and 6.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR ITEMS 1, 2 AND 3.
1. ELECTION OF DIRECTORS:
Lee A. Ault III, Neil R. Austrian, George B.
Beitzel, Phillip A. Griffiths, William R.
Howell, Vernon E. Jordan, Jr., Hamish
Maxwell, Frank N. Newman, N.J. Nicholas Jr., FOR ALL
Russell E. Palmer, Donald L. Staheli, FOR WITHHOLD EXCEPT*
Patricia Carry Stewart, G. Richard Thoman,
George J. Vojta and Paul A. Volcker. / / / / / /
- -----------------------------------------------------------
*(Except nominee(s) written above.)
SIGNATURE(S) SHOULD CONFORM EXACTLY WITH NAME(S) SHOWN ABOVE. IF SIGNING FOR
ESTATE, TRUST, CORPORATION OR PARTNERSHIP, TITLE OR CAPACITY SHOULD BE STATED.
IF SHARES ARE HELD JOINTLY EACH JOINT HOLDER SHOULD SIGN.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE PROPOSALS AS TO
FOR AGAINST ABSTAIN
2. Ratification of the Appointment of
the Independent Auditor. / / / / / /
3. Amendments to the Certificate of
Incorporation:
A. Issuance of Preferred Stock. / / / / / /
B. Capital Stock Distributions. / / / / / /
C. Calculating Votes. / / / / / /
D. Change the Name of the
Corporation. / / / / / /
FOR AGAINST ABSTAIN
The Board of Directors Recommends a Vote
AGAINST the Proposals as to
4. Term Limits for Board Members. / / / / / /
5. Cumulative Voting. / / / / / /
6. Any Merger of the Corporation or
its Subsidiaries. / / / / / /
- --------------------------------------------------------------------------------
SIGNATURE
- --------------------------------------------------------------------------------
SIGNATURE DATE
DETACH HERE
IMPORTANT
THIS IS YOUR
PROXY CARD
PLEASE SIGN AND RETURN YOUR PROXY CARD PROMPTLY.
THE BANKERS TRUST
NEW YORK CORPORATION
<PAGE>
THE BANKERS TRUST
NEW YORK CORPORATION
PROXY SOLICITED BY THE BOARD OF DIRECTORS FOR THE ANNUAL MEETING OF
SHAREHOLDERS--APRIL 21, 1998
FRANK N. NEWMAN and GEORGE J. VOJTA (collectively, the "Proxies"), or
either of them, with full power of substitution, are hereby appointed proxies to
vote all shares of stock of Bankers Trust New York Corporation (the
"Corporation") that the undersigned is entitled to vote at the Annual Meeting of
Shareholders of the Corporation to be held at One Bankers Trust Plaza (130
Liberty Street), New York, New York, April 21, 1998, at 3:00 P.M., or
adjournments thereof, with all powers the undersigned would possess if
personally present, for the election of directors, and on each of the other
matters described in the Proxy Statement, hereby revoking any proxy heretofore
given.
THE SHARES REPRESENTED BY THIS PROXY WILL BE VOTED AS DIRECTED BY THE
SHAREHOLDER. IF NO DIRECTION IS GIVEN, SUCH SHARES WILL BE VOTED FOR ITEMS 1, 2
AND 3 AND AGAINST ITEMS 4, 5 AND 6.
In their discretion, the Proxies, or either of them, are authorized to vote
upon such other business as may come properly before the meeting.
PLEASE MARK AND DATE THE PROXY AND SIGN YOUR NAME ON THE REVERSE SIDE.
(CONTINUED, AND TO BE DATED AND SIGNED, ON THE REVERSE SIDE)
<PAGE>
PRELIMINARY COPY
BANKERS TRUST NEW YORK CORPORATION
PLEASE MARK VOTE IN OVAL IN THE FOLLOWING MANNER USING DARK INK ONLY.
This proxy, when properly executed, will be voted in the manner described
herein. If no direction is made, this proxy will be voted FOR the election of
directors and FOR items 2 and 3 and AGAINST items 4, 5 and 6.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR ITEMS 1, 2 AND 3.
1. ELECTION OF DIRECTORS:
Lee A. Ault III, Neil R. Austrian, George B.
Beitzel, Phillip A. Griffiths, William R.
Howell, Vernon E. Jordan, Jr., Hamish
Maxwell, Frank N. Newman, N.J. Nicholas Jr., FOR ALL
Russell E. Palmer, Donald L. Staheli, FOR WITHHOLD EXCEPT*
Patricia Carry Stewart, G. Richard Thoman,
George J. Vojta and Paul A. Volcker. / / / / / /
- -----------------------------------------------------------
*(Except nominee(s) written above.)
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE PROPOSALS AS TO
FOR AGAINST ABSTAIN
2. Ratification of the Appointment of
the Independent Auditor. / / / / / /
3. Amendments to the Certificate of
Incorporation:
A. Issuance of Preferred Stock. / / / / / /
B. Capital Stock Distributions. / / / / / /
C. Calculating Votes. / / / / / /
D. Change the Name of the
Corporation. / / / / / /
FOR AGAINST ABSTAIN
The Board of Directors Recommends a Vote
AGAINST the Proposals as to
4. Term Limits for Board Members. / / / / / /
5. Cumulative Voting. / / / / / /
6. Any Merger of the Corporation or
its Subsidiaries. / / / / / /
- --------------------------------------------------------------------------------
SIGNATURE DATE
DETACH HERE
IMPORTANT
THIS IS YOUR
PROXY CARD
PLEASE SIGN AND RETURN YOUR PROXY CARD PROMPTLY.
THE BANKERS TRUST
NEW YORK CORPORATION
<PAGE>
THE BANKERS TRUST
NEW YORK CORPORATION
CONFIDENTIAL VOTING INSTRUCTIONS
SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS AND MANAGEMENT
OF BANKERS TRUST NEW YORK CORPORATION
TO: BANKERS TRUST COMPANY AS TRUSTEE UNDER THE BANKERS TRUST NEW YORK
CORPORATION PARTNERSHARE PLAN.
In accordance with the provisions of the Bankers Trust New York Corporation
PartnerShare Plan (the "PartnerShare Plan"), you are instructed to vote as
follows with respect to shares of Common Stock of Bankers Trust New York
Corporation (the "Corporation") which are credited to my account in the
PartnerShare Plan at the Annual Meeting of Shareholders of the Corporation to be
held on April 21, 1998, or adjournments thereof, upon the matters shown on the
reverse side of this proxy voting instruction card, all as provided in the proxy
statement, and upon any other matters which may properly come before the
Meeting.
Please date, sign exactly as your name appears on the reverse side, and
return in the enclosed envelope. By returning this proxy voting instruction
card, you are providing confidential voting instructions to the Trustee to vote
your shares. Only the Trustee can vote the shares that are credited to your
account in the PartnerShare Plan. Shares will be voted according to your
instructions. If this card is returned signed with no voting instructions,
shares will be voted FOR Items 1, 2 and 3 and AGAINST Items 4, 5 and 6.
Unless a signed proxy is received by the Trustee before April 21, 1998,
shares held under the PartnerShare Plan will be voted by the Trustee in the same
proportion as it votes shares as to which it has received directions.
The Board of Directors recommends a vote FOR Items 1, 2 and 3 and a vote AGAINST
Items 4, 5 and 6.
