SCHEDULE 14A
Information Required in Proxy Statement
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to (S)(S)240.1a-11(c) or 240.1a-12
First Commerce Corporation
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(Name of Registrant as Specified in its Charter)
Board of Directors of First Commerce Corporation
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(Name of Person(s) Filing Proxy Statement
Payment of Filing Fee (Check appropriate box):
[X] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-6(j)(2).
[ ] $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
1) Title of each class of securities to which transaction applies:
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2) Aggregate number of securities to which transaction applies:
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3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11;*
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4) Proposed maximum aggregate value of transaction:
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* Set forth amount on which the filing is calculated and state how
it was determined.
[ ] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identity the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form of 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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(Logo of First Commerce Corp appears here)
Post Office Box 60279
New Orleans, Louisiana 70150
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
To the Holders of Common Stock of First Commerce Corporation:
The annual meeting of stockholders of First Commerce Corporation ("FCC") will
be held in the Vieux Carre Room of the Hotel Inter-Continental, 444 St. Charles
Avenue, New Orleans, Louisiana, on Monday, April 18, 1994, at 9:00 a.m., New
Orleans time, to:
1. Elect directors.
2. Consider and vote upon a proposal to approve the Amended and Restated
1992 Stock Incentive Plan (the "Plan").
3. Consider and vote upon a proposal to approve the performance goals
applicable to awards of restricted stock and performance shares granted
under the Plan.
4. Consider and vote upon a proposal to approve the Chief Executive Officer
Sharemax Plan.
5. Transact such other business as may properly come before the meeting or
any adjournments thereof.
Only holders of record of FCC's Common Stock at the close of business on
February 25, 1994, are entitled to notice of and to vote at the annual meeting.
PLEASE SIGN AND DATE THE ENCLOSED PROXY AND RETURN IT IN THE ACCOMPANYING
ENVELOPE AS PROMPTLY AS POSSIBLE. A PROXY MAY BE REVOKED AT ANY TIME PRIOR TO
THE VOTING THEREOF.
By Order of the Board of Directors
(Signature of Michael A. Flick appears here)
Michael A. Flick
Secretary
New Orleans, Louisiana
March 14, 1994
FIRST COMMERCE CORPORATION
POST OFFICE BOX 60279
NEW ORLEANS, LOUISIANA 70160
MARCH 14, 1994
PROXY STATEMENT
This Proxy Statement is furnished to stockholders of First Commerce
Corporation ("FCC" or the "Corporation") in connection with the solicitation on
behalf of its Board of Directors (the "Board") of proxies for use at the annual
meeting of stockholders of FCC (the "Meeting") to be held on Monday, April 18,
1994 at the time and place set forth in the accompanying notice and at any
adjournments thereof.
Only stockholders of record of FCC common stock ("Common Stock") at the close
of business on February 25, 1994, are entitled to notice of and to vote at the
Meeting. On that date, FCC had outstanding 26,135,440 shares of Common Stock,
each of which is entitled to one vote.
The enclosed proxy may be revoked by the stockholder at any time prior to its
exercise by filing with the Secretary of FCC a written revocation or duly
executed proxy bearing a later date. A shareholder who votes in person at the
Meeting in a manner inconsistent with a proxy previously filed on the
shareholder's behalf will be deemed to have revoked such proxy as it relates to
the matter voted upon in person.
This Proxy Statement is first being mailed to stockholders on or about March
14, 1994, and the cost of soliciting proxies in the enclosed form will be borne
by FCC. In addition to the use of the mails, proxies may be solicited by
personal interview, telephone and telegraph. Banks, brokerage houses and other
nominees or fiduciaries will be requested to forward the soliciting material to
their principals and to obtain authorization for the execution of proxies, and
FCC will, upon request, reimburse them for their expenses in so acting. In
addition, FCC has retained Morrow & Co., Inc., a professional proxy
solicitation firm, to aid in the solicitation of proxies for a fee of $5,000,
plus out-of-pocket expenses.
ELECTION OF DIRECTORS
GENERAL
The Articles of Incorporation of FCC authorize the Board to fix the number of
directors at not less than three nor more than 30. Pursuant thereto, the Board
has fixed the number of directors to be elected at the Meeting at 20, and
proxies cannot be voted for a greater number of persons. Unless authority is
withheld, the persons named in the enclosed proxy will vote the shares
represented by the proxies received by them for the election of the 20 persons
named below to serve until the next annual meeting and until their successors
are duly elected and qualified. In the unanticipated event that one or more
nominees cannot be a candidate at the Meeting, the By-laws provide that the
number of authorized directors will be automatically reduced by the number of
such nominees unless the Board determines otherwise, in which case proxies will
be voted in favor of such other nominees as may be designated by the Board.
The following table sets forth certain information as of February 11, 1994,
with respect to each nominee to be proposed on behalf of the Board. Unless
otherwise indicated, each person has been engaged in the principal occupation
shown for the past five years.
YEAR FIRST
PRINCIPAL OCCUPATION BECAME A
AND DIRECTORSHIPS IN DIRECTOR
NAME AND AGE OTHER PUBLIC CORPORATIONS OF FCC
------------ ------------------------- ----------
Ian Arnof, 54.................... President and Chief Executive 1983
Officer of FCC
James J. Bailey III, 51.......... Managing Partner, Bailey Family 1985
Investments (real estate
development and management);
director, United Companies
Financial Corporation
John W. Barton, 77............... Private investments 1985
Sydney J. Besthoff III, 66....... Chairman of the Board, K & B, 1992
Incorporated (retail drug
stores)
Robert H. Bolton, 85 (1)......... Senior Chairman of the Board, 1986
Rapides Bank & Trust Company in
Alexandria ("RBT") (2)
Frances B. Davis, 65 (1)......... Private investments 1986
Laurance Eustis, Jr., 80......... Advisory Chairman and 1983
Consultant, Eustis Insurance,
Inc.; director, International
Shipholding Corporation and
Pan-American Life Insurance
Company (3)
William P. Fuller, 67............ President, Fuller Farms, Inc. 1978
Arthur Hollins III, 63........... Chairman of the Board, The First 1985
National Bank of Lake Charles
and The First National Bank of
Lafayette; director, Calcasieu
Real Estate & Oil Co., Inc.
F. Ben James, Jr., 58............ President, James Investments, 1973
Inc. (real estate development
and private investments);
director, Central Louisiana
Electric Co., Inc.
Erik F. Johnsen, 68.............. President and director, 1983
International Shipholding
Corporation and Central Gulf
Lines, Inc. (ocean shipping)
J. Merrick Jones, Jr., 59........ President, Canal Barge Company, 1983
Inc. (river transportation)
Edwin Lupberger, 57.............. Chairman and Chief Executive 1992
Officer, Entergy Corporation
(electric utility holding
company); director,
International Shipholding
Corporation
Hermann Moyse, Jr., 72........... Chairman of the Board, FCC and 1985
City National Bank of Baton
Rouge ("CNB"); director, Pan-
American Life Insurance Company
O. Miles Pollard, Jr., 56........ Private investments; director, 1988
United Companies Financial
Corporation and John I. Jacobs,
PLC
G. Frank Purvis, Jr., 79......... Chairman of the Board, Pan- 1975
American Life Insurance Company
Edward M. Simmons, 65............ President and Chief Executive 1981
Officer, McIlhenny Co.
(producer of Tabasco brand food
products); director, Pan-
American Life Insurance
Company, Piccadilly Cafeterias,
Inc. and Central Louisiana
Electric Co., Inc.
H. Leighton Steward, 59.......... Chairman, Chief Executive 1992
Officer and President,
Louisiana Land and Exploration
Company (oil and gas
exploration and production)
Joseph B. Storey, 81............. Oil and gas consultant and 1983
private investments
Robert A. Weigle, 47............. President, David C. Bintliff & 1988
Co., Inc. (investments)
2
- --------
(1) Mr. Bolton is Mrs. Davis' uncle.
(2) In February 1990, Mr. Bolton was named Senior Chairman of the Board of RBT.
From January 1988 until February 1990, he was Chairman of the Board of RBT.
(3) For more than five years prior to 1990, when he relinquished those
positions, Mr. Eustis was the President and Chief Executive Officer of the
Laurance Eustis Insurance Agency, Inc. and Chairman of the Board and Chief
Executive Officer of the Laurance Eustis Mortgage Corporation (mortgage
banking).
----------------
During 1993, the Board held seven meetings. Each incumbent director of FCC
attended at least 75% of the aggregate number of meetings held during 1993 of
the Board and committees of which he or she was a member, except John W. Barton
who attended 64% and H. Leighton Steward who attended 67%.
The Board has an Executive Committee, Audit Committee and Compensation
Committee. The current members of the Executive Committee are Messrs. Arnof,
Fuller, Hollins, Moyse (Chairman), Pollard, Purvis and Simmons. The Executive
Committee, which met nine times during 1993, may exercise any of the powers of
the Board when the Committee's members agree unanimously that such exercise is
necessary because it is not possible or practicable to convene the full Board.
In addition, the Executive Committee (1) makes recommendations to the Board
concerning potential acquisitions, dividend policies, stock splits and other
special projects or policies, (2) performs an initial review of candidates to
the Board, (3) approves proposals for, and adopts resolutions authorizing, the
acquisition of failed or failing financial institutions or affiliates thereof
and (4) reviews any proposed employment contract between FCC and its
subsidiaries and employees of institutions proposed to be acquired by FCC.
The current members of the Audit Committee are Messrs. Bailey (Chairman),
Barton, James, Jones, Lupberger, Steward and Weigle. The Audit Committee, which
met four times during 1993, is responsible for (1) making recommendations to
the Board concerning the selection and retention of FCC's independent auditors,
(2) consulting with the independent auditors with regard to the plan of audit,
(3) consulting directly with the Chief Internal Auditor on any matter the
Committee or the Chief Internal Auditor deems appropriate in connection with
carrying out the audit, (4) reviewing the results of audits of FCC by its
independent auditors and the Federal Reserve Board, (5) reviewing reports of
the subsidiaries' Examining Committees regarding their reviews of the scope and
results of internal audits and results of regulatory examinations, (6)
discussing audit recommendations with management and reporting the results of
its reviews to the Board and (7) determining the compensation of the senior
internal auditing personnel and approving the termination of any member of the
internal auditing staff.
The current members of the Compensation Committee are Mrs. Davis and Messrs.
Besthoff, Eustis, Johnsen (Chairman) and Storey. The Compensation Committee met
once during 1993. The Compensation Committee is responsible for (1) determining
the compensation of the President and Chief Executive Officer of FCC, (2)
reviewing the evaluations of FCC's senior management conducted by the President
and Chief Executive Officer, (3) assuring that plans for the succession of
senior management personnel have been developed by the President and Chief
Executive Officer, (4) reviewing and approving certain employment contracts (of
which there are none currently) between FCC or any of its subsidiaries and an
employee of FCC or any of its subsidiaries and (5) administering the First
Commerce Corporation 1985 Stock Option Plan and the 1992 Stock Incentive Plan.
COMPENSATION OF DIRECTORS
Each director who is not an employee of FCC or any of its subsidiaries
receives an annual fee of $20,000 ($60,000 for the Chairman), payable in
monthly installments, for service on the Board and all committees of which he
or she is a member, in addition to fees for services as a director of
subsidiaries of FCC.
3
SECURITY HOLDINGS OF DIRECTORS, EXECUTIVE OFFICERS AND CERTAIN BENEFICIAL
OWNERS
SECURITY HOLDINGS OF DIRECTORS AND EXECUTIVE OFFICERS
The following table sets forth certain information concerning the beneficial
ownership of each class of outstanding FCC equity securities by each director
and nominee of FCC, by each executive officer for whom compensation information
is disclosed under the heading "Summary of Executive Compensation" ("Named
Executive Officer") and by all directors and executive officers of FCC as a
group as of February 12, 1994, determined in accordance with Rule 13d-3 of the
Securities and Exchange Commission ("SEC"). In addition to the Common Stock,
FCC currently has outstanding three other classes of equity securities, none of
which are entitled to vote at the Meeting: 7.25% Cumulative Convertible
Preferred Stock, Series 1992 ("Preferred Stock"), 12 3/4% Convertible
Debentures due 2000, Series A ("A Debentures") and 12 3/4% Convertible
Debentures due 2000, Series B ("B Debentures"). Unless otherwise indicated, the
equity securities shown are held with sole voting and investment power.
TYPE AND CLASS
OF EQUITY NO. OF PRINCIPAL PERCENT
NAME OF BENEFICIAL OWNER SECURITY SHARES AMOUNT OF CLASS(1)
- ------------------------ --------------- ------- ------------- -----------
DIRECTORS AND DIRECTOR
NOMINEES
Ian Arnof............... Common Stock 152,499(2) *
James J. Bailey III..... Common Stock 143,007(3) *
Preferred Stock 10,000 *
John W. Barton.......... Common Stock 86,810(4) *
Sydney J. Besthoff III.. Common Stock 2,250 *
Robert H. Bolton........ Common Stock 194,597(5) *
B Debentures $3,178,000 5.56%
Frances B. Davis........ Common Stock 383,419(6) 1.45%
B Debentures $7,520,400(7) 13.17%
Preferred Stock 1,200 *
Laurance Eustis, Jr..... Common Stock 37,500 *
William P. Fuller....... Common Stock 59,571(8) *
Arthur Hollins III...... Common Stock 255,108(9) *
A Debentures $5,304,225(10) 19.76%
F. Ben James, Jr........ Common Stock 13,125 *
Erik F. Johnsen......... Common Stock 147,686(11) *
Preferred Stock 1,000(12) *
J. Merrick Jones, Jr.... Common Stock 127,128(13) *
Edwin Lupberger......... Common Stock 2,312 *
Hermann Moyse, Jr....... Common Stock 526,301(14) 2.02%
O. Miles Pollard, Jr.... Common Stock 181,632 *
G. Frank Purvis, Jr..... Common Stock 59,542(15) *
Edward M. Simmons....... Common Stock 122,274(16) *
H. Leighton Steward..... Common Stock 4,205(3) *
Preferred Stock 2,000 *
Joseph B. Storey........ Common Stock 93,852(3) *
Preferred Stock 4,000 *
Robert A. Weigle........ Common Stock 56,606(17) *
NAMED EXECUTIVE OFFICERS
(18)
Joseph V. Wilson III.... Common Stock 32,630(2) *
Michael A. Flick........ Common Stock 67,869(2) *
Ashton J. Ryan, Jr...... Common Stock 23,085(2) *
Howard C. Gaines........ Common Stock 38,947(2) *
4
TYPE AND CLASS
OF EQUITY NO. OF PRINCIPAL PERCENT
NAME OF BENEFICIAL OWNER SECURITY SHARES AMOUNT OF CLASS(1)
- ------------------------ --------------- ------------- --------------- -----------
ALL DIRECTORS AND
EXECUTIVE
OFFICERS AS A GROUP
(29 persons).......... Common Stock 4,113,712(19) 15.18%
A Debentures $11,119,665(20) 41.42%
B Debentures $12,606,400(21) 22.07%
Preferred Stock 22,300(22) *
- --------
* Less than one percent
(1) Shares subject to options currently exercisable or exercisable within 60
days are deemed to be outstanding for purposes of computing the percentage
of outstanding Common Stock owned by such persons individually and by all
directors and executive officers as a group but are not deemed to be
outstanding for the purpose of computing the ownership percentage of any
other person.
(2) Includes shares entitled to be acquired within 60 days upon the exercise
of options, restricted shares and shares allocated to the Tax-Deferred
Savings Plan and Supplemental Tax-Deferred Savings Plan (the "Plans")
accounts, as follows:
OPTION SHARES RESTRICTED SHARES PLAN SHARES
------------- ----------------- -----------
Mr. Arnof...................... 20,544 7,890 17,157
Mr. Wilson..................... 5,548 4,025 4,435
Mr. Flick...................... 12,490 4,423 8,438
Mr. Ryan....................... 2,314 3,737 2,034
Mr. Gaines..................... 3,531 4,126 7,587
(3) Includes shares that may be acquired upon conversion of Preferred Stock as
follows: Mr. Bailey, 11,646 shares, Mr. Steward, 2,330 shares and Mr.
Storey, 4,658 shares.
(4) Includes 1,272 shares as to which Mr. Barton shares voting and investment
power.
(5) Includes 119,175 shares Mr. Bolton has the right to acquire upon
conversion of B Debentures, and 6,646 shares allocated to his Plan
accounts.
(6) Includes 63,256 shares as to which Mrs. Davis shares voting and investment
power. Also includes 282,015 shares Mrs. Davis has the right to acquire
upon conversion of B Debentures and 1,398 shares she has the right to
acquire upon conversion of Preferred Stock.
(7) Includes $1,508,400 principal amount of B Debentures owned by Mrs. Davis'
husband, as to which she disclaims beneficial ownership.
(8) Includes 3,165 shares as to which Mr. Fuller shares voting and investment
power.
(9) Includes 4,687 shares as to which Mr. Hollins shares voting and investment
power. Also includes 198,908 shares Mr. Hollins has the right to acquire
upon conversion of A Debentures, 3,992 shares he is entitled to acquire
within 60 days upon the exercise of options, 2,376 shares of restricted
stock and 25,505 shares allocated to his Plan accounts.
(10) Includes $333,360 principal amount of A Debentures as to which Mr. Hollins
shares voting and investment power and $59,040 principal amount of A
Debentures owned by Mr. Hollins' wife, as to which he disclaims beneficial
ownership.
(11) Includes 3,533 shares as to which Mr. Johnsen shares voting and investment
power. Mr. Johnsen disclaims beneficial ownership of these shares, which
are held in a trust of which he is a co-trustee. Also includes 1,165
shares of Common Stock that may be acquired upon conversion of shares of
Preferred Stock owned by Mr. Johnsen's wife, as to which he disclaims
beneficial ownership.
(12) Mr. Johnsen disclaims beneficial ownership of these shares, which are
owned by his wife.
(13) Includes 890 shares as to which Mr. Jones has sole voting power, but
disclaims beneficial ownership.
(14) Includes 495,711 shares as to which Mr. Moyse shares voting and investment
power.
(15) Includes 53,666 shares owned by Pan-American Life Insurance Company, of
which Mr. Purvis is the Chairman of the Board. Mr. Purvis disclaims
beneficial ownership of these shares.
(16) Includes 19,800 shares as to which Mr. Simmons shares voting and
investment power. Mr. Simmons disclaims beneficial ownership of these
shares. Also includes 500 shares as to which Mr. Simmons has sole voting
and investment power but disclaims beneficial ownership.
5
(17) Mr. Weigle shares voting and investment power of these shares.
(18) Information for Mr. Arnof appears above under the heading "Directors and
Director Nominees."
(19) Includes 21,197 shares underlying the Preferred Stock, 198,908 shares
underlying the A Debentures and 401,190 shares underlying the B
Debentures. Also includes 72,846 shares directors and executive officers
are entitled to acquire within 60 days upon the exercise of options,
35,189 shares of restricted stock and 85,580 shares allocated to the
Plans. Also includes 2,770 shares held in a Savings and Investment Plan,
8,006 shares held by FCC's Pension Plan and 383,801 shares held by the
trust departments of the subsidiary banks of FCC as fiduciaries (including
shares that may be acquired upon conversion of Preferred Stock, A
Debentures and B Debentures). Also includes 825,906 shares held of record
by the trustee of the Plans (in addition to those shares held on behalf of
directors and executive officers) that are voted by the trustee in
accordance with the instructions of the Plan's participants.
(20) Includes $5,815,440 principal amount of A Debentures held by the trust
departments of subsidiary banks of FCC as fiduciaries.
(21) Includes $1,908,000 principal amount of B Debentures held by the trust
departments of subsidiary banks of FCC as fiduciaries.
(22) Includes 4,100 shares of Preferred Stock held by the trust departments of
subsidiary banks of FCC as fiduciaries.
----------------
SECURITY HOLDINGS OF CERTAIN BENEFICIAL OWNERS
As of February 9, 1994, the person named below was, to FCC's knowledge, the
only beneficial owner of more than 5% of FCC's outstanding voting securities,
determined in accordance with Rule 13d-3 of the SEC. All information presented
below is based solely on information contained in an amended Schedule 13G dated
February 9, 1994 filed by the beneficial owner with the SEC.
AMOUNT AND
NATURE OF
NAME AND ADDRESS OF CLASS OF BENEFICIAL PERCENT
BENEFICIAL OWNER SECURITIES OWNERSHIP(2) OF CLASS
------------------- ------------ ------------ --------
Capital Growth Management Limited Partner-
ship(1).................................... Common Stock 2,332,861 9.43%
One International Place
Boston, MA 02110
- --------
(1) Capital Growth Management Limited Partnership ("CGM") is a registered
investment adviser.
(2) According to the amended Schedule 13G, CGM has the sole power to vote
1,045,874, and the shared power to dispose of all, of the shares held by
it, and CGM disclaims beneficial ownership of all of the shares.
6
EXECUTIVE COMPENSATION AND CERTAIN TRANSACTIONS
SUMMARY OF EXECUTIVE COMPENSATION
The following table summarizes, for each of the three years ended December
31, 1991, 1992 and 1993, the compensation of FCC's Chief Executive Officer and
each of the four most highly compensated executive officers of FCC in all
capacities in which they served:
SUMMARY COMPENSATION TABLE
ANNUAL ALL OTHER
COMPENSATION LONG-TERM COMPENSATION COMPENSATION
----------------- -------------------------------- ------------
RESTRICTED NO. OF
NAME AND STOCK OPTIONS LTIP
PRINCIPAL POSITIONS YEAR SALARY BONUS AWARDS(1) AWARDED(2) PAYOUTS(3) OTHER(4)
------------------- ---- -------- -------- ---------- ---------- ---------- ------------
Ian Arnof............... 1993 $516,667 $210,000 $222,498 0 $425,316 $12,917
President and Chief Ex- 1992 471,347 190,000 0 9,375 234,124 11,786
ecutive Officer 1991 429,680 170,000 176,066 0 0 10,878
of FCC
Joseph V. Wilson III.... 1993 267,833 108,000 113,505 0 183,061 6,747
Senior Executive Vice 1992 253,980 77,100 0 4,462 87,649 6,506
President of FCC 1991 218,480 50,000 75,777 0 0 5,827
Michael A. Flick........ 1993 288,250 87,000 124,729 0 253,009 7,195
Executive Vice Presi- 1992 280,797 83,850 0 5,696 128,318 6,984
dent, Chief Credit 1991 272,047 50,000 104,735 0 0 6,769
Policy Officer and
Secretary of FCC
Ashton J. Ryan, Jr...... 1993 252,633 102,000 105,383 0 376,875 6,356
Senior Executive Vice 1992 239,247 72,240 0 4,627 0 6,205
President of FCC 1991 131,790 28,000 156,000 0 0 2,878
and President and Chief
Operating Officer of
First National Bank of
Commerce ("FNBC")
Howard C. Gaines........ 1993 270,450 81,600 116,353 0 242,255 6,763
Chairman and Chief Exec- 1992 262,077 78,810 0 5,340 92,813 6,553
utive Officer of FNBC 1991 256,080 35,000 100,289 0 0 6,628
- --------
(1) Reflects the number of shares of restricted stock awarded multiplied by the
closing market price of FCC's Common Stock on the date of grant. The
amounts shown represent 7,890, 4,025, 4,423, 3,737, and 4,126 shares of
restricted stock, respectively, which constitute all of the shares of
restricted stock held by each executive officer as of December 31, 1993. As
of December 31, 1993, the value of the aggregate restricted stock holdings
for each executive officer (calculated by multiplying the number of shares
of restricted stock by the closing market price of FCC Common Stock on
December 31, 1993) was $198,236, $111,128, $101,128, $103,666, and $93,892,
respectively. Holders of restricted stock receive dividends paid on the
stock. Three years from the date of grant, the restricted stock may vest in
whole or in part based on whether certain cumulative earnings per share
targets are met and provided that the individual is then in FCC's employ.
Shares not vesting at that time will be canceled. Restrictions on the
shares would lapse within the three-year period immediately prior to the
anticipated effective date of a proposed dissolution or liquidation of FCC
or of a reorganization, merger or consolidation of FCC with one or more
corporations in which FCC is not the surviving corporation, or of a
transfer of substantially all the property or more than 80% of the then
outstanding stock of FCC to another corporation.
(2) For additional information, please refer to the two tables below.
(3) Amounts reported for 1993 reflect the value on December 31, 1993, the date
restrictions lapsed, of those vested shares of restricted stock granted in
1991. These shares were earned over a three-year performance period based
on cumulative earnings per share targets. All of the shares originally
granted vested on December 31, 1993. Amounts reported for 1992 relate to
grants of restricted stock in 1989, 55% of which were earned based on
cumulative earnings per share targets.
(4) Consists of amounts contributed by FCC on behalf of the Named Executive
Officer pursuant to the Savings Plan and the Supplemental Savings Plan.
7
1993 LONG TERM INCENTIVE PLAN AWARDS
The following table contains information concerning the grant of restricted
stock under FCC's long term incentive plan to the Named Executive Officers
during the fiscal year ended December 31, 1993:
NO. OF
RESTRICTED ESTIMATED FUTURE PAYOUTS
SHARES PERFORMANCE -----------------------------------
NAME GRANTED(1) PERIOD THRESHOLD TARGET MAXIMUM
---- ---------- -------------- --------- ------------ ------------
Ian Arnof............... 7,890 3 year 35 shares 7,890 shares 7,890 shares
cumulative EPS
Joseph V. Wilson III.... 4,025 3 year 18 shares 4,025 shares 4,025 shares
cumulative EPS
Michael A. Flick........ 4,423 3 year 19 shares 4,423 shares 4,423 shares
cumulative EPS
Ashton J. Ryan, Jr...... 3,737 3 year 16 shares 3,737 shares 3,737 shares
cumulative EPS
Howard C. Gaines........ 4,126 3 year 18 shares 4,126 shares 4,126 shares
cumulative EPS
- --------
(1) The restricted shares granted may vest, in whole or in part, three years
from the date of grant based on whether certain cumulative earnings per
share targets are met and provided that the individual is then in FCC's
employ. Shares not vesting at that time will be canceled. Restrictions on
the shares would lapse within the three-year period immediately prior to
the anticipated effective date of a proposed dissolution or liquidation of
FCC or of a reorganization, merger or consolidation of FCC with one or more
corporations in which FCC is not the surviving corporation, or of a
transfer of substantially all the property or more than 80% of the then
outstanding stock of FCC to another corporation. Holders of restricted
stock receive dividends paid on the stock. As of December 31, 1993, the
value of the 1993 restricted stock grants for each executive officer
(calculated by multiplying the number of shares of restricted stock by the
closing market price of FCC Common Stock on December 31, 1993) was
$198,236, $101,128, $111,128, $93,892 and $103,661, respectively.
OPTION EXERCISES AND HOLDINGS
The following table sets forth information with respect to the Named
Executive Officers concerning the exercise of options during 1993 and
unexercised options held as of December 31, 1993.
AGGREGATED OPTION EXERCISES IN 1993 AND OPTION VALUES AS OF DECEMBER 31, 1993
NO. OF NUMBER OF UNEXERCISED VALUE OF UNEXERCISED
SHARES OPTIONS AT IN-THE-MONEY OPTIONS AT
ACQUIRED DECEMBER 31, 1993(2) DECEMBER 31, 1993(3)
ON VALUE ------------------------- -------------------------
NAME EXERCISE REALIZED(1) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
---- -------- ----------- ----------- ------------- ----------- -------------
Ian Arnof............... 70,658 $1,413,209 14,237 10,994 $169,584 $81,880
Joseph V. Wilson III.... 0 0 2,775 5,005 26,864 35,904
Michael A. Flick........ 23,847 527,325 8,659 6,679 103,147 49,760
Ashton J. Ryan, Jr...... 0 0 1,157 3,469 4,698 14,082
Howard C. Gaines........ 16,251 220,152 0 6,201 0 45,812
- --------
(1) Reflects the difference between the closing sale price of the Common Stock
on the exercise date and the exercise price of the options. For Mr. Arnof,
$699,087 and $714,122 was realized on the exercise of options outstanding
based on the increase in stock value for a period of five years and six
years, respectively. For Mr. Flick, $527,325 was realized on the exercise
of options outstanding for more than five years. For Mr. Gaines, $5,518,
$89,185, and $125,449 was realized on the exercise of options outstanding
for more than two, four and five years, respectively.
8
(2) All options were awarded at the fair market value of the shares on the date
of grant. All options are not exercisable for one year from the date of
grant and become exercisable thereafter in 25% increments each year;
provided that the Compensation Committee may, in its discretion, accelerate
the exercisability of the options, and if there is a reorganization, merger
or consolidation involving FCC in which FCC is not the surviving
corporation, or a transfer of substantially all of the property or more
than 80% of the outstanding stock of FCC to another corporation, or a
dissolution or liquidation of FCC, then the Compensation Committee will
notify all optionees and all outstanding options will become immediately
exercisable in full. All options expire eight years from the date of grant.
(3) Reflects the difference between the closing sale price of the Common Stock
on December 31, 1993 and the exercise price of the options. The following
table shows, for exercisable options, the value attributed to options
outstanding for the number of years indicated:
VALUE YEARS
-------- -----
Mr. Arnof.................... $160,071 4
9,513 1
Mr. Wilson................... 22,335 4
4,529 2
Mr. Flick.................... 97,364 4
5,783 2
Mr. Ryan..................... 4,698 2
----------------
PENSION PLAN
FCC's defined benefit plan provides for retirement benefits based on a
participant's highest average monthly compensation for any 120-month period of
employment but not less than the 60-month average monthly compensation
determined as of December 31, 1988. Normal retirement benefits payable under
the plan are equal in value to a straight-life annuity based on the sum of 1%
of the highest average monthly compensation multiplied by years of service plus
.65% of such monthly compensation in excess of covered compensation (as defined
by the Social Security Act) multiplied by years of service not in excess of 35.
The following table reflects annual retirement benefits that a participant
with the years of service and the compensation levels indicated below can
expect to receive under the plan upon retirement at age 65. The table assumes
benefits are paid in the form of a straight-life annuity. Benefits are not
subject to any deduction for Social Security or other offset amounts.
The table reflects that, notwithstanding the benefit formula, the annual
retirement benefit cannot exceed the maximum benefit allowed under the Internal
Revenue Code, which for 1994 is $118,800. Additionally, the Code limits the
amount of compensation on which benefits can be based. The current limit is
$150,000, which is indexed for annual cost-of-living increases. The table does
not incorporate the limitation on includable compensation.
YEARS OF SERVICE
--------------------------------------------
EARNINGS 15 YRS. 20 YRS. 25 YRS. 30 YRS. 35 YRS.
-------- -------- -------- -------- -------- --------
$200,000..................... $ 47,130 $ 62,839 $ 78,549 $ 94,259 $109,969
225,000..................... 53,317 71,089 88,862 106,634 118,800
250,000..................... 59,505 79,339 99,174 118,800 118,800
300,000..................... 71,880 95,839 118,800 118,800 118,800
400,000..................... 96,630 118,800 118,800 118,800 118,800
450,000..................... 109,005 118,800 118,800 118,800 118,800
500,000..................... 118,800 118,800 118,800 118,800 118,800
600,000..................... 118,800 118,800 118,800 118,800 118,800
9
Compensation covered by the plan for Messrs. Arnof, Wilson, Flick, Ryan and
Gaines is represented by the amounts appearing in the Summary Compensation
Table under the headings "Salary" and "Bonus," except that after 1991 amounts
received pursuant to the Bonus Plan are not included in covered compensation.
For 1994, covered compensation for each of these individuals was capped at the
current limit of $150,000, and they had 15, 18, 23, 2 and 5 years of credited
service, respectively.
COMPENSATION COMMITTEES INTERLOCKS AND INSIDER PARTICIPATION
In December 1993, FCC formed a Compensation Committee to perform the
functions previously divided among two committees, the Management Review
Committee and the Stock Option Committee. The members of FCC's Compensation
Committee are Messrs. Besthoff, Eustis, Johnsen and Storey and Mrs. Davis. The
members of FCC's former Management Review Committee were Messrs. Eustis,
Fuller, Johnsen and Storey and Mrs. Davis. The members of FCC's former Stock
Option Committee were Messrs. Moyse, Pollard, Purvis and Simmons. None of the
members of FCC's Compensation Committee, Management Review Committee or Stock
Option Committee (the "Compensation Committees") have been officers or
employees of FCC or any of its subsidiaries, except Mr. Moyse, a member of
FCC's former Stock Option Committee who was an executive officer of FCC from
1985 through 1993. No executive officer of FCC served in 1993 as a director, or
member of the compensation committee, of another entity one of whose executive
officers served as a director, or on the Compensation Committees, of FCC.
During 1993, FCC and its subsidiaries paid $348,263 in premiums on disability
and life insurance policies issued by Pan-American Life Insurance Company
covering FCC's employees. In addition, FNBC leases branch space in a building
owned by Pan-American Life Insurance Company. Total rent paid under this lease
in 1993 was $126,966. Mr. G. Frank Purvis, Jr., a director of FCC and member of
FCC's former Stock Option Committee, is Chairman of the Board of Pan-American
Life Insurance Company.
Members of the Compensation Committees and their associates have been
customers of, and have had loan transactions with, subsidiary banks of FCC in
the ordinary course of business, and such transactions are expected to continue
in the future. In the opinion of FCC's management, such transactions have been
on substantially the same terms, including interest rates and collateral on
loans, as those prevailing at the time for comparable transactions with other
persons and did not involve more than the normal risk of collectibility or
present other unfavorable features.
COMPENSATION COMMITTEE'S REPORT ON EXECUTIVE COMPENSATION
General
At its December 1993 meeting, the Board of Directors established the
Compensation Committee, the duties of which were previously shared by the
Management Review Committee and the Stock Option Committee.
The Compensation Committee of the Board oversees all compensation
arrangements for executive officers. The Committee is composed of five Board
members who are not employees of FCC. The Committee retains outside consultants
to assist it in obtaining relevant information on pay practices generally and
with respect to comparable organizations, and in determining whether FCC's
compensation programs are consistent with the Committee's compensation
philosophy and objectives.
The executive compensation programs of FCC are designed to (1) provide a
competitive total compensation package that enables FCC to hire, develop,
reward and retain key executives, (2) link executive behavior to the
Corporation's annual, intermediate-term and long-term business objectives and
strategy, and (3) provide variable total reward opportunities that are directly
tied to increases in stockholder value. These objectives are generally sought
to be met with base salaries that are within competitive ranges of similar
institutions, annual incentive bonuses keyed primarily to annual increases in
earnings per share and a mix of
10
stock award programs that are focused on both increases in earnings per share
over a three-year period and increases in stock values over a longer term.
Competitive data used to analyze total compensation is drawn from a group of
banks that has been determined by management to be those institutions with whom
FCC competes for management personnel, some of which are also included in the
industry indices used in the performance graphs in this Proxy Statement. Since
many of those banks are substantially larger than FCC, the compensation data is
then adjusted for asset size. For purposes of this report, the banks with whom
FCC competes for management personnel will be referred to as the "Competitors."
Base Salary and Annual Incentive Compensation
General. The Compensation Committee reviews and approves the methodology for
determining base salaries and annual incentive bonuses of executive officers,
and determines the base salary and annual incentive bonus of the Chief
Executive Officer and any executive officer whose base salary and bonus would
exceed 80% of the base salary and bonus of the Chief Executive Officer. The
Committee has incorporated long-term and short-term rewards into the
compensation program so that no executive is rewarded for achieving a single
financial target to the detriment of total stockholder value. The Chief
Executive Officer determines the amounts of the base salary and annual
incentive bonus of each other officer, and the Compensation Committee reviews
his determinations and the evaluations on which those determinations are based.
Base Pay. The Committee establishes salary ranges for each position based on
salary data of Competitors. Executive base pay is intended to be slightly above
average levels of Competitors. Individual base pay is determined within the
established ranges on the basis of FCC's performance as well as individual
performance evaluations conducted by the Chief Executive Officer and reviewed
by the Compensation Committee. The Compensation Committee evaluates the
performance of the Chief Executive Officer and determines his base salary. The
performance evaluations generally use financial performance and subjective
factors indicative of the executive's organizational skills and adherence to
overall corporate policies and goals.
To set the precise level of each executive officer's base salary within the
established ranges, the Chief Executive Officer uses a "scorecard" that
includes financial performance measures such as return on assets, credit
quality, cost control and other measures such as teamwork, organizational
skills and adherence to overall corporate policies and goals. Each quantitative
and qualitative measure is weighted by the Chief Executive Officer depending on
the executive officer's position and the measure's impact on overall corporate
goals.
Annual Cash Incentive Compensation. Each year an executive may earn an
incentive bonus from zero up to a maximum percentage of his base salary
specified by the Committee. The exact amount of the potential bonus is
dependent on the relationship of the Corporation's earnings per share in the
current year to an earnings per share target approved by the Committee. This
target is based on the Corporation's annual budget plan and is considered by
the Committee to be confidential. The amount of potential cash incentive
compensation plus the base salary provides total compensation that is generally
not at levels in excess of the average of Competitors. Once the potential bonus
amount is established, the actual annual bonus award is then determined by the
Compensation Committee in the case of the Chief Executive Officer and by the
Chief Executive Officer in the case of other executive officers. While the
Corporation's 1993 performance exceeded that of 1992, the maximum incentive
bonus as a percentage of salary was not increased for most executive officers,
except for certain positions where the Committee determined to shift a
percentage of total cash compensation from salary to incentive bonus. The
Committee intends to structure its performance-based compensation such that all
executive compensation will continue to be deductible by the Corporation under
current federal tax laws.
Stock Incentive Program
The purpose of the stock incentive program is to link management to
stockholders, focus on intermediate and long-term results and maximize
stockholder returns. The Committee has sought to accomplish these
11
objectives with a combination of grants of stock options and awards of
performance-based restricted stock, with awards of each type generally
alternating every year. Stock options have value to the employee only if there
is a corresponding value to stockholders.
Stock option grants are made at 100% of the market value of the stock on the
date of the award, are not exercisable during the first year after the award
and are exercisable thereafter under a four-year vesting schedule with 25% of
the options becoming exercisable each year. The size of awards are determined
as a percentage of salary based on salary level. The options expire eight years
from the date of grant. Grants of performance-based restricted stock may vest
after three years to the extent of the ratio of cumulative earnings per share
over the three-year restriction period to pre-established cumulative earnings
per share targets for such period, if the executive remains employed by the
Corporation for the specified period of time.
The three-year cumulative earnings per share target for 100% vesting for the
1993 grants is $10.06. None of the shares will vest with three-year cumulative
earnings per share less than $8.10. Grants in 1994 will vest based on a
relative return on equity which will qualify compensation for tax deductibility
under Section 162(m) of the Internal Revenue Code.
Compensation for the President and Chief Executive Officer
The Committee has made the following determinations regarding the 1993
compensation of Mr. Arnof:
Base salary was increased in March 1993 by 10.5% or $50,000 over 1992. An
annual incentive award of $210,000 was paid to Mr. Arnof, representing 100%
of his potential award. The amounts of the adjustment and award were based
on the Corporation's performance during 1992 and 1993, respectively, both
of which were record earnings years for the Corporation, as well as
individual performance as evaluated by the Committee and an analysis of
Competitors.
Restricted stock grants for 7,890 shares of Common Stock were granted to
Mr. Arnof in February 1993, with a fair market value of $28.20 per share.
The grants are performance-based and may vest after three years based on
pre-determined cumulative earnings per share over the three-year
restriction period. The number of shares was determined by the Stock Option
Committee according to a percentage of salary formula. No stock options
were awarded during 1993.
On December 31, 1993, Mr. Arnof became 100% vested in 16,928 shares of
restricted stock which were granted in February 1991. The 100% vesting was
based on a pre-determined three-year cumulative earnings per share of
$5.85. The Corporation achieved $7.71.
THE COMMITTEE
Frances B. Davis Laurance Eustis, Jr. Sydney Besthoff, III
Erik F. Johnsen Joseph B. Storey
12
PERFORMANCE GRAPHS
The graphs below compare the cumulative total stockholder return on FCC's
Common Stock for the last five years with the cumulative total return on the
S&P 500 Index and the S&P Major Regional Banks Index, in the first graph, and
on the KBW 50 Total Return Index, in the second graph, in each case assuming
the investment of $100 on January 1, 1989 at closing prices on December 31,
1988 and reinvestment of dividends. The S&P Major Regional Banks Index consists
of fifteen banks and is currently published in Barron's. The KBW 50 Index is
prepared by Keefe, Bruyette & Woods, Inc., consists of 50 banks and is
available by contacting Keefe, Bruyette & Woods, Inc. directly.
[INSERT GRAPHS HERE]
13
TOTAL RETURN FOR THE YEAR
---------------------------------------
1988 1989 1990 1991 1992 1993
---- ------ ------ ------ ------ ------
FCC............................... 100 134.95 87.31 211.38 323.62 327.26
S&P 500........................... 100 131.59 127.49 166.17 178.81 196.75
S&P MRI........................... 100 122.15 87.30 156.03 198.61 210.34
KBW 50............................ 100 147.94 106.24 168.16 214.27 226.14
----------------
CERTAIN OTHER TRANSACTIONS
Directors, nominees and executive officers of FCC and their associates have
been customers of, and have had loan transactions with, subsidiary banks of FCC
in the ordinary course of business, and such transactions are expected to
continue in the future. In the opinion of FCC's management, such transactions,
which at December 31, 1993 amounted to an aggregate of 9.37% of FCC's
stockholders' equity, have been on substantially the same terms, including
interest rates and collateral on loans, as those prevailing at the time for
comparable transactions with other persons and did not involve more than the
normal risk of collectibility or present other unfavorable features.
Section 16(a) of the Securities Exchange Act of 1934 (the "1934 Act")
requires FCC's directors and executive officers to file with the SEC reports of
ownership and changes in ownership of equity securities of FCC. During 1993,
certain executive officers and directors of FCC were delinquent in filing
required reports. William P. Fuller, a director of FCC, was late in filing two
reports of changes in beneficial ownership, each of which reported one
transaction. John W. Barton, a director of FCC, was late in reporting a
purchase of shares of Common Stock. J. B. Storey, a director of FCC, was late
in filing a report of change in beneficial ownership of Preferred Stock. David
B. Kelso and Ashton J. Ryan, Jr., executive officers of FCC, were each late in
filing his Annual Statement of Beneficial Ownership of Securities for 1992.
PROPOSAL TO APPROVE THE AMENDED AND RESTATED 1992 STOCK INCENTIVE PLAN
THE PROPOSAL
The 1992 Stock Incentive Plan (the "Plan") was adopted by the Board of
Directors in 1992 and approved by the FCC stockholders at the 1992 annual
meeting of stockholders. The Board of Directors recently approved the amendment
and restatement of the Plan, subject to stockholder approval at the Meeting.
The proposed amendments to the Plan (the "Amendments") provide for, among other
things, (1) certain changes to the Plan in order that compensation received
through the Plan by executive officers of the Corporation will continue to be
deductible by the Corporation under the 1993 Omnibus Budget Reconciliation Act
("OBRA"); (2) the addition of stock appreciation rights, stock awards and
performance shares as types of awards that may be granted through the Plan; (3)
separate annual limits on different types of awards based on the form of
payment and a provision that awards paid in cash will not be counted against
the total aggregate number of shares that may be awarded through the Plan; and
(4) the addition of authority for the Compensation Committee to permit loans to
be made by the Corporation to participants in order to pay the exercise price
of stock options and the tax liability that may result from the receipt or
vesting of an award under the Plan or from the exercise of a stock option. The
stock options, stock appreciation rights, restricted stock, performance shares
and stock awards that may be granted through the amended and restated Plan will
be referred to herein as "Incentives."
PURPOSE OF THE PROPOSAL
OBRA added a new Section 162(m) to the Internal Revenue Code of 1986, as
amended (the "Code") under which the allowable deduction for compensation paid
or accrued with respect to the Chief Executive Officer and each of the four
other most highly compensated executive officers of the Corporation in any year
14
will be limited to $1 million beginning in 1994. Qualified performance-based
compensation is excluded from this deduction limitation if certain requirements
are met. The purpose of certain of the proposed amendments and one of the
purposes of the submission of the amended and restated Plan to the stockholders
for approval is to qualify stock options, stock appreciation rights,
performance shares, stock awards and restricted stock granted under the Plan as
qualified performance-based compensation in order to preserve the Corporation's
tax deduction for these awards. With respect to awards of restricted stock and
performance shares, Section 162(m) requires that the stockholders also approve
the particular performance goals that must be met in order for the awards to be
vested or earned. In order to qualify recent grants of restricted stock and
performance shares under the Plan as qualified performance-based compensation,
the stockholders are also being asked to approve the performance goals
applicable to those awards. See "Proposal to Approve Performance Goals for
Restricted Stock and Performance Shares."
Through this and the other proposals presented to stockholders for their
consideration and vote at the Meeting, the Board of Directors wishes to
preserve the tax deduction formerly available to the Corporation for all
executive compensation. Profits received by officers on stock options or other
stock awards resulting solely from increases in the value of the Common Stock
prior to exercise or vesting will be included in calculating the $1 million
limit although not paid to the executive by the Corporation, unless the
stockholders approve the amended and restated Plan. The Corporation will be
able to continue to deduct the amount of the increase in the value of these
awards as well as other compensation paid to executive officers if this
proposal and the other proposals presented at the Meeting are approved.
The purpose of the addition of stock appreciation rights, stock awards and
performance shares to the stock options and restricted stock previously
authorized to be issued through the Plan is to give the Corporation greater
flexibility in structuring awards that will be both equity-based and
performance-based in order to tie the interests of participants in the Plan to
the interests of FCC stockholders. Changes to the current accounting treatment
of stock options have been proposed and if such changes are adopted, the Board
of Directors desires to have the flexibility to choose to compensate its
officers and key employees through other alternative types of equity-based
awards that may offer more favorable accounting treatment. In addition, the
Board wishes to encourage the acquisition and retention of Common Stock by its
officers and believes that the grant of options coupled with grants of other
types of Incentives that may be paid in cash will allow officers to exercise
options without the necessity of selling shares to pay the option exercise
price and the resulting taxes. For this same purpose, the Board of Directors
wishes to provide the Committee with the authority to make Plan-related loans
to participants.
The Amendments do not change the total limit on the number of shares of
Common Stock that may be issued through the Plan, which continues to be 10% of
the total outstanding shares. The Plan will now specifically provide, however,
that if and when an Incentive is paid in cash and not in shares, the number of
shares to which the cash award relates will be credited back against the total
Plan maximum. As a result, the Plan maximum, which has always been stated in
terms of total shares, will not be reduced as the result of cash payments of
stock appreciation rights or performance shares. Revised annual limits relating
to awards that may be paid in stock and all awards are then imposed by the
Amendments. The Amendments specify that the annual limit under the Plan of 1%
of total outstanding shares will apply to Incentives that may be paid in shares
of Common Stock and an annual limitation of 5% of the outstanding shares per
year will be imposed on the aggregate of awards that may be paid in stock and
awards that must be paid in cash.
Stockholder approval of this proposal is required not only to qualify awards
granted through the Plan as performance-based compensation under OBRA, but also
to meet the requirements of Rule 16b-3 under the 1934 Act, an exemption for
certain officers of the Corporation from short-swing trading liability in
connection with acquisitions of Common Stock through the Plan, and to meet the
requirements of the Nasdaq National Market.
A summary of the material features of the Plan, as proposed to be amended and
restated, is provided below. All of the Plan provisions described below are
currently in effect and were previously approved by stockholders, unless a
provision is described as being affected by the Amendments.
15
ADMINISTRATION
The Plan was previously administered by the Stock Option Committee of the
Board of Directors. In December 1993, the Compensation Committee assumed the
duties of the Stock Option Committee. The Amendments reflect that the Plan will
now be administered by the Compensation Committee of the Board of Directors
(the "Committee"). The Committee must consist of two or more members of the
Board of Directors, all of whom must be qualified to administer the Plan under
Rule 16b-3 under the 1934 Act. Under the Amendments, beginning after the
Corporation's 1995 annual meeting of stockholders, each member must also
qualify as an "outside director" under Section 162(m) of the Code. The
Committee has plenary authority to award Incentives under the Plan, to set the
terms of the Incentives, to interpret the Plan, to establish rules or
regulations relating to the Plan that it determines to be appropriate and to
make any other determination that it believes necessary or advisable for the
proper administration of the Plan.
SHARES ISSUABLE THROUGH THE PLAN
Up to 10% of the outstanding shares of Common Stock (2,613,544 as of February
25, 1994) may be issued under the Plan as Incentives. Incentives relating to a
total of 125,550 shares have been issued through the Plan, 334,595 shares
covered by Incentives were recently granted subject to stockholder approval of
the Amendments and related performance goals and 2,153,399 shares currently
remain available for issuance. Under the Amendments, when Incentives such as
stock appreciation rights or performance shares are paid in cash, the shares to
which the Incentives relate will be credited back and these shares will again
be available for issuance through the Plan. In addition, the Amendments impose
annual limits of 1% of outstanding shares on awards that may be paid in shares
of Common Stock and 5% of outstanding shares on the aggregate of awards paid in
stock and cash. No more than 1% of the total number of outstanding shares of
Common Stock may be awarded through the Plan in any one year, and the
Amendments also provide that no participant may be awarded more than 100,000
shares in one year. A total of 261,644 shares remain available for issuance
under the First Commerce Corporation 1985 Stock Option Plan (the "1985 Plan"),
but the Committee does not intend to make future awards under the 1985 Plan.
The closing sale price of a share of Common Stock as reported on the Nasdaq
National Market on February 28, 1994 was $25.50.
The Committee, in its reasonable discretion, will make proportionate
adjustments to the number of shares of Common Stock subject to the Plan in the
event of any recapitalization, stock dividend, stock split, combination of
shares or other change in the Common Stock of the Corporation, and may also
amend the terms of any Incentive to the extent appropriate to provide
participants with the same relative rights before and after the occurrence of
such an event. Incentives that expire, are terminated or are forfeited may in
some cases be reissued through the Plan.
ELIGIBILITY
Under the Amendments, employees of the Corporation holding the position of
assistant vice president or above (including directors who also hold positions
of assistant vice president or above) who, in the opinion of the Committee,
have significant responsibility for the growth, development and financial
success of the Corporation are eligible to receive Incentives under the Plan
when designated by the Committee. The Amendments allow the Committee to
delegate its authority to the Chief Executive Officer to grant and set the
terms of Incentives awarded to officers who are not subject to Section 16 of
the 1934 Act or Section 162(m) of the Code, subject to ratification by the
Committee. The Corporation has 622 employees who hold the position of assistant
vice president or above who are eligible for consideration to receive
Incentives. For 1994 awards, the Committee considered persons holding the
position of assistant vice president or above who were also in certain salary
grades. A total of 201 employees were eligible to receive 1994 awards with 171
receiving awards.
16
TYPES OF INCENTIVES
Stock Options
The Committee may grant non-qualified or incentive stock options to purchase
shares of Common Stock. Subject to the terms of the Plan, the Committee has the
discretion to determine the number and purchase price of the shares subject to
any option granted, the term of each such option and the time or times during
its term when such option becomes exercisable. Under the Amendments, the
exercise price for stock options must be equal to the fair market value of the
Common Stock on the date of grant. Options that are designated by the Committee
as incentive stock options must comply with Section 422 of the Code.
No options may be exercised during the six-month period immediately following
the date of grant. In addition, if the option holder's employment is terminated
for any reason other than his retirement, death or disability, the option
immediately terminates, unless otherwise determined by the Committee in its
discretion. With respect to all options other than incentive stock options, no
option may be exercised more than six months and one day after retirement or
more than 12 months after termination of employment as a result of the option
holder's death or disability, unless otherwise provided in a stock option
agreement. An incentive stock option must be exercised within one year after
termination of employment as the result of disability and within three months
after termination of employment for any other reason. The term of an option
will be determined by the Committee, but the term of an incentive stock option
may not exceed 10 years.
The Committee may accelerate the exercisability of any option and the
exercisability of outstanding options may also be accelerated upon a change of
control of FCC, as described below. The Committee may determine to cancel stock
options in order to make a participant eligible for the grant of an option at a
lower price. An unexercised stock option may be purchased by FCC for the
difference between the exercise price and the fair market value of the shares
covered by such option with the approval of the Committee and the option
holder.
The option exercise price may be paid in cash, in shares of Common Stock, in
a combination of cash and shares of Common Stock or by delivering a properly
executed exercise notice together with irrevocable instructions to a broker
approved by FCC to sell the shares subject to the option and promptly deliver
to FCC the portion of the sale or loan proceeds necessary to pay the exercise
price.
No stock option granted under the Plan will be transferable by its holder,
except by will or the laws of descent and distribution in the event of the
holder's death. During an employee's lifetime, a stock option may be exercised
only by him or by his guardian or legal representative.
Restricted Stock
The Plan permits the Committee to grant shares of restricted stock to
eligible officers. At the time an award of restricted stock is made, the
Committee will establish a restricted period during which the participant will
be prohibited from transferring or otherwise disposing of the restricted stock
awarded. In addition, the Committee may prescribe conditions for the
incremental lapse of restrictions relating to an award of restricted stock
during the restricted period. An award of restricted stock may also be made
subject to the attainment of specified performance goals or targets and the
shares may be forfeited if the goals or targets are not met. The Committee has
the power to accelerate the lapse of restrictions on shares of restricted
stock.
Participants who receive restricted stock will generally have all rights and
privileges of stockholders regarding such shares, including voting rights and
the right to receive dividends, subject to such terms and conditions as the
Committee may prescribe. Certificates for shares of Common Stock relating to an
award of restricted stock will be issued at the time of grant but will be held
by FCC until termination of the restricted period and the satisfaction of any
conditions applicable to such award.
17
Stock Appreciation Rights
A stock appreciation right or "SAR" is a right to receive, without payment to
the Corporation, a number of shares of Common Stock, cash or any combination
thereof, the amount of which is determined pursuant to the formula described
below. A SAR may be granted in conjunction with a stock option or alone without
reference to any stock option. A SAR granted in conjunction with a stock option
may be granted concurrently with the grant of such option or at such later time
as determined by the Committee and as to all or any portion of the shares
subject to the option.
The Plan confers on the Committee discretion to determine the number of
shares to which a SAR will relate as well as the duration and exercisability
terms of a SAR. In the case of a SAR granted with respect to a stock option,
the number of shares of Common Stock to which the SAR pertains will be reduced
in the same proportion that the holder exercises the related option. Unless
otherwise provided by the Committee, a SAR will be exercisable for the same
time period as any stock option to which it relates. No SAR granted to an
officer subject to Section 16 of the 1934 Act may be exercised during the first
six months of its term. The Committee may accelerate the exercisability of an
SAR.
Upon exercise of an SAR, the holder is entitled to receive an amount which is
equal to the aggregate amount of the appreciation in the shares of Common Stock
as to which the SAR is exercised. For this purpose, the "appreciation" in the
shares consists of the amount by which the fair market value of the shares of
Common Stock on the exercise date exceeds (a) in the case of a SAR related to a
stock option, the purchase price of the shares under the option or (b) in the
case of a SAR granted alone without reference to a related stock option, an
amount determined by the Committee at the time of grant. The Committee may pay
the amount of this appreciation to the holder of the SAR by the delivery of
Common Stock, cash, or any combination of Common Stock and cash.
Stock Awards
Stock awards consist of the transfer by the Corporation to an eligible
employee of shares of Common Stock, without payment, as additional compensation
for his services to the Corporation. The number of shares transferred pursuant
to any stock award will be determined by the Committee.
Performance Shares
Performance shares consist of the grant by the Corporation to an eligible
employee of an award that may be paid in shares of Common Stock or in cash. The
payment of each Performance Share will be subject to the achievement of
performance objectives by the Corporation, a subsidiary, or a department by the
end of a specified period. The number of shares granted and the performance
criteria will be determined by the Committee. If the performance criteria are
met, a participant will be paid (a) a number of shares of Common Stock equal to
the number of performance shares earned; (b) a cash payment equal to the fair
market value of such number of shares of Common Stock; or (c) a combination of
cash and shares of Common Stock. The award of Performance Shares does not
create any rights in a participant as a stockholder of the Corporation until
the issuance of shares of Common Stock with respect to an award. Performance
Shares may be awarded in conjunction with the grant of dividend equivalent
payment rights that entitle a participant to receive an amount equal to the
cash dividends paid on an equal number of shares of Common Stock during the
period beginning on the date of grant of an award and ending on the date on
which the award is paid or is forfeited. Performance shares are not
transferable.
AMENDMENT TO THE PLAN
The Board may amend or discontinue the Plan at the time, provided that no
such amendment or discontinuance may change or impair, without the consent of
the recipient thereof, an Incentive previously granted and provided that
stockholder approval must be obtained if required under Rule 16b-3 of the 1934
Act. Stockholder approval is required under Rule 16b-3 if an amendment would
(a) increase the maximum number of shares of Common Stock issuable under the
Plan to persons who are subject to Section 16 of the 1934 Act ("Insiders"), (b)
permit an additional class of Insiders to participate in the Plan or (c)
materially increase the benefits accruing to Insiders.
18
ACCELERATION OF INCENTIVES UPON CHANGE IN CONTROL
Except as otherwise provided in the Incentive Agreement, if (a) a person or
group of persons, other than an employee benefit plan of the Corporation or
related trust, becomes the beneficial owner of securities representing 40% or
more of the total voting power of FCC; (b) a majority of the members of the
Board of Directors of FCC is replaced within any period of less than two years
by directors not nominated and approved by the Board of Directors; or (c) the
stockholders of FCC approve a reorganization, merger or consolidation with or
into another corporation or an agreement to sell all or substantially all of
the Corporation's assets (including a plan of liquidation), all Incentives will
become immediately exercisable and vested; provided, that a participant may
direct the Committee not to accelerate the exercisability or vesting of his or
her Incentives.
LOANS TO PARTICIPANTS
Under the Amendments, the Committee may authorize the extension of a loan to
a participant by the Corporation to cover the purchase or exercise of an
Incentive and to cover the participant's tax liability that arises in
connection with the Incentive. The terms of the loan will be determined by the
Committee.
AWARDS GRANTED
Since the Amendments were adopted by the Board, the following Incentives have
been granted to the persons and groups described in the table below, subject to
stockholder approval of the amended and restated Plan at the Meeting and, in
the case of restricted stock and performance shares, subject to stockholder
approval of the related performance goals. If the amended and restated Plan is
not approved at the Meeting, all of the awards included in the table below will
be forfeited. If the performance goals for the restricted stock and performance
shares are not approved at the Meeting, all shares of restricted stock and
performance shares included in the table below will be forfeited.
NEW PLAN BENEFITS UNDER THE
AMENDED AND RESTATED 1992 STOCK INCENTIVE PLAN
DOLLAR
VALUE OF
NUMBER NUMBER OF NUMBER RESTRICTED
OF STOCK OF SHARES OF NUMBER OF STOCK AND
STOCK APPRECIATION RESTRICTED PERFORMANCE PERFORMANCE
NAME AND POSITION OPTIONS RIGHTS STOCK SHARES SHARES(1)
----------------- ------- ------------ ------------ ----------- -----------
Ian Arnof, President and
Chief Executive Officer
of FCC................. 6,951 20,854 2,489 1,244 $ 102,671
Joseph V. Wilson III,
Senior Executive Vice
President of FCC....... 2,374 7,122 839 419 $ 34,608
Michael A. Flick,
Executive Vice
President, Chief Credit
Policy Officer and
Secretary of FCC....... 1,398 4,194 504 252 $ 20,790
Ashton J. Ryan, Jr.,
Senior Executive Vice
President of FCC and
President and Chief
Operating Officer of
FNBC................... 2,374 7,122 839 419 $ 34,608
Howard C. Gaines,
Chairman and Chief
Executive Officer of
FNBC................... 1,698 5,094 609 304 $ 25,107
All current executive
officers as a group.... 20,607 61,822 7,296 3,648 $ 300,960
All employees other than
executive officers as a
group.................. 59,371 178,109 2,496 1,248 $ 102,905
- --------
(1) Based on the closing sale price of a share of Common Stock on February 18,
1994, the trading day prior to the date of grant. The shares of restricted
stock and performance shares will vest after three years if specified
performance goals are satisfied. See "Proposal to Approve Performance Goals
for Restricted Stock and Performance Shares."
19
FEDERAL INCOME TAX CONSEQUENCES
Under existing federal income tax provisions, an employee who receives stock
options, SARs or performance shares or who receives shares of restricted stock
that are subject to restrictions which create a "substantial risk of
forfeiture" (within the meaning of Section 83 of the Code) will not normally
realize any income, nor will the Corporation normally receive any deduction for
federal income tax purposes in the year such Incentive is granted. An employee
who receives a stock award under the Plan consisting of shares of Common Stock
will recognize ordinary income in the year of the award in an amount equal to
the fair market value of the shares of Common Stock covered by the award on the
date it is made, and, unless prohibited by Section 162(m) of the Code, the
Corporation will be entitled to a deduction equal to the amount the employee is
required to treat as ordinary income.
When a non-qualified stock option granted pursuant to the Plan is exercised,
the employee will realize ordinary income measured by the difference between
the aggregate purchase price of the shares of Common Stock as to which the
option is exercised and the aggregate fair market value of the shares of Common
Stock on the exercise date, and the Corporation will be entitled to a deduction
in the year the option is exercised equal to the amount the employee is
required to treat as ordinary income.
An employee generally will not recognize any income upon the exercise of any
incentive stock option, but the excess of the fair market value of the shares
at the time of exercise over the option price will be an item of tax
preference, which may, depending on particular factors relating to the
employee, subject the employee to the alternative minimum tax imposed by
Section 55 of the Code. The alternative minimum tax is imposed in addition to
the federal individual income tax, and it is intended to ensure that individual
taxpayers do not completely avoid federal income tax by using preference items.
An employee will recognize capital gain or loss in the amount of the difference
between the exercise price and the sale price on the sale or exchange of stock
acquired pursuant to the exercise of an incentive stock option, provided the
employee does not dispose of such stock within two years from the date of grant
and one year from the date of exercise of the incentive stock option (the
"required holding periods"). An employee disposing of such shares before the
expiration of the required holding periods will recognize ordinary income
generally equal to the difference between the option price and the fair market
value of the stock on the date of exercise. The remaining gain, if any, will be
capital gain. The Corporation will not be entitled to a federal income tax
deduction in connection with the exercise of an incentive stock option, except
where the employee disposes of the Common Stock received upon exercise before
the expiration of the required holding periods.
If the exercise price of an option is paid by the surrender of previously-
owned shares, the basis of the previously-owned shares carries over to the
shares received in replacement therefor. If the option is a non-qualified
option, the income recognized on exercise is added to the basis. If the option
is an incentive stock option, the optionee will recognize gain if the shares
surrendered were acquired through the exercise of an incentive stock option and
have not been held for the required holding periods. This gain will be added to
the basis of the shares received in replacement of the previously-owned shares.
When a SAR is exercised, the employee will recognize ordinary income in the
year the SAR is exercised equal to the value of the appreciation that he is
entitled to receive pursuant to the formula previously described, and the
Corporation will be entitled to a deduction in the same year and in the same
amount.
An employee who receives restricted stock or performance shares will normally
recognize taxable income on the date the shares become transferable or no
longer subject to substantial risk of forfeiture or on the date of their
earlier disposition. The amount of such taxable income will be equal to the
amount by which the fair market value of the shares of Common Stock on the date
such restrictions lapse (or any earlier date on which the shares are disposed
of) exceeds their purchase price, if any. An employee may elect, however, to
include in income in the year of purchase or grant the excess of the fair
market value of the shares of Common Stock (without regard to any restrictions)
on the date of purchase or grant over its purchase price. Subject to the
limitations imposed by Section 162(m) of the Code, the Corporation will be
entitled to a deduction for
20
compensation paid in the same year and in the same amount as income is realized
by the employee. Dividends currently paid to the participant will be taxable
compensation income to the participant and deductible by the Corporation.
The Plan permits a participant, under certain conditions, to elect to have
FCC withhold from the shares the participant would otherwise be entitled to
receive in connection with the receipt of shares under the Plan or the lapse of
restrictions on shares of restricted stock, shares having a fair market value
on such date equal to the amount required to be withheld under applicable
income tax laws. In this way, a participant is not required to provide FCC with
cash sufficient to satisfy his or her tax withholding obligation. The Committee
may disapprove a tax withholding election by a participant or may suspend or
terminate the right to make elections. Under the Amendments, a participant may
satisfy his total tax liability in connection with an Incentive by delivering
previously-owned shares of Common Stock that have been owned by the participant
for six months.
If, upon a change in control of the Corporation, the exercisability or
vesting of an Incentive granted under the Plan is accelerated, any excess on
the date of the change in control of the fair market value of the shares or
cash issued under Incentives over the purchase price of such shares, if any,
may be characterized as Parachute Payments (within the meaning of Section 280G
of the Code) if the sum of such amounts and any other such contingent payments
received by the employee exceeds an amount equal to three times the "Base
Amount" for such employee. The Base Amount generally is the average of the
annual compensation of such employee for the five years preceding such change
in ownership or control. An Excess Parachute Payment, with respect to any
employee, is the excess of the Parachute Payments to such person, in the
aggregate, over and above such person's Base Amount. If the amounts received by
an employee upon a change in control are characterized as Parachute Payments,
such employee will be subject to a 20% excise tax on the Excess Parachute
Payment, and the Corporation will be denied any deduction with respect to such
Excess Parachute Payment.
This summary of federal income tax consequences of non-qualified stock
options, incentive stock options and restricted stock does not purport to be
complete. Reference should be made to the applicable provisions of the Code.
There also may be state and local income tax consequences applicable to
transactions involving Incentives.
VOTE REQUIRED
Approval of the Plan requires the affirmative vote, cast in person or by
proxy, of the holders of at least a majority of the shares of Common Stock
present and entitled to vote at the Meeting.
THE BOARD UNANIMOUSLY RECOMMENDS THAT FCC'S STOCKHOLDERS VOTE FOR APPROVAL OF
THE AMENDED AND RESTATED 1992 STOCK INCENTIVE PLAN.
PROPOSAL TO APPROVE PERFORMANCE GOALS
FOR RESTRICTED STOCK AND PERFORMANCE SHARES
PURPOSE OF THE PROPOSAL
OBRA limits the allowable deduction for compensation paid or accrued with
respect to the Chief Executive Officer and the four other most highly
compensated executive officers of the Corporation to $1 million per year
beginning in 1994. An exclusion from the $1 million limitation is available for
compensation that satisfies the requirements provided in new Section 162(m) of
the Code for qualified performance-based compensation. Restricted stock and
performance shares granted under the Plan will qualify as performance-based
compensation if, in addition to the satisfaction of other requirements, these
awards are vested or earned as a result of the achievement of performance goals
pre-established in writing by the Committee and the material terms of the
performance goals are disclosed to and approved by the stockholders. If the
stockholders do not approve the performance goals at the Meeting, the
restricted stock and performance shares to be earned upon achievement of the
goals will be automatically cancelled. In such case, the Committee may
determine to make other awards to replace the cancelled awards.
21
THE PROPOSAL
Eligibility
Shares of restricted stock and performance shares have been awarded in 1994
to the fifteen most highly paid officers of the Corporation. See "Proposal to
Approve the Amended and Restated 1992 Stock Incentive Plan--Awards Granted" for
more information on the number of shares of restricted stock and performance
shares awarded to the five most highly paid executive officers and certain
other groups. No officer was granted a larger number of shares of restricted
stock or performance shares than the number granted to the Chief Executive
Officer. In future years, restricted stock and performance shares may be
awarded to officers who are included in FCC's highest salary range. Under the
Plan, no participant may receive more than 100,000 shares through the Plan in
one year.
Business Criteria
The restricted stock and performance shares will vest or be forfeited based
on the Corporation's relative return on equity for the three-year period ending
December 31, 1996 as compared to the return on equity of the other banks or
bank holding companies included in a peer group established by Keefe, Bruyette
& Woods, Inc. of companies with total assets of between $5 million and $10
billion (the "KBW Peer Group"). The KBW Peer Group currently consists of 25
companies, but the identity and number of companies is subject to change by
Keefe, Bruyette & Woods, Inc.
Notwithstanding the foregoing, no performance shares or restricted stock will
vest or be earned, except in the case of death, unless the officer remains
employed by the Corporation through December 31, 1996, the Corporation's
average annual return on equity for the three-year period ending December 31,
1996 is 10% or higher and cumulative core earnings per share for the three-year
period are at least equal to those of the prior three-year period. Core
earnings per share are based on net income adjusted for provisions for loan
losses, securities transactions, nonperforming assets expense and other special
one time material items.
If these threshold requirements are met, then all performance shares will be
earned and paid in shares of Common Stock only if the Corporation ranks in the
top 10% of the KBW Peer Group for the three-year period. If the Corporation is
not in the top 10%, the performance shares will be forfeited.
The shares of restricted stock will vest or be forfeited as follows:
PERCENTAGE OF
THE CORPORATION'S POSITION RESTRICTED STOCK
IN THE KBW PEER GROUP THAT WILL VEST
-------------------------- ----------------
Top 25%.................................................. 100%
Between the top 25% and the top 50% (above the median)... 80%
At the median............................................ 50%
Bottom 50% (below the median)............................ 0%
Any shares of restricted stock that do not vest will be forfeited.
The Committee may not waive any of the conditions or performance goals
described above. Under the terms of the Plan, however, in the event of a change
of control of the Corporation, the restricted stock and the performance shares
will automatically vest. In the event the officer dies during the three-year
performance period and the performance shares and restricted stock vest, the
officer's estate will be paid a pro rata portion of those awards based on the
portion of the performance period that elapsed prior to the date of death.
If the relative return on equity performance goals described above are used
in connection with future grants of restricted stock and performance shares,
the Committee may utilize percentage targets other than those used for the 1994
grants.
Prior to the payment of any performance shares or the release of restrictions
on restricted stock, the Committee must certify in writing that the performance
goals and all applicable conditions have been met.
22
VOTE REQUIRED
Approval of the proposal to approve the performance goals requires the vote
of a majority of the votes cast.
THE BOARD UNANIMOUSLY RECOMMENDS THAT FCC'S STOCKHOLDERS VOTE FOR THE
PROPOSAL TO APPROVE THE PERFORMANCE GOALS FOR THE RESTRICTED STOCK AND
PERFORMANCE SHARES.
PROPOSAL TO APPROVE THE CHIEF EXECUTIVE
OFFICER SHAREMAX PLAN
THE PROPOSAL
The annual cash incentive bonus to be paid to Ian Arnof, the Corporation's
President and Chief Executive Officer, for 1994 performance will be paid
pursuant to the Chief Executive Officer Sharemax Plan (the "CEO Plan"). The CEO
Plan was adopted by the Committee on February 22, 1994, subject to stockholder
approval of the CEO Plan and the performance goals contained therein at the
Meeting. If the CEO Plan is not approved at the Meeting, the annual cash
incentive bonus to be paid to Mr. Arnof under the CEO Plan will not be paid. In
that event, the Committee may decide to pay Mr. Arnof a cash incentive bonus
other than the bonus provided for in the CEO Plan.
PURPOSE OF THE PROPOSAL
As with the restricted stock and performance share awards described in
"Proposal to Approve the Performance Goals for Restricted Stock and Performance
Shares," the purpose of submitting the CEO Plan and the performance goals
contained therein to the stockholders is to satisfy the stockholder approval
requirement necessary in order to qualify compensation as performance-based
and, therefore, excluded from the $1 million limit on deductible compensation
under OBRA.
THE PLAN
Eligibility and Administration
The only employee eligible to participate in the CEO Plan is Ian Arnof. The
CEO Plan is administered by the Committee and the Committee has the power to
establish performance goals, adopt regulations and make all determinations
necessary for the administration of the CEO Plan.
Business Criteria
Under the CEO Plan, Mr. Arnof is eligible to be paid a cash bonus in an
amount up to 120% of his annual salary, based on the achievement of annual
performance goals. Mr. Arnof's annual salary for 1994 is $525,000. In order for
any cash bonus to be paid, the Corporation must either (i) achieve a threshold
performance level for the year of at least 15% return on equity and 1.25%
return on assets or (ii) be ranked in the top 50% of the fifty companies
included in the KBW Fifty Total Return Index, ranked as to both return on
equity and return on assets. If the threshold requirement is met, the amount of
Mr. Arnof's bonus will be calculated based on a formula that considers levels
of loan volume, deposit volume, net interest margin, fee income, charge-offs
and pre-tax income divided by salaries and benefits.
The Committee has no discretion to increase the amount of the bonus paid to
Mr. Arnof from the amount that is payable under the terms of the pre-
established formula for the applicable year. The Committee has reserved the
right to change the targets applicable to the individual performance goals
listed above in future years. Prior to the payment of the annual bonus under
the CEO Plan, the Committee must certify in writing that the performance goals
and the applicable conditions to the payment of the bonus have been met.
If Mr. Arnof's employment is terminated as the result of normal retirement,
early retirement (with the Corporation's permission), permanent disability or
death, Mr. Arnof or his heirs will receive the incentive bonus as earned
pursuant to the applicable formula for the year in which the termination of
employment occurred. If his employment is terminated for any other reason, he
will not receive an award for that year.
23
The Committee may amend, suspend or terminate the Plan at any time. Any
amendment or termination of the Plan shall not, however, affect the right of
Mr. Arnof to receive an incentive bonus earned for the year during which the
Plan was amended or terminated or any earned but unpaid incentive bonus. The
Plan consists of individual calendar year plans, beginning effective January 1,
1994 and each consecutive January 1 thereafter until the Plan is terminated by
the Committee.
DESCRIPTION OF COMPENSATION
The maximum bonus that will be paid to Mr. Arnof under the CEO Plan if all
performance goals are achieved at the highest level is $630,000.
VOTE REQUIRED
Approval of the proposal to approve the CEO Plan, including the performance
goals, requires the vote of a majority of the votes cast.
THE BOARD UNANIMOUSLY RECOMMENDS THAT FCC'S STOCKHOLDERS VOTE FOR THE
PROPOSAL TO APPROVE THE CEO PLAN.
RELATIONSHIP WITH INDEPENDENT
PUBLIC ACCOUNTANTS
FCC's consolidated financial statements for the year ended December 31, 1993
were audited by the firm of Arthur Andersen & Co. Under the resolution
appointing Arthur Andersen & Co. to audit FCC's financial statements, such firm
will remain as FCC's auditors until replaced by the Board. Representatives of
Arthur Andersen & Co. are expected to be present at the Meeting, with the
opportunity to make any statement they desire at that time, and will be
available to respond to appropriate questions.
OTHER MATTERS
QUORUM AND VOTING OF PROXIES
The presence, in person or by proxy, of a majority of the outstanding shares
of Common Stock is necessary to constitute a quorum. Stockholders voting, or
abstaining from voting, by proxy on any issue will be counted as present for
purposes of constituting a quorum. If a quorum is present, the election of
directors is determined by plurality vote, the affirmative vote of a majority
of the shares present or represented by proxy and entitled to vote is required
to approve the proposal to approve the amended and restated Plan and a majority
of the votes cast is required to approve the proposal to approve the
performance goals for restricted stock and performance shares and the proposal
to approve the CEO Plan. An abstention will have the effect of a vote against
the proposal to approve the amended and restated Plan and will have no effect
on the other proposals. If brokers not receiving instructions from beneficial
owners as to the granting or withholding of proxies may not or do not exercise
discretionary power to grant a proxy with respect to such shares (a "broker
non-vote") on a proposal, shares not voted on a proposal as a result will be
counted as not present and not cast with respect to the proposal.
24
All proxies received by FCC in the form enclosed will be voted as specified
and, in the absence of instructions to the contrary, will be voted for each of
the Proposals and for the election of the nominees named herein. FCC does not
know of any matters to be presented at the Meeting other than those described
herein. However, if any other matters properly come before the Meeting or any
adjournment thereof, it is the intention of the persons named in the enclosed
proxy to vote the shares represented by them in accordance with their best
judgment.
STOCKHOLDER PROPOSALS
Eligible stockholders who desire to present a proposal qualified for
inclusion in the proxy materials relating to the 1995 annual meeting of FCC
must forward such proposals to the Secretary of FCC at the address listed on
the first page of this Proxy Statement in time to arrive at FCC prior to
November 13, 1994.
By Order of the Board of Directors
(Signature of Michael A. Flick appears here)
Michael A. Flick
Secretary
New Orleans, Louisiana
March 14, 1994
25
FIRST COMMERCE CORPORATION
PROXY SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
FOR THE ANNUAL MEETING OF STOCKHOLDERS ON APRIL 18, 1994
The undersigned hereby appoints Amos T. Beason, David B. Kelso and Clifton J.
Saik or any one or more of them, proxies for the undersigned, with full power of
substitution, to vote all shares of Common Stock of First Commerce Corporation
that the undersigned is entitled to vote at the annual meeting of stockholders
to be held April 18, 1994, and any adjournments thereof.
Election of Directors, Nominees:
Ian Arnof, James J. Bailey III, John W. Barton, Sydney J. Besthoff III,
Robert H. Bolton, Frances B. Davis, Laurence Eustis, Jr., William P.
Fuller, Arthur Hollins III, F. Ben James, Jr., Erik F. Johnsen, J. Merrick
Jones, Jr., Edwin Lupberger, Hermann Moyse, Jr., O. Miles Pollard, Jr.,
G. Frank Purvis, Jr., Edward M. Simmons, H. Leighton Steward, J.B. Storey,
Robert A. Weigle.
Please specify your choices by marking the appropriate boxes on the reverse
side. IF NO SPECIFIC DIRECTIONS ARE GIVEN, THIS PROXY WILL BE VOTED FOR ALL
NOMINEES AND PROPOSALS LISTED HEREIN. YOUR SHARES CANNOT BE VOTED UNLESS YOU
SIGN, DATE AND RETURN THIS PROXY.
/X/ Please mark your
votes as in this
example.
To withhold authority to vote for any individual nominee(s) mark the FOR
box in Proposal 1 and write that nominee's name(s) on
the space provided below the boxes.
The Board of Directors recommends a vote for proposals 1,2,3 and 4.
1. Election of Directors FOR WITHHELD
(see reverse) / / / /
FOR, except vote WITHHELD from the following nominee(s):
- --------------------------------------------------------
2. Approval of the Proposal to approve the Amended and FOR AGAINST ABSTAIN
Restated 1992 Stock Incentive Plan (the "Plan"). / / / / / /
3. Approval of the Proposal to approve the performance FOR AGAINST ABSTAIN
goals applicable to awards of restricted stock and / / / / / /
performance shares granted under the Plan.
4. Approval of the Proposal to approve the Chief FOR AGAINST ABSTAIN
Executive Officer Sharemax Plan. / / / / / /
5. In their discretion, to transact such other business
as may properly come before the meeting and any
adjournments thereof.
Please sign exactly as name appears hereon. Joint owners should each sign.
When signing as attorney, executor, administrator, trustee or guardian, please
give full title as such. The signer hereby revokes all authorizations
heretofore given by the signer to vote at the meeting or any adjournments
thereof.
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
SIGNATURE(S) DATE
FIRST COMMERCE CORPORATION
AMENDED AND RESTATED
1992 STOCK INCENTIVE PLAN
SECTION 1. PURPOSE. The purpose of the First Commerce Corporation
1992 Stock Incentive Plan (the "Plan") is to increase shareholder value and to
advance the interests of First Commerce Corporation ("FCC") and its subsidiaries
(collectively, the "Company") by granting stock options, stock appreciation
rights, stock awards, restricted stock and performance share awards (the
"Incentives") to key officers of the Company in order to attract, retain and
motivate these officers.
SECTION 2. ADMINISTRATION.
SECTION 2.1 COMPOSITION. The Plan shall be administered by the
Compensation Committee (the "Committee") of the Board of Directors of FCC.
The Committee shall consist of not fewer than two members of the Board of
Directors, all of whom shall (a) to the extent required, qualify to
administer the Plan under Rule 16b-3 under the Securities Exchange Act of
1934 (the "Exchange Act") as currently in effect or any successor rule, and
(b) beginning on the date of the Company's 1995 annual meeting of
shareholders, qualify as "outside directors" under Section 162(m) of the
Internal Revenue Code of 1986, as amended (the "Code").
SECTION 2.2 AUTHORITY. The Committee shall have plenary authority to
award Incentives under the Plan, to set the terms of such Incentives, to
interpret the Plan, to establish any rules or regulations relating to the
Plan that it determines to be appropriate, and to make any other
determination that it believes necessary or advisable for the proper
administration of the Plan. Its decisions in matters relating to the Plan
shall be final and conclusive on the Company and participants. The
Committee may delegate its authority hereunder to the extent provided
elsewhere herein.
SECTION 3. ELIGIBLE PARTICIPANTS. Employees of the Company holding the
position of assistant vice-president or above (including directors who also hold
positions of assistant vice-president or above) who, in the opinion of the
Committee have significant responsibility for the continued growth, development
and financial success of the Company shall become eligible to receive Incentives
under the Plan when designated by the Committee. Participants may be designated
individually or by groups or categories as the Committee deems appropriate.
With respect to participants not subject to Section 16 of the Exchange Act and
not covered employees under Section 162(m) of the Code, the Committee may
delegate to the Chief Executive Officer of FCC its authority to designate
participants, to determine the size and type of Incentive to be received by
those participants and to determine or modify performance objectives for those
participants, subject to ratification by the Committee.
SECTION 4. TYPES OF INCENTIVES. Incentives may be granted under the Plan
in any of the following forms, either individually or in combination, (a)
incentive stock options and non-
1
qualified stock options; (b) stock appreciation rights ("SARs"); (c) stock
awards; (d) restricted stock and (e) performance shares.
SECTION 5. SHARES SUBJECT TO THE PLAN.
SECTION 5.1 NUMBER OF SHARES. Subject to adjustment as provided in
Section 11.5, the total number of shares of FCC common stock, $5.00 par
value per share (the "Common Stock"), with respect to which Incentives may
be granted under the Plan shall not exceed ten percent of the total number
of outstanding shares of Common Stock during the effectiveness of the Plan.
In addition, Incentives that may be paid in shares of Common Stock granted
in any one year shall not exceed one percent of the total number of shares
outstanding and the aggregate of Incentives that may be paid in shares of
Common Stock and Incentives that must be paid in cash granted in one year
shall not exceed five percent of the total number of shares outstanding.
Incentives with respect to no more than 100,000 shares of Common Stock may
be granted through the Plan to a single participant in one calendar year.
If and to the extent that an Incentive is paid in cash rather than shares
of Common Stock, the total number of shares available for issuance during
the effectiveness of the Plan hereunder shall be credited with the
appropriate number of shares represented by the cash payment of the
Incentive, as determined in the sole discretion of the Committee.
SECTION 5.2 CANCELLATION. If a stock option or stock appreciation
right granted hereunder expires or is terminated or cancelled as to any
shares of Common Stock, such shares may again be issued under the Plan. If
shares of Common Stock are issued as restricted stock or as stock awards
and thereafter are forfeited or reacquired by the Company pursuant to
rights reserved upon issuance thereof, such forfeited and reacquired shares
may again be issued under the Plan, if such issuance does not result in a
violation of Rule 16-3 under the Act or any successor rule. The Committee
may also determine to cancel, and agree to the cancellation of, stock
options and stock appreciation rights in order to grant new stock options
or stock appreciation rights to the same participant at a lower price than
the options or stock appreciation rights to be cancelled.
SECTION 5.3 TYPE OF COMMON STOCK. Common Stock issued under the
Plan in connection with Incentives may be authorized and unissued shares or
issued shares held as treasury shares.
SECTION 5.4 REINVESTMENT OF DIVIDENDS. Shares of Common Stock that
are delivered to a participant in the Plan as a result of the reinvestment
of dividends in conjunction with restricted stock shall be applied against
the maximum number of shares provided in Section 5.1.
SECTION 6. STOCK OPTIONS. A stock option is a right to purchase shares
of Common Stock from the Company. Each stock option granted by the Committee
under the Plan shall be subject to the following terms and conditions:
2
SECTION 6.1 PRICE. The option price per share shall be equal to the
Fair Market Value (as defined in Section 11.11) of a share of Common Stock
on the date of grant, subject to adjustment under Section 11.5.
SECTION 6.2 NUMBER. The number of shares of Common Stock subject to
the option shall be determined by the Committee, subject to adjustment as
provided in Section 11.5.
SECTION 6.3 DURATION AND TIME FOR EXERCISE. The term of each option
shall be determined by the Committee. Each option shall become exercisable
at such time or times during its term as shall be determined by the
Committee and as provided in Section 11.10; provided, however, that, except
as provided in Section 11.10, no stock option shall be exercisable within
the six month period immediately following the date of grant and, unless
otherwise provided in the stock option agreement, all stock options shall
expire (a) 12 months from the date of termination of employment as the
result of death or disability, (b) six months and one day after termination
of employment as a result of retirement and (c) immediately if employment
terminates for any other reason, including resignation and termination for
cause. The Committee may in its discretion extend the term of options
which would otherwise expire as a result of resignation or termination for
cause. The Committee may also impose such terms and conditions to the
exercise of each option as it deems advisable and may accelerate the
exercisability of any outstanding option at any time in its sole
discretion.
SECTION 6.4 REPURCHASE. Upon approval of the Committee, the Company
may repurchase a previously granted stock option from a participant by
mutual agreement before such option has been exercised by payment to the
participant of the amount per share by which: (a) the Fair Market Value of
the Common Stock subject to the option on the date of purchase exceeds (b)
the option price.
SECTION 6.5 MANNER OF EXERCISE. A stock option may be exercised, in
whole or in part, by giving written notice to the Company, specifying the
number of shares of Common Stock to be purchased. The exercise notice
shall be accompanied by the full purchase price for such shares. The
option price shall be payable in United States dollars and may be paid (a)
by cash, uncertified or certified check or bank draft, (b) by delivery of
shares of Common Stock held by the optionee for at least six months in
payment of all or any part of the option price, which shares shall be
valued for this purpose at the Fair Market Value on the date such option is
exercised, (c) by delivering a properly executed exercise notice together
with irrevocable instructions to a broker approved by the Company (with a
copy to the Company) to promptly deliver to the Company the amount of sale
or loan proceeds to pay the exercise price or (d) in such other manner as
may be authorized from time to time by the Committee. Shares of Common
Stock delivered in payment of the exercise price that were acquired upon
the exercise of a stock option are deemed to have been held from the date
of grant of the stock option. In the case of delivery of an uncertified
check or bank draft upon exercise of a stock option, no shares shall be
issued until the check or draft has been paid in full. Prior to the
issuance
3
of shares of Common Stock upon the exercise of a stock option, a
participant shall have no rights as a stockholder.
SECTION 6.6 INCENTIVE STOCK OPTIONS. Notwithstanding anything in
the Plan to the contrary, the following additional provisions shall apply
to the grant of stock options that are intended to qualify as incentive
stock options (as such term is defined in Section 422 of the Internal
Revenue Code of 1986, as amended (the "Code"):
(a) Any incentive stock option authorized under the Plan shall
contain such other provisions as the Committee shall deem advisable,
but shall in all events be consistent with and contain or be deemed to
contain all provisions required in order to qualify the options as
incentive stock options;
(b) All incentive stock options must be granted within ten years
from the date on which this Plan was adopted by the Board of
Directors;
(c) Unless sooner exercised, all incentive stock options shall
expire no later than ten years after the date of grant;
(d) No incentive stock option shall be granted to any
participant who, at the time such option is granted, would own (within
the meaning of Section 422 of the Code) stock possessing more than 10%
of the total combined voting power of all classes of stock of the
employer corporation or of its parent or subsidiary corporation; and
(e) The aggregate Fair Market Value (determined with respect to
each incentive stock option as of the time such incentive stock option
is granted) of the Common Stock with respect to which incentive stock
options are exercisable for the first time by a participant during any
calendar year (under the Plan or any other plan of the Company) shall
not exceed $100,000. To the extent that such limitation is exceeded,
such options shall not be treated, for federal income tax purposes, as
incentive stock options.
SECTION 6.7 NON-TRANSFERABILITY OF OPTIONS. Options granted under
the Plan shall not be transferable otherwise than by will or by the laws of
descent and distribution or pursuant to a qualified domestic relations
order, as defined by the Code, and options may be exercised during the
lifetime of a participant only by the participant or by the participant's
guardian or legal representative. Any attempted assignment, transfer,
pledge, hypothecation or other disposition of an option, or levy of
attachment or similar process upon the option not specifically permitted
herein shall be null and void and without effect.
SECTION 7. RESTRICTED STOCK
SECTION 7.1 GRANT OF RESTRICTED STOCK. The Committee may award
shares of restricted stock to such key employees as the Committee
determines to be eligible pursuant to the terms of Section 3. An award of
restricted stock may be subject to the
4
attainment of specified performance goals or targets, restrictions on
transfer, forfeitability provisions and on such other terms and conditions
as the Committee may determine, subject to the provisions of the Plan. To
the extent restricted stock is intended to qualify as performance based
compensation under Section 162(m) of the Code, it must meet the additional
requirements imposed thereby.
SECTION 7.2 AWARD AND DELIVERY OF RESTRICTED STOCK. At the time an
award of restricted stock is made, the Committee shall establish a period
of time (the "Restricted Period") applicable to such an award. Each award
of restricted stock may have a different Restricted Period. The Committee
may, in its sole discretion, prescribe conditions for the lapse of
restrictions upon death, disability, retirement or other termination of
employment or for the lapse or termination of restrictions upon the
satisfaction of other conditions in addition to or other than the
expiration of the Restricted Period with respect to all or any portion of
the shares of restricted stock. In addition, any participant subject to
Section 16 of the Exchange Act shall be prohibited from selling shares of
restricted stock for a period of six months from the grant thereof. The
Committee shall have the power to accelerate the expiration of the
Restricted Period with respect to all or any part of the shares awarded to
a participant and the expiration of the Restricted Period shall
automatically occur under the conditions described in Section 11.10 hereof.
SECTION 7.3 ESCROW. In order to enforce the restrictions imposed by
the Committee pursuant to this Section 7, the participant receiving
restricted stock shall enter into an agreement with the Company setting
forth the conditions of the grant. Certificates representing shares of
restricted stock shall be registered in the name of the participant and
deposited with the Company, together with a stock power endorsed in blank
by the participant. Each such certificate shall bear a legend in
substantially the following form:
The transferability of this certificate and the shares of Common Stock
represented by it are subject to the terms and conditions (including
conditions of forfeiture) contained in the First Commerce Corporation
1992 Stock Incentive Plan (the "Plan"), and an agreement entered into
between the registered owner and First Commerce Corporation. Copies
of the Plan and the agreement are on file at the principal office of
the Company.
SECTION 7.4 DIVIDENDS ON RESTRICTED STOCK. Any and all cash and
stock dividends paid with respect to the shares of restricted stock shall
be subject to any restrictions on transfer, forfeitability provisions or
reinvestment requirements as the Committee may, in its discretion,
determine.
SECTION 7.5 FORFEITURE. Upon the forfeiture of any restricted stock
(including any additional shares of restricted stock that may result from
the reinvestment of cash and stock dividends in accordance with such rules
as the Committee may establish pursuant to Section 7.4), such forfeited
shares shall be surrendered. The participants shall have the same rights
and privileges, and be subject to the same forfeiture provisions with
respect to any additional shares received pursuant to Section 11.5 due to a
recapitalization, merger or other change in capitalization.
5
SECTION 7.6 EXPIRATION OF RESTRICTED PERIOD. Upon the expiration or
termination of the Restricted Period and the satisfaction of any other
conditions prescribed by the Committee or at such earlier time as provided
for in Section 7.2 and in the restricted stock agreement, the restrictions
applicable to the restricted stock shall lapse and a stock certificate for
the number of shares of restricted stock with respect to which the
restrictions have lapsed shall be delivered, free of all such restrictions,
except any that may be imposed by law, to the participant or the
participant's estate, as the case may be.
SECTION 7.7 RIGHTS AS A STOCKHOLDER. Subject to the terms and
conditions of the Plan and subject to any restrictions on the receipt of
dividends that may be imposed by the Committee, each participant receiving
restricted stock shall have all the rights of a stockholder with respect to
shares of stock during any period in which such shares are subject to
forfeiture and restrictions on transfer, including without limitation, the
right to vote such shares. Unless otherwise restricted by the Committee,
dividends paid in cash or property, other than Common Stock with respect to
shares of restricted stock, shall be paid to the participant currently.
SECTION 8. STOCK APPRECIATION RIGHTS. A SAR is a right to receive,
without payment to the Company, a number of shares of Common Stock, cash or any
combination thereof, the amount of which is determined pursuant to the formula
set forth in Section 8.4. A SAR may be granted (a) with respect to any stock
option granted under the Plan, either concurrently with the grant of such stock
option or at such later time as determined by the Committee (as to all or any
portion of the shares of Common Stock subject to the stock option), or (b)
alone, without reference to any related stock option. Each SAR granted by the
Committee under the Plan shall be subject to the following terms and conditions:
SECTION 8.1 NUMBER. Each SAR granted to any participant shall relate
to such number of shares of Common Stock as shall be determined by the
Committee, subject to adjustment as provided in Section 11.5. In the case
of a SAR granted with respect to a stock option, the number of shares of
Common Stock to which the SAR pertains shall be reduced in the same
proportion that the holder of the option exercises the related stock
option.
SECTION 8.2 DURATION. The term of each SAR shall be determined by
the Committee. Unless otherwise provided by the Committee, each SAR shall
become exercisable at such time or times, to such extent and upon such
conditions as the stock option, if any, to which it relates is exercisable.
No SAR granted to an officer subject to Section 16 of the Exchange Act may
be exercised during the first six months of its term. Notwithstanding the
foregoing, the Committee may in its discretion accelerate the
exercisability of any SAR.
SECTION 8.3 EXERCISE. A SAR may be exercised, in whole or in part,
by giving written notice to the Company, specifying the number of SARs that
the holder wishes to exercise. The date that the Company receives such
written notice shall be referred to herein as the "Exercise Date." The
Company shall, within 30 days of an Exercise Date, deliver to the
exercising holder certificates for the shares of Common Stock or cash or
6
both, as determined by the Committee, to which the holder is entitled
pursuant to Section 8.4.
SECTION 8.4 PAYMENT. Subject to the right of the Committee to
deliver cash in lieu of shares of Common Stock, the number of shares of
Common Stock that shall be issuable upon the exercise of an SAR shall be
determined by dividing:
(a) the number of shares of Common Stock as to which the SAR is
exercised multiplied by the amount of the appreciation in such shares
(for this purpose, the "appreciation" shall be the amount by which the
Fair Market Value of the shares of Common Stock subject to the SAR on
the Exercise Date exceeds (1) in the case of a SAR related to a stock
option, the purchase price of the shares of Common Stock under the
stock option or (2) in the case of a SAR granted alone, without
reference to a related stock option, an amount equal to the Fair
Market Value of a share of Common Stock on the date of grant, which
shall be determined by the Committee at the time of grant, subject to
adjustment under Section 11.5); by
(b) the Fair Market Value of a share of Common Stock on the
Exercise Date.
In lieu of issuing shares of Common Stock upon the exercise of a SAR,
the Committee may elect to pay the holder of the SAR cash equal to the Fair
Market Value on the Exercise Date of any or all of the shares which would
otherwise be issuable. No fractional shares of Common Stock shall be
issued upon the exercise of a SAR; instead, the holder of a SAR shall be
entitled to receive a cash adjustment equal to the same fraction of the
Fair Market Value of a share of Common Stock on the Exercise Date or to
purchase the portion necessary to make a whole share at its Fair Market
Value on the Exercise Date.
SECTION 9. STOCK AWARDS. A stock award consists of the transfer by the
Company to a participant of shares of Common Stock, without other payment
therefor, as additional compensation for services previously provided to the
Company. The number of shares to be transferred by the Company to a participant
pursuant to a stock award shall be determined by the Committee. To the extent a
stock award is intended to qualify as performance based compensation under
Section 162(m) it must meet the additional requirements imposed thereby.
SECTION 10. PERFORMANCE SHARES. A performance share consists of an
award that may be paid in shares of Common Stock or in cash, as described below.
The award of performance shares shall be subject to such terms and conditions as
the Committee deems appropriate, includ-ing the following:
SECTION 10.1 PERFORMANCE OBJECTIVES. Each performance share will be
subject to performance objectives for the Company or one of its
subsidiaries or departments to be achieved by the end of a specified
period. The number of performance shares awarded shall be determined by
the Committee and may be subject to such terms and conditions,
7
as the Committee shall determine. If the performance objectives are
achieved, each participant will be paid (a) a number of shares of Common
Stock equal to the number of performance shares initially granted to that
participant; (b) a cash payment equal to the Fair Market Value of such
number of shares of Common Stock on the date the performance objectives are
met or such other date as may be provided by the Committee or (c) a
combination of shares of Common Stock and cash, as may be provided by the
Committee. If such objectives are not met, each award of performance
shares may provide for lesser payments in accordance with the established
formula. To the extent a performance share is intended to qualify as
performance based compensation under Section 162(m) of the Code, it must
meet the additional requirements imposed thereby.
SECTION 10.2 NOT A SHAREHOLDER. The award of performance shares to
a participant shall not create any rights in such participant as a
shareholder of the Company, until the payment of shares of Common Stock
with respect to an award.
SECTION 10.3 DIVIDEND EQUIVALENT PAYMENTS. A performance share
award may be granted by the Committee in conjunction with dividend
equivalent payment rights or other such rights. If so granted, an
adjustment shall be made in performance shares awarded on account of cash
dividends that may be paid or other rights that may be issued to the
holders of Common Stock prior to the end of any period for which
performance objectives were established.
SECTION 10.4 NON-TRANSFERABILITY OF PERFORMANCE SHARES. No
performance share may be transferred, pledged or assigned by the holder
thereof (except, in the event of the holder's death, by will or the laws of
descent and distribution) and the Company shall not be required to
recognize any attempted assignment of such performance share by any
participant.
SECTION 11. GENERAL.
SECTION 11.1 DURATION. The Plan shall remain in effect until all
Incentives granted under the Plan have either been satisfied by the
issuance of shares of Common Stock or the payment of cash or been
terminated under the terms of the Plan and all restrictions imposed on
shares of restricted stock in connection with their issuance under the Plan
have lapsed.
SECTION 11.2 EFFECT OF TERMINATION OF EMPLOYMENT OR DEATH. If a
participant ceases to be an employee of the Company for any reason,
including death, any Incentives may be exercised or shall expire as
provided herein or as may be determined by the Committee in the Incentive
Agreement.
SECTION 11.3 LEGAL AND OTHER REQUIREMENTS. The obligation of the
Company to sell and deliver Common Stock under the Plan shall be subject to
all applicable laws, regulations, rules and approvals, including, but not
by way of limitation, the effectiveness of a registration statement under
the Securities Act of 1933 if deemed necessary or appropriate by the
Company.
8
SECTION 11.4 NON-TRANSFERABILITY OF COMMON STOCK. Any shares of Common
Stock awarded to a participant subject to Section 16 of the Exchange Act
through a stock award, as restricted stock or in payment of a performance
share award must be held for a period of six months from the date of grant,
unless otherwise permitted to be transferred and still be in compliance
with Rule 16b-3 under the Exchange Act.
SECTION 11.5 ADJUSTMENT. In the event of any merger, consolidation
or reorganization of the Company with any other corporation or
corporations, there shall be substituted for each of the shares of Common
Stock then subject to the Plan, including shares subject to restrictions,
options, or achievement of performance share objectives, the number and
kind of shares of stock or other securities to which the holders of the
shares of Common Stock will be entitled pursuant to the transaction. In
the event of any recapitalization, stock dividend, stock split, combination
of shares or other change in the Common Stock, the number of shares of
Common Stock then subject to the Plan, including shares subject to
restrictions, options or achievement of performance share objectives, shall
be adjusted in proportion to the change in outstanding shares of Common
Stock. In the event of any such adjustments, the purchase price of any
option, the performance objectives of any Incentive, and the shares of
Common Stock issuable pursuant to any Incentive shall be adjusted as and to
the extent appropriate, in the reasonable discretion of the Committee, to
provide participants with the same relative rights before and after such
adjustment.
SECTION 11.6 INCENTIVE AGREEMENTS. The terms of each Incentive
shall be stated in an agreement approved by the Committee. The Committee
may also determine to enter into agreements with holders of options to
reclassify or convert certain outstanding options, within the terms of the
Plan, as incentive stock options or as non-qualified stock options with
respect to all or part of such options and any other previously issued
options. Notwithstanding anything to the contrary contained in the Plan,
the Company is under no obligation to grant an Incentive to a participant
or continue an Incentive in force unless the participant executes all
appropriate agreements with respect to such Incentives in such form as the
Committee may determine from time to time.
SECTION 11.7 WITHHOLDING. At any time that a participant is
required to pay to the Company an amount required to be withheld under the
applicable income tax laws in connection with the issuance of shares of
Common Stock under the Plan or upon the lapse of restrictions on shares of
restricted stock, the participant may, subject to the Committee's right of
disapproval, satisfy this obligation in whole or in part by electing (the
"Election") to have the Company withhold from the distribution shares of
Common Stock having a value equal to the amount required to be withheld.
The value of the shares withheld shall be based on the Fair Market Value of
the Common Stock on the date that the amount of tax to be withheld shall be
determined (the "Tax Date").
Each Election must be made prior to the Tax Date. The Committee may
disapprove of any Election or may suspend or terminate the right to make
Elections. If a participant makes an election under Section 83(b) of the
Internal Revenue Code with respect to shares of restricted stock, an
Election is not permitted to be made.
9
If a participant is an officer of the Company within the meaning of Section
16 of the Exchange Act, then the exemption provided by Rule 16b-3(e) under
the Exchange Act for the stock withholding transaction will only be
available if the Election meets the following additional provisions:
(a) No Election shall be effective for a Tax Date that occurs
within six months of the grant of the option or restricted stock.
(b) The Election must be made either (i) six months prior to the
Tax Date or (ii) during a period beginning on the third business day
following the date of release for publication of the Company's
quarterly or annual summary statements of earnings and ending on the
twelfth business day following such date (a "window period"). If the
Election is made under (b)(ii) hereof and relates to the exercise of
an option, the exercise must also occur during a window period.
(c) The Election is irrevocable except upon six months' advance
written notice to the Company.
A participant may also satisfy his or her total tax liability related
to the Incentive by delivering shares of Common Stock that have been owned
by the participant for at least six months. Satisfaction of the tax
obligation through the use of previously owned shares does not require
compliance with the procedures described above applicable to an Election to
have shares withheld from the shares otherwise issuable under the
Incentive. The value of the shares delivered shall be based on the Fair
Market Value of the Common Stock on the Tax Date.
SECTION 11.8 NO CONTINUED EMPLOYMENT. No participant in the Plan
shall have any right, because of his or her participation, to continue in
the employ of the Company for any period of time or to any right to
continue his or her present or any other rate of compensation.
SECTION 11.9 AMENDMENT OF THE PLAN. The Board may amend or
discontinue the Plan at any time; provided, however, that no such amendment
or discontinuance shall change or impair, without the consent of the
recipient, an Incentive previously granted and; further provided that if
any such amendment requires shareholder approval to meet the requirements
of Rule 16b-3 under the Exchange Act or any successor rule such amendment
shall be subject to the approval of the shareholders of FCC.
SECTION 11.10 IMMEDIATE ACCELERATION OF INCENTIVES. Notwithstanding
any provision in this Plan or in any Incentive Agreement to the contrary,
except a provision in an Incentive Agreement that provides that an
Incentive will in no case be earned unless the prescribed performance goals
are met and no acceleration of vesting will occur under the terms of this
provision, (a) the restrictions on all shares of restricted stock awarded
shall lapse immediately and (b) all outstanding options and SARs shall
become exercisable immediately and (c) all performance goals established
with respect to any Incentives will be deemed to be met and payment made
immediately, if any of the following events
10
occur, unless otherwise determined by the Board of Directors and a majority
of the Continuing Directors (as defined below):
(a) any person or group of persons, other than any employee
benefit plan of the Company, or related trust, initially becomes the
beneficial owner of securities representing 40% or more of the total
voting power of FCC;
(b) a majority of the members of the Board of Directors of FCC
is replaced within any period of less than two years by directors not
nominated and approved by the Board of Directors; or
(c) the stockholders of FCC approve a reorganization, merger or
consolidation, in each case, with respect to which the individuals and
entities who were the respective beneficial owners of the Common Stock
and other voting securities of FCC immediately prior to such
reorganization, merger, or consolidation do not, following such
reorganization, merger or consolidation, beneficially own, directly or
indirectly, more than 80% of, respectively, the then outstanding
shares of Common Stock and the combined voting power of the then
outstanding voting securities entitled to vote generally in the
election of directors, as the case may be, of the corporation
resulting from such reorganization, merger or consolidation, or a
complete liquidation or dissolution of FCC or the sale or other
disposition of all or substantially all of the assets of FCC;
provided that, if a participant directs the Committee in writing prior
to the occurrence of any such event (an "Acceleration Notice") then
the restrictions on that participant's shares shall lapse and the
stock options held by that participant shall become exercisable only
to the extent specified in the Acceleration Notice.
For the purposes of this Section 11.10, beneficial ownership by a
person or group of persons shall be determined in accordance with
Regulation 13D (or any similar successor regulation) promulgated by the
Securities and Exchange Commission under the Exchange Act. Beneficial
ownership of securities representing more than 30% of the total voting
power may be established by any reasonable method, but shall be presumed
conclusively as to any person who files a Schedule 13D report with the
Securities and Exchange Commission reporting such ownership. If the
restrictions and non-exercisability periods are eliminated by reason of
provision (a), the limitations of this Plan shall not become applicable
again should the person or group cease to own securities representing 30%
or more of the voting power of FCC.
For purposes of this Section 11.10, "Continuing Directors" are
directors (i) who were in office prior to the time any of provisions (a),
(b) or (c) occurred or any person publicly announced an intention to
acquire securities representing 20% or more of the voting power of FCC,
(ii) directors in office for a period of more than two years, and (iii)
directors nominated and approved by the Continuing Directors.
11
SECTION 11.11 DEFINITION OF FAIR MARKET VALUE. "Fair Market Value"
of the Common Stock on any date shall be deemed to be the final closing
sale price per share of Common Stock on the trading day immediately prior
to such date. If the Common Stock is listed upon an established stock
exchange or exchanges or any automated quotation system that provides sale
quotations, such fair market value shall be deemed to be the closing price
of the Common Stock on such exchange or quotation system, or if no sale of
the Common Stock shall have been made on that day, on the next preceding
day on which there was a sale of such stock. If the Common Stock is not
listed on any exchange or quotation system, but bid and asked prices are
quoted and published, such fair market value shall be the mean between the
quoted bid and asked price on the day the option is granted, and if bid and
asked quotations are not available on such day, on the latest preceding
day. If the Common Stock is not actively traded, or quoted, such fair
market value shall be established by the Committee based upon a good faith
effort to value the Common Stock.
SECTION 11.12 DEFERRAL PERMITTED. Payment of cash or distribution
of any shares of Common Stock to which a participant is entitled under any
Incentive shall be made as provided in the Incentive Agreement. Payment
may be deferred at the option of the participant if provided in the
Incentive Agreement.
SECTION 11.13 LOANS. In order to assist a participant to acquire
shares of Common Stock pursuant to an Incentive granted under the Plan and
to assist a participant to satisfy his tax liabilities arising in
connection with such Incentive, the Committee may authorize, at either the
time of the grant of the Incentive, at the time of the acquisition of
Common Stock pursuant to the Incentive, or at the time of the lapse of
restrictions on shares of restricted stock granted under the Plan, the
extension of a loan to the participant by the Company. The terms of any
loans, including the interest rate, collateral and terms of repayment, will
be subject to the discretion of the Committee. The maximum credit
available hereunder shall be the purchase price, if any, of the Common
Stock acquired pursuant to the Incentive, plus the maximum tax liability
that may be incurred in connection with the acquisition.
To be submitted to shareholders for approval on April 18, 1994.
12
FIRST COMMERCE CORPORATION
CHIEF EXECUTIVE OFFICER
$HAREMAX PLAN
1. Purpose. The purpose of the Chief Executive Officer $haremax Plan (the
"Plan") is to advance the interests of First Commerce Corporation (the
"Company") by providing an annual incentive cash bonus to be paid to the
Chief Executive Officer of the Company based on the achievement of pre-
established quantitative Company performance goals.
2. Shareholder Approval. The payment of any bonus hereunder is subject to the
approval of the Plan and the performance goals by the shareholders of the
Company at the 1994 Annual Meeting.
3. Administration. The Compensation Committee of the Board of Directors of
the Company shall have authority to administer the Plan in all respects
including but not limited to the following:
(a) Establish performance goals;
(b) Establish regulations for the administration of the Plan and make all
determinations deemed necessary for the administration of the Plan;
and
(c) Certify in writing prior to the payment of any incentive bonus under
the Plan that the performance goals applicable to the bonus payment
were met. Approved minutes of a Committee meeting will satisfy this
requirement.
4. Incentive Bonus. The CEO shall be eligible to be paid a cash bonus in an
amount up to 120% of his annual salary. The exact amount of the bonus
shall be calculated according to the formula established by the Committee
based on the achievement of annual performance goals. The Committee has no
discretion to increase the amount of the bonus from that amount that is
payable under the terms of the pre-established formula for the applicable
year. The formula for 1994 is attached as Exhibit A hereto. The Committee
may in future years change the targets applicable to the performance goals
provided in Exhibit A hereto.
5. Payment of Incentive Bonus. As soon as practicable after the Company's
audited financial statements are available for the year for which the
incentive bonus will be paid, the Committee shall apply the formula for
that year and determine the amount of the incentive bonus. Promptly
thereafter, the incentive bonus shall be paid to the CEO.
6. Termination of Employment. In the event the CEO's employment with the
Company is terminated as a result of normal retirement, early retirement
(with the Company's permission), permanent disability or death, the CEO or
his heirs shall receive the incentive
1
bonus as earned pursuant to the applicable formula for that year in which
the retirement, permanent disability or death occurred. If the employment
of the CEO is terminated for any reason other than normal retirement, early
retirement (with the Company's permission), permanent disability or death
during a Plan year, the CEO shall not receive an award for that Plan year.
7. Assignments and Transfers. The CEO may not assign, encumber or transfer
his rights and interests under the Plan.
8. Amendment and Termination. The Committee may amend, suspend or terminate
the Plan at any time. Any amendment or termination of the Plan shall not,
however, affect the right of the CEO to receive an incentive bonus earned
for the year during which the Plan was amended or terminated or any earned
but unpaid incentive bonus.
9. Withholding of Taxes. The Company shall deduct from the amount of any
incentive bonus paid hereunder any federal or state taxes required to be
withheld.
10. Term of Plan. The Plan shall consist of individual calendar year Plans,
commencing effective January 1, 1994 and each consecutive January 1
thereafter during the continuation of the Plan. The Plan shall continue
until terminated by the Committee.
2