SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
(Amendment No. )
(x ) Filed by the Registrant
( ) Filed by a Party other than the Registrant
Check the appropriate box:
( ) Preliminary Proxy Statement
( ) Confidential, for Use of the Commission Only (as permitted by
Rule 14a-b(e)(2))
(x ) Definitive Proxy Statement
(x ) Definitive Additional Materials
( ) Soliciting Material Pursuant to (section mark)240.14a-11(c) or
(section mark)240.14a-12
NationsBank Corporation
(Name of Registrant as Specified In Its Charter)
(Name of Person(s) Filing Proxy Statement If Other Than Registrant)
PAYMENT OF FILING FEE (Check the appropriate box):
(x ) $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-6(i)(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:
2) Aggregate number of securities to which transaction applies:
3) Per unit price or other underlying value of transaction
computed pursuant to Exchange Act Rule 0-11: *
4) Proposed maximum aggregate value of transaction:
5) Total fee paid:
(Set forth the amount on which the filing fee is calculated and state how
it was determined)
( ) Fee previously paid with preliminary materials.
( ) Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration
statement number, or the Form or Schedule and the date of its filing.
1) Amount Previously Paid: $
2) Form, Schedule or Registration Statement No.:
3) Filing Party:
4) Date Filed:
NATIONSBANK
March 27, 1995
To the Shareholders of
NationsBank Corporation:
In connection with the Annual Meeting of Shareholders of your Corporation to be
held on April 26, 1995, we enclose a Notice of the Meeting, a Proxy Statement
containing information about those matters which are to be considered at this
meeting, and a form of proxy relating to those matters.
Detailed information relating to the Corporation's activities and operating
performance during 1994 is contained in our Annual Report, which has been mailed
to you previously.
You are cordially invited to attend the Annual Meeting of Shareholders. We would
appreciate your signing and returning the form of proxy in the enclosed
postage-paid return envelope so that your shares can be voted in the event you
are unable to attend the meeting. If you plan to attend the meeting and your
shares are held in the name of a broker or other nominee, please bring with you
a proxy or letter from the broker or nominee to confirm your ownership of
shares. Your proxy may be revoked if you are present at the meeting and elect to
vote in person. It may also be revoked in the manner set forth in the Proxy
Statement.
Sincerely yours,
(Signature of Hugh L. McColl, Jr. appears here)
HUGH L. MCCOLL, JR.
CHAIRMAN OF THE BOARD AND
CHIEF EXECUTIVE OFFICER
NATIONSBANK CORPORATION
NATIONSBANK CORPORATE CENTER
CHARLOTTE, NORTH CAROLINA 28255
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
To the Shareholders:
Notice is hereby given that the Annual Meeting of Shareholders of NationsBank
Corporation will be held in the James River Ballroom of the Omni Richmond Hotel,
100 South 12th Street, in the city of Richmond, Virginia, on Wednesday, April
26, 1995, at 11:00 A.M., local time, for the following purposes:
1. To elect 23 directors;
2. To consider and act upon a proposal to ratify the action of the Board of
Directors in selecting Price Waterhouse LLP as independent public accountants
to audit the books of the Corporation and its subsidiaries for the current
year;
3. To consider and act upon a proposal to approve and adopt the NationsBank
Corporation Key Employee Stock Plan;
4. To consider and act upon a shareholder proposal requesting the Corporation to
develop and provide annual reporting on programs designed to meet the credit
needs of small and mid-sized family farms and rural small business
enterprises; and
5. To transact such other business as may properly come before the meeting or
any adjournment or adjournments thereof.
The Board of Directors has fixed the close of business on March 3, 1995, as the
record date for determination of shareholders entitled to notice of and to vote
at the Annual Meeting or any adjournment or adjournments thereof.
The Board of Directors of the Corporation would appreciate your signing and
returning the accompanying form of proxy promptly, so that if you are unable to
attend, your shares can nevertheless be voted at the meeting.
HUGH L. MCCOLL, JR.
CHAIRMAN OF THE BOARD AND
CHIEF EXECUTIVE OFFICER
March 27, 1995
IMPORTANT NOTICE
Please Sign and Mail Your Proxy Promptly
NATIONSBANK CORPORATION
NATIONSBANK CORPORATE CENTER
CHARLOTTE, NORTH CAROLINA 28255
PROXY STATEMENT
The following statement and the accompanying notice and form of proxy are
furnished in connection with the solicitation by the Board of Directors
(hereinafter sometimes referred to as the "Board") of NationsBank Corporation
(hereinafter sometimes referred to as the "Corporation" or "NationsBank") of
proxies to be used at the Annual Meeting of Shareholders of the Corporation to
be held on April 26, 1995, at 11:00 A.M., local time, in the James River
Ballroom of the Omni Richmond Hotel, 100 South 12th Street, Richmond, Virginia,
and at any adjournment or adjournments thereof. This statement and the
accompanying notice and form of proxy are first being mailed to shareholders on
or about March 27, 1995.
The accompanying form of proxy is for use at the meeting if a shareholder will
be unable to attend in person. The proxy may be revoked by the shareholder at
any time before it is exercised, by submitting to the Secretary of the
Corporation written notice of revocation, a properly executed proxy of a later
date or by attending the meeting and electing to vote in person. All shares
represented by valid proxies received pursuant to this solicitation, and not
revoked before they are exercised, will be voted in the manner specified
therein. If no specification is made, the proxies will be voted in FAVOR of:
1. The election to the Board of Directors of the 23 nominees named in this Proxy
Statement;
2. The ratification of action taken by the Board of Directors in selecting Price
Waterhouse LLP as independent public accountants to audit the books of the
Corporation and its subsidiaries for the current year;
3. The adoption of the NationsBank Corporation Key Employee Stock Plan;
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and AGAINST:
4. The shareholder proposal requesting the Corporation to develop and provide
annual reporting on programs designed to meet the credit needs of small and
mid-sized family farms and rural small business enterprises.
The entire cost of soliciting these proxies will be borne by the Corporation. In
addition to the solicitation of the proxies by mail, the Corporation will
request banks, brokers and other record holders to send proxies and proxy
material to the beneficial owners of the stock and secure their voting
instructions, if necessary. The Corporation will reimburse such record holders
for their reasonable expenses in so doing. The Corporation has also made
arrangements with Georgeson & Company Inc. to assist it in soliciting proxies
from banks, brokers and nominees and has agreed to pay $8,500 plus expenses for
such services. If necessary, the Corporation may also use several of its regular
employees, who will not be specially compensated, to solicit proxies from
shareholders, either personally or by telephone, telegram, facsimile or special
delivery letter.
Pursuant to the provisions of the North Carolina Business Corporation Act, March
3, 1995 has been fixed as the record date for determination of shareholders
entitled to notice of and to vote at such Annual Meeting and, accordingly, only
holders of shares of record at the close of business on that date of the
Corporation's Common Stock (hereinafter referred to as the "Common Stock") and
its ESOP Convertible Preferred Stock, Series C (hereinafter referred to as the
"ESOP Preferred Stock"), will be entitled to notice of and to vote at said
meeting. Holders of Common Stock and holders of ESOP Preferred Stock will vote
together without regard to class upon the matters currently expected to come
before the meeting.
The number of outstanding shares of Common Stock and ESOP Preferred Stock
entitled to vote at the meeting is 276,504,344 and 2,590,602, respectively. Each
of such shares is entitled to one vote. Directors shall be elected by a
plurality of the votes cast. Cumulative voting will not be permitted, in
accordance with the provisions of the North Carolina Business Corporation Act.
With respect to the election of directors, votes may be cast in favor of
nominees or withheld. Withheld votes and broker non-votes, if any, are not
treated as votes cast and, therefore, will have no effect on such proposal.
Approval of the NationsBank Corporation Key Employee Stock Plan
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requires the affirmative vote of the holders of a majority of the Common Stock
and ESOP Preferred Stock present in person or represented by proxy and entitled
to vote. Abstentions will be counted as present for purposes of such proposal
and, therefore, will have the effect of a negative vote. However, broker
non-votes are not considered shares entitled to vote and, therefore, will have
no effect on such proposal. Approval of the other matters to be presented at the
Annual Meeting requires the affirmative vote of the holders of a majority of the
Common Stock and ESOP Preferred Stock voted with respect to each such matter.
Abstentions from voting, including broker non-votes, if any, are not treated as
votes cast and, therefore, will have no effect on any such proposal.
ELECTION OF DIRECTORS
It is intended that the persons named in the accompanying proxy will vote only
for the 23 nominees for director, which number has been set by the Board, named
on the following pages, except to the extent authority to so vote is withheld
with respect to one or more nominees, and that the number of directors elected
shall be 23. Each director is elected to serve until the next Annual Meeting of
Shareholders or until a successor shall be elected and shall qualify.
Although the Board does not expect that any of the nominees named will be
unavailable for election, in the event of a vacancy in the slate of nominees
occasioned by death or any other unexpected occurrence, it is intended that
shares of Common Stock and ESOP Preferred Stock represented by proxies in the
accompanying form will be voted for the election of a substitute nominee
selected by the persons named in the proxy.
Each nominee's name, age, current principal occupation (which has continued for
at least five years unless otherwise indicated), and the name and principal
business of the corporation in which that occupation is carried on, the year
each incumbent was first elected to the Board, all positions and offices
presently held with the Corporation, 1994 attendance record at Board meetings
and at meetings of committees of the Board of which the nominee was a member,
and directorships in other publicly-held companies are set forth below. None of
the following nominees or current directors is related by blood, marriage or
adoption (not more remote than first
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cousin) to any other nominee, director or person who may be deemed to be an
executive officer of the Corporation.
(Photo of RONALD W. ALLEN (53), CHAIRMAN OF THE BOARD, PRESIDENT AND
Ronald W. Allen CHIEF EXECUTIVE OFFICER, DELTA AIR LINES, INC., Atlanta,
appears here) Georgia, an air transportation company. He has been a director
of the Corporation or one of its predecessors since 1987 and
is a member of the compensation and stock option committees.
During 1994, Mr. Allen attended all Board meetings
and all meetings of committees of the Board on which he
served. He also serves as a director of Delta Air Lines,
Inc. and The Coca-Cola Company.
(Photo of WILLIAM M. BARNHARDT (66), CHAIRMAN OF THE BOARD, SOUTHERN
William M. WEBBING MILLS, INC., Charlotte, North Carolina, a textile
Barnhardt manufacturing firm. He is also Chairman of Barnhardt Elastic
appears here) Corporation, a textile sales firm. At Southern Webbing Mills,
Inc., he was Chief Executive Officer until 1993 and President
from 1974 until 1991. At Barnhardt Elastic Corpo
ration, he was Chief Executive Officer from 1990 to 1993. He
has been a director of the Corporation since 1976 and is chairman of the audit
committee. During 1994, Mr. Barnhardt attended all Board meetings and all
meetings of the committee of the Board on which he served.
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(Photo of THOMAS E. CAPPS (59), CHAIRMAN OF THE BOARD AND CHIEF
Thomas E. Capps EXECUTIVE OFFICER, DOMINION RESOURCES, INC., an electric
appears here) utility holding company, Richmond, Virginia. Mr. Capps served
as President of Dominion Resources, Inc. from 1986 until
August 1994, has served as its Chief Executive Officer since
December 1992. He also served as its Chief Operating Officer
from April 1989 to May 1990. He has also served as Chairman of the Board of
Virginia Electric and Power Company, an electric utility, from December 1992
until August 1994, serving as its Vice Chairman prior to that time. He has been
a director of the Corporation since 1993 and is a member of the audit
committee. During 1994, Mr. Capps attended all Board meetings and all meetings
of the committee of the Board on which he served. He also serves as a director
of Dominion Resources, Inc. and Bassett Furniture Industries, Inc.
(Photo of CHARLES W. COKER (61), CHAIRMAN AND CHIEF EXECUTIVE OFFICER,
Charles W. Coker SONOCO PRODUCTS COMPANY, Hartsville, South Carolina, a
appears here) manufacturer of paper and plastic products. He has been a
director of the Corporation since 1969 and is chairman of the
compensation, nominating and stock option committees and a
member of the executive committee. During 1994, Mr. Coker
attended all Board meetings and all meetings of committees of
the Board on which he served. He also serves as a director of Sara Lee
Corporation, Sonoco Products Company, Springs Industries, Inc. and Carolina
Power and Light Company.
(Photo of THOMAS G. COUSINS (63), CHAIRMAN AND PRESIDENT, COUSINS
Thomas G. Cousins PROPERTIES INCORPORATED, Atlanta, Georgia, a real estate
appears here) development company. He has been a director of the Corporation
since 1993 and is a member of the asset quality review
committee. During 1994, Mr. Cousins attended 6 out of 8 Board
committee of the Board on which he served. He also serves as
a director of Cousins Properties Incorporated and Shaw Industries, Inc.
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(Photo of Alan ALAN T. DICKSON (63), CHAIRMAN, RUDDICK CORPORATION,
T. Dickson Charlotte, North Carolina, a diversified holding company. Mr.
appears here) Dickson served as President of Ruddick Corporation until
February 1994. He has been a director of the Corporation since
1969 and is a member of the executive and nominating
committees. During 1994, Mr. Dickson attended 6 out of 8 Board
meetings and 5 out of 7 meetings of committees of the Board on
which he served. He also serves as a director of Ruddick Corporation, Bassett
Furniture Industries, Inc., Lance, Inc. and Sonoco Products Company.
(Photo of W. W. FRANK DOWD, JR. (68), CHAIRMAN OF THE EXECUTIVE COMMITTEE,
Frank Dowd, Jr. CHARLOTTE PIPE & FOUNDRY COMPANY, Charlotte, North Carolina, a
appears here) manufacturer of cast iron and plastic pipe and fittings. He
has been a director of the Corporation since 1969 and is a
member of the audit, compensation and stock option committees.
During 1994, Mr. Dowd attended all Board meetings and all
meetings of committees of the Board on which he served.
(Photo of A. L. ELLIS (89), SENIOR CHAIRMAN, NATIONSBANK OF FLORIDA,
A. L. Ellis N.A., Tampa, Florida, a national bank. Mr. Ellis was the
appears here) Chairman of the Board of Ellis Banking Corporation until it
was merged with the Corporation in 1984. He has been a
director of the Corporation since 1984 and is a member of the
executive committee. During 1994, Mr. Ellis attended 5 out of
8 Board meetings and 4 out of 7 meetings of the committee of
the Board on which he served.
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(Photo of PAUL FULTON (60), DEAN, KENAN-FLAGLER BUSINESS SCHOOL,
Paul Fulton UNIVERSITY OF NORTH CAROLINA, Chapel Hill, North Carolina. Mr.
appears here) Fulton has been in his present position since January 1994,
and prior thereto was President of Sara Lee Corporation, a
consumer goods company, until June 1993. He has been a
member of the asset quality review committee. During 1994, Mr.
Fulton attended all Board meetings and all meetings of the committee of the
Board on which he served. He also serves as a director of Bassett Furniture
Industries, Inc., The Cato Corporation, Sonoco Products Company and Winston
Hotels, Inc.
(Photo of L. L. L. L. GELLERSTEDT, JR. (69), CHAIRMAN OF THE EXECUTIVE
Gellerstedt, Jr. COMMITTEE, BEERS CONSTRUCTION COMPANY, Atlanta, Georgia,
appears here) general contractor. Mr. Gellerstedt served as Chairman of The
Board of Beers Construction Company until June 1994 when he
was named to his present position. He has been a director of
the Corporation or one of its predecessors since 1971 and is a
member of the compensation, executive and stock option
committees. During 1994, Mr. Gellerstedt attended all Board meetings and all
meetings of committees of the Board on which he served. He also serves as a
director of Atlanta Gas Light Company, John H. Harland Company and Rock-Tenn
Company.
(Photo of Timothy TIMOTHY L. GUZZLE (58), CHAIRMAN OF THE BOARD AND CHIEF
Guzzle appears EXECUTIVE OFFICER, TECO ENERGY, INC., Tampa, Florida, an
here) electric utility holding company. Mr. Guzzle served as
President of TECO Energy, Inc. from 1988 to July 1994, as its
Chief Executive Officer since 1989 and also was named its
Chairman of the Board in 1991. He has been a director of the
Corporation since 1992 and is a member of the audit committee.
During 1994, Mr. Guzzle attended 7 out of 8 Board meetings and all meetings of
the committee of the Board on which he served. He also serves as a director of
TECO Energy, Inc. and Tampa Electric Company.
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(Photo of E. E. BRONSON INGRAM (63), CHAIRMAN AND CHIEF EXECUTIVE OFFICER,
Bronson Ingram INGRAM INDUSTRIES INC., Nashville, Tennessee, a diversified
appears here) holding company. Mr. Ingram was elected Chairman of Ingram
Industries Inc. in December 1993 and prior to that time served
as its President. He has been a director of the Corporation
since 1993 and is a member of the asset quality review
committee. During 1994, Mr. Ingram attended 7 out of 8 Board
meetings and 7 out of 8 meetings of the committee of the Board on which he
served. He also serves as a director of Ingram Industries Inc. and Weyerhaeuser
Company and as President of the Board of Trust of Vanderbilt University.
(Photo of W. W. W. W. JOHNSON (64), CHAIRMAN OF THE EXECUTIVE COMMITTEE,
Johnson NATIONSBANK CORPORATION, Charlotte, North Carolina. Mr.
appears here) Johnson served as Chairman of the Board and Chief Executive
Officer of Bankers Trust of South Carolina from 1980 until its
merger with the Corporation in 1986. He has been a director of
chairman of the executive committee. During 1994, Mr. Johnson
attended all Board meetings and all meetings of the committee of the Board on
which he served. He also serves as a director of Alltel Corporation, The Liberty
Corporation and Duke Power Company.
(Photo of Hugh HUGH L. MCCOLL, JR. (59), CHAIRMAN OF THE BOARD AND CHIEF
L. McColl, Jr. EXECUTIVE OFFICER, NATIONSBANK CORPORATION, AND CHIEF
appears here) EXECUTIVE OFFICER OF EACH OF ITS SUBSIDIARY BANKS, Charlotte,
North Carolina. Mr. McColl also served as Chairman of the
Board of the Corporation from 1983 until December 31, 1991 and
was re-appointed Chairman on December 31, 1992. He has been a
director of the Corporation since 1972 and is a member of the
contributions, executive and nominating committees. During 1994, Mr. McColl
attended all Board meetings and all meetings of committees of the Board on which
he served. He also serves as a director of CSX Corporation, Jefferson-Pilot
Corporation, Ruddick Corporation and Sonoco Products Company.
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(Photo of BUCK MICKEL (69), CHAIRMAN OF THE BOARD AND CHIEF EXECUTIVE
Buck Mickel OFFICER, R.S.I. HOLDINGS INC., Greenville, South Carolina, a
appears here) holding company of corporations involved in distribution and
textiles. Mr. Mickel retired as Vice Chairman of the Board of
Fluor Corporation, a heavy construction company, in 1987,
having also served as its President. He has been a director of
the Corporation or one of its predecessors since 1986 and is a
member of the compensation and stock option committees. During 1994, Mr. Mickel
attended 7 out of 8 Board meetings and 6 out 7 meetings of committees of the
Board on which he served. He also serves as a director of Delta Woodside
Industries, Inc., Duke Power Company, Emergent Group, Inc., Fluor Corporation,
Insignia Financial Group, Inc., The Liberty Corporation, Monsanto Company, and
R.S.I. Holdings Inc.
(Photo of John JOHN J. MURPHY (63), CHAIRMAN OF THE BOARD AND CHIEF EXECUTIVE
J. Murphy OFFICER, DRESSER INDUSTRIES, INC., Dallas, Texas, a supplier
appears here) of engineered products and services utilized in energy-related
activities. He also served as President of Dresser Industries,
Inc. until April 1992. He has been a director of the
Corporation since 1992 and is chairman of the asset quality
review committee. During 1994, Mr. Murphy attended 7 out of 8
Board meetings and 7 out of 8 meetings of the committee of the Board on which he
served. He also serves as a director of Dresser Industries, Inc., Kerr-McGee
Corporation and PepsiCo, Inc.
(Photo of JOHN C. SLANE (66), PRESIDENT, SLANE HOSIERY MILLS, INC., High
John C. Slane Point, North Carolina, a manufacturer of textile products. Mr.
appears here) Slane has been a director of the Corporation since 1969 and is
a member of the audit, compensation and stock option
committees. During 1994, Mr. Slane attended all Board meetings
and all meetings of committees of the Board on which he
served.
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(Photo of JOHN W. SNOW (55), CHAIRMAN OF THE BOARD, PRESIDENT AND CHIEF
John W. Snow EXECUTIVE OFFICER, CSX CORPORATION, Richmond, Virginia, a
appears here) transportation company. Mr. Snow has served as President and
Chief Executive Officer of CSX Corporation since 1989 and also
was named Chairman of the Board in 1991. He has been a
director of the Corporation or one of its predecessors since
1983 and is a member of the audit committee. During 1994, Mr.
Snow attended 7 out of 8 Board meetings and all meetings of the committee of the
Board on which he served. He also serves as a director of CSX Corporation,
Bassett Furniture Industries, Inc., Textron Inc. and USX Corporation.
(Photo of MEREDITH R. SPANGLER (57), TRUSTEE AND BOARD MEMBER, Chapel
Meredith R. Hill, North Carolina. She is a director of C. D. Spangler
Spangler Construction Company and is Chairman of the Board of the C. D.
appears here) Spangler Foundation. She has served on the Wellesley College
Board of Trustees since 1989. She has been a director of the
contributions committee and a member of the asset quality
review committee. During 1994, Mrs. Spangler attended all Board meetings and
all meetings of committees of the Board on which she served. She also serves
as a director of Stone & Webster, Incorporated.
(Photo of Robert ROBERT H. SPILMAN (67), CHAIRMAN OF THE BOARD AND CHIEF
H. Spilman EXECUTIVE OFFICER, BASSETT FURNITURE INDUSTRIES, INC.,
appears here) Bassett, Virginia, a furniture manufacturer. He has been a
director of the Corporation since 1979 and is a member of the
executive committee. During 1994, Mr. Spilman attended 7 out
of 8 Board meetings and 6 out of 7 meetings of the committee
of the Board on which he served. He also serves as a director
of Bassett Furniture Industries, Inc., Dominion Resources, Inc., The Pittston
Company, Trinova Corporation, Virginia Electric and Power Company and as
Chairman of the Board of Jefferson-Pilot Corporation.
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(Photo of RONALD TOWNSEND, (53), PRESIDENT/GANNETT TELEVISION, GANNETT
Ronald Townsend COMPANY, INC., Arlington, Virginia, a communications company.
appears here) He has been a director of the Corporation since 1993 and is a
member of the compensation, contributions and stock option
committees. During 1994, Mr. Townsend attended all Board
committees of the Board on which he served. He also serves
as a director of Alltel Corporation.
(Photo of Jackie JACKIE M. WARD (56), PRESIDENT AND CHIEF EXECUTIVE OFFICER,
M. Ward COMPUTER GENERATION INCORPORATED, Atlanta, Georgia, a computer
apepars here) software company. She has been a director of the Corporation
since April 1994 and is a member of the asset quality review
committee. During 1994, Ms. Ward attended 5 out of 6 Board
meetings and 4 out of 5 meetings of the committee of the Board
on which she served. She also serves as a director of SCI
Systems, Inc. and Trigon Blue Cross Blue Shield.
(Photo of MICHAEL WEINTRAUB (56), PRIVATE INVESTOR, Miami, Florida. Mr.
Michael Weintraub Weintraub was Vice Chairman of Pan American Banks Inc., which
appears here) merged with the Corporation in 1985. He has been a director of
the Corporation since 1986 and is a member of the audit and
contributions committees. During 1994, Mr. Weintraub attended
7 out of 8 Board meetings and all meetings of committees of
the Board on which he served. He also serves as a director of
The Continental Corporation and IVAX Corporation.
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SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
As of December 31, 1994, the only classes of voting securities which the
Corporation had issued and outstanding were the Common Stock and the ESOP
Preferred Stock. As of such date, no persons were known to own beneficially 5%
or more of the Common Stock, and all of the shares of ESOP Preferred Stock
outstanding were held by State Street Bank and Trust Company, 225 Franklin
Street, Boston, Massachusetts 02110, as trustee of the ESOP Trust Agreement
executed in connection with the Corporation's Retirement Savings Plan (the
"Trustee"). See Note 2 below.
The following table sets forth certain information with respect to beneficial
ownership of the Common Stock as of December 31, 1994 by: (i) each director and
nominee for director of the Corporation; (ii) each executive officer of the
Corporation named in the Summary Compensation Table; and (iii) all directors and
executive officers of the Corporation as a group.
AMOUNT AND NATURE PERCENT
NAME OF BENEFICIAL OWNERSHIP (1)(2) OF CLASS
Ronald W. Allen 1,108 (3)
William M. Barnhardt (4) 30,156 (3)
Thomas M. Belk (5) 12,800 (3)
Thomas E. Capps (6) 1,655 (3)
R. Eugene Cartledge 1,000 (3)
Charles W. Coker (7) 46,000 (3)
Thomas G. Cousins 43,301 (3)
Alan T. Dickson (8) 56,528 (3)
W. Frank Dowd, Jr. (9) 16,343 (3)
A. L. Ellis (10) 6,292,340 2.28%
Fredric J. Figge, II 65,578 (3)
Paul Fulton (11) 1,504 (3)
L. L. Gellerstedt, Jr. (12) 24,386 (3)
Timothy L . Guzzle 2,150 (3)
James H. Hance, Jr. (13) 84,933 (3)
E. Bronson Ingram (14) 55,516 (3)
W. W. Johnson 61,782 (3)
Kenneth D. Lewis 59,835 (3)
Hugh L. McColl, Jr. 453,392 (3)
Buck Mickel (15) 5,000 (3)
John J. Murphy 1,000 (3)
John C. Slane (16) 32,648 (3)
John W. Snow (17) 809 (3)
Meredith R. Spangler (18) 8,000,118 2.89%
Robert H. Spilman 3,806 (3)
William W. Sprague, Jr. (19) 11,131 (3)
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James W. Thompson 107,089 (3)
Ronald Townsend 500 (3)
Jackie M. Ward 562 (3)
Michael Weintraub (20) 795,753 (3)
All directors, nominees and executive
officers as a group (31 persons) (21) 16,298,284 5.9%
(1) All shares of Common Stock indicated in the above table are subject to the
sole investment and voting power of the directors and corporate officers,
except as otherwise set forth in the footnotes below.
(2) As of December 31, 1994, none of the listed individuals owned shares of
ESOP Preferred Stock, except Messrs. Ellis, Figge, Hance, Johnson, Lewis,
McColl and Thompson. Mr. Ellis owned 35 shares and Messrs. Figge, Hance,
Johnson, Lewis, McColl and Thompson each owned 81 shares of ESOP Preferred
Stock, which is less than 1% of the outstanding shares of ESOP Preferred
Stock. As of December 31, 1994, no director, nominee for director or
executive officer of the Corporation beneficially owned more than 1% of the
outstanding shares of ESOP Preferred Stock. Such ESOP Preferred Stock is
held of record by the Trustee. Subject to the terms and provisions of the
trust, the Trustee has sole investment power with respect to all shares of
ESOP Preferred Stock. It votes shares of ESOP Preferred Stock that have
been allocated to individual accounts in accordance with the participants'
instructions, and it votes allocated shares of ESOP Preferred Stock as to
which no instructions are received together with unallocated shares in the
same proportion as the shares for which voting instructions are received
are voted.
(3) Represents less than 1% of the outstanding shares of Common Stock.
(4) Includes 7,795 shares of Common Stock over which Mr. Barnhardt shares
voting and investment power but does not include 4,790 shares of Common
Stock owned by his wife over which he disclaims beneficial ownership.
(5) Includes 9,360 shares of Common Stock over which Mr. Belk shares voting
and/or investment power.
(6) Does not include 5,000 shares of Common Stock owned by a subsidiary of
Dominion Resources, Inc. over which Mr. Capps disclaims beneficial
interest.
(7) Includes 40,200 shares of Common Stock owned by Mr. Coker's wife over which
he shares voting and investment power.
(8) Includes 53,545 shares of Common Stock over which Mr. Dickson shares voting
and investment power.
(9) Includes 3,032 shares of Common Stock held in a trust in which Mr. Dowd is
a beneficiary and 996 shares of Common Stock owned by Mr. Dowd's wife over
which he shares voting and investment power.
(10) Includes 20,000 shares of Common Stock owned by the Ellis Foundation, Inc.
and 1,161,288 shares of Common Stock owned by Carlen Realty Company, a
corporation which is 100% owned by Mr. Ellis and of which he also is an
officer and director. He has sole voting and investment power for all such
shares.
(11) Does not include 100 shares of Common Stock owned by Mr. Fulton's wife over
which he disclaims beneficial ownership.
13
(12) Includes 4,803 shares of Common Stock owned by Mr. Gellerstedt's wife and
966 shares of Common Stock owned by Beers Construction Company over which
he shares voting and investment power.
(13) Includes 2,000 shares of Common Stock held jointly with Mr. Hance's wife
over which he shares voting and investment power.
(14) Includes 31,527 shares of Common Stock held in a trust belonging to a
family member over which Mr. Ingram is a co-trustee and 1,000 shares of
Common Stock held by a foundation, over which he has shared voting and
investment power, and over which he disclaims beneficial ownership.
(15) Does not include 200 shares of Common Stock owned by Mr. Mickel's wife over
which he disclaims beneficial ownership.
(16) Includes 3,818 shares of Common Stock owned by Slane Hosiery Mills, Inc.
over which Mr. Slane shares voting and investment power, but does not
include 4,169 shares of Common Stock owned by Mr. Slane's wife over which
he disclaims beneficial ownership.
(17) Mr. Snow shares voting and investment power over these shares of Common
Stock.
(18) Includes 7,990,118 shares of Common Stock owned by Mrs. Spangler's husband,
certain other family members for whom Mrs. Spangler's husband acts in a
fiduciary capacity, and C. D. Spangler Construction Company, Golden Eagle
Industries, Inc., Spangler Foundation, Delcap, Inc. and Delcor, Inc., all
of which are parties related to Mrs. Spangler's husband, over which Mrs.
Spangler shares voting and investment power.
(19) Includes 1,491 shares of Common Stock owned by Mr. Sprague's wife over
which he shares voting and investment power.
(20) Includes 668,277 shares of Common Stock held by certain family interests
and trusts over which Mr. Weintraub shares voting and investment power but
disclaims beneficial ownership.
(21) Of these 16,298,284 shares of Common Stock, such persons had sole voting
and investment power over 7,467,626 shares of Common Stock and shared
voting or investment power or both over 8,830,658 shares.
COMPLIANCE WITH SECTION 16(A) OF THE SECURITIES EXCHANGE ACT OF 1934
Pursuant to Section 16(a) of the Securities Exchange Act of 1934, as amended
(the "Exchange Act"), directors and executive officers of the Corporation are
required to file reports with the Securities and Exchange Commission indicating
their holdings of and transactions in the Corporation's equity securities. To
the Corporation's knowledge, based solely on a review of the copies of such
reports furnished to the Corporation and written representations that no other
reports were required, insiders of the Corporation complied with all filing
requirements during the fiscal year ended December 31, 1994.
14
MEETINGS AND COMMITTEES OF THE BOARD OF DIRECTORS
The Corporation has the following standing committees to which directors are
appointed: asset quality review, audit, compensation, contributions, executive,
nominating and stock option.
The audit committee, currently consisting of eight directors who are not
officers of the Corporation or of a subsidiary, reviews at least semi-annually
the work of the audit and loan review staffs and requires reports covering such
work to be prepared. The audit committee establishes the scope and detail of the
continuous audit program which is conducted by the audit staff and the loan
review staff to protect against improper and unsound practices and to furnish
adequate protection to all assets and records. Subject to the approval of the
Board and the shareholders, it engages a qualified firm of independent public
accountants to conduct such audit work as is necessary and receives written
reports, supplemented by such oral reports as it deems necessary from the audit
firm. In addition, the General Auditor of the Corporation reports to the
chairman of the audit committee on all matters relating to the Corporation.
During 1994, the committee held four meetings.
The compensation committee, currently consisting of seven directors who are not
officers of the Corporation or of a subsidiary, provides overall guidance to
officer compensation programs, including salaries and other forms of
compensation. The committee reviews the officer salary administration program as
necessary, including salary grades and ranges, and salary surveys. It also
reviews and approves salary changes, grade changes and promotions for executive
officers and major benefit plans for employees. The joint recommendations of the
compensation committee and the executive committee as to compensation of the
Chief Executive Officer and any of the Corporation's directors who are also
officers of the Corporation are subject to approval by the Board. During 1994,
the committee held four meetings.
The nominating committee, currently consisting of four directors who are not
officers of the Corporation or of a subsidiary and the Chief Executive Officer,
reviews information assembled for the purposes of selecting candidates for
nomination to membership on the Board. Following appropriate investigations, it
ascertains the willingness of selected individuals to
15
serve and extends, on behalf of the Board, invitations to become candidates. Its
recommendations are presented to the Board at regularly scheduled meetings. The
committee will also consider, at its regularly scheduled meetings, those
recommendations by shareholders which are submitted, along with biographical and
business experience information, to the Chief Executive Officer. During 1994,
the committee held no meetings.
BOARD OF DIRECTORS' COMPENSATION
In 1994, compensation for each director who was not an officer of the
Corporation or of a subsidiary included an annual retainer of $30,000 and an
attendance fee of $1,200 for each meeting of the Corporation's Board or
committee of the Board. During 1994, there were eight meetings of the Board. The
aggregate amount of all payments by the Corporation to directors during 1994 was
$1,111,200. In September 1994, the Corporation adopted a plan to permit
directors of the Corporation, beginning in 1995, to defer all of their annual
retainer and meeting fees until they leave the Board.
Effective as of January 1, 1985, the Corporation's Board adopted the NationsBank
Corporation and Designated Subsidiaries Directors' Retirement Plan (the
"Directors' Retirement Plan"). The Directors' Retirement Plan originally covered
directors of the Corporation, NationsBank of North Carolina, N.A. and
NationsBank of Florida, N.A. other than directors who were current or former
employees of the Corporation or one of its subsidiaries. In September 1994, the
Corporation amended the Directors' Retirement Plan to make ineligible persons
who first become directors of NationsBank, N.A. (Carolinas) and NationsBank of
Florida, N.A. after October 31, 1994. Directors are required to complete five
years of service as a director in order to become eligible for benefits. A
director who satisfies the service requirement becomes eligible for benefits on
the date such director ceases to be a director for a reason other than death or
attains age 65, whichever occurs later. The annual benefit paid to a former
director under the Directors' Retirement Plan is equal to the annual retainer
fee that was last paid to such director for services as a director. The benefit
is paid in equal quarterly installments. Benefits are paid to a former director
until the first to occur of the following: (i) receipt of payments for a period
of time equal to such director's years of service as a director; (ii) receipt of
payments for ten years;
16
or (iii) the director's death. The cost of benefits under the Directors'
Retirement Plan is paid from the general assets of the participating employers
as such benefits become payable to former directors. In 1994, the cost of
benefits accrued under the Directors' Retirement Plan for all eligible directors
was $485,000, and $294,500 was paid to 21 retired directors.
17
EXECUTIVE COMPENSATION
The following table sets forth the compensation paid to each named executive
officer for services rendered to the Corporation and its subsidiaries during the
periods indicated.
SUMMARY COMPENSATION TABLE
ANNUAL COMPENSATION LONG TERM
OTHER COMPENSATION
ANNUAL RESTRICTED ALL OTHER
NAME AND SALARY BONUS COMP. STOCK AWARDS COMPENSATION
PRINCIPAL POSITION YEAR $ $ $(1) $(4) $
Hugh L. McColl, Jr. 1994 900,000 2,100,000 -- 10,725,000 203,298(5)
Chairman & CEO, 1993 800,000 1,800,000 -- 0 183,042
NationsBank
Corporation 1992 700,000 1,800,000 50,897(2) 4,350,000 205,180
James W. Thompson 1994 650,000 1,050,000 -- 0 29,250(6)
Vice Chairman, 1993 575,000 800,000 -- 0 25,875
NationsBank
Corporation 1992 500,000 600,000 -- 2,175,000 6,546
Kenneth D. Lewis 1994 650,000 1,100,000 193,210(3) 0 29,250(6)
President, NationsBank 1993 550,000 800,000 -- 0 112,250
Corporation 1992 450,000 550,000 -- 1,740,000 170,250
James H. Hance, Jr. 1994 650,000 1,050,000 -- 0 29,250(6)
Vice Chairman & 1993 525,000 800,000 -- 0 23,625
Chief Financial Officer 1992 400,000 550,000 -- 2,175,000 18,000
NationsBank Corporation
Fredric J. Figge, II 1994 550,000 850,000 -- 0 24,750(6)
Chairman, Corporate 1993 475,000 700,000 -- 0 21,375
Risk Policy
NationsBank Corporation 1992 400,000 480,000 -- 1,740,000 18,000
(1) For 1994, 1993 and 1992, excludes perquisites and other personal benefits,
securities or property which, in the aggregate, do not exceed $50,000 for
each named executive officer.
(2) Includes an auto allowance in the amount of $17,362 and tax preparation in
the amount of $26,400.
(3) Includes moving expenses in the amount of $177,004.
(4) On June 22, 1994, the Corporation granted 200,000 shares of restricted
stock to Mr. McColl with the value shown for 1994 based on the closing
price of $53.625 per share on June 22, 1994. On January 22, 1992, the
Corporation granted the following numbers of shares of restricted stock to
the named executive officers: Mr. McColl -- 100,000 shares; Mr.
Thompson -- 50,000 shares; Mr. Lewis -- 40,000 shares; Mr. Hance -- 50,000
shares; and Mr. Figge -- 40,000 shares. (Values shown for 1992 are based on
the closing price of $43.50 per share on January 22, 1992). Shares of
restricted stock vest in equal installments over 5 years beginning in 1993
for shares granted on January 22, 1992 and beginning in 1995 for shares
granted on June 22, 1994, and each of the named executive officers has the
right to receive dividends on these shares prior to vesting. As of December
31, 1994, the named executive officers held the following numbers of shares
of restricted stock with the following values (based on the closing price
of $45.125 per share on December 31, 1994): Mr. McColl -- 260,000 shares
valued at $11,732,500; Mr. Thompson -- 30,000 shares valued at $1,353,750;
Mr. Lewis -- 24,000 shares valued at $1,083,000; Mr. Hance -- 30,000 shares
valued at $1,353,750; and Mr. Figge -- 24,000 shares valued at $1,083,000.
(5) For 1994, consists of matching contributions by the Corporation under
certain defined contribution plans in the amount of $40,500 and the value
of
18
certain premiums paid by the Corporation under a split dollar life
arrangement in the amount of $162,798.
(6) For 1994, consists of matching contributions by the Corporation under
certain defined contribution plans.
RETIREMENT PLANS
The following table shows the estimated annual pension benefits payable at
normal retirement to a participant in certain of the Corporation's qualified and
nonqualified defined benefit plans. (1)
PENSION PLAN TABLE
ANNUAL BENEFITS UPON RETIREMENT
WITH YEARS OF SERVICE INDICATED
15 YEARS
AVERAGE ANNUAL EARNINGS 5 YEARS 10 YEARS OR MORE
$ 750,000 $ 150,000 $ 300,000 $ 450,000
1,000,000 200,000 400,000 600,000
1,250,000 250,000 500,000 750,000
1,500,000 300,000 600,000 900,000
1,750,000 350,000 700,000 1,050,000
2,000,000 400,000 800,000 1,200,000
2,250,000 450,000 900,000 1,350,000
2,500,000 500,000 1,000,000 1,500,000
2,750,000 550,000 1,100,000 1,650,000
3,000,000 600,000 1,200,000 1,800,000
3,250,000 650,000 1,300,000 1,950,000
3,500,000 700,000 1,400,000 2,100,000
(1) The table sets forth the combined benefits payable under the NationsBank
Pension Plan, the NationsBank Corporation and Designated Subsidiaries
Supplemental Retirement Plan, the NationsBank Corporation and Designated
Subsidiaries Supplemental Executive Retirement Plan and Social Security.
Messrs. McColl, Thompson, Lewis, Hance and Figge each participate in the
three plans of the Corporation listed above.
A participant's "average annual earnings" means the average of the five highest
years of the participant's salary and bonuses during his last ten years of
employment. The "salary" and "bonuses" used to determine a participant's
"average annual earnings" are the same as the salary and bonuses disclosed in
the "Salary" and "Bonus" columns of the Summary Compensation Table. The table
describes annual benefits payable in the form of a joint and 75% survivor
annuity beginning at normal retirement. For purposes of the table, normal
retirement means a participant's separation from service following either (1)
attainment of age 62 or (2) attainment of age 60 with 20
19
years of service. A person who retires before normal retirement may be entitled
to reduced benefits under the plans depending on the participant's age and years
of service. The Corporation has entered into an arrangement with Mr. Figge
pursuant to which he would receive retirement benefits equal to 50% of his
"average annual earnings" upon the completion of 11 years of service (payable as
a joint and 50% survivor annuity) and 60% of "average annual earnings" upon the
completion of 14 years of service (payable as a joint and 75% survivor annuity).
As of December 31, 1994, Messrs. McColl, Thompson, Lewis, Hance and Figge had
the following amounts of "average annual earnings" and completed years of
service: Mr. McColl -- $2,320,000 and 35 years; Mr. Thompson -- $1,195,000 and
31 years; Mr. Lewis -- $1,110,000 and 25 years; Mr. Hance -- $1,115,000 and 7
years; and Mr. Figge -- $966,000 and 7 years.
DEFERRED COMPENSATION PLAN
Messrs. McColl, Thompson and Lewis also participate in the NationsBank
Corporation and Designated Subsidiaries Deferred Compensation Plan for Key
Employees (the "Deferred Compensation Plan") which was established by the
Corporation as of November 1, 1985. Each of the named executives deferred
compensation under the Deferred Compensation Plan during the period from 1985
through 1989, but no compensation has been deferred by the named executives
under the plan since 1989.
Under the Deferred Compensation Plan, a participant is returned his deferrals,
along with interest, following the participant's termination of employment. The
annual rate of interest depends on the participant's age and years of service at
termination and will be approximately 13% (in the case of normal retirement or
"special" early retirement), 11% (in the case of "regular" early retirement) or
8% (in the case of termination prior to "regular" early retirement). For these
purposes, normal retirement means termination of employment following attainment
of age 62; "special" early retirement means termination of employment following
attainment of age 55 with 20 years of service; and "regular" early retirement
means termination of employment following attainment of age 50 with 15 years of
service. In addition, the designated beneficiary of a
20
participant who dies while in service receives a benefit equal to the
participant's "regular" early retirement benefit (or the participant's "special"
early retirement benefit or normal retirement benefit to which the participant
may have been entitled at the time of death). As a result, the designated
beneficiary of a participant who dies prior to eligibility for "regular" early
retirement may, in effect, receive a return on the participant's deferrals that
is greater than an 11% annual rate. Payments under the Deferred Compensation
Plan are generally made over a period of 15 years following retirement or death,
but they are made in a single payment following a termination of employment
prior to eligibility for "regular" early retirement.
BENEFIT SECURITY TRUST
The Corporation and certain of its subsidiaries have established a Benefit
Security Trust (the "Trust") which is a "grantor trust" under Section 671 of the
Internal Revenue Code of 1986, as amended (the "Code"). The purpose of the Trust
is to provide participants in designated supplemental retirement plans sponsored
by the Corporation, including generally all of the Corporation's nonqualified
defined contribution and defined benefit plans, with greater assurances that the
benefits to which such participants are entitled under the plans will be
satisfied. The Corporation may in its discretion designate additional plans to
be covered by the Trust. Contributions to the Trust are discretionary with the
Corporation and its participating subsidiaries from time to time. In that
regard, the Corporation has made cumulative contributions of $77.9 million to
the Trust through December 31, 1994. Prior to a change of control of the
Corporation, benefits are paid from the Trust only upon the direction of the
Corporation. After a change of control of the Corporation, benefits are paid
from the Trust to the extent such benefits are not paid by the Corporation or
its subsidiaries. The assets of the Trust are subject to the claims of the
creditors of the Corporation and its participating subsidiaries in the event of
an "Event of Insolvency" (as such term is defined in the Trust). The market
value of assets held in the Trust as of December 31, 1994 was $86.7 million.
21
STOCK OPTIONS
No options or stock appreciation rights were awarded or exercised in 1994 with
respect to any of the named executive officers. None of the named executive
officers holds any options or stock appreciation rights.
TOTAL CUMULATIVE SHAREHOLDER RETURN FOR
FIVE-YEAR AND TEN-YEAR PERIODS ENDING
DECEMBER 31, 1994
The following graphs compare the yearly percentage change in the Corporation's
cumulative total shareholders' return on the Common Stock with (i) Standard &
Poor's 500 Index, and (ii) Standard & Poor's Major Regional Banks Index for the
years ended 1990 to 1994, inclusive, and for the years ended 1985 to 1994,
inclusive.
(Performance Graph appears here. Plot points are listed below.)
1989 1990 1991 1992 1993 1994
NationsBank 100.00 52.01 96.04 125.86 124.03 118.86
S&P 500 100.00 96.89 126.28 135.88 149.52 151.55
S&P Major Regional Banks 100.00 68.09 99.77 135.96 167.36 163.23
22
(Performance Graph appears here. Plot points are listed below.)
1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994
NationsBank 100.00 130.57 128.07 106.69 175.14 304.68 158.46 293.51 383.48 377.89 362.14
S&P 500 100.00 131.64 156.15 164.24 191.33 251.77 243.93 317.93 342.12 376.45 361.56
S&P Major Regional Banks 100.00 120.28 123.68 99.85 126.07 154.00 110.06 196.71 250.40 265.18 251.25
The graphs assume an initial investment of $100 at the end of 1989 and 1984,
respectively, and the reinvestment of all dividends during the periods
indicated.
COMPENSATION COMMITTEE AND STOCK OPTION COMMITTEE REPORT ON EXECUTIVE
COMPENSATION
The compensation committee of the Board provides overall guidance to the
Corporation's executive compensation programs. The committee, which is composed
of seven outside directors named at the end of this report, meets quarterly to
review the Corporation's compensation programs, including executive salary
administration and incentive compensation plans. The committee makes
recommendations jointly with the executive committee to the Board regarding the
compensation of the Chief Executive Officer. The Chief Executive Officer does
not participate in those discussions or in the making of such recommendations by
the compensation and executive committees. The Board (other than the Chief
Executive Officer) must approve all compensation actions regarding the Chief
Executive Officer. During 1994, the Board approved all such actions which were
recommended by the compensation and executive committees related to the
compensation of the Chief Executive Officer.
23
GENERAL EXECUTIVE COMPENSATION POLICIES
The Corporation's executive compensation policies have two primary goals: (1) to
attract and retain the highest quality executive officers and (2) to reward
those officers for superior corporate performance measured by the Corporation's
financial results and strategic achievements.
The Corporation pays its executive officers three principal types of
compensation: base salary, annual incentive compensation and long-term incentive
compensation, each of which is more fully described below. Executive officers
also participate in the Corporation's various qualified and certain
non-qualified employee benefit plans designed to provide retirement income.
1. BASE SALARY. The relative levels of base salary for the named executive
officers are designed to reflect each named executive officer's scope of
responsibility and accountability within the Corporation. To determine the
necessary amounts of base salary to attract and retain top quality management,
the committee extensively reviews comparable salary and other compensation
arrangements in effect at comparable competitor financial institutions. Such
comparable competitor financial institutions include all of the banks listed in
the Standard & Poor's Major Regional Banks Index used in the graphs on pages 22
and 23. In addition, the committee compares the group with the base salary data
of the 35 largest United States bank holding companies. Based on such
comparison, in 1994 the base salary levels of the named executive officers were
not changed from the levels in effect since July 1, 1993. The amount of base
salary paid during 1994 to the named executive officers generally is slightly
above the median of the competitive range for the Chief Executive Officer and in
the high end of the competitive range for the remaining named executive
officers. However, when base salary data is adjusted to consider the size of the
financial institution, the Chief Executive Officer's base salary is somewhat
below the median of the competitive range while the other named executive
officers' base salaries generally approximate the median of the competitive
range as a group.
Over the last several years the Corporation's policy has been to place less
emphasis on base salary and greater emphasis on variable, performance-related
annual and long-term incentive
24
compensation. The goal of this policy is to better align the interests of
management with the interests of shareholders.
2. ANNUAL INCENTIVE COMPENSATION. The Corporation provides performance-related
annual incentive compensation to its named executive officers under the
shareholder-approved Executive Incentive Compensation Plan ("EIC Plan"). Amounts
awarded under the EIC Plan are intended to constitute "performance-based
compensation" under Section 162(m) of the Code ("Section 162(m)"). Section
162(m) limits the deductibility of compensation paid to certain executive
officers in excess of $1.0 million, but excludes "performance-based
compensation" from this limit.
Under the EIC Plan, the compensation committee establishes a formula during the
first quarter of each fiscal year for determining the amount of an incentive
compensation pool and the allocation of that pool among the named executive
officers. The formula is based on performance of the Corporation as measured by
"return on average common shareholders' equity" ("ROE") for the fiscal year,
which measures net income of the Corporation for the year as a percentage of
average common shareholder's equity for the year. The committee establishes a
base benchmark ROE for the year below which no awards will be made. The formula
then provides for increasing amounts of awards for levels of ROE above the base
benchmark. No award may be made under the EIC Plan for a year to a named
executive officer in excess of $2.7 million. For 1994, ROE was 16.1%. This
exceeded the base benchmark ROE established by the committee, and under the EIC
Plan's award formula amounts were paid and are included in the summary
compensation table.
During 1994, the Corporation achieved a number of strategic goals, including the
acquisitions of Rock Hill National Bank, Consolidated Bank, N.A., Corpus Christi
National Bank and Cypress Financial Corporation and the consolidation of the
Maryland and Washington, D.C. banking operations, which the committee believes
should be considered for compensation purposes. Because the EIC Plan rewards
performance based only on ROE, the committee believes that the EIC Plan did not
fully reward those named executive officers who had significant responsibilities
in achieving these and other strategic goals. The committee therefore made a
special payment outside of the EIC Plan to certain of the named executive
25
officers, including the Chief Executive Officer as described below, in the
aggregate amount of $700,000.
3. LONG-TERM INCENTIVE COMPENSATION. The compensation committee believes that
stock ownership is the best way to align the interests of the executive officers
with those of the Corporation's shareholders. To that end, executive officers
may be awarded restricted stock under the Corporation's 1986 Restricted Stock
Award Plan (the "Restricted Stock Plan").
The Restricted Stock Plan, which has been previously approved by the
shareholders, contains a formula which establishes the number of shares
available for award each fiscal year. Subject to certain adjustments to take
into account options awarded in prior years under the Corporation's 1978 Key
Employee Stock Option Plan, 0.5% of the total shares of Common Stock outstanding
on the first day of each calendar year during which the Restricted Stock Plan is
in effect become available for granting awards in such year. All shares
available for granting awards in any year that are not used and shares allocated
to awards that are canceled or forfeited are also available for use in
subsequent years. On January 1, 1994 there was a total of 2,529,434 shares of
Common Stock available for award under the Restricted Stock Plan.
The Restricted Stock Plan is administered by the stock option committee of the
Corporation, which during 1994 consisted of all of the members of the
compensation committee. The stock option committee, upon recommendation by
executive management, determines whether, to whom and in what amounts awards are
to be made under the Restricted Stock Plan. The Board acts on the
recommendations of the compensation and executive committees regarding proposed
awards under the Restricted Stock Plan to the Chief Executive Officer.
Awards are intended to serve as compensation over a period of several years and
are therefore generally not made every year. Also, in order to provide
additional incentives for a participant to remain in service with the
Corporation, an award vests in the participant in five equal annual installments
beginning on the first day of the calendar year following the award.
Other than the award to Mr. McColl described below, no awards under the
Restricted Stock Plan were made to the executive officers during 1994.
26
During 1994, the Corporation adopted, subject to shareholder approval, the
"NationsBank Corporation Key Employee Stock Plan," which would replace the
Restricted Stock Plan effective January 1, 1995. See page 32 for a description
of this plan. One of the intended results of adopting the Key Employee Stock
Plan would be to provide for types of long-term incentive awards, such as stock
options and performance shares, that would qualify as "performance-based
compensation" under Section 162(m). Restricted stock awards under the Restricted
Stock Plan generally do not qualify for such treatment. However, awards made
under the Restricted Stock Plan prior to February 17, 1993 are not subject to
the limitations of Section 162(m).
4. COMPENSATION POLICIES FOR OTHER EXECUTIVE OFFICERS. The Corporation currently
has one executive officer who is not a named executive officer. Such executive
officer's base salary and annual incentive compensation are determined by the
management compensation committee, which, in 1994, was comprised of the named
executive officers and one other senior officer. The management compensation
committee establishes such executive officer's base salary using the same
executive compensation surveys described above which are employed by the
compensation committee to set base salary levels for the named executive
officers.
This executive officer's annual incentive compensation is determined pursuant to
the Corporation's Corporate Management Incentive Plan, which applies to the
senior officers of the Corporation other than the named executive officers. Each
year, the management compensation committee reviews the performance of the
participating executive officer, taking into account financial performance of
the Corporation, achievement of strategic goals and the officer's individual
contributions in achieving corporate goals, with no specified weight being given
to any factor. Based on such review, the executive officer may be allocated a
portion of any incentive pool for the year.
1994 COMPENSATION FOR MR. MCCOLL
The general policies described above for the compensation of executive officers
also apply to the compensation recommendations made by the compensation and
executive committees and approved by the Board of Directors (other than
27
Mr. McColl) with respect to the 1994 compensation for Mr. McColl as the
Corporation's Chief Executive Officer.
As discussed above, in 1994 no change was made to Mr. McColl's annualized rate
of base salary from the rate in effect since July 1, 1993.
Mr. McColl received an award of $1.9 million under the EIC Plan formula in
effect for 1994 as a result of the level of ROE attained by the Corporation for
1994. In addition, the committee believes that Mr. McColl provided the critical
leadership role which enabled the Corporation to achieve a number of its
strategic goals for 1994 described above. To recognize this performance which
the committee believes is not reflected by the ROE-based formula under the EIC
Plan, the committee made a special payment to Mr. McColl outside of the EIC Plan
in the amount of $200,000.
In 1994, the stock option committee awarded Mr. McColl 200,000 shares of
restricted stock under the Restricted Stock Plan that vest in equal installments
over the period from 1995 through 1999. The committee made this award on two
equally important bases: First, the award recognizes Mr. McColl's outstanding
contributions over the last decade in leading the Corporation to become one of
the largest, most diversified and most successful financial services
corporations in the country; and second, the recent passage of the Riegle/Neal
Interstate Banking and Branching Efficiency Act marks the beginning of a number
of fundamental structural changes that the committee believes will radically
transform the way banks do business in our nation over the next several years.
The committee recognized Mr. McColl's leadership in changing the nature of
banking in the United States. The committee believes that Mr. McColl's continued
leadership during this critical period of change will be invaluable to the
Corporation and that the award will provide Mr. McColl a significant incentive
to continue his leadership role during this period.
28
SUBMITTED BY THE COMPENSATION AND STOCK OPTION COMMITTEES OF THE CORPORATION'S
BOARD OF DIRECTORS:
Ronald W. Allen
Charles W. Coker
W. Frank Dowd, Jr.
L. L. Gellerstedt, Jr.
Buck Mickel
John C. Slane
Ronald Townsend
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
Messrs. Allen, Coker, Dowd, Gellerstedt, Mickel, Slane and Townsend served as
members of the Corporation's compensation committee during 1994. In addition,
Mr. McColl served as a member of the committee until resigning from the
committee on January 24, 1994. He is the only executive officer of the
Corporation who served on the committee during 1994, although the committee took
no action in 1994 prior to his resignation. Mr. McColl serves as a director of
Sonoco Products Company, a corporation of which Mr. Coker, chairman of the
compensation committee, is Chairman and Chief Executive Officer.
NationsBank, N.A. (Carolinas) entered into a construction contract in 1993 with
Shelco, Inc. to construct a 400,000 square foot office facility in Guilford
County, North Carolina. The facility, which is owned by NationsBank, N.A.
(Carolinas) was completed in 1994, and approximately $14,700,000 was paid to
Shelco in 1994 under this contract. Hugh L. McColl, III, son of Hugh L. McColl,
Jr., Chairman of the Board and Chief Executive Officer of the Corporation, is
the Chief Executive Officer of Shelco, Inc. Neither Mr. McColl nor his son had
any participation in the negotiation or arrangement of this contract. In the
opinion of management of NationsBank, N. A. (Carolinas), the amount paid to
Shelco is not higher than that which would be paid to an unrelated party
rendering similar services.
CERTAIN TRANSACTIONS
A number of the Corporation's directors and executive officers and certain
business organizations and individuals associated with them have been customers
of the Corporation's various banking subsidiaries. All extensions of credit to
the foregoing persons have been made in the ordinary course of business on
29
substantially the same terms, including interest rates and collateral, as those
prevailing at the time in comparable transactions with others and did not
involve more than normal risk of collectibility or present other unfavorable
features.
NationsBank, N.A. has entered into agreements with Goodman Segar Hogan Hoffler
("Goodman Segar"), a majority owned indirect subsidiary of Dominion Resources,
Inc., of which Mr. Thomas E. Capps is Chairman and Chief Executive Officer, for
the leasing of three Norfolk buildings and parking facilities -- NationsBank
Center, Two Commercial Place and Norfolk Southern Tower -- and for a variety of
property management services. In 1994, fees paid to Goodman Segar were
approximately $159,000. In the opinion of management of NationsBank, N.A., the
amount paid for such services is not higher than that which would be paid to an
unrelated party rendering similar services.
NationsBank of Florida, N.A. ("NationsBank Florida") leases space for a banking
office in Tarpon Springs, Florida from a company in which Mr. A. L. Ellis is a
general partner. The annual rental for the space is approximately $30,000. The
rental paid is at a rate no more or less favorable, in the opinion of management
of NationsBank Florida, than that which an unaffiliated company would be
required to pay for similar space. NationsBank Florida also has an easement
agreement with a company controlled by Mr. Ellis for access and egress to a
private road in a shopping center which is adjacent to the bank's branch located
in South Winter Haven, Florida. The annual payment under the easement agreement
is approximately $13,000.
NationsBank Florida leases space for its Miami main office from Intercontinental
Bank, of which Mr. Michael Weintraub is a shareholder. The annual rental paid
for the space, which is approximately 150,000 square feet, is approximately
$1,600,000. The rental paid is at a rate no more or less favorable, in the
opinion of management of NationsBank Florida, than that which an unaffiliated
company would be required to pay for similar space.
Cousins Properties Incorporated ("CPI"), of which Mr. Thomas G. Cousins is
Chairman and President, entered into a ground lease with the Corporation for a
banking center at North Point, Alpharetta, Georgia. The lease commenced in
October 1992
30
with annual rental payments to CPI of approximately $63,000 per year. The rental
paid is at a rate no more or less favorable, in the opinion of management of the
Corporation, than that which an unaffiliated company would be required to pay
for similiar space.
NationsBank Corporation leases space for its Atlanta headquarters in NationsBank
Plaza from CSC, which is a joint venture partnership between C&S Premises, Inc.
and CPI which is the managing partner of the joint venture. The annual rental
paid for the space, which is approximately 566,294 square feet, is approximately
$14,200,000. The rental paid is at a rate no more or less favorable, in the
opinion of management of the Corporation, than that which an unaffiliated
company would be required to pay for similar space.
CSC also has entered into an agreement with CPI for the management of
NationsBank Plaza. In 1994, fees paid for building management were approximately
$250,000. In the opinion of management of the Corporation, the amount paid to
CSC for such services is not higher than that which would be paid to an
unrelated party rendering similar services.
In March 1984, the Ellis Banking Corporation, of which Mr. A. L. Ellis was
Chairman of the Board, merged into a subsidiary of the Corporation. As a result
of that merger, Mr. Ellis entered into a ten-year employment agreement with
NationsBank Florida whereby he assists NationsBank Florida in operating and
expanding its business in Florida and receives in return $1.00 per year, an
office and secretary, reimbursement of his business expenses and an automobile
and driver. In addition the Corporation continues Mr. Ellis's annual salary of
$333,200, along with employee benefits, for an indefinite period so long as he
chooses to be employed. In 1994, he received compensation and fees of $620,431
from the Corporation and its subsidiaries.
The Corporation and various of its subsidiaries purchase business forms and
supplies from Jordan Graphics, Inc., a subsidiary of Ruddick Corporation of
which Mr. Alan T. Dickson is Chairman. In 1994, purchases from Jordan Graphics
amounted to approximately $405,700, which were at rates competitive with those
charged by other suppliers of those products.
31
Certain additional transactions with the Corporation's directors are described
above under the caption "Compensation Committee Interlocks and Insider
Participation."
APPOINTMENT OF INDEPENDENT PUBLIC ACCOUNTANTS
The Board, upon the recommendation of the audit committee, has approved the
selection of the firm of Price Waterhouse LLP as independent accountants to
audit the books of the Corporation and its subsidiaries for the current year, to
report on the consolidated statement of financial position and related statement
of earnings of the Corporation and its subsidiaries, and to perform such other
appropriate accounting services as may be required by the Board. The Board
recommends that the shareholders vote in favor of ratifying and approving the
selection of Price Waterhouse LLP for the purposes set forth above. The
Corporation has been advised by Price Waterhouse LLP that the firm did not have
any direct financial interest or any material indirect financial interest in the
Corporation and its subsidiaries during 1994.
Representatives of Price Waterhouse LLP are expected to be present at the
shareholders' meeting with the opportunity to make a statement if they so
desire, and they are expected to be available to respond to appropriate
questions.
Should the shareholders vote negatively, the Board will consider a change in
auditors for the next year.
THE BOARD RECOMMENDS A VOTE "FOR" RATIFYING THE SELECTION OF PRICE WATERHOUSE
LLP AS INDEPENDENT PUBLIC ACCOUNTANTS TO AUDIT THE BOOKS OF THE CORPORATION AND
ITS SUBSIDIARIES FOR THE CURRENT YEAR.
APPROVAL OF PROPOSED KEY EMPLOYEE STOCK PLAN
The Board has adopted, subject to shareholder approval, the NationsBank
Corporation Key Employee Stock Plan (the "Stock Plan"). The Stock Plan reserves
that number of shares of Common Stock set forth under "Number of Shares" below
for issuance to certain key employees of the Corporation in the form of stock
options, stock appreciation rights ("SARs"), restricted stock and performance
shares.
32
BACKGROUND AND PURPOSE
As described in the Compensation Committee and Stock Option Committee Report on
Executive Compensation, one of the fundamental components of compensation for
the Corporation's key employees is long-term incentive compensation. For a
number of years, such long-term incentive compensation has been provided through
shares of restricted stock issued under the Restricted Stock Plan. Under the
Restricted Stock Plan, the stock option committee awards restricted stock from
time to time to certain selected key employees of the Corporation, and such
awards vest over a period of years.
The Corporation intends its long-term incentive plans to (i) attract and retain
key executive and managerial employees, (ii) motivate such employees by means of
growth-related incentives, (iii) provide incentive compensation opportunities
that are competitive with those of other major corporations and (iv) further
align the interests of such employees with the shareholders of the Corporation.
The Board of Directors believes that the Stock Plan should be adopted to replace
the Restricted Stock Plan because it would provide a better means for achieving
these goals. The Stock Plan would provide the Corporation with greater
flexibility in designing long-term incentive compensation awards, including
providing the Corporation with a means of making awards that are conditioned on
satisfying certain performance criteria. This would allow the Corporation to
make long-term incentive compensation a more significant aspect of a key
employee's overall compensation package. In addition, awards of restricted stock
under the Restricted Stock Plan would not constitute "qualified
performance-based compensation" under Section 162(m), and would therefore be
subject to the deductibility limit that Section 162(m) imposes on compensation
paid to certain executive officers in excess of $1.0 million. The Stock Plan, on
the other hand, is designed to provide for several types of awards, including
(i) stock options with a fair market value exercise price at the date of grant
and (ii) restricted stock or performance shares that are conditioned on the
satisfaction of certain performance criteria, all of which are intended to
constitute "qualified performance-based compensation" under Section 162(m) that
would be exempt from its deductibility limits.
If the Stock Plan is adopted by the shareholders of the Corporation, it would
replace the Restricted Stock Plan. No further
33
awards would be made under the Restricted Stock Plan, and as described below,
the shares reserved for issuance under the Restricted Stock Plan that have not
been used would be available for issuance of awards under the Stock Plan. The
following is a summary of the material terms of the Stock Plan as proposed.
NUMBER OF SHARES
The number of shares available for issuance under the Stock Plan would be 0.75%
of the outstanding shares of Common Stock as of the first business day of each
calendar year beginning with calendar year 1995 and continuing through calendar
year 2004. In addition, the Restricted Stock Plan would be terminated effective
January 31, 1995, and the number of shares available for issuance under the
Restricted Stock Plan as of that date would become available for issuance under
the Stock Plan. Based on the foregoing formula and the addition of the shares
that remain available for issuance under the Restricted Stock Plan, there will
be approximately 5,685,000 shares of Common Stock available for issuance under
the Stock Plan in calendar year 1995. All shares available for granting awards
in any year that are not used, as well as shares allocated to awards under both
the Stock Plan and the Restricted Stock Plan that are canceled or forfeited,
would be available for use in subsequent years.
ADMINISTRATION
The Stock Plan would be administered by the stock option committee of the Board
(the "Committee"). It is intended that the Committee would at all times be made
up of "disinterested persons" within the meaning of Rule 16b-3 promulgated under
Section 16(b) of the Exchange Act and that all of its members would be "outside
directors" within the meaning of Section 162(m). Under the Stock Plan, the
Committee would (i) select the key employees to receive awards from time to
time, (ii) make awards in such amounts as it determines, (iii) impose such
limitations, restrictions and conditions upon awards as it deems appropriate,
(iv) establish performance targets and allocation formulas for awards of
restricted stock or performance shares intended to be "qualified
performance-based compensation" under Section 162(m), (v) certify the attainment
of performance goals, if applicable, as required by Section 162(m), (vi)
interpret the Stock Plan and adopt, amend and rescind
34
administrative guidelines and other rules and regulations relating to the Stock
Plan, (vii) correct any defect or omission or reconcile any inconsistency in the
Stock Plan or any award granted thereunder and (viii) make all other
determinations and take all other actions necessary or advisable for the
implementation and administration of the Stock Plan. The Committee would also
have the authority to accelerate the vesting and/or waive any restrictions of
any outstanding awards. No awards would be made under the Stock Plan after
December 31, 2004. In no event may an individual receive awards under the Stock
Plan for a given calendar year covering in excess of 250,000 shares.
ELIGIBILITY
Only "key employees" of the Corporation may participate in the Stock Plan. "Key
employees" are those employees of the Corporation who occupy managerial or other
important positions and who have made significant contributions to the business
of the Corporation, as determined by the Committee, including persons employed
outside the United States. Approximately 10,000 employees are expected to be
eligible to participate. The Committee, in its discretion, will select the award
recipients.
AWARDS OF STOCK OPTIONS AND STOCK APPRECIATION RIGHTS
The Stock Plan provides for the grant of options to purchase shares of Common
Stock at option prices which are not less than the fair market value of shares
of Common Stock at the close of business on the date of grant. (The fair market
value of the Common Stock as of March 15, 1995 was $50.00.) The Stock Plan also
provides for the grant of SARs (either in tandem with stock options or
freestanding), which entitle holders upon exercise to receive either cash or
shares of Common Stock or a combination thereof, as the Committee in its
discretion shall determine, with a value equal to the difference between (i) the
fair market value on the exercise date of the shares with respect to which an
SAR is exercised and (ii) fair market value of such shares on the date of grant
(or, if different, the exercise price of the related option in the case of a
tandem SAR).
35
Awards of options under the Stock Plan, which may be either incentive stock
options (which qualify for special tax treatment) or non-qualified stock
options, are determined by the Committee. The terms and conditions of each
option and of any SAR are to be determined by the Committee at the time of
grant.
Exercise of an option (or an SAR) will result in the cancellation of any related
SAR (or option) to the extent of the number of shares in respect of which such
option or SAR has been exercised. Options and SARs granted under the Stock Plan
will expire not more than 10 years from the date of grant, and the option
agreements entered into with the optionees will specify the extent to which
options and SARs may be exercised during their respective terms, including in
the event of the optionee's death, disability or termination of employment.
Payment for shares issuable pursuant to the exercise of an option may be made
either in cash or by tendering shares of Common Stock with a fair market value
at the date of the exercise equal to the portion of the exercise price which is
not paid in cash.
AWARDS OF RESTRICTED STOCK AND PERFORMANCE SHARES
The Stock Plan provides for the issuance of shares of restricted stock to such
key employees and on such terms and conditions as determined from time to time
by the Committee. The restricted stock award agreement with the participant will
set forth the terms of the award, including the applicable restrictions. Such
restrictions may include the continued service of the participant with the
Corporation, the attainment of specified performance goals or any other
conditions deemed appropriate by the Committee.
The stock certificates evidencing the restricted stock will bear an appropriate
legend and will be held in the custody of the Corporation until the applicable
restrictions have been satisfied. The participant cannot sell, transfer, pledge,
assign or otherwise alienate or hypothecate shares of restricted stock until the
applicable restrictions have been satisfied. Once the restrictions are
satisfied, the shares will be delivered to the participant. During the period of
restriction, the participant may exercise full voting rights with respect to the
restricted stock. The participant will also be credited with dividends with
36
respect to the restricted stock. Such dividends may be payable currently or may
be subject to additional restrictions as determined by the Committee and set
forth in the award agreement.
In addition to restricted stock, the Committee may award performance shares to
selected key employees. The value of a performance share will equal the fair
market value of a share of Common Stock. The Stock Plan provides that the number
of performance shares granted and/or the vesting of granted performance shares
can be contingent on the attainment of certain performance goals or other
conditions over a period of time (called the "performance period"), all as
determined by the Committee and evidenced by an award agreement. During the
performance period, the Committee would determine what number (if any) of
performance shares have been earned. Earned performance shares may be paid in
cash, shares of common stock or a combination thereof having an aggregate fair
market value equal to the value of the earned performance shares as of the
payment date. Common Stock used to pay earned performance shares may have
additional restrictions as determined by the Committee. In addition, the
Committee may cancel any earned performance shares and replace them with stock
options determined by the Committee to be of equivalent value based on a
conversion formula specified in the participant's performance share award
agreement. Earned but unpaid performance shares may have dividend equivalents
rights as determined by the Committee and evidenced in the award agreement.
SECTION 162(M)
Because stock options and SARs granted under the Stock Plan must have an
exercise price equal at least to fair market value at the date of grant,
compensation from the exercise of stock options and SARs should be treated as
"qualified performance-based compensation" for Section 162(m) purposes.
In addition, the Stock Plan authorizes the Committee to make awards of
restricted stock or performance shares that are conditioned on the satisfaction
of certain performance criteria. For such awards intended to result in
"qualified performance-based compensation," the Committee will establish prior
to or within 90 days after the start of the applicable performance period the
applicable performance conditions. The Committee may select from the following
performance measures for such
37
purpose: (i) return on average common shareholders' equity of the Corporation,
(ii) return on average assets of the Corporation, (iii) net income of the
Corporation, (iv) earnings per common share of the Corporation or (v) total
shareholder return of the Corporation. The performance conditions will be stated
in the form of an objective, nondiscretionary formula, and the Committee will
certify in writing the attainment of such performance conditions prior to any
payout with respect to such awards. The Committee in its discretion may adjust
downward any such award, even if the performance objective is achieved.
WITHHOLDING FOR PAYMENT OF TAXES
The Stock Plan provides for the withholding and payment by a participant of any
payroll or withholding taxes required by applicable law. The Stock Plan permits
a participant to satisfy such requirement, with the approval of the Committee
and subject to the terms of the Stock Plan, by having the Corporation withhold
from the participant a number of shares of Common Stock otherwise issuable under
the award having a fair market value equal to the amount of the applicable
payroll and withholding taxes.
CHANGES IN CAPITALIZATION AND SIMILAR CHANGES
In the event of any change in the outstanding shares of Common Stock by reason
of any stock dividend, stock split, spin-off, recapitalization, merger,
consolidation, combination, exchange of shares or otherwise, the aggregate
number of shares of Common Stock with respect to which awards may be made under
the Stock Plan, and the terms, types of shares and number of shares of any
outstanding awards under the Stock Plan may be equitably adjusted by the
Committee in its discretion to preserve the benefit of the award for the
Corporation and the participant.
CHANGE IN CONTROL
The Stock Plan provides that in the event of a change in control of the
Corporation, all options and SARs will be fully exercisable as of the date of
the change in control and shall remain exercisable through their full term.
Outstanding awards of restricted stock and performance shares will become
immediately vested, and any applicable performance conditions shall
38
be deemed satisfied (at the target performance condition, if applicable) as of
the date of the change in control.
AMENDMENT AND TERMINATION OF THE STOCK PLAN
The Board of Directors will have the power to amend, modify or terminate the
Stock Plan on a prospective basis. Shareholder approval will be obtained for any
change to the material terms of the Stock Plan to the extent required by Section
16(b) under the Exchange Act or Section 162(m).
FEDERAL INCOME TAX TREATMENT
INCENTIVE STOCK OPTIONS. Incentive stock options ("ISOs") granted under the
Stock Plan will be subject to the applicable provisions of the Code, including
Code Section 422. If shares of Common Stock are issued to an optionee upon the
exercise of an ISO, and if no "disqualifying disposition" of such shares is made
by such optionee within one year after the exercise of the ISO or within two
years after the date the ISO was granted, then (i) no income will be recognized
by the optionee at the time of the grant of the ISO, (ii) no income, for regular
income tax purposes, will be realized by the optionee at the date of exercise,
(iii) upon sale of the shares acquired by exercise of the ISO, any amount
realized in excess of the option price will be taxed to the optionee, for
regular income tax purposes, as a long-term capital gain and any loss sustained
will be a long-term capital loss, and (iv) no deduction will be allowed to the
Corporation for federal income tax purposes. If a "disqualifying disposition" of
such shares is made, the optionee will realize taxable ordinary income in an
amount equal to the excess of the fair market value of the shares purchased at
the time of exercise over the option price (the "bargain purchase element") and
the Corporation will be entitled to a federal income tax deduction equal to such
amount. The amount of any gain in excess of the bargain purchase element
realized upon a "disqualifying disposition" will be taxable as capital gain to
the holder (for which the Corporation will not be entitled a federal income tax
deduction). Upon exercise of an ISO, the optionee may be subject to alternative
minimum tax.
NONQUALIFIED STOCK OPTIONS. With respect to nonqualified stock options ("NQSOs")
granted to optionees under the Stock Plan, (i) no income is realized by the
optionee at the time the NQSO is granted, (ii) at exercise, ordinary income is
realized
39
by the optionee in an amount equal to the difference between the option price
and the fair market value of the shares on the date of exercise, and the
Corporation receives a tax deduction for the same amount, and (iii) on
disposition, appreciation or depreciation after the date of exercise is treated
as either short-term or long-term capital gain or loss depending on whether the
shares have been held for more than one year.
RESTRICTED STOCK. Upon becoming entitled to receive shares at the end of the
applicable restriction period without a forfeiture, the recipient has ordinary
income in an amount equal to the fair market value of the shares at that time.
However, a recipient who elects under Code Section 83(b) within 30 days of the
date of the grant will have ordinary taxable income on the date of the grant
equal to the fair market value of the shares of restricted stock as if the
shares were unrestricted and could be sold immediately. If the shares subject to
such election are forfeited, the recipient will not be entitled to any
deduction, refund or loss for tax purposes. Upon sale of the shares after the
forfeiture period has expired, the holding period to determine whether the
recipient has long-term or short-term capital gain or loss begins when the
restriction period expires, and the tax basis will be equal to the fair market
value of the shares when the restriction period expires. However, if the
recipient timely elects to be taxed as of the date of grant, the holding period
commences on the date of the grant and the tax basis will be equal to the fair
market value of the shares on the date of the grant as if the shares were then
unrestricted and could be sold immediately. The Corporation generally will be
entitled to a deduction equal to the amount that is taxable as ordinary
compensation income to the recipient.
PERFORMANCE SHARES. A participant who is awarded performance shares will not
recognize income and the Corporation will not be allowed a deduction at the time
the award is made. When a participant receives payment for performance shares in
cash or shares of Common Stock, the amount of the cash and the fair market value
of the shares received will be ordinary income to the participant and will be
allowed as a deduction for federal income tax purposes to the Corporation.
However, if there is a substantial risk that any shares used to pay out earned
performance shares will be forfeited (for example,
40
because the Committee conditions such shares on the performance of future
services), the taxable event is deferred until the risk of forfeiture lapses. In
this case, the participant can elect to make a Code Section 83(b) election as
previously described. The Corporation can take the deduction at the time the
income is recognized by the participant.
THE BOARD RECOMMENDS A VOTE "FOR" APPROVAL OF THE STOCK PLAN.
SHAREHOLDER PROPOSALS
RURAL COMMUNITY REINVESTMENT
The Corporation has received a proposal from the Sinsinawa Dominicans, Inc.,
Sinsinawa, Wisconsin 53824, who beneficially own 3,500 shares of Common Stock of
the Corporation, which notes their intention to present the following resolution
at the Annual Meeting:
WHEREAS, the Community Reinvestment Act is a 1977 federal law which says that
banks and savings institutions have a continuing and affirmative obligation to
serve the public and help meet local credit needs; and
WHEREAS, this broad mandate includes the credit needs of family farmers and
other rural residents; and
WHEREAS, the CRA has been used mostly by community groups in urban areas to
address lending policies related to housing loans; and
WHEREAS, there is a growing awareness among members of the general public that
CRA is directly relevant and applicable to rural areas and the lending policies
and practices of banks serving these communities; and
WHEREAS, this increased awareness is manifested in the day-to-day efforts of
rural-based groups in Iowa, Wisconsin, Minnesota, Nebraska, Missouri, Arkansas
and other states;
BE IT RESOLVED: The shareholders request that the Board of Directors report to
all the shareholders within one year of this year's annual meeting regarding
specific steps and actions taken during the preceding FY to address the credit
needs of small and mid-sized family farms (owning less than 400 acres) and rural
(areas having population less than 50,000) small business enterprises.
Thereafter, this information shall be provided
41
annually. Reports should be prepared at a cost deemed reasonable and omit
proprietary information.
SUPPORTING STATEMENT
Disclosing information on lending activities is an appropriate and
cost-effective way for banks to identify the various steps they are taking to
serve community credit needs.
Banks in urban areas are required by law under the Home Mortgage Disclosure Act
to provide detailed information on home lending activities in low and moderate
income neighborhoods. There is no similar law which requires banks doing
business in rural areas to disclose specific facts and figures about their local
lending patterns related to small and mid-sized family farms and small business
enterprises.
Therefore, we call upon NationsBank to provide the above-described information
on a voluntary and annual basis.
MANAGEMENT'S STATEMENT
Rural and farm communities are an integral part of the communities in which
NationsBank does business. As such, NationsBank's community investment
commitment and programs apply equally to rural and urban areas.
In the Community and Reinvestment Act files, available in each NationsBank
branch, information on community lending is already being provided to the
public. In addition, NationsBank fully complies with such regulatory reporting
requirements as the Home Mortgage Disclosure Act (HMDA). HMDA reports make
public detailed information on home mortgage lending. Home mortgages made in
rural and farm areas are a part of these reports.
Management believes that such information as requested by the shareholder
resolution is already available through various public bank files and other
public records. Therefore, an additional report as requested would be redundant
and an unnecessary expense to NationsBank shareholders.
THE BOARD RECOMMENDS A VOTE "AGAINST" THIS SHAREHOLDER PROPOSAL.
42
PROPOSALS FOR 1996 ANNUAL MEETING OF SHAREHOLDERS
Shareholders who intend to present proposals for consideration at next year's
annual meeting are advised that any such proposal must be received by the
Secretary of the Corporation no later than the close of business on November 29,
1995 if such proposal is to be considered for inclusion in the proxy statement
and form of proxy relating to that meeting.
OTHER MATTERS
The Board is not aware of any other matters which may be presented for action at
the meeting, but if other matters do properly come before the meeting, it is
intended that shares of Common Stock and ESOP Preferred Stock represented by
proxies in the accompanying form will be voted by the persons named in the proxy
in accordance with their best judgment.
You are cordially invited to attend this year's meeting. However, whether you
plan to attend the meeting or not, you are respectfully urged to sign and return
the enclosed proxy, which may be revoked if you are present at the meeting and
so request.
(Signature of Hugh L. McColl, Jr. appears here)
HUGH L. MCCOLL, JR.
CHAIRMAN OF THE BOARD AND
March 27, 1995 CHIEF EXECUTIVE OFFICER
43
NationsBank
Notice of Annual Meeting
and Proxy Statement
ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD APRIL 26, 1995
******************************************************************************
APPENDIX
P NationsBank Corporation
R This Proxy is solicited on behalf of the Board of Directors
O ANNUAL MEETING OF SHAREHOLDERS, APRIL 26, 1995
X The undersigned shareholder of NationsBank Corporation hereby appoints
Y Douglas Cruickshanks, Jr., A. Ransone Hartz, and C. Lee Wilkinson, Jr.
or any of them acting by majority or acting singly in the absence of the
others, attorneys and proxies, with full power of substitution, to represent
the undersigned and vote all of the shares of Common Stock of NationsBank
Corporation which the undersigned is entitled to vote at the Annual Meeting
of Shareholders to be held in the James River Ballroom of the Omni Richmond
Hotel, 100 South 12th Street, Richmond, Virginia, on Wednesday, April 26,
1995, at 11:00 A.M. (local time) or any adjournment(s) thereof:
THIS PROXY IS CONTINUED ON THE REVERSE SIDE
PLEASE SIGN ON REVERSE SIDE AND RETURN PROMPTLY
IN THE ENCLOSED POSTAGE-PAID ENVELOPE
The shares represented by this proxy will be voted as directed
by the shareholder. If no direction is given when the duly
executed proxy is returned, such shares of Common Stock will
be voted "FOR" all nominees in item 1, "FOR" Proposals 2 and 3
and "AGAINST" Proposal 4.
[X] Please mark COMMON DIVIDEND REINVESTMENT
your votes
as this
The Board of Directors Recommends a Vote "FOR all nominees" in Item 1 and "FOR"
Proposals 2 and 3.
1. Election of the following nominees as Directors: R. Allen, W. Barnhardt,
T. Capps, C. Coker, T. Cousins, A. Dickson, W. Dowd, Jr., A. Ellis, P. Fulton,
L. Gellerstedt, Jr., T. Guzzle, E. Ingram, W. Johnson, H. McColl, Jr.,
B. Mickel, J. Murphy, J. Slane, J. Snow, M. Spangler, R. Spilman, R. Townsend,
J. Ward, M. Weintraub
To withhold authority to vote for any individual nominee,
write that nominee's name on the line provided below.
WITHHELD
FOR FOR ALL
[ ] [ ]
FOR AGAINST ABSTAIN
2. Approval of Auditors [ ] [ ] [ ]
FOR AGAINST ABSTAIN
3. Adoption of Key Employee [ ] [ ] [ ]
Stock Plan
The Board of Directors Recommends a Vote "AGAINST" Proposal 4.
FOR AGAINST ABSTAIN
4. Shareholder Proposal Concerning [ ] [ ] [ ]
Rural Credit Reporting
I PLAN TO ATTEND THE [ ]
ANNUAL MEETING
The undersigned hereby authorizes the proxies, in
their discretion, to vote on any other business
which may properly be brought before the meeting
or any adjournment thereof.
This Proxy must be signed as name(s) appears hereon.
If shares are held jointly, each shareholder named
should sign.
Dated this day of , 1995
Signature
Signature
Please mark, date and sign as your name appears above and return in the enclosed
envelope. If acting as executor, administrator, trustee, guardian, etc., you
should so indicate when signing. If the signer is a corporation, please sign
in full corporate name, by duly authorized officer.
April 13, 1995
DEAR SHAREHOLDER:
On March 27, 1995, we mailed to you a notice of the Annual Meeting of
Shareholders which will be held on Wednesday, April 26, 1995, a proxy card and a
proxy statement discussing the proposals which will be presented for
shareholders' consideration.
Since we have not yet received your proxy, we are taking the liberty of
enclosing a duplicate of the NationsBank Corporation proxy card, the proxy
statement and a return envelope for your convenience. If you have not mailed
your proxy, please sign it and return to us promptly so that your shares will be
represented at the meeting. If your proxy card has been mailed, you may
disregard this second mailing.
You are, of course, cordially invited to attend the meeting. Should you attend,
the fact that you have sent in your proxy will not affect your right to vote in
person, if you wish to do so.
Thank you for your cooperation.
Sincerely yours,
J. W. KISER
Executive Vice President
Secretary and Corporate Counsel
enclosures