Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934
Filed by the registrant X
Filed by a party other than the registrant |_|
Check the appropriate box:
|_| Preliminary proxy statement
|_| 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 Rule 14a-12
Lexington B & L Financial Corp.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified in Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of filing fee (Check the appropriate box):
|X| No fee required.
|_| Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
(1) Title of each class of securities to which transaction applies:
N/A
- --------------------------------------------------------------------------------
(2) Aggregate number of securities to which transactions applies:
N/A
- --------------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed pursuant
to Exchange Act Rule 0-11:
N/A
- --------------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
N/A
- --------------------------------------------------------------------------------
(5) Total Fee paid:
N/A
- --------------------------------------------------------------------------------
|_| Fee paid previously 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:
N/A
- --------------------------------------------------------------------------------
(2) Form, schedule or registration statement no.:
N/A
- --------------------------------------------------------------------------------
(3) Filing party:
N/A
- --------------------------------------------------------------------------------
(4) Date filed:
N/A
- --------------------------------------------------------------------------------
<page> 2
December 20, 2002
Dear Stockholder:
You are cordially invited to attend the annual meeting of stockholders of
Lexington B & L Financial Corp. The meeting will be held at the main office of B
& L Bank, 205 S. 13th Street, Lexington, Missouri, on Tuesday, January 21, 2003
at 10:00 a.m., local time.
The notice of annual meeting and proxy statement appearing on the
following pages describe the formal business to be transacted at the meeting.
During the meeting, we will also report on the operations of the Company.
Directors and officers of the Company, as well as a representative of Moore,
Horton & Carlson, P.C., the Company's independent auditors, will be present to
respond to appropriate questions of stockholders.
It is important that your shares are represented at this meeting, whether
or not you attend the meeting in person and regardless of the number of shares
you own. To make sure your shares are represented, we urge you to complete and
mail the enclosed proxy card. If you attend the meeting, you may vote in person
even if you have previously mailed a proxy card.
We look forward to seeing you at the meeting.
Sincerely,
/s/ E. Steva Vialle
E. Steva Vialle
CHIEF EXECUTIVE OFFICER
<page> 3
LEXINGTON B & L FINANCIAL CORP.
205 S. 13TH STREET
LEXINGTON, MISSOURI 64067
(660) 259-2247
- --------------------------------------------------------------------------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
- --------------------------------------------------------------------------------
The annual meeting of stockholders of Lexington B & L Financial Corp.
("Company") will be held at the main office of B & L Bank, 205 S. 13th Street,
Lexington, Missouri, on Tuesday, January 21, 2003, at 10:00 a.m., local time,
for the following purposes:
1. To elect two directors of the Company;
2. To ratify the appointment of Moore, Horton & Carlson, P.C. as
independent auditors for the Company for the fiscal year ending
September 30, 2003; and
3. To transact any other business that may properly come before the
meeting.
NOTE: The Board of Directors is not aware of any other business to come
before the meeting.
Stockholders of record at the close of business on December 2, 2002 are
entitled to receive notice of the meeting and to vote at the meeting and any
adjournment or postponement of the meeting.
Please complete and sign the enclosed form of proxy, which is solicited by
the Board of Directors, and mail it promptly in the enclosed envelope. The proxy
will not be used if you attend the meeting and vote in person.
BY ORDER OF THE BOARD OF DIRECTORS
/s/ Terry L. Thompson
Terry L. Thompson
SECRETARY
Lexington, Missouri
December 20, 2002
IMPORTANT: THE PROMPT RETURN OF PROXIES WILL SAVE THE COMPANY THE EXPENSE OF
FURTHER REQUESTS FOR PROXIES IN ORDER TO ENSURE A QUORUM. A SELF-ADDRESSED
ENVELOPE IS ENCLOSED FOR YOUR CONVENIENCE. NO POSTAGE IS REQUIRED IF MAILED IN
THE UNITED STATES.
<page> 4
LEXINGTON B & L FINANCIAL CORP.
------------------------------------
PROXY STATEMENT
------------------------------------
This proxy statement is furnished in connection with the solicitation of
proxies by the Board of Directors of Lexington B & L Financial Corp.
("Lexington" or the "Company") to be used at the annual meeting of stockholders
of the Company. The Company is the holding company for B & L Bank. The annual
meeting will be held at the main office of B & L Bank, 205 S. 13th Street,
Lexington, Missouri, on Tuesday, January 21, 2003, at 10:00 a.m., local time.
This proxy statement and the enclosed proxy card are being first mailed to
stockholders on or about December 20, 2002.
- --------------------------------------------------------------------------------
VOTING AND PROXY PROCEDURE
- --------------------------------------------------------------------------------
WHO CAN VOTE AT THE MEETING
You are entitled to vote your Lexington common stock if the records of the
Company showed that you held your shares as of the close of business on December
2, 2002. As of the close of business on that date, a total of 726,399 shares of
Lexington common stock were outstanding and entitled to vote. Each share of
common stock has one vote. As provided in the Company's Articles of
Incorporation, record holders of the Company's common stock who beneficially
own, either directly or indirectly, in excess of 10% of the Company's
outstanding shares are not entitled to any vote in respect of the shares held in
excess of the 10% limit.
ATTENDING THE MEETING
If you are a beneficial owner of Lexington common stock held by a broker,
bank or other nominee (i.e., in "street name"), you will need proof of ownership
to be admitted to the meeting. A recent brokerage statement or letter from a
bank or broker are examples of proof of ownership. If you want to vote your
shares of Lexington common stock held in street name in person at the meeting,
you will have to get a written proxy in your name from the broker, bank or other
nominee who holds your shares.
VOTE REQUIRED
The annual meeting will be held if a majority of the outstanding shares of
common stock entitled to vote is represented at the meeting. If you return valid
proxy instructions or attend the meeting in person, your shares will be counted
for purposes of determining whether there is a quorum, even if you abstain from
voting. Broker non-votes also will be counted for purposes of determining the
existence of a quorum. A broker non-vote occurs when a broker, bank or other
nominee holding shares for a beneficial owner does not vote on a particular
proposal because the nominee does not have discretionary voting power with
respect to that item and has not received voting instructions from the
beneficial owner.
<page> 5
In voting on the election of directors, you may vote in favor of all
nominees, withhold votes as to all nominees, or withhold votes as to specific
nominees. There is no cumulative voting for the election of directors. Directors
must be elected by an affirmative vote of a majority of the shares present in
person or by proxy at the annual meeting. Votes that are withheld will have the
same effect as a negative vote and broker non-votes will have no effect on the
outcome of the election. In voting on the approval of the ratification of the
appointment of Moore, Horton & Carlson, P.C. as independent auditors, you may
vote in favor of the proposal, vote against the proposal or abstain from voting.
This matter will be decided by the affirmative vote of a majority of the shares
present in person or by proxy at the annual meeting. On this matter, abstentions
will have the same effect as a negative vote and broker non-votes will have no
effect on the voting.
VOTING BY PROXY
This proxy statement is being sent to you by the Board of Directors of the
Company for the purpose of requesting that you allow your shares of Lexington
common stock to be represented at the annual meeting by the persons named in the
enclosed proxy card. All shares of Lexington common stock represented at the
meeting by properly executed proxies will be voted in accordance with the
instructions indicated on the proxy card. If you sign and return a proxy card
without giving voting instructions, your shares will be voted as recommended by
the Company's Board of Directors. The Board of Directors recommends a vote "FOR"
each of the nominees for director and "FOR" ratification of Moore, Horton &
Carlson, P.C. as independent auditors.
If any matters not described in this proxy statement are properly
presented at the annual meeting, the persons named in the proxy card will use
their own judgment to determine how to vote your shares. This includes a motion
to adjourn or postpone the meeting in order to solicit additional proxies. If
the annual meeting is postponed or adjourned, your Lexington common stock may be
voted by the persons named in the proxy card on the new meeting date as well,
unless you have revoked your proxy. The Company does not know of any other
matters to be presented at the meeting.
You may revoke your proxy at any time before the vote is taken at the
meeting. To revoke your proxy you must either advise the Secretary of the
Company in writing before your common stock has been voted at the annual
meeting, deliver a later dated proxy, or attend the meeting and vote your shares
in person. Attendance at the annual meeting will not in itself constitute
revocation of your proxy.
If your Lexington common stock is held in street name, you will receive
instructions from your broker, bank or other nominee that you must follow in
order to have your shares voted. Your broker or bank may allow you to deliver
your voting instructions via the telephone or the Internet. Please see the
voting instruction form from your broker or bank that accompanies this proxy
statement.
PARTICIPANTS IN B & L BANK'S ESOP
If you participate in the B & L Bank Employee Stock Ownership Plan, the
proxy card represents a voting instruction to the trustees. Each participant in
the B & L Bank ESOP may direct the trustees as to the manner in which shares of
Lexington common stock allocated to the participant's plan account are to be
voted. Unallocated shares of common stock held by the B & L Bank ESOP and
allocated shares for which no voting instructions are received will be voted by
the trustees in the same proportion as shares for which the trustees have
received voting instructions.
2
<page> 6
- --------------------------------------------------------------------------------
STOCK OWNERSHIP
- --------------------------------------------------------------------------------
The following table provides information as of December 2, 2002 with
respect to persons known to the Company to be the beneficial owners of more than
5% of the Company's outstanding common stock. A person may be considered to
beneficially own any shares of common stock over which he or she has, directly
or indirectly, sole or shared voting or investing power.
PERCENT OF
NUMBER OF COMMON STOCK
NAME AND ADDRESS SHARES OWNED OUTSTANDING
- --------------- -------------------- -------------
B & L Bank 101,200(1) 13.93%
Employee Stock Ownership Plan
205 S. 13th Street
Lexington, Missouri 64067
Erwin Oetting, Jr. 64,998(2) 8.65
205 S. 13th Street
Lexington, Missouri 64067
Jeffrey L. Gendell 62,500(3) 8.60
Tontine Financial Partners, L.P.
Tontine Management, L.L.C.
200 Park Avenue, Suite 3900
New York, New York 10166
E. Steva Vialle 54,738(4) 7.36
205 S. 13th Street
Lexington, Missouri 64067
- ----------------------------
(1) Includes 35,782 shares that have not been allocated to participants'
accounts and 65,418 shares that have been allocated to participants'
accounts. Under the terms of the B & L Bank ESOP, the trustees will vote
unallocated shares and allocated shares for which no voting instructions
are received in the same proportion as shares for which the trustees have
received voting instructions from participants. The trustees of the B & L
Bank ESOP are Erwin Oetting, Norman Vialle and Steve Oliaro, all of whom
are directors of the Company.
(2) Includes 11,898 shares allocated to Mr. Oetting under the B & L Bank ESOP
as to which Mr. Oetting has voting power but not investment power. Also
includes 25,300 shares that may be acquired within 60 days of December 2,
2002 through the exercise of stock options.
(3) Information concerning the shares owned by Mr. Gendell and related entities
was obtained from an amended Schedule 13G dated February 15, 2002.
According to this filing, Mr. Gendell has shared voting and dispositive
power with respect to 62,500 shares, Tontine Financial Partners, L.P. has
shared voting and dispositive power with respect to 62,500 shares, and
Tontine Management, L.L.C. has shared voting and dispositive power with
respect to 62,500 shares.
(4) Includes 10,312 shares allocated to Mr. Vialle under the B & L Bank ESOP as
to which Mr. Vialle has voting power but not investment power. Also
includes 17,710 shares that may be acquired within 60 days of December 2,
2002 through the exercise of stock options.
3
<page> 7
<table>
<caption>
The following table provides information about the shares of Lexington
common stock that may be considered to be owned by each director or nominee for
director of the Company and by all directors and executive officers of the
Company as a group as of December 2, 2002. Unless otherwise indicated, each of
the named individuals has sole voting power and sole investment power with
respect to the shares shown.
NUMBER OF NUMBER OF SHARES
SHARES OWNED THAT MAY BE ACQUIRED PERCENT OF
(EXCLUDING WITHIN 60 DAYS BY COMMON STOCK
NAME OPTIONS)(1) EXERCISING OPTIONS OUTSTANDING(5)
------------------------------------- --------------- ---------------------- ------------------
<s> <c> <c> <c>
Erwin Oetting, Jr. 39,698 25,300 8.65%
Steve Oliaro 13,260(2) 6,325 2.67
Norman Vialle 10,060(3) 6,325 2.24
Charles R. Wilcoxon 9,560 6,325 2.17
E. Steva Vialle 37,028(4) 17,710 7.36
William J. Huhmann 31,713 0 4.37
All Executive Officers and 181,047 82,225 32.56%
Directors as a Group (10 persons)
</table>
- ---------------------------------
(1) Shares allocated under the B & L Bank ESOP, as to which the holder has
voting power but not investment power, are included as follows: Mr.
Oetting, 11,898 shares; Mr. Steva Vialle, 10,312 shares; all executive
officers and directors as a group, 40,671 shares.
(2) Includes 3,000 shares owned by a company controlled by Mr. Oliaro and 800
shares owned by Mr. Oliaro's spouse.
(3) Includes 9,554 shares owned by trusts for which Mr. Vialle serves as
trustee.
(4) Includes 223 shares owned by Mr. Vialle's spouse.
(5) Percentages with respect to each person or group of persons have been
calculated on the basis of 726,399 shares of Lexington common stock, which
is the number of shares of the Company's common stock outstanding and
entitled to vote as of December 2, 2002, plus the number of shares that
may be acquired within 60 days of that date through the exercise of stock
options.
4
<page> 8
- ------------------------------------------------------------------------------
PROPOSAL 1 -- ELECTION OF DIRECTORS
- ------------------------------------------------------------------------------
The Company's Board of Directors consists of six members. Three of the
Company's directors, Norman Vialle, Charles R. Wilcoxon and Steve Oliaro, are
independent directors under the current listing standards for the Nasdaq Stock
Market. The Board is divided into three classes with three-year staggered terms,
with approximately one-third of the directors elected each year. Two directors
will be elected at the annual meeting to serve three-year terms, or until their
successors have been elected and qualified. The nominees are Norman Vialle and
Charles R. Wilcoxon, each of whom is currently a director of the Company and B &
L Bank.
It is intended that the proxies solicited by the Board of Directors will
be voted for the election of the nominees named above. If any nominee is unable
to serve, the persons named in the proxy card would vote your shares to approve
the election of any substitute proposed by the Board of Directors.
Alternatively, the Board of Directors may adopt a resolution to reduce the size
of the Board. At this time, the Board of Directors knows of no reason why the
nominees might be unable to serve.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE ELECTION OF MESSRS.
VIALLE AND WILCOXON.
Information regarding the nominees for election at the annual meeting, as
well as information regarding the continuing directors whose terms expire in
2004 and 2005, is provided below. Unless otherwise stated, each individual has
held his current occupation for the last five years. The age indicated in each
individual's biography is as of September 30, 2002. The indicated period for
service as a director includes service as a director of B & L Bank. There are no
family relationships among the directors except that Norman Vialle is the uncle
of E. Steva Vialle.
NOMINEES FOR ELECTION AS DIRECTORS
The directors standing for election are:
NORMAN VIALLE. Mr. Vialle is the retired owner and operator of Maid-Rite
Drive-In, Lexington, Missouri. Mr. Vialle is 76 years old and has been a
director since 1964.
CHARLES R. WILCOXON. Mr. Wilcoxon is a retired businessman. Mr. Wilcoxon
is 90 years old and has been a director since 1962.
DIRECTORS CONTINUING IN OFFICE
The following directors have terms ending in 2004:
E. STEVA VIALLE. Mr. Vialle has served as Chief Executive Officer of the
Company and the Bank since December 2001. Mr. Vialle served as Executive Vice
President, Chief Operating Officer and Secretary of the Company and B & L Bank
from 1984 to December 2001. Mr. Vialle is 51 years old and has been a director
since 1992.
WILLIAM J. HUHMANN. Mr. Huhmann has served as President of the Company
since December 2001, and Senior Vice President and Chief Financial Officer of
the Company since September 1997 and of B&L
5
<page> 9
Bank since April 2000. Mr. Huhmann served as Chairman and Chief Financial
Officer of Lafayette County Bank from 1991 until April 2000. Mr. Huhmann is 63
years old and has been a director since April 2002.
The following directors have terms ending in 2005:
ERWIN OETTING JR. Mr. Oetting retired as the President and Chief Executive
Officer of the Company and President and Chief Executive Officer of B & L Bank
in December 2001. Mr. Oetting currently serves as Chairman of the Board of the
Company and B & L Bank. Mr. Oetting is 62 years old and has been a director
since 1966.
STEVE OLIARO. Mr. Oliaro is the owner of Baker Memorials, Inc. and sole
proprietor of Custom Grafix Design, both in Lexington, Missouri. Mr. Oliaro is
57 years old and has been a director since 1989.
MEETINGS AND COMMITTEES OF THE BOARD OF DIRECTORS
The Board of Directors of the Company conducts its business through
meetings of the Board and its committees. During the fiscal year ended September
30, 2002, the Board of Directors of the Company held twelve regular meetings. No
director of the Company attended fewer than 75% of the total meetings of the
Board and committees on which such Board member served during this period.
Messrs. Erwin Oetting, Jr., Steve Oliaro, Norman Vialle, Charles R.
Wilcoxon, and E. Steva Vialle currently serve on the audit committee. The audit
committee receives and reviews reports prepared by the Company's outside
auditor. During the fiscal year ended September 30, 2002, the audit committee
met one time. The entire Board of Directors functions as a compensation
committee to review and establish annual employee salary increases and bonuses.
During the fiscal year ended September 30, 2002, the Board of Directors met one
time in its capacity as a compensation committee.
DIRECTORS' COMPENSATION
All of the Directors of the Company currently serve on the Board of
Directors of B & L Bank. Non- employee directors of B & L Bank receive a fee of
$750 per month. No additional compensation is paid for service on the Board of
Directors of the Company.
B & L Bank has adopted a retirement plan to help ensure the retention of
directors of experience and ability in key positions of responsibility by
providing such directors with a retirement benefit upon their retirement from
the Board of Directors. The plan provides that a director who retires from the
Board with specified years of service will be designated a director emeritus and
continue to receive the compensation payable to members of the Board for a
period of five years following retirement. The same benefit would be payable to
the director (or his designated beneficiary) in the event of his death or
disability while serving on the Board if the director was otherwise eligible to
receive the normal retirement benefit. In the event of a change in control of B
& L Bank (as defined in the plan), the plan provides that all directors would be
deemed retired and the then present value of the normal retirement benefit would
be payable in a lump sum to each director on the effective date of the change in
control.
6
<page> 10
- --------------------------------------------------------------------------------
EXECUTIVE COMPENSATION
- --------------------------------------------------------------------------------
SUMMARY COMPENSATION TABLE
The following information is furnished for Mr. Oetting and Mr. Vialle. No
other executive officer of the Company or its subsidiaries received salary and
bonus of $100,000 or more during the year ended September 30, 2002.
<table>
<caption>
LONG-TERM COMPENSATION
---------------------------
ANNUAL COMPENSATION AWARDS
---------------------------------- ---------------------------
OTHER SECURITIES
ANNUAL RESTRICTED UNDERLYING ALL OTHER
NAME AND PRINCIPAL COMPENSATION STOCK AWARDS OPTIONS/SAR COMPENSATION
POSITIONS YEAR SALARY($) BONUS($) ($)(1)(2) ($) (#) ($)(3)
- ---------------------- ----- -------- ------- ------------- ------------- ----------- -------------
<s> <c> <c> <c> <c> <c> <c> <c>
Erwin Oetting, Jr., 2002 23,851 3,950 -- -- -- --
Former President and Chief 2001 95,848 8,108 3,000 -- -- 23,781
Executive Officer 2000 80,875 8,015 9,806 -- -- 21,955
E. Steva Vialle 2002 88,167 3,143 -- -- -- 20,291
Chief Executive Officer 2001 79,777 6,482 3,000 -- -- 19,087
2000 64,000 6,165 9,806 -- -- 16,887
</table>
- ------------------------
(1) Does not include certain additional benefits, the aggregate amounts of
which do not exceed 10% of total annual salary and bonus.
(2) Consists of director's fees of $3,000 for Mr. Oetting and directors fees of
$3,000 for Mr. Vialle.
(3) Represents employer contribution to the B & L Bank ESOP.
OPTION VALUE AT FISCAL YEAR END
The following table provides information regarding unexercised stock
options for the persons named in the summary compensation table (the named
executive officers) as of September 30, 2002. No named executive officer
exercised any stock options during the year ended September 30, 2002.
<table>
<caption>
NUMBER OF SECURITIES
UNDERLYING UNEXERCISED VALUE OF UNEXERCISED
OPTIONS AT FISCAL IN-THE-MONEY OPTIONS AT
NAME YEAR-END (#) FISCAL YEAR-END ($) (1)
- -------------------------- -------------------------- ------------------------------
EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
----------- ------------- ----------- -------------
<s> <c> <c> <c> <c>
Erwin Oetting, Jr. 25,300 -- -- --
E. Steva Vialle 17,710 -- -- --
</table>
- -------------------------
(1) Value of unexercised in-the-money stock options equals the market value of
shares covered by in-the-money options on September 30, 2002 less the option
exercise price. Options are in-the-money if the market value of shares
covered by the options is greater than the exercise price.
7
<page> 11
EMPLOYMENT AGREEMENT
The Company and B & L Bank have entered into a three-year employment
agreement with Mr. Vialle. Under the agreement, the current salary level for Mr.
Vialle is $87,625, which amount is paid by B & L Bank and may be increased at
the discretion of the Board of Directors or an authorized committee of the
Board. On each anniversary of the commencement date of the agreement, the term
of the agreement may be extended for an additional year. The agreement is
terminable by the Company and B & L Bank at any time or upon the occurrence of
certain events specified by federal regulations.
The employment agreement provides for a severance payment and other
benefits in the event of involuntary termination of employment in connection
with any change in control of the Company or B & L Bank. A severance payment
also will be provided on a similar basis in connection with a voluntary
termination of employment where, subsequent to a change in control, Mr. Vialle
is assigned duties inconsistent with his positions, duties, responsibilities and
status immediately prior to such change in control.
The severance payment under the employment agreement will equal 2.99 times
Mr. Vialle's average annual compensation during the five-year period preceding
the change in control. Such amount will be paid in a lump sum within 10 business
days following the termination of employment. Section 280G of the Internal
Revenue Code states that severance payments that equal or exceed three times the
base compensation of the individual are deemed to be "excess parachute payments"
if they are contingent upon a change in control. Individuals receiving excess
parachute payments are subject to a 20% excise tax on the amount of such
payments in excess of base compensation, and the Company would not be entitled
to deduct such amount.
The employment agreement restricts Mr. Vialle's right to compete against
the Company and B & L Bank for a period of one year from the date of termination
of the agreement if Mr. Vialle voluntarily terminates employment, except in the
event of a change in control.
SALARY CONTINUATION AGREEMENTS
MR. VIALLE
B & L Bank has entered into a salary continuation agreement with Mr.
Vialle to ensure his continued service with B & L Bank through retirement and to
provide him with additional financial security at retirement. The agreement
provides Mr. Vialle with monthly benefits of $1,500 for a period of 180 months
following retirement. In the event of Mr. Vialle's death while employed by the
Company or B & L Bank, his designated beneficiary will receive the same benefit
as if Mr. Vialle had retired at the specified retirement age.
MR. OETTING
B & L Bank entered into a salary continuation agreement with Mr. Oetting
to ensure his continued service with B & L Bank through retirement and to
provide him with additional financial security at retirement. The agreement
provides Mr. Oetting with monthly benefits of $3,165 for a period of 180 months
following retirement. Mr. Oetting began receiving his monthly payment under his
salary continuation agreement in January, 2002. In the event of Mr. Oetting's
death his designated beneficiary will receive the same benefit currently
received by Mr. Oetting.
8
<page> 12
DEFINED BENEFIT PLAN
B & L Bank is a participant in the Financial Institution Retirement Fund
("FIRF"), a multiple employer, non-contributory defined benefit retirement plan.
The FIRF plan covers all employees who have completed one year of service and
have attained the age of 21 years and provides for monthly retirement benefits
determined based on the employee's base salary and years of service after June
1, 1988. The normal retirement age is 65 and the early retirement age is before
age 65, but generally after age 55. Normal retirement benefits are equal to 2.0%
multiplied by the years of service to B & L Bank and the employee's average
salary for the five highest consecutive years preceding retirement. Benefits
under the plan are not subject to offset for social security benefits. If an
employee elects early retirement, but defers the receipt of benefits until age
65, the formula for computation of early retirement benefits is the same as if
the employee had retired at the normal retirement age. However, if the employee
elects early retirement and receives benefits prior to age 65, benefits are
reduced by applying an early retirement factor based on the number of years the
early retirement date precedes age 65. If a participant terminates employment
prior to the normal retirement date or early retirement date as a result of
disability, the participant would receive the vested percentage of benefits at
the participant's normal retirement date. Separate actuarial valuations are not
made for individual members of the plan. As of September 30, 2002, Mr. Oetting
had 13.7 years and Mr. Vialle had 14.5 years of credited service under the plan.
The following table illustrates annual pension benefits payable at normal
retirement age, based on various levels of compensation and years of service.
YEARS OF BENEFIT SERVICE
HIGHEST 5 YEAR FINAL -------------------------------------------
AVERAGE EARNINGS 5 10 15 25 35
- ---------------------------- ------- ------- ------- ------- -------
$ 10,000 1,000 2,000 3,000 5,000 7,000
20,000 2,000 4,000 6,000 10,000 14,000
30,000 3,000 6,000 9,000 15,000 21,000
40,000 4,000 8,000 12,000 20,000 28,000
60,000 6,000 12,000 18,000 30,000 42,000
80,000 8,000 16,000 24,000 40,000 56,000
100,000 10,000 20,000 30,000 50,000 70,000
120,000 12,000 24,000 36,000 60,000 84,000
130,000 13,000 26,000 39,000 65,000 91,000
- ------------------------------------------------------------------------------
AUDIT COMMITTEE REPORT
- ------------------------------------------------------------------------------
The Audit Committee is responsible for exercising independent, objective
oversight of the Company's independent auditors, accounting functions and
internal controls. The Audit Committee is comprised of five directors of the
Company, a majority of whom are independent under the National Association of
Securities Dealers' listing standards. The Audit Committee acts under a written
charter adopted by the Board of Directors.
9
<page> 13
The Audit Committee reviewed and discussed the annual financial statements
with management and the independent accountants. As part of this process,
management represented to the Audit Committee that the financial statements were
prepared in accordance with generally accepted accounting principles. The Audit
Committee also received and reviewed written disclosures and a letter from the
accountants concerning their independence as required under applicable standards
for auditors of public companies. The Audit Committee discussed with the
accountants the contents of such materials, the accountants independence and the
additional matters required under Statement on Auditing Standards No. 61. Based
on such review and discussions, the Audit Committee recommended that the Board
of Directors include the audited consolidated financial statements in the
Company's Annual Report on Form 10-KSB for the year ended September 30, 2002 for
filing with the Securities and Exchange Commission.
Erwin Oetting, Jr.
Steve Oliaro
Norman Vialle
Charles R. Wilcoxon
E. Steva Vialle
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COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT
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Section 16(a) of the Securities Exchange Act of 1934 requires Lexington's
executive officers and directors, and persons who own more than 10% of any
registered class of the Company's equity securities, to file reports of
ownership and changes in ownership with the SEC. Executive officers, directors
and greater than 10% stockholders are required by regulation to furnish the
Company with copies of all Section 16(a) reports they file.
Based solely on its review of the copies of the reports it has received
and written representations provided to the Company from the individuals
required to file the reports, the Company believes that each of the Company's
executive officers and directors has complied with applicable reporting
requirements for transactions in Lexington common stock during the fiscal year
ended September 30, 2002.
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TRANSACTIONS WITH MANAGEMENT
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Federal regulations require that all loans or extensions of credit to
executive officers and directors of insured financial institutions must be made
on substantially the same terms, including interest rates and collateral, as
those prevailing at the time for comparable transactions with other persons,
except for loans made pursuant to programs generally available to all employees,
and must not involve more than the normal risk of repayment or present other
unfavorable features. B & L Bank is therefore prohibited from making any new
loans or extensions of credit to executive officers and directors at different
rates or terms than those offered to the general public, except for loans made
pursuant to programs generally available to all employees, and has adopted a
policy to this effect. In addition, loans made to a director or executive
officer in an amount that, when aggregated with the amount of all other loans to
such person and his or her related interests, are in excess of the greater of
$25,000 or 5% of the institution's capital and surplus (up to a
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maximum of $500,000) must be approved in advance by a majority of the
disinterested members of the Board of Directors.
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PROPOSAL 2 -- RATIFICATION OF AUDITORS
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The Board of Directors has appointed Moore, Horton & Carlson, P.C. to be
its independent auditors for the 2003 fiscal year, subject to the ratification
by stockholders. A representative of Moore, Horton & Carlson is expected to be
present at the annual meeting to respond to appropriate questions from
stockholders and will have the opportunity to make a statement should he or she
desire to do so.
If the ratification of the appointment of the auditors is not approved by
a majority of the votes cast by stockholders at the annual meeting, other
independent public accountants will be considered by the Board of Directors.
THE BOARD OF DIRECTORS RECOMMENDS THAT STOCKHOLDERS VOTE "FOR" THE
RATIFICATION OF THE APPOINTMENT OF INDEPENDENT AUDITORS.
The following table sets forth the fees billed to the Company for the
fiscal year ending September 30, 2002 by Moore, Horton & Carlson, P.C.:
Audit Fees.......................... $59,315
Financial information and systems
design and implementation fees.... $ --
All other fees*..................... $16,912
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* Includes fees for tax-related services and assistance with
securities filings.
The Audit Committee believes that the provision of non-audit services by
Moore, Horton & Carlson, P.C. are compatible with maintaining Moore, Horton &
Carlson, P.C.'s independence.
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MISCELLANEOUS
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The Company will pay the cost of this proxy solicitation. The Company will
reimburse brokerage firms and other custodians, nominees and fiduciaries for
reasonable expenses incurred by them in sending proxy materials to the
beneficial owners of Lexington common stock. In addition to soliciting proxies
by mail, directors, officers and regular employees of the Company may solicit
proxies personally or by telephone. None of these persons will receive
additional compensation for these activities. The Company has also hired Regan &
Associates, New York, New York, to assist in soliciting proxies at a cost of
$3,400.
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The Company's Annual Report to Stockholders has been mailed to all persons
who were stockholders as of the close of business on December 2, 2002. Any
stockholder who has not received a copy of the Annual Report may obtain a copy
by writing to the Secretary of the Company. The Annual Report is not to be
treated as part of the proxy solicitation material or as having been
incorporated herein by reference.
A COPY OF THE COMPANY'S FORM 10-KSB FOR THE FISCAL YEAR ENDED SEPTEMBER
30, 2002 AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION, WILL BE FURNISHED
WITHOUT CHARGE TO ALL PERSONS WHO WERE STOCKHOLDERS AS OF THE CLOSE OF BUSINESS
ON DECEMBER 2, 2002 UPON WRITTEN REQUEST TO TERRY L. THOMPSON, CORPORATE
SECRETARY, LEXINGTON B & L FINANCIAL CORP., 205 SOUTH 13TH STREET, LEXINGTON,
MISSOURI 64067. THE COMPANY'S FORM 10-KSB IS ALSO AVAILABLE THROUGH THE SEC'S
WORLDWIDE WEBSITE ON THE INTERNET (HTTP://WWW.SEC.GOV).
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STOCKHOLDER PROPOSALS
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Proposals that stockholders seek to have included in the proxy statement
for Lexington's next annual meeting must be received by the Company no later
than August 22, 2003. Any such proposals will be subject to the requirements of
the proxy rules adopted by the SEC.
The Company's Bylaws provide that in order for a stockholder to make
nominations for the election of directors or proposals for business to be
brought before the annual meeting, a stockholder must deliver notice of such
nominations and/or proposals to the Secretary not less than 60 nor more than 90
days prior to the date of the annual meeting; provided that if less than 70
days' notice of the annual meeting is given to stockholders, such notice must be
delivered not later than the close of the tenth day following the day on which
notice of the annual meeting was mailed to stockholders or public disclosure of
the meeting date was made. A copy of the Bylaws may be obtained from the
Company.
BY ORDER OF THE BOARD OF DIRECTORS
/s/ Terry L. Thompson
Terry L. Thompson
SECRETARY
Lexington, Missouri
December 20, 2002
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LEXINGTON B & L FINANCIAL CORP.
ANNUAL MEETING OF STOCKHOLDERS
JANUARY 21, 2003
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THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints the entire Board of Directors, each with
full power of substitution, to act as proxy for the undersigned, and to vote all
shares of common stock of Lexington B & L Financial Corp. ("Company") owned of
record by the undersigned at the Annual Meeting of Stockholders, to be held on
January 21, 2003, at 10:00 a.m., local time, at the main office of B & L Bank,
205 South 13th Street, Lexington, Missouri, and at any and all adjournments
thereof, as designated below with respect to the matters set forth below and
described in the accompanying Proxy Statement and, in their discretion, for the
election of a person to the Board of Directors if any nominee named herein
becomes unable to serve or for good cause will not serve and with respect to any
other business that may properly come before the meeting. Any prior proxy or
voting instructions are hereby revoked.
This proxy card will also be used to provide voting instructions to the
trustees for any shares of common stock of the Company allocated to participants
under the B & L Bank Employee Stock Ownership Plan.
1. The election as directors of all nominees listed (except as marked
to the contrary below).
Norman Vialle and Charles R. Wilcoxon
FOR VOTE WITHHELD
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2. The ratification of the appointment of Moore, Horton & Carlson,
P.C., as independent auditors for the Company for the fiscal year
ending September 30, 2003.
FOR AGAINST ABSTAIN
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THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR"
EACH OF THE LISTED PROPOSALS
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THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS
THIS PROXY WILL BE VOTED AS DIRECTED, BUT IF NO INSTRUCTIONS ARE
SPECIFIED, THIS PROXY WILL BE VOTED "FOR" EACH OF THE PROPOSALS LISTED. IF ANY
OTHER BUSINESS IS PRESENTED AT THE MEETING, INCLUDING WHETHER OR NOT TO ADJOURN
THE MEETING, THIS PROXY WILL BE VOTED BY THE PROXIES IN THEIR BEST JUDGMENT. AT
THE PRESENT TIME, THE BOARD OF DIRECTORS KNOWS OF NO OTHER BUSINESS TO BE
PRESENTED AT THE ANNUAL MEETING.
The above-signed acknowledges receipt from the Company prior to the
execution of this proxy of a Notice of Annual Meeting of Stockholders, a Proxy
Statement dated December 20, 2002 and the Annual Report to Stockholders.
Please sign exactly as your name appears on this card. When signing as
attorney, executor, administrator, trustee or guardian, please give your full
title. If shares are held jointly, each holder may sign but only one signature
is required.
Dated:
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STOCKHOLDER SIGN ABOVE
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CO-HOLDER (IF ANY) SIGN ABOVE
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PLEASE COMPLETE, DATE, SIGN AND PROMPTLY MAIL THIS PROXY
IN THE ENCLOSED POSTAGE-PAID ENVELOPE.