SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
Filed by the Registrant [X]
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-6(E)(2))
[X] Definitive Proxy Statement
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to Section 240.14a-11(c) or Section 240.14a-12
PNC BANK CORP.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required
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pursuant to Exchange Act Rule 0-11 (Set forth the amount on which
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[_] Fee paid previously with preliminary materials.
[_] Check box if any part of the fee is offset as provided by Exchange
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was paid previously. Identify the previous filing by registration statement
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Notes:
PNC BANK CORP. THOMAS H. O'BRIEN
One PNC Plaza Chairman and Chief Executive Officer
249 Fifth Avenue
Pittsburgh, PA 15222-2707
LOGO
PNCBANK
March 20, 1998
Dear Shareholder:
You will find enclosed the notice of meeting, proxy statement, and proxy card
for the annual meeting of shareholders of PNC Bank Corp., which will be held on
Tuesday, April 28, 1998, on the 15th floor of One PNC Plaza, in Pittsburgh,
Pennsylvania, beginning at 11:00 a.m. Our 1997 Annual Report to Shareholders
accompanies these enclosures.
Please review the enclosed material and complete, sign, date and return the
proxy card regardless of whether you plan to attend the annual meeting, so that
the matters coming before the meeting can be acted upon.
We look forward to meeting our shareholders, and welcome the opportunity to
discuss the business of your company with you.
Cordially,
/s/ Thomas H. O'Brien
Thomas H. O'Brien
LOGO
PNCBANK
PNC BANK CORP.
One PNC Plaza
249 Fifth Avenue
Pittsburgh, PA 15222-2707
March 20, 1998
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
APRIL 28, 1998
To The Shareholders:
The annual meeting of the shareholders of PNC Bank Corp. (the "Corporation")
will be held on the 15th floor of One PNC Plaza, 249 Fifth Avenue, Pittsburgh,
Pennsylvania, on Tuesday, April 28, 1998, beginning at 11:00 a.m., local time,
for the purpose of considering and acting upon the following matters:
(1) The election of 17 directors to serve until the next annual meeting and
until their successors are elected and qualified; and
(2) Such other business as may properly come before the meeting or any
adjournment thereof.
Shareholders of record at the close of business on February 26, 1998 (except
for holders of the Corporation's Fixed/Adjustable Rate Noncumulative Preferred
Stock, Series F) are entitled to receive notice of, and to vote at, the meeting
and any adjournment thereof.
A proxy statement, form of proxy and self-addressed envelope are enclosed.
Please complete, date and sign the proxy card. Return it promptly in the
envelope provided, which requires no postage if mailed in the United States. If
you attend the meeting, you may withdraw your proxy and vote in person, if you
so choose.
By Order of the Board of Directors,
/s/ John F. Fulgoney
John F. Fulgoney
Corporate Secretary
LOGO
PNCBANK
PNC BANK CORP.
One PNC Plaza
249 Fifth Avenue
Pittsburgh, PA 15222-2707
March 20, 1998
PROXY STATEMENT
FOR THE ANNUAL MEETING OF SHAREHOLDERS TO BE HELD
APRIL 28, 1998
The enclosed proxy is being solicited by the Board of Directors ("Board of
Directors" or "Board") of PNC Bank Corp. ("Corporation" or "PNC") for use at
the Corporation's annual meeting of shareholders to be held April 28, 1998, or
at any adjournment thereof ("meeting" or "annual meeting"). Solicitation of
proxies may be made by mail, personal interviews, telephone and facsimile by
officers and employees of the Corporation and its subsidiaries. The Corporation
has retained D. F. King & Co., Inc. to assist in the solicitation of proxies
for a fee of $10,000 plus out-of-pocket expenses. Brokerage houses and other
custodians, nominees and fiduciaries will be requested to forward soliciting
material to the beneficial owners of the stock held of record by such persons.
Expenses for such solicitation will be borne by the Corporation. The proxy
statement and form of proxy are first being mailed to shareholders on or about
March 20, 1998.
The enclosed proxy is revocable at any time prior to the actual voting of
such proxy by the filing of an instrument revoking it, or a duly executed proxy
bearing a later date, with the Corporate Secretary of the Corporation. In the
event your proxy is mailed and you attend the meeting, you may revoke your
proxy and cast your vote personally. All properly executed proxies delivered
pursuant to this solicitation will be voted at the meeting in accordance with
instructions, if any. Unless otherwise directed, proxies will be voted FOR the
election as director of each of the persons named on page 3.
The Board of Directors has fixed the close of business on February 26, 1998
as the record date for determining shareholders entitled to receive notice of
and to vote at the meeting and any adjournment thereof ("Record Date"). On the
Record Date, there were issued and outstanding 300,807,555 shares of the
Corporation's common stock, par value $5.00 per share ("Common Stock"), and the
following shares of the Corporation's preferred stock entitled to vote at the
meeting: 15,108 shares of $1.80 Cumulative Convertible Preferred Stock-Series A
("Preferred Stock-A"); 4,384 shares of $1.80 Cumulative Convertible Preferred
Stock-Series B ("Preferred Stock-B"); 302,617 shares of $1.60 Cumulative
Convertible Preferred Stock-Series C ("Preferred Stock-C") and 404,955 shares
of $1.80 Cumulative Convertible Preferred Stock-Series D ("Preferred Stock-D")
(collectively, "Voting Preferred Stock"). As of the Record Date, there were
6,000,000 shares of Fixed/Adjustable Rate Noncumulative Preferred Stock, Series
F ("Preferred Stock-F") issued and outstanding. Holders of Preferred Stock-F
have no voting rights except in limited circumstances which are not anticipated
to come before the annual meeting for a vote and therefore were not entitled to
receive notice of the meeting.
The holders of Common Stock are entitled to one vote per share. Holders of
each share of Voting Preferred Stock are entitled to a number of votes equal to
the number of full shares of Common Stock which can be acquired upon conversion
of such preferred stock, with holders of Preferred Stock-A and Preferred Stock-
B being entitled to 8 votes per share and the holders of Preferred Stock-C and
Preferred Stock-D being
1
entitled to 4 votes per 2.4 shares. Holders of record of the Common Stock and
Voting Preferred Stock will vote together as a single class at the meeting, as
described in the section captioned "Voting Procedures" beginning on page 21.
The presence in person or by proxy of the holders of a majority in voting power
of the Common Stock and the Voting Preferred Stock will constitute a quorum for
the transaction of business at the meeting.
THE CORPORATION WILL PROVIDE WITHOUT CHARGE TO EACH SHAREHOLDER UPON WRITTEN
REQUEST A COPY (WITHOUT EXHIBITS, UNLESS OTHERWISE REQUESTED) OF THE
CORPORATION'S ANNUAL REPORT ON FORM 10-K REQUIRED TO BE FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION ("SEC") FOR THE YEAR ENDED DECEMBER 31,
1997. REQUESTS FOR COPIES SHOULD BE ADDRESSED TO MICHELLE SENTNER, ASSISTANT
VICE PRESIDENT--FINANCIAL REPORTING, PNC BANK CORP., ONE PNC PLAZA, 249 FIFTH
AVENUE, PITTSBURGH, PENNSYLVANIA 15222-2707. REQUESTS MAY ALSO BE DIRECTED TO
(412) 762-1553 OR ON THE INTERNET TO FINANCIAL.REPORTING@PNCBANK.COM. COPIES
MAY ALSO BE ACCESSED ELECTRONICALLY BY MEANS OF THE SEC'S HOME PAGE ON THE
INTERNET AT HTTP://WWW.SEC.GOV. NEITHER THE ANNUAL REPORT ON FORM 10-K NOR THE
1997 ANNUAL REPORT TO SHAREHOLDERS IS PART OF THE PROXY SOLICITATION MATERIALS.
ITEM 1
ELECTION OF DIRECTORS
INFORMATION CONCERNING NOMINEES
The By-Laws of the Corporation provide that the number of directors shall be
not fewer than five nor more than 36 as from time to time determined by the
Board of Directors. Pursuant to the recommendation of the Committee on
Corporate Governance, the Board has acted to fix at 17 the number of directors
to be elected at the annual meeting. The persons named below are nominees for
election as directors to hold office until the next annual meeting of
shareholders and the election and qualification of their successors.
The proxies solicited hereby, unless directed to the contrary therein, will
be voted FOR all nominees named below. All such nominees are now directors of
the Corporation, except for Mr. Walter E. Gregg, Jr. who was nominated for
election as a director by the Board of Directors upon the recommendation of the
Committee on Corporate Governance at the Board's February 19, 1998 meeting, and
is standing for election for the first time. All nominees have consented to
being named in this proxy statement and to serve if elected. Four directors
currently serving on the Board, Messrs. C. G. Grefenstette, Thomas Marshall,
Vincent A. Sarni, and Garry J. Scheuring, are not standing for re-election. The
Board of Directors has no reason to believe that any nominee will be
unavailable or unable to serve as a director, but if for any reason any nominee
should not be available or able to serve, the accompanying proxy will be voted
by the persons acting under said proxy in accordance with the recommendations
of the Board of Directors.
The table below sets forth the names of the nominees for election as
directors of the Corporation; their principal occupations as of January 31,
1998; the year the incumbent directors first became directors of the
Corporation; and their directorships of certain other companies. All nominees
have held the position indicated or another senior executive position with the
same entity or one of its affiliates or a predecessor corporation for at least
the past five years.
2
Directorships in Companies
Other than the Corporation
Director Filing Reports with the
Name Age Principal Occupation Since SEC
- ---- --- -------------------- -------- --------------------------
Paul W. Chellgren 55 Chairman and Chief Executive Officer of Ashland Inc. 1995 Ashland Inc.; Arch Coal, Inc.; and
(energy company) Medtronic, Inc.
Robert N. Clay 51 President and Chief Executive Officer of Clay Holding 1987 None
Company (investments)
George A. Davidson, Jr. 59 Chairman and Chief Executive Officer of Consolidated 1988 Consolidated Natural Gas Company;
Natural Gas Company (public utility holding company) and B.F. Goodrich Company
David F. Girard-diCarlo 55 Managing Partner of Blank Rome Comisky & McCauley 1995 None
LLP (law firm)
Walter E. Gregg, Jr. 56 Senior Executive Vice President of the Corporation * None
William R. Johnson 49 President and Chief Operating Officer of H.J. Heinz 1997 Amerada Hess Corporation;
Company (food products company) Cincinnati Financial Corporation;
and H.J. Heinz Company
Bruce C. Lindsay 56 Chairman and Managing Director of Brind-Lindsay & 1995 None
Co., Inc. (advisory company)
W. Craig McClelland 63 Chairman and Chief Executive Officer of Union Camp 1985 Union Camp Corporation; and
Corporation (paper manufacturing and land resources) Allegheny Teledyne Incorporated
Thomas H. O'Brien 61 Chairman and Chief Executive Officer of the Corporation 1983 Bell Atlantic Corporation; and
Hilb, Rogal and Hamilton Company
Jane G. Pepper 52 President of Pennsylvania Horticultural Society 1997 None
(nonprofit horticultural membership organization)
Jackson H. Randolph 67 Chairman of Cinergy Corp. (public utility holding 1988 Cinergy Corp.; and
company) Cincinnati Financial Corporation
James E. Rohr 49 President of the Corporation 1989 Allegheny Teledyne Incorporated;
and Equitable Resources, Inc.
Roderic H. Ross 67 Chairman and Chief Executive Officer of Keystone State 1979 Hunt Corp.; and Pennsylvania
Life Insurance Company (insurance company) Manufacturers Corporation
Richard P. Simmons 66 Chairman, President and Chief Executive Officer of 1976 Allegheny Teledyne Incorporated; and
Allegheny Teledyne Incorporated (specialty metals Consolidated Natural Gas Company
and diversified business)
Thomas J. Usher 55 Chairman and Chief Executive Officer of USX 1992 USX Corporation; and
Corporation (energy, steel and diversified business) PPG Industries, Inc.
Milton A. Washington 62 President and Chief Executive Officer of Allegheny 1994 None
Housing Rehabilitation Corporation (housing
rehabilitation and construction)
Helge H. Wehmeier 55 President and Chief Executive Officer of Bayer 1992 None
Corporation (specialty chemicals, pharmaceuticals,
imaging and graphic systems)
- --------
* Mr. Gregg was nominated for election as a director by the Board of
Directors upon the recommendation of the Committee on Corporate Governance
at the Board's February 19, 1998 meeting, and is standing for election for
the first time.
3
BOARD AND COMMITTEES
The Board of Directors has six standing committees: an Audit Committee; a
Finance Committee; a Credit Committee; a Committee on Corporate Governance; a
Personnel and Compensation Committee; and an Executive Committee. During 1997,
the name of the Asset and Liability Management Committee was changed to the
"Finance Committee" to reflect more accurately the scope of the Committee's
responsibilities.
The Audit Committee is responsible for assisting the Board of Directors in
fulfilling its statutory and fiduciary responsibilities for the audit function
of the Corporation and its subsidiaries and in monitoring its accounting and
financial reporting practices; determining that the Corporation has adequate
administrative, operational and internal accounting controls and that the
Corporation is operating in accordance with its prescribed procedures and
codes of conduct; determining that the Corporation has in place policies and
procedures to enable it to comply with applicable laws and regulations and
that such compliance is occurring; and providing general oversight for the
internal and external audit function. Its functions include recommending to
the Board of Directors the appointment of the independent auditors and
reviewing with the internal auditors and the independent auditors their annual
audit plans and monitoring their progress during the year. In discharging its
responsibilities, the Committee is entitled to rely upon the reports,
findings, and representations of the Corporation's auditors, legal counsel,
and responsible officers. The Committee is presently composed of Messrs.
Davidson (Chairman), Chellgren, Girard-diCarlo, Grefenstette, Usher and
Wehmeier.
The Committee on Corporate Governance is responsible for recommending to the
Board of Directors persons to be nominated for election or appointment as
directors of the Corporation and monitoring and recommending enhancements to
the Corporation's corporate governance framework, particularly with respect to
the structure, processes, and proceedings of the Board of Directors. In
performing the nominating function, the Committee may consider director
nominees recommended by shareholders. Such recommendations must be submitted
in writing no later than November 20, 1998 to the Corporate Secretary, PNC
Bank Corp., One PNC Plaza, 249 Fifth Avenue, Pittsburgh, Pennsylvania 15222-
2707, and include the name, age, citizenship, residence, qualifications and
directorships and other positions held by the proposed nominee in business,
charitable, and community organizations. For information on the requirements
governing shareholder nominations for the election of directors to be made at
an annual meeting of shareholders, please see the section captioned "By-Law
Amendments", beginning on page 23. The Committee is presently composed of
Messrs. Sarni (Chairman), Davidson, Lindsay, Randolph, Ross, Simmons and
Wehmeier.
The Credit Committee is responsible for reviewing and approving (when
appropriate) loan policies and reports of compliance therewith; reviewing
credit policy officer committee activities; and reviewing reports regarding
lending and credit activities, as well as the Corporation's credit quality.
The Committee is presently composed of Messrs. McClelland (Chairman), Girard-
diCarlo, Lindsay, Marshall, Randolph, Rohr, Ross, Scheuring and Washington.
The Executive Committee has all the powers of the Board of Directors to the
extent permitted by law and can exercise such powers between meetings of the
Board of Directors. The Committee is presently composed of Messrs. Simmons
(Chairman), Davidson, Grefenstette, McClelland, O'Brien, Rohr, Sarni, and
Usher.
The Finance Committee is primarily responsible for monitoring the
Corporation's interest rate and liquidity risks. In performing this function,
the Committee reviews and approves (when appropriate) key asset and liability
policies regarding interest rate sensitivity, financial derivatives and
funding needs and reviews management reports regarding these policies and
activities related thereto. The Committee's responsibilities also include
oversight of the Corporation's capital management activities and trading
activities, including related market risk management policies and risk limits.
The Committee is presently composed of Messrs. Grefenstette (Chairman), Clay,
O'Brien, Sarni, Simmons and Wehmeier.
The Personnel and Compensation Committee is responsible for recommending to
the Board of Directors the persons to be elected as Chairman, President, and
Vice Chairmen of the Corporation and establishing the compensation of the
executive officers of the Corporation. The Committee also makes
recommendations to
4
the Board of Directors regarding the adoption of employee benefit, bonus,
incentive compensation or similar plans and is responsible for their
oversight. The Committee is presently composed of Messrs. Usher (Chairman),
Chellgren, Clay, Marshall, McClelland and Washington.
The Board of Directors met eight times in 1997. During 1997, the Board's
committees held the following number of meetings: Audit Committee--four
meetings; Committee on Corporate Governance--four meetings; Credit Committee--
five meetings; Executive Committee--one meeting; Finance Committee--five
meetings; and Personnel and Compensation Committee--five meetings.
In 1997, each director then serving attended at least 75% of the combined
total of meetings of the Board of Directors held during his or her period of
service and meetings of each committee of the Board on which such director
served, except for Mr. Johnson (67%). Mr. Johnson was appointed to the Board
in August 1997. Due to a previous commitment, Mr. Johnson was abroad and
unable to attend one of the three Board meetings he was eligible to attend
during the second half of 1997. Since his appointment to the Board and through
the date of this proxy statement, Mr. Johnson has attended 80% of the Board
meetings he was eligible to attend.
COMPENSATION OF DIRECTORS
Executive officers of the Corporation who are directors or members of
committees of the Board of Directors of the Corporation or its subsidiaries
receive no compensation for serving in such positions. All non-officer
directors of the Corporation are compensated for their services by a per diem
fee of $1,200 for any day's participation in a Board or committee meeting, or
any combination thereof, an annual retainer fee of $32,000 for Board
membership and, in accordance with the terms of the Corporation's 1992
Director Share Incentive Plan ("Director Share Plan"), a number of shares of
Common Stock having a fair market value on the date of the award equal to
$5,000. In addition, the chairman of each standing committee receives a $3,000
annual retainer fee. For 1997, the Corporation did not pay more than $56,800
in aggregate fees, including the value of Common Stock awarded pursuant to the
Director Share Plan, to any one director.
Under the terms of the Directors Deferred Compensation Plan approved in 1996
by the Board upon the recommendation of the Committee on Corporate Governance,
non-officer directors may elect to defer the receipt of all or a portion of
the compensation otherwise payable to them as a result of their service as a
director. The minimum deferral amount is $10,000 per year. A director may
elect one of two investment options with respect to amounts deferred: an
interest rate alternative or an investment in phantom shares of Common Stock.
Investment elections may be changed quarterly. A director may also elect the
event or date when amounts credited to his or her account are paid out and
whether the payout shall be in a lump sum or a designated number of annual
installments (not to exceed ten annual installments). The director may
designate a beneficiary to receive unpaid amounts in the account upon the
director's death.
As an additional form of deferred compensation, each current or future non-
officer director of the Corporation who served as a director of the
Corporation or a predecessor or acquired corporation or other business entity
for at least five years will be paid an annual cash benefit following his or
her separation from the Board. The amount of the annual benefit will be equal
to the annual retainer fee in effect for non-officer directors of the
Corporation on the date of the director's separation from service. The annual
benefit will be paid for the lesser of ten years or the life of the director,
with payment to commence on the later of age 65 or separation from the Board
of Directors.
COMMON STOCK PURCHASE GUIDELINE
In 1995, upon the recommendation of the Committee on Corporate Governance,
the Board of Directors adopted a Common Stock purchase guideline which
requires that each non-officer director annually purchase Common Stock in an
amount equal to twenty-five percent of the annual retainer fee then in effect.
5
SECURITY OWNERSHIP OF DIRECTORS AND EXECUTIVE OFFICERS
The following table sets forth information concerning beneficial ownership
of the Corporation's Common Stock as of January 31, 1998, by each director and
nominee for election as a director, each of the five executive officers named
in the Summary Compensation Table on page 15 and all directors and executive
officers of the Corporation as a group. The number of shares shown as
beneficially owned by each director and executive officer is determined under
the rules of the SEC and the information is not necessarily indicative of
beneficial ownership for any other purpose. For purposes of the table set
forth below, beneficial ownership includes any shares as to which the
individual has sole or shared voting power or investment power and also any
shares which the individual has the right to acquire within 60 days of January
31, 1998 through the exercise of any option, warrant or right.
SECURITY OWNERSHIP OF DIRECTORS AND EXECUTIVE OFFICERS
Amount and Nature
Name of Beneficial Ownership
- ---- -----------------------
Richard C. Caldwell 136,464(/1/)(/2/)
Paul W. Chellgren 7,724
Robert N. Clay 6,016
George A. Davidson, Jr. 9,104
David F. Girard-diCarlo 1,914
C. G. Grefenstette* 473,438(/3/)
Walter E. Gregg, Jr. 191,444(/1/)(/2/)
William R. Johnson 512
Bruce C. Lindsay 2,952
Thomas Marshall* 51,179(/4/)
W. Craig McClelland 4,446
Thomas H. O'Brien 792,508(/1/)(/2/)(/4/)
Jane G. Pepper 1,089
Jackson H. Randolph 11,547
Bruce E. Robbins 133,635(/1/)(/2/)
James E. Rohr 449,518(/1/)(/2/)(/4/)
Roderic H. Ross 6,156
Vincent A. Sarni* 16,230(/4/)
Garry J. Scheuring* 92,697
Richard P. Simmons 84,997
Thomas J. Usher 5,051
Milton A. Washington 18,882
Helge H. Wehmeier 4,562
Directors and executive officers as a group (29 persons)** 3,152,021(/1/)(/2/)(/3/)(/4/)
- --------
* Not standing for re-election.
** As of January 31, 1998, there were 301,036,487 shares of the Corporation's
Common Stock issued and outstanding. The number of shares of Common Stock
held by each individual is less than 1% of the outstanding Common Stock;
the total number held by the group equals approximately 1.05% of the class.
These percentages were calculated by adding shares subject to employee
stock options to the foregoing number, if the options were either
exercisable as of January 31, 1998 or exercisable within 60 days of that
date. The number shown also includes 237,700 restricted shares of Common
Stock held by 11 executive officers. The number of restricted shares held
by each executive officer named in the Summary Compensation Table on page
15 is shown in footnote (e) to that table. Based on copies of SEC filings
provided to the Corporation, no person is known by the Corporation to own
beneficially more than 5% of its Common Stock.
6
(1) Includes shares held in the Corporation's Incentive Savings Plan, a
qualified employee benefit defined contribution plan.
(2) Includes shares subject to employee stock options held by the executive
officers and either exercisable as of January 31, 1998 or exercisable
within 60 days of that date. The shares subject to such options are as
follows, for Messrs. O'Brien (359,000 shares), Rohr (347,000 shares), Gregg
(150,800 shares), Caldwell (114,200 shares), and Robbins (111,400 shares).
The aggregate number of shares subject to such options for the remaining
six executive officers is 476,300.
(3) The amount listed for Mr. Grefenstette includes 142,000 shares held in a
trust of which Mr. Grefenstette is one of three co-trustees; in that
fiduciary capacity he shares voting and dispositive power over the trust's
assets with the other co-trustees. The amount listed for Mr. Grefenstette
also includes 316,000 shares owned by Hayden Holdings, Inc., an indirect
wholly-owned subsidiary of The Hillman Company, which is controlled by the
trust. The amount listed for Mr. Grefenstette, however, does not include
448,000 shares owned by The Hillman Foundation, Inc.; Mr. Grefenstette, who
is a Vice President and Director of the Foundation, disclaims beneficial
ownership of that holding.
(4) Includes shares held jointly and/or indirectly.
7
COMPENSATION OF EXECUTIVE OFFICERS
PERSONNEL AND COMPENSATION COMMITTEE REPORT
The following is the Personnel and Compensation Committee's report to
shareholders on the Corporation's executive compensation policies with respect
to compensation reported for fiscal year 1997. In accordance with the rules of
the SEC, this report shall not be incorporated by reference into any of the
Corporation's filings made under the Securities Exchange Act of 1934 or under
the Securities Act of 1933.
PERSONNEL AND COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION FOR
FISCAL YEAR 1997
Key compensation-related responsibilities of the Personnel and Compensation
Committee ("Committee") of the Board of Directors ("Board"):
. Oversee PNC Bank Corp.'s ("Corporation") compensation policies and
practices;
. Establish the annual compensation of the Corporation's executive
officers;
. Recommend to the Board the adoption or amendment of employee benefit,
bonus, incentive compensation, and similar plans;
. Oversee those plans; and
. Conduct an annual, comprehensive review of the Corporation's executive
compensation program.
How the Committee functions:
. No Committee member can be a current or former Corporation officer.
. The Committee reviews comparative compensation data for:
. The domestic banking industry as a whole; and
. A peer group of selected money center bank holding companies and
certain regional bank holding companies which compete in markets
served by the Corporation ("Peer Group"). The banking institutions
included in the Peer Group do not necessarily include the same banking
institutions included in the peer group index used for the Common
Stock performance graph on page 21.
. Management provides the Committee with comparative compensation data
obtained from nationally-recognized compensation consulting firms.
. The Committee is assisted by:
. An independent compensation consultant retained by the Committee; and
. The Corporation's internal support staffs.
The Corporation's executive compensation program is designed to:
. Attract, motivate, and retain executive officers who can make significant
contributions to the Corporation's long-term success;
. Align the interests of executive officers with those of shareholders; and
. Place a significant proportion of an executive officer's total
compensation at risk by tying it to the Corporation's financial and
Common Stock price performance.
8
Description of the three primary components of the Corporation's executive
compensation program: base salary; annual incentive awards; and annual long-
term incentive awards:
Base salary
. The base salary structure is targeted at the middle of the competitive
marketplace.
. The base salary range for an executive position is determined through
an annual formal assessment by the Corporation's human resources
personnel. This assessment considers the position's complexity and
level of responsibility, its importance to the Corporation in relation
to other executive positions, and the competitiveness of an
executive's total compensation.
. Each executive position is assigned a corporate job grade with a
salary range which approximates the salary practices of the domestic
banking industry; specific compensation data obtained from Peer Group
proxy statements is used in establishing the salary ranges of the
Corporation's Chief Executive Officer and President, respectively.
. Subject to the Committee's approval, the level of an executive
officer's base pay is determined on the basis of:
. Relevant comparative compensation data; and
. The Chief Executive Officer's assessment of the executive's
performance, experience, demonstrated leadership, job knowledge,
and management skills.
Annual incentive awards
. For 1997, annual incentive awards were made under two plans. For the
Chief Executive Officer and the other four executive officers included
in the compensation tables beginning on page 15 ("named executive
officers"), awards were paid under the 1996 Executive Incentive Award
Plan ("1996 Plan"), which was approved by shareholders at the
Corporation's 1996 annual meeting. With respect to other eligible
executive officers, awards were paid under the shareholder-approved
1994 Annual Incentive Award Plan ("1994 Plan"). Participants in the
1996 Plan do not also receive an award under the 1994 Plan.
. These cash awards are intended to provide a linkage among executive
performance, annual objective performance measures, and long-term
shareholder value.
How annual incentive awards are calculated under the 1996 Plan:
. The 1996 Plan is designed to give the Committee the flexibility to
make annual incentive awards that are comparable to those found in the
marketplace in which the Corporation competes for executive talent.
The 1996 Plan permits the payment of annual incentive awards that
qualify as deductible, performance-based compensation under Section
162(m) of the Internal Revenue Code of 1986, as amended ("Code").
. Before the end of the first quarter of 1997, the Committee assigned
each participant an incentive award amount, expressed as the maximum
percentage of the compensation pool available to that participant for
the 1997 award period. For 1997, the compensation pool was equal to
one-half of one percent of the Corporation's 1997 consolidated pre-tax
net income.
. No participant can be assigned a percentage of the compensation pool
greater than 35% and the sum of all percentages assigned cannot exceed
100% of the compensation pool.
9
During the first quarter of 1998, the Committee:
. Confirmed the identity of the executive officers eligible to
participate in the 1996 Plan;
. Computed and certified the size of the compensation pool for the 1997
award period, based upon financial information supplied by the
Corporation's officers; and
. Determined the amount of the incentive award to be paid to each
participant, based on:
. the maximum percentage of the compensation pool assigned to a
participant during the first quarter of 1997; and
. such qualitative or quantitative performance factors the Committee
deemed relevant in adjusting the incentive award payable to the
level shown in the Summary Compensation Table on page 15, in the
column captioned "Bonus($)," for the year 1997.
How annual incentive awards are calculated under the 1994 Plan:
. The target amount payable to an executive officer as an annual
incentive award under the 1994 Plan is a function of the officer's
salary grade, expressed as a percentage of base salary. The percentage
amount generally increases as the officer's salary grade increases.
. When setting the 1997 target annual incentive awards, the Committee
assumed that the 1997 target performance goal would be achieved.
Achievement of that goal would result in the payment of median annual
incentive amounts, in terms of the domestic banking industry.
. There are five factors which can affect the size of actual award
payments:
. "EPS Goal"--This goal is based on the Corporation's earnings per
share in relation to the Corporation's budget or profit plan. The
EPS Goal is used as the primary performance measure when making
annual incentive awards. Management established, subject to
Committee approval, the target EPS Goal for 1997.
. "Relative Goals"--These goals are based on the Corporation's
return on average assets and return on average equity relative to
the Peer Group.
. The Chief Executive Officer's assessment of an executive officer's
performance is also considered.
. The Committee may, in its sole discretion, increase, reduce, or
eliminate an executive officer's award, based on an assessment of
the officer's performance.
. Line of business ("LOB") financial performance relative to that
LOB's budget or profit plan.
Annual long-term incentive awards
. The 1997 stock option grants were made under the shareholder-approved
1997 Long-Term Incentive Award Plan ("Long-Term Plan").
. The Long-Term Plan is intended to focus the efforts of executive
officers on performance which will increase the equity value of the
Corporation for its shareholders.
. The Committee may grant incentive stock options and nonstatutory stock
options to purchase shares of Common Stock. The options are granted at
an exercise price per share not less than the fair market value of a
share of Common Stock on the date of grant. The Committee may also
grant stock appreciation rights, performance units, and incentive or
restricted stock. For 1997, nonstatutory stock options were granted,
and Incentive Shares and restricted shares of Common Stock were
awarded to selected executive officers. More details about the 1997
grants of Incentive Shares and restricted shares of Common Stock are
provided in the highlights section of this report below.
10
How the number of stock options granted under the Long-Term Plan is
determined:
. A number of stock options is established which would position the
executive officer competitively relative to the domestic banking
industry (approximately at the median) with respect to long-term
compensation. This number is called the "base-line amount" and is used
as a reference point for upward and downward adjustments to the stock
option grant level. The base-line amount is adjusted periodically in
order to achieve the market competitive objective.
. Each year, the stock option grant level may be adjusted upward or
downward from the base-line amount. This adjustment is based on the
Corporation's total shareholder return as compared to the Peer Group.
. If the Corporation's total shareholder return is significantly higher
or lower than the Peer Group's median return, the number of options to
be granted will be adjusted above or below, respectively, the base-
line amount.
. For the 1997 stock option grants, Common Stock appreciation and
dividend payments during 1995 and 1996 were used to calculate total
shareholder return.
. In 1998, and in each following year, total shareholder return will be
based on Common Stock appreciation and dividend payments for the three
most recent years. For example, the 1998 grants are based on Common
Stock appreciation and dividend payments for the period 1995 through
1997.
Chief Executive Officer compensation
. With input from the Committee's independent compensation consultant, the
Committee discusses matters affecting Mr. O'Brien's compensation
privately, without Mr. O'Brien or other officers present.
. In arriving at a decision affecting Mr. O'Brien's compensation, the
Committee considered:
. The Corporation's financial performance and industry-wide and Peer
Group compensation data; and
. Mr. O'Brien's leadership, decision-making skills, experience,
knowledge, communication with the Board, and strategic
recommendations, as well as the Corporation's positioning for future
performance.
. The Committee did not place any particular relative weight on one of
these factors over another, but the Corporation's financial
performance is generally given the most weight.
. The Committee's decisions regarding Mr. O'Brien's compensation are
reported to and discussed by the full Board at its next regularly
scheduled meeting. These discussions are conducted privately, without Mr.
O'Brien or other officers present.
. For 1997, the Committee's decisions regarding Mr. O'Brien's compensation
included the following:
. In December 1996, the Committee decided that Mr. O'Brien's 1997 base
salary would be maintained at the same level established for 1996.
. In February 1997, the Committee granted Mr. O'Brien 132,000
nonstatutory stock options, using the total shareholder return
methodology described in this report. These options have an exercise
price per share of $43.75, the average of the high and low sale prices
of a share of Common Stock on the date of grant.
. In February 1998, in accordance with the methodology used for
calculating annual incentive awards under the 1996 Plan, the Committee
authorized the payment to Mr. O'Brien of $2,000,000 as an incentive
award for 1997.
11
. In deciding upon the size of Mr. O'Brien's 1997 incentive award payment,
the Committee considered these significant accomplishments, in addition
to the Corporation's EPS Goal and Relative Goals achievements, for 1997:
. Earnings for 1997 were a record $1.052 billion, compared with $992
million in 1996.
. On a per share basis, earnings rose to $3.28 per diluted share from
$2.88 in 1996.
. Revenue increased by 12%, compared with 1996 results.
. Noninterest income grew $413 million for the year, led by a 30%
increase in revenues from fee-based businesses such as asset
management, treasury management, capital markets, private banking and
mutual fund servicing.
. The ratio of noninterest income to total revenue continued to grow,
increasing to 44% for the fourth quarter and 42% for 1997, compared
with 36% in 1996.
. The net interest margin improved to 3.94 % during 1997, compared with
3.83% in 1996.
. Asset quality improved significantly. Nonperforming assets declined
15% from the third quarter and 27% since 1996.
. Progress continued in the implementation of National Consumer Banking
strategies, positioning the Corporation to market a wide range of
products and services to consumers nationwide.
Tax policy
. Section 162(m) of the Code disallows a federal income tax deduction for
compensation over $1 million paid to the Chief Executive Officer and any of
the executive officers included in the compensation tables following this
report, subject to certain exceptions.
. One exception applies to compensation paid pursuant to shareholder-approved
plans that are performance-based.
. The Committee intends that awards made under the 1996 Plan and the Long-
Term Plan be eligible for the performance-based exception, and therefore
eligible as a federal income tax deduction for the Corporation.
. The Long-Term Plan was amended and restated and resubmitted last year to
the shareholders for approval as the 1997 Long-Term Incentive Award Plan. A
transitional rule under Section 162(m) required that this plan be approved
by shareholders at the Corporation's 1997 annual meeting and that approval
was obtained.
. The Committee has taken and will continue to take whatever actions are
necessary to minimize, if not eliminate, the Corporation's nondeductible
compensation expense under Section 162(m). While keeping this goal in mind,
the Committee will also try to maintain the flexibility which the Committee
believes to be an important element of the Corporation's executive
compensation program.
Other highlights of compensation-related developments since the Committee's
previous report:
. The Committee authorized the creation of a pool of 100,000 shares of
restricted Common Stock, pursuant to the Long-Term Plan. The Corporation's
Chief Executive Officer may award shares of restricted stock from the pool
to a select group of officers or recruits who have a high potential to
contribute to the Corporation's success, a proven record of exceptional
performance, or skills which are critical to the achievement of the
Corporation's long-term goals. Awards made by the Chief Executive Officer
are subject to review by the Committee. The Committee believes that these
awards will help the Corporation retain talented employees and attract new
recruits who may have to forfeit similar incentives upon leaving their
current employer to join the Corporation.
12
The Chief Executive Officer will be highly selective in making awards, but
individuals may receive awards in successive years, depending upon an
assessment of his or her performance or potential value to the Corporation.
Generally, each award will vest in increments over a five-year period. A
participant will forfeit any shares which are not vested by leaving the
Corporation, subject to possible exceptions granted in the Committee's
discretion in cases of retirement, death, or total disability. The
Committee has the authority to replenish the pool with additional shares,
as needed.
.The Committee granted special Incentive Shares of Common Stock to a select
group of senior officers pursuant to the Long-Term Plan. Actual issuance of
the shares is conditioned upon the satisfaction of specified Common Stock
share price and financial performance goals on or before December 31, 1999.
Mr. O'Brien and each of the named executive officers listed in the
compensation tables following this report received grants of Incentive
Shares. Information on those grants is included in the table captioned
"1997 Long-Term Incentive Award Plan--Grants in 1997" on page 18. The
footnotes to that table provide more information about the performance
goals and the conditions to which the grants are subject.
The officers who were granted Incentive Shares did not also receive a grant
of restricted stock during 1997 from the pool discussed above, although
such awards may be made in the future.
The Committee believes that these Incentive Shares further align the
interests of senior executives with those of the Corporation's shareholders
and tie a significant proportion of their total compensation to the
achievement of appropriate share price and financial performance goals.
. Following the Committee's review of Peer Group competitive data provided by
an independent compensation consultant, the Committee increased the Annual
Incentive Target for Mr. O'Brien to 150% of salary, effective as of January
1, 1997.
. For the first time, the Committee granted reload options to a select group
of senior executives, in connection with the February 1997 grant of stock
options. A reload option allows the option holder to use Common Stock he or
she has owned for at least six months to cover the cost (including tax
withholding obligations) of exercising the options. When an option with a
reload feature is exercised, it is replaced, or "reloaded," with a new, at-
the-market option for the same number of shares that were tendered. The new
option would have the same remaining term as the option that was exercised.
There is a limit of one reload for each option originally granted. The
reload feature does not apply to options granted before 1997. Reload
options reinforce the importance of Common Stock ownership by the
Corporation's senior executives and permit the Corporation to provide an
enhanced benefit to option grantees with no accounting expense.
Conclusion:
. Based upon its annual, comprehensive review of the Corporation's executive
compensation program, the Committee has concluded that the program's basic
structure is appropriate, competitive, and effective to serve the purposes
for which it was established.
MEMBERS OF THE COMMITTEE:
Thomas J. Usher (Chairman)
Paul W. Chellgren
Robert N. Clay
Thomas Marshall
W. Craig McClelland
Milton A. Washington
13
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
No member of the Personnel and Compensation Committee is an officer or former
officer of the Corporation or any of its subsidiaries.
Certain directors, nominees and executive officers and/or their associates,
including certain members of the Personnel and Compensation Committee and their
respective associates, were customers of and had transactions with the
Corporation or its subsidiaries during 1997. Transactions which involved loans
or commitments by subsidiary banks were made in the ordinary course of business
and on substantially the same terms, including interest rates and collateral,
as those prevailing at the time for comparable transactions with other persons
and did not involve more than normal risk of collectibility or present other
unfavorable features. Blank Rome Comisky & McCauley, the law firm for which Mr.
Girard-diCarlo serves as Managing Partner, was retained to provide legal
services to one or more of the Corporation's subsidiaries during 1997 and may
provide similar services during 1998.
CHANGE IN CONTROL AND OTHER ARRANGEMENTS
The Corporation has entered into change in control severance agreements with
each of the executive officers named in the Summary Compensation Table, and
certain other executive officers. If the executive officer's employment is
terminated by the Corporation without cause or by the executive officer for
good reason, during a period of up to three years (two years for certain
executive officers) following a change in control of the Corporation, the
executive officer will receive severance benefits, including (i) a lump sum
payment of up to three times (two times for certain executive officers) the
executive officer's annual base salary and bonus; (ii) the payment of at least
the target bonus for the executive officer for the fiscal year during which the
executive officer's employment is terminated; (iii) up to three years (two
years for certain executive officers) of additional benefits under the
Corporation's retirement and benefit plans; and (iv) a payment to reimburse the
executive officer for any excise taxes on severance benefits that are
considered excess parachute payments under the Code. Each agreement requires
the executive officer not to use or disclose any of the Corporation's
confidential business information and, if the executive officer receives the
above severance benefits, not to employ or solicit any officer of the
Corporation during the year following the executive officer's termination. Each
agreement terminates when the executive officer reaches age 65, and the
Corporation may, upon one year's advance notice, simultaneously terminate all
of the change in control severance agreements.
The Corporation's displaced employee assistance plans for employees generally
provide an increase in severance benefits following a change in control under
certain circumstances. If an employee's employment is terminated by the
Corporation within two years following consummation of a change in control, the
employee will receive a lump sum payment equal to twice the benefits to which
such employee otherwise would be entitled under the applicable plan.
14
SUMMARY COMPENSATION TABLE*
The Summary Compensation Table shows, for the years 1995 through 1997, the
compensation paid or awarded to Mr. O'Brien, the Corporation's Chairman and
Chief Executive Officer, and the Corporation's next four most highly
compensated, policy-making executive officers; the inclusion of the four
executive officers other than Mr. O'Brien in this group was based on salary and
bonus earned during 1997. Mr. O'Brien and the other four executive officers are
referred to collectively as the Corporation's "named executive officers." For a
detailed discussion of the Corporation's executive compensation program, please
refer to the Personnel and Compensation Committee Report on Executive
Compensation beginning on page 8.
ANNUAL COMPENSATION LONG-TERM COMPENSATION
-------------------------------- ----------------------------------
AWARDS PAYOUTS
---------- --------------
OTHER SECURITIES
ANNUAL UNDERLYING LONG-TERM ALL
NAME AND PRINCIPAL COMP OPTIONS/ INCENTIVE PLAN OTHER
POSITION YEAR SALARY ($) BONUS ($) ($) SARS (#) PAYOUTS ($) COMP ($)
- ------------------ ---- ---------- --------- ------ ---------- -------------- --------
(a) (b) (c) (d)(e)
Thomas H. O'Brien 1997 950,000 2,000,000 3,411 132,000 0 206,089
Chairman and Chief 1996 950,000 1,150,000 2,476 132,000 0 204,230
Executive Officer 1995 900,000 657,000 10,306 0 0 192,397
PNC Bank Corp.
James E. Rohr 1997 675,000 877,500 3,387 71,500 0 152,533
President 1996 650,000 700,000 3,387 71,500 0 161,174
PNC Bank Corp. 1995 570,000 400,000 13,926 0 0 111,035
Walter E. Gregg, Jr. 1997 510,000 596,700 1,260 53,400 0 106,147
Senior Executive Vice 1996 460,000 345,000 1,181 53,400 0 119,526
President, Finance 1995 430,000 300,000 4,914 0 0 77,979
and Administration
PNC Bank Corp.
Richard C. Caldwell 1997 355,000 410,000 1,188 32,000 0 30,587
Executive Vice 1996 330,000 330,000 1,163 29,200 0 31,810
President Asset 1995 315,000 157,500 4,667 0 0 30,637
Management and
Servicing
PNC Bank Corp.
Bruce E. Robbins 1997 352,000 295,680 972 29,200 0 116,474
Executive Vice 1996 335,000 167,500 928 29,200 0 108,796
President and 1995 320,000 116,800 4,022 0 0 96,103
Chief Executive
Officer, Secured
Lending
PNC Bank Corp.
- ----
*Footnotes to the Summary Compensation Table are set forth on page 16.
15
FOOTNOTES TO SUMMARY COMPENSATION TABLE
(a) Incentive Awards for 1997 were made to each named executive officer
pursuant to the Corporation's 1996 Executive Incentive Award Plan.
(b) The amounts shown represent reimbursement for certain tax liabilities. None
of the named executive officers received perquisites or other personal
benefits, securities, or property during 1997 which, in the aggregate, cost
the Corporation the lesser of $50,000 or 10% of the named executive
officer's salary and bonus earned during that year. Perquisites and other
personal benefits which were received by the named executive officers were
valued on the basis of their incremental cost to the Corporation and its
subsidiaries, as prescribed by the rules of the SEC.
(c) No options were granted in 1995 due to a timing change related to the
implementation of a revised method of calculating stock option levels. The
options granted in February 1996 would have been granted in December 1995
under the practice previously followed by the Personnel and Compensation
Committee.
(d) The amount shown for each named executive officer for 1997 includes the
dollar value ($9,500) of matching contributions of the Corporation's Common
Stock made pursuant to the Corporation's Incentive Savings Plan, a
qualified employee benefit defined contribution plan. Such amount does not
include an additional employer contribution for the 1997 plan year which is
scheduled to be allocated among eligible participants' accounts late in the
first quarter of 1998. The additional contribution is mandatory and is
attributable to the fact that the shares of Common Stock required to be
released from the Employee Stock Ownership Plan portion of the Incentive
Savings Plan during 1997 exceeded the number of shares actually needed to
fund the employer match for the 1997 plan year. The exact dollar amount of
the additional employer contribution to be allocated among eligible
participants' accounts, including those of the named executive officers,
has not yet been determined, but is expected to approximate 37% of each
participant's previously allocated 1997 employer matching contribution. For
each of the named executive officers, this additional contribution is
estimated to be approximately $3,515. The amount also includes 1997
contributions made to the Corporation's Supplemental Incentive Savings
Plan, a non-qualified employee benefit defined contribution plan, for
Messrs. O'Brien ($47,500), Rohr ($31,000), Gregg ($21,100), Caldwell
($11,800), and Robbins ($11,620). Finally, the amount shown includes the
1997 net premiums paid by the Corporation in connection with its Key
Executive Equity Plan, a split-dollar insurance arrangement, on behalf of
Messrs. O'Brien ($149,089), Rohr ($112,033), Gregg ($75,547), Caldwell
($9,287) and Robbins ($95,354). The net premiums disclosed in the preceding
sentence, and included in "All Other Compensation" for 1995 and 1996,
represent the full dollar amounts paid by the Corporation for both the term
and non-term portions of the Key Executive Equity Plan.
(e) As of December 31, 1997, the named executive officers held restricted
shares of Common Stock as follows, with the aggregate dollar value shown as
of that date: Messrs. O'Brien (66,900 shares; $3,788,213); Rohr (42,400
shares; $2,400,900); Gregg (31,900 shares; $1,806,338); Caldwell (17,600
shares; $996,600), and Robbins (17,800 shares; $1,007,925). The per share
dollar amount used to calculate these values is $56.6250, the average of
the high and low sale prices of the Corporation's Common Stock on the New
York Stock Exchange on December 31, 1997.
16
OPTION GRANTS IN 1997
This table provides information on stock options granted to the named
executive officers in 1997. Only nonstatutory stock options were granted in
1997 under the Corporation's 1997 Long-Term Incentive Award Plan.
INDIVIDUAL GRANTS--1997
NUMBER OF % OF TOTAL
SECURITIES OPTIONS
UNDERLYING GRANTED TO GRANT DATE
OPTIONS EMPLOYEES EXERCISE OR BASE EXPIRATION PRESENT
NAME GRANTED (#) IN 1997 PRICE ($/SH) DATE VALUE ($)
- ---- ----------- ---------- ---------------- ---------- ----------
(a) (b) (c)
Thomas H. O'Brien 132,000 4.53% $43.75 02/19/07 $1,222,320
James E. Rohr 71,500 2.45% 43.75 02/19/07 622,090
Walter E. Gregg, Jr. 53,400 1.83% 43.75 02/19/07 494,484
Richard C. Caldwell 32,000 1.09% 43.75 02/19/07 296,320
Bruce E. Robbins 29,200 1.00% 43.75 02/19/07 270,392
- --------
(a) Options were granted on February 19, 1997 and became exercisable on
February 19, 1998.
(b) Exercise price shown equals the average of the high and low sale prices of
the Corporation's Common Stock on the New York Stock Exchange on February
19, 1997.
(c) The values listed in this column are based upon the Black-Scholes option
pricing model. The assumptions used to determine the grant date present
value of $9.26 per option are as follows: market price ($43.75), exercise
price ($43.75), volatility (.276), annualized risk free rate of return
(6.15%), estimated useful life (6 years), and dividend yield (4.90%). The
Corporation in no way intends to provide any predictions or assurances with
respect to option or Common Stock values, as some of the underlying
assumptions are highly subjective. The options granted in 1997 to the named
executive officers, and certain other executive officers, include a
"reload" feature which allows the optionee to exercise the options using
Common Stock held for at least six months. The options exercised in this
way are replaced, or "reloaded," with a new, at-the-market option for the
same number of shares of Common Stock that were tendered. The new option
will have the same remaining term as the option that was exercised. In
accordance with generally accepted accounting principles, the options shown
were valued without regard to the reload feature. The grant of a reload
option will be treated as being separate from the initial options granted
and valued in this table. Upon the reload of an option, the fair value of
the new option would be determined based on its own terms. Each option
granted in 1997 can be reloaded only once. For an explanation of the method
used to determine the number of options granted, please refer to the
section of the Personnel and Compensation Committee Report on Executive
Compensation captioned "How the number of stock options granted under the
Long-Term Plan is determined," at page 11. For additional information on
the reload option feature, please see the discussion contained in the
Personnel and Compensation Committee Report on Executive Compensation, at
the bottom of page 13.
17
AGGREGATED OPTION EXERCISES IN 1997 AND 1997 YEAR-END OPTION VALUES
This table provides information concerning exercises of nonstatutory stock
options during 1997 by the named executive officers. The table also shows the
number and value of unexercised options at the end of 1997.
NUMBER OF SECURITIES
UNDERLYING UNEXERCISED VALUE OF UNEXERCISED
OPTIONS AT 1997 IN-THE-MONEY OPTIONS
YEAR-END (#) AT 1997 YEAR-END (a)
------------------------- -------------------------
SHARES
ACQUIRED ON VALUE
NAME EXERCISE (#) REALIZED EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- ---- ------------ ---------- ----------- ------------- ----------- -------------
(b) (b)
Thomas H. O'Brien 294,000 $6,174,244 385,000 132,000 $10,849,125 $1,699,500
James E. Rohr 82,000 1,768,125 275,500 71,500 8,029,125 920,562
Walter E. Gregg, Jr. 50,000 796,875 97,400 53,400 2,566,200 687,525
Richard C. Caldwell 43,000 1,388,969 112,200 32,000 3,266,100 412,000
Bruce E. Robbins 60,000 1,194,375 82,200 29,200 2,394,225 375,950
- --------
(a) An option is in-the-money if the fair market value of the underlying
security exceeds the exercise price of the option.
(b) The dollar values shown were calculated by determining the difference
between: (i) the average of the high and low sale prices of the
Corporation's Common Stock on the New York Stock Exchange on December 31,
1997 (i.e., $56.6250) and (ii) the exercise prices of the various options
held by the named executive officer as of December 31, 1997.
1997 LONG-TERM INCENTIVE AWARD PLAN--GRANTS IN 1997
This table provides information on the Incentive Shares granted to each of
the named executive officers in 1997 under the Corporation's 1997 Long-Term
Incentive Award Plan. For a discussion of these grants, please see the
highlights section of the Personnel and Compensation Committee Report on
Executive Compensation on page 13.
PERFORMANCE OR OTHER PERIOD UNTIL
NAME NUMBER OF INCENTIVE SHARES(#)(a) MATURATION OR PAYOUT
- ---- -------------------------------- ---------------------------------
Thomas H. O'Brien 108,000 (b)
James E. Rohr 55,500 (b)
Walter E. Gregg, Jr. 40,500 (b)
Richard C. Caldwell 13,500 (b)
Bruce E. Robbins 15,000 (b)
- --------
(a) The actual issuance of shares of Common Stock will occur only upon the
achievement of the share price and/or financial performance goals specified
in the Incentive Share Agreement between the Corporation and the grantee.
(b) The Corporation will issue to the grantee two thirds of the identified
Incentive Shares if: (i) the Corporation's average Common Stock price
reaches $57.00 per share over twenty consecutive business days; and (ii)
two financial performance goals (i.e., return on common equity and relative
shareholder return in relation to a specified peer group of bank holding
companies) are achieved. This peer group is not the same as the peer group
index used for purposes of the Common Stock performance graph found on page
21.
The Corporation will issue one third of the identified Incentive Shares if
the share price performance goal is achieved, but either of the financial
performance goals is not achieved. If the share price performance goal is
not achieved on or before December 31, 1999, but the Corporation's return on
18
common equity and relative shareholder return are both within the top one
third of the peer group, the Corporation will issue one third of the
identified Incentive Shares to the grantee.
All of the identified Incentive Shares will be issued if: (i) the share
price and financial performance goals are all achieved on or before
December 31, 1999; (ii) the Corporation's relative shareholder return ranks
among the top five of the bank holding companies included in the peer
group; and (iii) the Corporation's return on common equity is among the top
five of the peer group. If only one of these peer group goals is achieved,
five sixths of the identified Incentive Shares will be issued.
If the grantee's employment with the Corporation terminates prior to the
end of a two-year restricted period following the issuance of shares of
Common Stock, he or she will forfeit all shares awarded, except in certain
cases involving the grantee's death, total disability, or retirement or
certain change in control events. During the restricted period, the grantee
will have the right to vote the awarded shares and receive dividends on
them, but may not sell or otherwise transfer the shares.
Pension Benefits
The Corporation maintains a non-contributory pension plan ("Pension Plan")
for employees which is a defined benefit plan under the Employee Retirement
Income Security Act of 1974, as amended ("ERISA") and is qualified under
Section 401(a) of the Code. The Corporation and certain of its subsidiaries
contribute an actuarially determined amount necessary to fund total benefits
payable to participants employed by them. The amount of the Corporation's
annual contribution to this Plan with respect to a specified participant cannot
readily be calculated by the actuaries for the Pension Plan. Benefits under the
Pension Plan are based on the average of the highest base salary for five
consecutive years during the last ten years of credited service ("final average
compensation"), and are subject to limitations imposed by the Code.
Retirement benefits under the Pension Plan are calculated as follows: (i)
1.3% of the final average compensation for each year of credited service up to
25 years, plus (ii) 1% of the final average compensation for each year of
credited service over 25, plus (iii) 0.45% of the final average compensation in
excess of the participant's social security covered compensation (determined as
of the earlier of age 65 or the year of retirement) for each year of credited
service up to 35 years.
A supplemental benefit plan applicable to certain officers of the Corporation
and its subsidiaries provides retirement benefits equal to the difference, if
any, between the maximum benefit allowed under the Code and the amount provided
by the Pension Plan. Under the provisions of a separate supplemental benefit
plan, certain officers who received qualifying cash payments in connection with
annual incentive awards (or bonuses under prior cash compensation plans) are
eligible for additional retirement benefits based on either the additional
payment under the Pension Plan that eligible officers would receive if
qualifying cash payments made in connection with annual incentive awards were
included in determining final average compensation for purposes of calculating
such eligible officers' pension benefits, or on an alternative minimum formula.
19
The following table sets forth the estimated annual benefits payable upon
normal retirement (age 65) pursuant to the provisions of the Pension Plan as
supplemented by the various plans described above to persons in the indicated
final average compensation and credited years of service classifications.
Annual Benefits for Credited Years of Service Indicated
Final Average --------------------------------------------------------------
Compensation 15 20 25 30 35 40
------------ -- -- -- -- -- --
$ 300,000 $ 76,649 $102,198 $ 127,748 $ 148,798 $ 169,847 $ 184,847
500,000 129,149 172,198 215,248 250,798 286,347 311,347
700,000 181,649 242,198 302,748 352,798 402,847 437,847
900,000 234,149 312,198 390,248 454,798 519,347 564,347
1,100,000 286,649 382,198 477,748 556,798 635,847 690,847
1,300,000 339,149 452,198 565,248 658,798 752,347 817,347
1,500,000 391,649 522,198 652,748 760,798 868,847 943,847
1,700,000 444,149 592,198 740,248 862,798 985,347 1,070,347
1,900,000 496,649 662,198 827,748 964,798 1,101,847 1,196,847
2,100,000 549,149 732,198 915,248 1,066,798 1,218,347 1,323,347
2,300,000 601,649 802,198 1,002,748 1,168,798 1,334,847 1,449,847
2,500,000 654,149 872,198 1,090,248 1,270,798 1,451,347 1,576,347
2,700,000 706,649 942,198 1,177,748 1,372,798 1,567,847 1,702,847
2,900,000 759,149 1,012,198 1,265,248 1,474,798 1,684,347 1,829,347
3,100,000 811,649 1,082,198 1,352,748 1,576,798 1,800,847 1,955,847
Amounts reported in the Summary Compensation Table on page 15 under the
columns captioned "Annual Compensation--Salary" and "Annual Compensation--
Bonus" would be included in the calculation of final average compensation for
the purpose of determining the benefits shown in the table above. The named
executive officers have accumulated the following credited years of service:
Messrs. O'Brien (36), Rohr (26), Gregg (24), Caldwell (8), and Robbins (25).
The foregoing credited years of service were calculated by rounding each half
year or more to the next highest number. The estimated annual pension benefits
shown above are based on a single life annuity payment method and assume that
the benefits are payable beginning at age 65, with a termination date and
payment start date of February 1, 1998. The normal form of payment for a
married person is the joint and survivor annuity, which provides a lower annual
pension during the combined lives of the person and his or her spouse. The
estimated annual benefits listed in the Pension Plan Table are not subject to
any deduction for Social Security benefits or other offset amounts.
20
COMMON STOCK PERFORMANCE GRAPH
The graph set forth below shows the cumulative shareholder return (i.e.,
price change plus reinvestment of dividends) on the Corporation's Common Stock
during the five-year period ended December 31, 1997, as compared with: (i) an
overall stock market index, the S&P 500 Index; and (ii) a peer group index, the
S&P Major Regional Banks Index ("S&P Banks"). The stock performance graph
assumes that $100 was invested on January 1, 1993 for the five-year period and
also shows the resultant compound growth rate ("CGR") for the performance
period. The yearly points marked on the horizontal axis of the graph correspond
to December 31 of that year.
[GRAPH APPEARS HERE]
COMPARISON OF FIVE YEAR CUMULATIVE RETURN
AMONG PNC, S&P 500 INDEX AND S&P BANKS
Measurement period
(Fiscal year Covered)
12/31/92 PNC S&P Index S&P Banks
- --------------------- ----- --------- ---------
Measurement PT -
12/31/92 $100.00 $100.00 $100.00
FYE 12/31/93 $105.81 $110.08 $106.02
FYE 12/31/94 $ 80.87 $111.53 $100.34
FYE 12/31/95 $130.55 $153.45 $158.00
FYE 12/31/96 $159.36 $188.68 $215.88
FYE 12/31/97 $249.60 $251.63 $324.62
5 Year CGR
-----------
PNC.........................20.1%
S&P 500 Index...............20.3%
S&P Banks...................26.6%
ASSUMES $100 INVESTMENT ON JANUARY 1, 1993
TOTAL RETURN=PRICE CHANGE PLUS REINVESTMENT OF DIVIDENDS
In accordance with the rules of the SEC, this section shall not be
incorporated by reference into any of the Corporation's filings under the
Securities Exchange Act of 1934 or the Securities Act of 1933.
VOTING PROCEDURES
Pennsylvania law and the Corporation's By-Laws require the presence of a
quorum for the annual meeting. A quorum is constituted by the presence, in
person or by proxy, of shareholders entitled to cast at least a majority of the
votes which all shareholders are entitled to cast on the particular matters to
be voted on. At a duly organized annual meeting, the Corporation's By-Laws
provide that, except as otherwise specified in the Corporation's Articles of
Incorporation or provided by law, each matter shall be decided by a majority of
the votes cast on such matters by the shareholders present at the meeting in
person or by proxy. Votes withheld from director nominees and abstentions will
be counted in determining whether a quorum has been reached, but the failure to
execute and return a proxy will result in a shareholder not being considered
present at the meeting.
Assuming a quorum has been reached, a determination must be made as to the
results of the vote on Item 1, the election of directors.
21
Under Pennsylvania law, the act of "voting" does not include either recording
the fact of abstention or failing to vote for a candidate or for approval or
disapproval of a proposal, whether or not the person entitled to vote
characterizes the conduct as voting. In other words, only those who indicate an
affirmative or negative decision on a matter are treated as voting, so that
ordinarily abstention or a mere absence or failure to vote is not equivalent to
a negative decision.
With respect to Item 1, the 17 nominees for election as directors who receive
the greatest number of votes cast at the annual meeting, assuming that a quorum
is present, shall be elected as directors at the conclusion of the vote
tabulation. A withheld vote on any nominee will not affect the voting results.
Under the rules of the New York Stock Exchange, "routine" items are those
upon which broker-dealers holding shares in street name for their customers may
vote, in their discretion, on behalf of any customers who do not furnish voting
instructions within ten days of the annual meeting. With respect to non-routine
items that come before the annual meeting for a vote, such broker-dealers would
not be able to vote without first receiving voting instructions from their
customers. These broker "non-votes" would not be considered in the calculation
of the majority of the votes cast and therefore would have no effect on the
vote with respect to a non-routine item.
The Corporation has adopted a policy that all proxies, ballots, voting
instructions from employee benefit plan participants and voting tabulations
that identify the particular vote of a shareholder or benefit plan participant
be kept permanently confidential and not be disclosed to the Corporation, its
directors, officers or employees except: (i) as necessary to meet legal
requirements or to pursue or defend legal actions; (ii) to allow the Judge of
Election to certify the results of the vote; (iii) when expressly requested by
a shareholder or benefit plan participant; or (iv) in the event of a contested
proxy solicitation. The Corporation has confirmed with its independent vote
tabulator and Judge of Election that its procedures will be consistent with the
foregoing policy.
INDEPENDENT AUDITORS
At its meeting on January 8, 1998, the Board of Directors approved the
recommendation of the Audit Committee for the appointment of Ernst & Young LLP
to audit the consolidated financial statements of the Corporation for 1998.
Ernst & Young LLP performed audit services for the Corporation during 1997.
Such services included an audit of annual consolidated financial statements,
interim reviews of quarterly financial statements, review and consultation
connected with filings with the SEC, internal control reviews required by
regulatory authorities and certain contractual agreements, consultation on tax,
financial accounting and reporting matters, and meetings with the Audit
Committee of the Board of Directors.
Representatives of Ernst & Young LLP are expected to be present at the annual
meeting with the opportunity to make a statement if they desire to do so and to
be available to respond to appropriate questions.
LEGAL PROCEEDINGS
A consolidated class action complaint was filed in March 1995 in the United
States District Court for the Western District of Pennsylvania against the
Corporation, its Chairman and Chief Executive Officer and its Senior Vice
President and Chief Financial Officer. The lawsuit was consolidated from four
lawsuits filed in November and December 1994. The consolidated complaint
alleges violations of federal securities laws and common law relating to
disclosures regarding the Corporation's net interest income, interest rate
risk, future prospects, and related matters, and seeks, among other things,
unquantified damages. The district court certified the case as a class action
consisting of all persons who purchased the Corporation's Common Stock
22
from April 18, 1994 through November 15, 1994. The parties have reached an
agreement in principle to settle this action, which is subject to documentation
and court approval. Management believes that the final disposition will not be
material to the Corporation's financial position or results of operation.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 requires the
Corporation's directors, certain of its executive officers, and persons who own
more than ten percent of a registered class of the Corporation's equity
securities (currently there are no such shareholders), to file with the
Corporation, the SEC and the New York Stock Exchange initial reports of
ownership and reports of changes in ownership of any equity securities of the
Corporation. With respect to 1997, to the best of the Corporation's knowledge,
all required report forms were filed on a timely basis. In making these
statements, the Corporation has relied on the written representations of its
directors and certain of its executive officers and copies of the reports
provided to the Corporation.
BY-LAW AMENDMENTS
During 1997, the Board of Directors amended the Corporation's By-Laws to add
new provisions governing nominations for the election of directors and other
proposals for action at an annual meeting of shareholders. Director nominations
and such proposals may be made only: (i) pursuant to the Corporation's notice
of such meeting; (ii) by the presiding officer; (iii) by or at the direction of
a majority of the Board of Directors; or (iv) by one or more shareholders in
accordance with the applicable rules of the SEC and the governing By-Law
provisions.
A shareholder may make a nomination for the election of a director or a
proposal for action at an annual meeting only if written notice is received by
the Corporate Secretary not later than (i) 90 days prior to the annual meeting
(unless a different date for such notice has been stated in the Corporation's
most recent proxy materials distributed to shareholders); or (ii) if the annual
meeting is to be held on a date other than the fourth Tuesday in April, the
close of business on the tenth day following the first public disclosure of the
meeting date. Public disclosure of the date of any annual meeting may be made
in a filing with the SEC, in any notice given to the New York Stock Exchange,
or in a news release reported by any national news service.
Each shareholder notice shall include: (i) as to the shareholder giving the
notice and the beneficial owner, if any, on whose behalf the notice is given
(A) the name and address of such shareholder and of such beneficial owner, and
(B) the class and number of shares of the Corporation which are owned of record
and beneficially by such shareholder and such beneficial owner; and (ii) a
representation that the shareholder is a beneficial owner of stock of the
Corporation entitled to vote at such meeting and intends to be present at the
meeting in person or by proxy to make such nomination or proposal.
Each notice of nomination for the election of a director from a shareholder
also shall set forth: (i) the name and address of the person to be nominated;
(ii) a description of all arrangements or understandings between the
shareholder and the nominee and any other person or persons (naming such person
or persons) pursuant to which the nomination is to be made by the shareholder;
(iii) such other information regarding the nominee as would be required to be
included in proxy materials filed under the applicable rules of the SEC had the
nominee been nominated by the Board of Directors; and (iv) the written consent
of the nominee to serve as a director of the Corporation if so elected.
Each notice of a proposal for action at an annual meeting from a shareholder
also shall set forth a brief description of the proposal, the reasons for
making such proposal, and any direct or indirect interest of the shareholder,
or any person on whose behalf the shareholder is acting, in making such
proposal.
The presiding officer of the meeting may refuse to permit any nomination for
the election of a director or proposal to be made at an annual meeting by a
shareholder who has not complied with all of the foregoing procedures.
23
The Board also adopted By-Law amendments which limit the call of and business
conducted at a special meeting of shareholders. Special meetings of the
shareholders may be called, at any time, only by the Board of Directors, the
Chairman of the Board, the President, or a Vice Chairman of the Board. Only
business brought before the meeting pursuant to the Corporation's notice of
such meeting, by the presiding officer, or by or at the direction of a majority
of the Board of Directors shall be conducted at a special meeting of
shareholders.
Questions about these requirements, or notices mandated by them, may be
directed to:
Corporate Secretary
PNC Bank Corp.
One PNC Plaza 249 Fifth Avenue
Pittsburgh, PA 15222-2707
For information on how to submit a shareholder proposal to be considered for
inclusion in the Corporation's 1999 annual meeting proxy materials, please see
the section immediately below. For information on how to submit the name of a
person to be considered by the Committee on Corporate Governance for possible
nomination as a director, please see the paragraph discussing the Committee's
responsibilities on page 4.
SUBMISSION OF CERTAIN SHAREHOLDER PROPOSALS
Eligible shareholders may submit proposals to be considered for inclusion in
the Corporation's 1999 proxy materials for the 1999 annual meeting of
shareholders if they do so in accordance with the applicable SEC rules. Any
such proposals must be in writing and received by the Corporate Secretary of
the Corporation no later than November 20, 1998 in order to be considered for
inclusion in the Corporation's 1999 proxy materials. For information on the
requirements governing shareholder proposals to be made at an annual meeting of
shareholders, please see the section captioned "By-Law Amendments" immediately
above.
OTHER MATTERS
The Board of Directors knows of no other business to be presented at the
meeting. If, however, any other business should properly come before the
meeting, or any adjournment thereof, it is intended that the proxy will be
voted with respect thereto in accordance with the best judgment of the persons
named in the proxy.
By Order of the Board of
Directors,
/s/ John F. Fulgoney
John F. Fulgoney
Corporate Secretary
24
LOGO
PNCBANK
March 20, 1998
Re: PNC Bank Corp. Retirement Savings Plan
Dear Plan Participant:
Under the provisions of the PNc Bank Corp. Retirement Savings Plan, any full and
partial shares of PNC Bank Corp. stock credited to a participant's account are
to be voted by the Trustee of the Plan in accordance with the participant's
written direction. Any shares for which the Trustee does not receive voting
instructions on a timely basis shall be voted by the Trustee in the exercise of
its discretion.
The enclosed material relates to a very important matter to be voted on at the
April 28, 1998 annual meeting of PNC Bank Corp. shareholders. The number of
shares for which you can give voting instructions appears on the enclosed
Instruction Card. Please complete, date, and sign the Instruction Card and
return it in the envelope provided as soon as possible. Thank you.
Very truly yours,
PNC Bank, National Association, Trustee
/s/ Donald R. Carroll
By: Donald R. Carroll
Senior Vice President
PNC BANK CORP.
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS FOR USE AT THE
ANNUAL MEETING OF SHAREHOLDERS
APRIL 28, 1998--11:00 AM
PLACE: ONE PNC PLAZA, PITTSBURGH, PA
Thomas H. O'Brien, Walter E. Gregg, Jr. and John F. Fulgoney, and each of them
with full power to act alone and with full power of substitution, are hereby
authorized to represent the shareholder named on the reverse side hereof
("shareholder") at the annual meeting of shareholders of PNC Bank Corp. to be
held on April 28, 1998, or at any adjournment thereof, and to vote, as
indicated on the reverse side hereof, the number of shares of Common Stock
and/or Preferred Stock which the shareholder would be entitled to vote if
personally present at said meeting. The above named individuals, and each of
them with full power to act alone, are further authorized to vote such stock
upon any other business as may properly come before the meeting, or any
adjournment thereof, in accordance with their best judgment.
THIS PROXY MAY BE REVOKED BY GIVING THE SECRETARY OF THE MEETING WRITTEN NOTICE
OF REVOCATION OR A SUBSEQUENTLY DATED PROXY AT ANY TIME BEFORE THE VOTING OF
THE SHARES REPRESENTED BY THIS PROXY, OR BY CASTING A BALLOT AT THE MEETING.
THIS PROXY IS CONTINUED ON THE REVERSE SIDE.
PLEASE SIGN ON THE REVERSE SIDE AND RETURN PROMPTLY.
- --------------------------------------------------------------------
COMMENTS/ADDRESS CHANGE: PLEASE MARK COMMENT/ADDRESS BOX ON REVERSE SIDE
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
/\ FOLD AND DETACH HERE /\
WILL ATTEND
MEETING [_]
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR ALL
NOMINEES LISTED IN ITEM 1. ALL SHARES WILL BE VOTED AS
INSTRUCTED BELOW. IN THE ABSENCE OF AN INSTRUCTION TO
THE CONTRARY, ALL SHARES WILL BE VOTED FOR ALL NOMINEES
LISTED IN ITEM 1.
ITEM 1--Election of FOR ALL WITHHELD
Directors: Ms. Pepper NOMINEES FOR ALL
and Messrs. Chellgren, Clay, [_] [_]
Davidson, Girard-
diCarlo, Gregg, Johnson,
Lindsay, McClelland,
O'Brien, Randolph, Rohr,
Ross, Simmons, Usher,
Washington and Wehmeier
(or any substitute
nominee in case of
unavailability).
SIGNATURE(S)
------------------------------------------------ DATE:
-------------
PLEASE SIGN AS NAME APPEARS HEREON. JOINT OWNERS SHOULD EACH SIGN. WHEN
SIGNING ON BEHALF OF A CORPORATION OR PARTNERSHIP OR AS ATTORNEY, EXECUTOR,
ADMINISTRATOR, TRUSTEE OR GUARDIAN, PLEASE GIVE FULL TITLE AS SUCH.
[_] FOR ALL NOMINEES, EXCEPT AS INDICATED BELOW:
-------------------------
(Write nominee name(s)
in the space provided
above to withhold
authority.) COMMENTS/ADDRESS CHANGE PLEASE MARK [_]
THIS BOX IF YOU HAVE WRITTEN COMMENTS
/ADDRESS CHANGE ON THE REVERSE SIDE.
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
/\ FOLD AND DETACH PROXY CARD HERE /\
RETURN PROXY CARD IN ENCLOSED ENVELOPE AFTER COMPLETING, SIGNING AND DATING
ADMISSION TICKET
PNC BANK CORP.
1998 ANNUAL MEETING OF SHAREHOLDERS
TUESDAY, APRIL 28, 1998
11:00 AM
ONE PNC PLAZA -- 15TH FLOOR
FIFTH AVENUE AND WOOD STREET
PITTSBURGH, PENNSYLVANIA
PLEASE ADMIT NON-TRANSFERABLE
PNC BANK CORP.
ANNUAL MEETING OF SHAREHOLDERS
APRIL 28, 1998--11:00 AM
PLACE: ONE PNC PLAZA, PITTSBURGH, PA
ISP INSTRUCTION CARD
To: PNC Bank, National Association, Trustee of the non-ESOP portion of the PNC
Bank Corp. Incentive Savings Plan and Trustee of the ESOP portion of the PNC
Bank Corp. Incentive Savings Plan.
The signatory on the reverse side hereof, a Participant having Common Stock
and/or Preferred Stock of PNC Bank Corp. credited to my account, does hereby
direct each Trustee to vote the number of shares indicated hereon at the annual
meeting of shareholders to be held on April 28, 1998, or any adjournment
thereof, as indicated.
THIS CARD IS CONTINUED ON THE REVERSE SIDE.
PLEASE SIGN ON THE REVERSE SIDE AND RETURN PROMPTLY.
- --------------------------------------------------------------------------------
COMMENTS/ADDRESS CHANGE: PLEASE MARK COMMENT/ADDRESS BOX ON REVERSE SIDE
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
/\ FOLD AND DETACH HERE /\
WILL ATTEND
MEETING [_]
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR ALL
NOMINEES LISTED IN ITEM 1. ALL FULL AND PARTIAL SHARES
OF STOCK CREDITED TO YOUR PLAN ACCOUNT WILL BE VOTED AS
DIRECTED BELOW. IN THE ABSENCE OF A DIRECTION TO THE
CONTRARY, ALL SHARES (INCLUDING UNALLOCATED SHARES) WILL
BE VOTED IN THE MANNER REQUIRED OR PERMITTED BY THE
GOVERNING PLAN DOCUMENTS.
ITEM 1--Election of FOR ALL WITHHELD
Directors: Ms. Pepper NOMINEES FOR ALL
and Messrs. Chellgren, Clay, [_] [_]
Davidson, Girard-
diCarlo, Gregg, Johnson,
Lindsay, McClelland,
O'Brien, Randolph, Rohr,
Ross, Simmons, Usher,
Washington and Wehmeier
(or any substitute
nominee in case of
unavailability).
FOR ALL NOMINEES, EXCEPT AS INDICATED BELOW:
-------------------------
(Write nominee name(s)
in the space provided
above to withhold
authority.) COMMENTS/ADDRESS CHANGE PLEASE [_]
MARK THIS BOX IF YOU HAVE WRITTEN
COMMENTS/ADDRESS CHANGE ON THE
REVERSE SIDE.
SIGNATURE DATE:
------------------------------------------------ -------------
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
/\ FOLD AND DETACH INSTRUCTION CARD HERE /\
RETURN INSTRUCTION CARD IN ENCLOSED ENVELOPE AFTER COMPLETING,
SIGNING AND DATING
ADMISSION TICKET
PNC BANK CORP.
1998 ANNUAL MEETING OF SHAREHOLDERS
TUESDAY, APRIL 28, 1998
11:00 AM
ONE PNC PLAZA -- 15TH FLOOR
FIFTH AVENUE AND WOOD STREET
PITTSBURGH, PENNSYLVANIA
PLEASE ADMIT NON-TRANSFERABLE
PNC BANK CORP.
ANNUAL MEETING OF SHAREHOLDERS
APRIL 28, 1998--11:00 AM
PLACE: ONE PNC PLAZA, PITTSBURGH, PA
RSP INSTRUCTION CARD
To: PNC Bank, National Association, Trustee of the PNC Bank Corp. Retirement
Savings Plan.
The signatory on the reverse side hereof, a Participant having Common Stock of
PNC Bank Corp. credited to my account, does hereby direct the Trustee to vote
the number of shares indicated hereon at the annual meeting of shareholders to
be held on April 28, 1998, or any adjournment thereof, as indicated.
THIS CARD IS CONTINUED ON THE REVERSE SIDE.
PLEASE SIGN ON THE REVERSE SIDE AND RETURN PROMPTLY.
- --------------------------------------------------------------------------------
COMMENTS/ADDRESS CHANGE: PLEASE MARK COMMENT/ADDRESS BOX ON REVERSE SIDE
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
/\ FOLD AND DETACH HERE /\
WILL ATTEND
MEETING [_]
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR ALL
NOMINEES LISTED IN ITEM 1. ALL FULL AND PARTIAL SHARES
OF STOCK CREDITED TO YOUR PLAN ACCOUNT WILL BE VOTED AS
DIRECTED BELOW. IN THE ABSENCE OF A DIRECTION TO THE
CONTRARY, ALL SHARES (INCLUDING UNALLOCATED SHARES) WILL
BE VOTED IN THE MANNER REQUIRED OR PERMITTED BY THE
GOVERNING PLAN DOCUMENTS.
ITEM 1--Election of FOR ALL WITHHELD
Directors: Ms. Pepper NOMINEES FOR ALL
and Messrs. Chellgren, Clay, [_] [_]
Davidson, Girard-
diCarlo, Gregg, Johnson,
Lindsay, McClelland,
O'Brien, Randolph, Rohr,
Ross, Simmons, Usher,
Washington and Wehmeier
(or any substitute
nominee in case of
unavailability).
[_] FOR ALL NOMINEES, EXCEPT AS INDICATED BELOW:
-------------------------
(Write nominee name(s)
in the space provided
above to withhold
authority.) COMMENTS/ADDRESS CHANGE PLEASE [_]
MARK THIS BOX IF YOU HAVE
WRITTEN COMMENTS/ADDRESS
CHANGE ON THE REVERSE SIDE.
SIGNATURE DATE:
------------------------------------------------ -------------
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
/\ FOLD AND DETACH INSTRUCTION CARD HERE /\
RETURN INSTRUCTION CARD IN ENCLOSED ENVELOPE AFTER COMPLETING,
SIGNING AND DATING
ADMISSION TICKET
PNC BANK CORP.
1998 ANNUAL MEETING OF SHAREHOLDERS
TUESDAY, APRIL 28, 1998
11:00 AM
ONE PNC PLAZA -- 15TH FLOOR
FIFTH AVENUE AND WOOD STREET
PITTSBURGH, PENNSYLVANIA
PLEASE ADMIT NON-TRANSFERABLE