Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
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Check the appropriate box:
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by Rule 14a-6(e)(2))
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240.14a-12
BRENTON BANKS, INC.
(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)
(4) and 0-11.
1) Title of each class of security to which transaction applies:
________________________________________________________________
2) Aggregate number of securities to which transaction applies:
_________________________________________________________________
3) Per unit price or other underlying value of transaction
computed pursuant to Exchange Act Rule 0-11 (Set forth the amount
on which the filing fee is calculated and state how it was
determined):
_________________________________________________________________
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_________________________________________________________________
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[ ] 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 offset
fee was paid previously. Identify the previous filing by
registration statement number, or the Form or Schedule and the
date of its filing.
1) Amount Previously paid:
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4) Date Filed:
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BRENTON BANKS, INC.
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
MAY 17, 2000
DES MOINES, IOWA
TO THE STOCKHOLDERS OF BRENTON BANKS, INC.:
You are cordially invited to attend the Annual Meeting of Stockholders of
Brenton Banks, Inc., which will be held at the Polk County Convention Complex,
501 Grand Avenue, Des Moines, Iowa, on Wednesday, May 17, 2000, at 5:00 p.m.,
for the following purposes:
1. To elect a Board of Directors to serve until the next Annual Meeting
and until their successors are elected and have qualified;
2. To vote upon a proposal to approve KPMG LLP as independent auditors
for Brenton Banks, Inc. for the year 2000; and
3. To transact any other business which may properly come before the
meeting.
In addition, we will report to you on the business and affairs of the
Company for 1999. The 1999 summary annual report and appendix to the proxy
statement, including financial statements, are enclosed for your information.
The close of business on March 6, 2000, has been fixed as the record date
for determination of stockholders entitled to notice of and to vote at the
Annual Meeting. A list of such stockholders will be maintained at the offices
of Brenton Banks, Inc. at Capital Square, 400 Locust, Des Moines, Iowa 50309,
during the ten-day period preceding the Annual Meeting.
PLEASE SIGN AND DATE THE ENCLOSED PROXY AND RETURN IT IN THE ENVELOPE
PROVIDED. Prompt return of your proxy will be appreciated. Your vote is
important no matter how many shares you own. We hope you will be able to
attend the meeting in person.
Des Moines, Iowa
March 23, 2000
C. Robert Brenton
Chairman of the Board
BRENTON BANKS, INC.
CAPITAL SQUARE, 400 LOCUST, DES MOINES, IOWA 50309
PROXY STATEMENT
ANNUAL MEETING OF STOCKHOLDERS TO BE HELD
MAY 17, 2000
This proxy statement is being mailed to the shareholders of Brenton Banks,
Inc. (the "Parent Company") on March 23, 2000. The proxy statement is
furnished in connection with the solicitation by the Board of Directors of
Brenton Banks, Inc. of proxies for use at the Annual Meeting of Stockholders of
Brenton Banks, Inc. to be held on May 17, 2000, and any adjournments thereof
(the "Proxy Statement"). The Bylaws of Brenton Banks, Inc. provide that the
Annual Meeting of Stockholders is to be held on May 3, 2000. However, the
Annual Meeting of Stockholders of Brenton Banks, Inc. is adjourned until
May 17, 2000.
The close of business on March 6, 2000, has been fixed as the record date
for determination of the stockholders of Brenton Banks, Inc. who are entitled
to notice of and to vote at the Annual Meeting. As of the record date, there
were 20,357,371 outstanding shares of Common Stock of Brenton Banks, Inc. Each
of these shares is entitled to one vote at the Annual Meeting. Only
stockholders of record on the books of Brenton Banks, Inc. as of the record
date will be entitled to vote at the Annual Meeting or any adjournments
thereof.
Any stockholder giving a proxy is empowered to revoke it at any time
before it is exercised. A proxy may be revoked by filing a written revocation
or a duly-executed proxy bearing a later date with the Secretary of Brenton
Banks, Inc. Any stockholder may still attend the meeting and vote in person,
regardless of whether the stockholder has previously given a proxy, but
presence at the meeting will not revoke the stockholder's proxy unless the
stockholder votes in person.
PRINCIPAL HOLDERS OF VOTING SECURITIES AND MANAGEMENT
The following table sets forth, as of March 6, 2000, information as to (a)
the only persons who were known by the Parent Company to own beneficially more
than 5 percent of the outstanding Common Stock (the only voting securities) of
the Parent Company, (b) each executive officer named in the Summary
Compensation Table and (c) the number of shares of such Common Stock
beneficially owned by all executive officers and directors as a group:
Of such beneficial ownership,
amounts to which the
Beneficial Ownership beneficial owner has:
__________________________________ ________________________________
Sole Voting Shared Voting
Name and Address of Shares Beneficially Percent and Investment and Investment
Beneficial Owner Owned (1)(2)(3) of Class Power Power
___________________ _______________ ________ _____ _____
William H. Brenton 3,675,295 17.33% 1,262,771 2,412,524
Capital Square
400 Locust
Des Moines, IA 50309
C. Robert Brenton 3,580,793 16.88% 1,053,792 2,527,001
Capital Square
400 Locust
Des Moines, IA 50309
Junius C. Brenton 3,805,083 17.94% 1,101,734 2,703,349
Capital Square
400 Locust
Des Moines, IA 50309
Jane Eddy 1,347,278 6.35% 465,757 881,521
2908 Forest Drive
Des Moines, IA 50312
Carolyn O'Brien 1,488,380 7.02% 481,239 1,007,141
4004 Grand Avenue, #402
Des Moines, IA 50312
Robert L. DeMeulenaere 189,308 (4) Less than 1% 148,749 (4) 40,559
Larry A. Mindrup 91,698 (4) Less than 1% 82,171 (4) 9,527
Phillip L. Risley 54,586 (4) Less than 1% 38,213 (4) 16,373
Steven T. Schuler 83,798 (4) Less than 1% 49,810 (4) 33,988
Norman D. Schuneman 95,201 (4) Less than 1% 95,201 (4) ---
All executive officers and 7,064,435 (4)(5) 33.31% 4,015,810 (4)(5) 3,048,625 (5)
directors as a group (15 persons
including William H. Brenton,
C. Robert Brenton, Junius C.
Brenton and the 5 executive
officers listed above)
<FN>
(1) For purposes of this proxy statement, beneficial ownership is deemed to include stock owned
(a) personally by the individual or as custodian for minor children; (b) by the spouse or
children of the individual having the same home as the individual or being supported by
the individual; (c) by any trust in which the individual has or shares voting power or
investment power over the securities; and (d) by any foundation or corporation in
which the individual has or shares voting power or investment power over the securities.
(2) The number of shares which are beneficially owned by each of the individuals listed above
and which are also listed as beneficially owned by another person(s) listed in the
above table are as follows: William H. Brenton - 2,354,535 shares; C. Robert Brenton
- 2,354,535 shares; Junius C. Brenton - 2,354,535 shares; Jane Eddy - 837,751 shares;
and Carolyn O'Brien - 837,751 shares.
(3) The registrant knows of no shares with respect to which any listed individual or group
has the right to acquire beneficial ownership, except as noted in Footnote (4) below.
(4) Amount includes vested options for the purchase of the Parent Company's Common Stock
pursuant to the 1996 Stock Option Plan in the following amounts: C. Robert Brenton
- 36,309 shares; Robert L. DeMeulenaere - 127,083 shares; Larry A. Mindrup - 81,696
shares; Phillip L. Risley - 38,213 shares; Steven T. Schuler - 45,387 shares; Norman
D. Schuneman - 45,387 shares; and ten members of the executive officers and
directors group (including C. Robert Brenton, Robert L. DeMeulenaere, Larry A. Mindrup,
Phillip L. Risley, Steven T. Schuler, and Norman D. Schuneman) - 510,125 shares.
(5) Adjusted to eliminate multiple counting of shares beneficially owned by two or more
persons. With respect to shares beneficially owned by individual directors who are
nominees, see "Election of Directors" (page 3).
2
I. ELECTION OF DIRECTORS
The Parent Company's Bylaws provide that the number of persons serving on
the Board of Directors shall not be less than five and not more than eleven.
The normal terms for persons elected as directors is until the next Annual
Meeting of Stockholders and until their successors are duly elected and
qualified.
The Board of Directors recommends a vote FOR the nominees listed below.
Proxies in the accompanying form will be voted FOR the election of these
individuals, unless authority to vote is withheld on the proxy. If any nominee
or nominees shall become unavailable for election, it is intended that the
proxies will be voted for the election of the substitute nominees as the Board
of Directors may propose. Any stockholder has the option to withhold authority
to vote for all nominees for directors, or to withhold authority to vote for
individual nominees for directors. The effect on the election of directors of
casting votes against nominees or of withholding authority to vote for nominees
is that the stockholder is considered present at the meeting and considered for
meeting quorum requirements, but the vote is not a vote in favor of the nominee
for purposes of determining whether the nominee has received the favorable vote
of a majority of shares present at the meeting needed for election. Information
about the nominees as of March 6, 2000, is set forth below:
NOMINEES
Has Served Shares Beneficially
Position with the Parent Company as a Director Owned as of Percent
Name Age and/or Principal Occupation Since March 6, 2000 of Class
____ ___ ___________________________ _____ ______________ ________
C. Robert Brenton 69 Chairman of the Board
Brenton Banks, Inc. 1960 3,580,793 (1) 16.88%
William H. Brenton 75 Director
Brenton Banks, Inc. 1957 3,675,295 (1) 17.33%
Junius C. Brenton 65 Director
Brenton Banks, Inc. 1969 3,805,083 (1) 17.94%
Robert L. DeMeulenaere 60 President and Chief Executive Officer
Brenton Banks, Inc. 1994 189,308 (2) less than
1%
Robert C. Carr 59 Director 1998 -- --
Brenton Banks, Inc.
Gary M. Christensen 56 President and Chief Executive
Officer, Pella Corporation 1995 -- --
Robert J. Currey 54 President 1998 -- --
21st Century Telecom Group, Inc.
<FN>
(1) See "Principal Holders of Voting Securities" (page 2). William H. Brenton, C. Robert Brenton and Junius C. Brenton
are control persons of Brenton Banks, Inc. by virtue of their stock ownership.
(2) Mr. DeMeulenaere has sole voting and investment power over 148,749 shares, including 127,083 vested options, and
shared power over 40,559 shares.
In addition to the positions listed above, the nominees were employed in
the following capacities during the past five years. C. Robert Brenton served
as Chairman of Brenton Bank from October 1995 to November 1997. Robert C. Carr
served as Vice President of Amoco Corporation from January 1995 to July 1999.
Gary M. Christensen served as President and Chief Operating Officer for Pella
Corporation from January 1994 through January 1996. Robert J. Currey served as
President for Consolidated Communications Inc. (CCI) from March 1990 through
September 1997 and subsequent to the
3
acquisition of CCI served as Group President, Telecommunications Services for
McLeodUSA Incorporated from October 1997 through February 1998.
None of the nominees, current directors or executive officers of the
Parent Company are related except William H. Brenton, C. Robert Brenton and
Junius C. Brenton, who are brothers.
All loans made by the Parent Company's affiliated banks to directors,
nominees, executive officers and associates of such persons were made in the
ordinary course of business, on substantially the same terms, including
interest rates and collateral, as those prevailing at the time for comparable
transactions with unaffiliated persons, and did not involve more than the
normal risk of collectibility or present other unfavorable features.
None of the above nominees hold a directorship in any other company with a
class of securities registered pursuant to Section 12 or subject to Section
15(d) of the Securities Exchange Act or registered as an investment company
under the Investment Company Act of 1940 except Robert J. Currey, who is a
director of McLeodUSA Incorporated.
The Audit Committee was comprised of Robert J. Currey and Robert C. Carr.
The Audit Committee oversees the functions of the internal audit department;
examines the services performed for Brenton Banks, Inc. and its subsidiaries
(the "Company") by the Company's independent auditors; approves or disapproves
their services and considers the effect of their services on the independence
of the auditors; and performs such other functions as the Board of Directors
shall from time to time assign to it. During 1999, the Audit Committee met
once.
The Compensation Committee, which sets and/or confirms the salaries of
executive officers, consisted of Gary M. Christensen, William H. Brenton,
Junius C. Brenton and Richard J. Oggero for 1999. Richard J. Oggero is a
member of the Board of Directors of Brenton Bank, a subsidiary of Brenton
Banks, Inc. During 1999, the Compensation Committee met three times. See the
Compensation Committee Report starting on page 7.
Although the Board of Directors has no standing Nominating Committee, the
Board met once during January 2000 for the purpose of naming nominees for the
Board of Directors and has selected C. Robert Brenton to report to the
stockholders at the Annual Meeting on the nominees recommended by the Board of
Directors. The Board will consider nominations for the Board of Directors
submitted by stockholders to the Secretary of the Parent Company at least one
hundred and twenty days prior to the Annual Meeting of Stockholders. In
accordance with the Parent Company's Bylaws, no nominations for the Board of
Directors will be considered or voted on at the Annual Meeting of Stockholders
unless submitted in writing to the Secretary of the Parent Company at least
five days prior to the Annual Meeting.
During 1999, the Board of Directors held ten meetings, including six
regular meetings, three dividend declaration meetings and one special meeting.
During 1999, each of the incumbent directors who are nominees for the Board of
Directors attended at least 75 percent of the aggregate of the total number of
meetings of the Board of Directors and the total number of meetings held by all
committees of the Board on which the nominee served.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16 of the Securities and Exchange Act of 1934 requires the
executive officers, directors and shareholders holding more than ten percent of
the Company's common stock to file reports reflecting their ownership of stock
and any changes in ownership with the Securities and Exchange Commission.
Copies of the reports filed with the Securities and Exchange Commission are
delivered to the Company. Based upon the Company's review of the forms and
upon representations from the individuals that no year-end filings are
necessary, the Company believes that all filing requirements under Section 16
were made by all of the Company's officers, directors and shareholders holding
more than ten percent of the Company's common stock. Brenton Banks, Inc.
undertakes to make the filings on behalf of its executive officers and
directors and has procedures to assure that filing requirements are met.
4
EXECUTIVE COMPENSATION
The following sets forth information on the annual and long-term
compensation paid or accrued by the Company for services rendered in 1999, 1998
and 1997 of those persons who are the President and Chief Executive Officer and
the four most highly compensated executive officers of the Company.
Summary Compensation Table
Annual Compensation Long Term Compensation
___________________ ______________________
Payouts
_______
Name LTIP All Other
And Current Principal Payouts Compensation
Position Year Salary ($) Bonus ($) ($)(1) ($)(2)
________ ____ __________ _________ _______ ____________
Robert L. DeMeulenaere 1999 273,312 -- -- 12,800
President and Chief 1998 227,760 81,994 -- 12,800
Executive Officer 1997 189,800 71,175 470,248 11,550
Larry A. Mindrup 1999 180,000 -- -- 12,800
President/Chief Banking 1998 169,800 61,128 -- 12,800
Officer 1997 169,800 63,675 339,643 11,550
Brenton Bank*
Phillip L. Risley 1999 164,800 -- -- 12,800
Executive Vice President/ 1998 156,100 56,196 -- 12,626
Chief Administrative Officer 1997 156,100 58,538 382,239 11,550
Brenton Bank*
Steven T. Schuler 1999 133,000 -- -- 12,800
Chief Financial Officer/ 1998 129,600 46,656 -- 12,800
Treasurer/Secretary 1997 121,700 45,638 264,167 11,286
Norman D. Schuneman 1999 139,800 -- -- 12,800
Chief Credit Officer 1998 139,800 50,328 -- 12,800
Brenton Bank* 1997 139,800 52,425 337,812 11,550
<FN>
* A subsidiary of the Parent Company
(1) The LTIP payouts consist of performance stock awards which were a part of the Company's Long-Term
Incentive Stock Compensation Plan. Under the terms of the 1995 performance stock grant, the
performance shares vested in accordance with a performance vesting schedule tied to the financial
performance of the Company for the three-year period ended December 31, 1997. The maximum potential
benefit available to an individual was 150 percent of the performance stock granted, with amounts
in excess of 100 percent to be paid in cash to the individual. Based on financial results for
the three-year performance period ended December 31, 1997, 150 percent of the performance shares
granted were vested and the amounts above represent the value of vested shares and cash paid.
(2) Constitutes the entire amount contributed to qualified retirement plans, on behalf of the named
individual.
Option Exercises and Fiscal Year-End Values - The following table sets
forth information regarding the number of options exercised by the named
executive officers and the year-end values of options held by such individuals
pursuant to the Company's non-qualified stock option plan.
5
Aggregated Option/SAR Exercises in Last Fiscal Year
and December 31, 1999, Option/SAR Values
Number of Securities Underlying Value of Unexercised
Unexercised In the Money
Shares Options/SARs at Options/SARs at
Acquired on Value December 31, 1999 December 31, 1999
Name Exercise #(b) Realized $ (Exercisable)/(Unexercisable)(b)(c) (Exercisable)/(Unexercisable)(c)
____ _____________ __________ ___________________________________ _______________________________
Robert L. DeMeulenaere
President and Chief -- -- 127,083/77,891 $228,800/$140,300
Executive Officer
Larry A. Mindrup
President/Chief Banking -- -- 81,696/50,073 $147,100/$90,200
Officer
Brenton Bank(a)
Phillip L. Risley
Executive Vice President/ 43,483 $293,002 38,213/50,073 $68,800/$90,200
Chief Administrative
Officer
Brenton Bank(a)
Steve T. Schuler
Chief Financial Officer/ -- -- 45,387/27,818 $81,700/$50,100
Treasurer/Secretary
Norman D. Schuneman
Chief Credit Officer -- -- 45,387/27,818 $81,700/$50,100
Brenton Bank(a)
<FN>
(a) A subsidiary of the Parent Company
(b) Restated for 2-for-1 stock split effective February 10, 1998 and June 1999, June 1998 and May 1997
ten percent stock dividends.
(c) The unexercisable stock options become vested only upon achievement of an aggressive net income
performance vesting schedule or with continued employment through March, 2006.
Shareholder Return Performance Presentation - Set forth on the following
page is a line graph comparing the yearly percentage change in the cumulative
total shareholder return on the Company's common stock against the cumulative
total return of the NASDAQ stock market index for all listed U.S. companies and
SNL Securities' Midwestern Bank Index for the five-year period ended December
31, 1999. Total return values for the Company, NASDAQ and SNL Securities'
Midwestern Bank Index were calculated based on cumulative total return values
assuming reinvestment of dividends. The graph represents a $100 investment on
December 31, 1994, and presents the current value, considering dividend
reinvestment and current market prices. The shareholder return shown on the
graph is not necessarily indicative of future performance of the Company.
6
Brenton Banks Inc. Stock Price Performance
1994 1995 1996 1997 1998 1999
Brenton Banks, Inc. 100 119 174 283 266 181
SNL Securities' Index for the NASDAQ
Stock Market (U.S. Companies)* 100 141 174 213 300 542
SNL Securities' Midwestern Bank Index** 100 148 201 326 347 272
Compensation Committee Report - The Compensation Committee report has
been prepared by the following individuals who comprise the Compensation
Committee: Gary M. Christensen, Chairperson; William H. Brenton, Junius C.
Brenton and Richard J. Oggero.
The role of the Compensation Committee is to provide leadership by
effectively and appropriately using compensation to tie the financial
interests of the Company's executive officers to those of the shareholders.
The goal is to achieve the Company's vision and goals and thereby maximize the
return to shareholders.
The general responsibilities of the Compensation Committee are oversight
of executive compensation for the Chief Executive Officer and other senior
officers of the Company who report to the Chief Executive Officer; to
communicate with the full Board of Directors; and to communicate with
shareholders of the Company.
The specific duties of the Compensation Committee include the following:
1. Establish a total compensation philosophy and policy, which fairly
rewards the executives for performance benefiting shareholders and which
effectively attracts and retains the executive resources necessary to
successfully lead and manage the Company.
2. Determine the details of the Chief Executive Officer's total
compensation.
3. Review and approve the Chief Executive Officer's salary and bonus
recommendations for the other Senior Officers who report to the Chief
Executive Officer.
7
4. Approve and administer cash incentive compensation plans and deferred
compensation plans for the executives, including any modifications to such
plans, and annually establish the performance objectives for the incentive
plans.
5. Approve and administer all the stock incentive plans.
6. Prepare the committee's annual report to shareholders in the proxy
statement.
7. Oversee the Company's retirement and benefit programs involving
significant cost; periodically review executive supplementary benefits and
perquisites.
8. Such other duties as delegated by the Board of Directors.
The total compensation of the Company's executive officers, including
Robert L. DeMeulenaere, is comprised of three distinct components; base
salary, annual incentive bonus and long-term stock compensation. In addition
to each of the foregoing, the executive officers of the Company are allowed to
participate in the Company's Executive Savings Plan, Profit Sharing/401(k)
Plan, Employee Stock Purchase Plan and other employee benefit programs
generally available to all Company employees.
During 1998, the Compensation Committee engaged a recognized consulting
firm to update the compensation programs of the Company, which were developed
by this firm in 1996. This engagement included a review of base pay,
incentive bonus and stock compensation plans for the executive officers and
other senior officers of the Company. The engagement also included a general
review of the compensation philosophy and compensation programs employed by
the Company. The general philosophy that resulted from the consulting work
was to focus on the following three items: competitive total compensation; a
philosophy of pay for performance; and on tying the financial interests of the
executives to those of the shareholders. As a result, compensation emphasis
is shifting toward the variable components of incentive bonus and stock
compensation.
Base Salaries - The Committee's policy is to set the base salary of each
of the Company's executive officers, including Robert L. DeMeulenaere, at
levels that are comparable to those paid by similar sized banks and bank
holding companies located in the midwestern region and throughout the United
States, as documented by independent survey companies. The base salaries of
the Company's executive officers, including Robert L. DeMeulenaere, are not
directly related to the Company's stock performance.
Bonuses - The bonus plans utilized by the Company are designed to promote
the interest of the Company by tying the Company's financial goals to each
executive officer's bonus plan. For 1999, to create a unified team, the
executive officers and policymakers of the Company had between 50 percent and
100 percent of their bonus plan tied to the consolidated net income goals of
the Company. The remaining portion of the bonus plan was tied to other
financial goals or personal objectives for which the officer had influence or
control. A bonus performance matrix was established for each bonus area.
Executive officers were eligible to earn a bonus of up to 45 to 60 percent of
base pay.
For 1999, Robert L. DeMeulenaere was eligible to receive a bonus of up to
60 percent of his base pay. The bonus plan was tied 100 percent to the
achievement of consolidated net income. This plan was subject to a tiered
earnings matrix whereby no bonus would be paid if consolidated net income was
below $19,500,000 and 100 percent of bonus was earned if consolidated net
income was above $22,500,000. Based on the financial performance of the
Company, Robert L. DeMeulenaere earned none of his bonus potential for 1999.
Long-Term Stock Compensation Plan - 1996 Stock Option Plan - In 1996, the
Company adopted the 1996 Stock Option Plan. The purpose of the Plan is to
support the creation of shareholder value. The Plan aligns the interests of
key employees with those of the shareholders of the Company and encourages key
employees of the Company to acquire equity interests in the Company. The Plan
is intended to attract, motivate and retain key employees and to tie a
significant portion of their compensation to the long-term success of the
Company. The Plan authorizes the granting of options on up to 1,607,100
shares of the Parent Company's $2.50 par value common stock. The options are
intended to be non-qualified options under the Internal Revenue Code.
The Board of Directors granted 1,247,413 options on September 12, 1996,
and 5,856 options on November 14, 1996. The options are exercisable at the
market price on the date of grant: $8.32 in September 1996, and $8.87 in
November 1996. During 1997, an additional 105,488 options were granted by the
Board of Directors to officers and key
8
employees at a weighted average exercise price of $11.49. During 1998, an
additional 148,940 options were granted by the Board of Directors to officers
and key employees at a weighted average exercise price of $16.97. During
1999, the Board of Directors authorized 143,000 additional shares to be added
to the Plan. The Board of Directors granted an additional 120,250 options
during 1999 to officers and key employees at a weighted average exercise price
of $11.32. The Compensation Committee and the Board of Directors considered
both the total number of shares to include in the Plan as well as how shares
should be allocated among employee groups. To meet the overall goals of the
Company's compensation philosophy and the Stock Option Plan, approximately 80
percent of the shares will be allocated to the executive officer group and
approximately 20 percent will be allocated to other officers and key
personnel. When making specific grants, the Compensation Committee considers
the position of the executive officer, the executive officer's past and
anticipated future contribution to the Company's profitability and the
executive officer's alliance with the interest of shareholders. As of
December 31, 1999, 133,845 options have expired or have been forfeited. The
weighted average per share exercise price of the 1,448,030 options currently
outstanding is $9.57. At December 31, 1999, there were 112,998 shares still
available for grant.
To date, a total of 840,672 option shares have been granted to the
executive officers as a group, with 204,974 granted to Robert L. DeMeulenaere.
The amount granted to Robert L. DeMeulenaere is in recognition of his past
and future expected contribution and impact on the financial results of the
Company. During 1999, the executive officers as a group exercised 43,483
options.
Under the provisions of the Stock Option Agreements originally granted,
the options will vest and may be exercised upon the earlier of nine years and
six months from the date of grant or upon the Company's achievement of
aggressive cumulative net income goals specified in the agreement. The
vesting requirements of the additional options authorized in 1999, vary
slightly from the original, as noted in the revised schedule below. The
cumulative net income goals specified in the option agreement include
performance periods beginning January 1, 1996, and continuing through December
31, 1998, 1999, 2000 and 2001. To the extent the Company's cumulative net
income meets or exceeds the thresholds set forth in the Performance Vesting
Schedules below, the options will become vested proportionately to the extent
that the amount of cumulative net income exceeds the minimum up to the maximum
level applicable to the performance period. As authorized by the Compensation
Committee, a one-time adjustment for the net cost of growth initiatives in the
amount of $1,035,000 was added to 1999 reported net income for the purpose of
calculating cumulative net income and 1999 vesting. As of December 31, 1999,
852,505 options, or 59 percent of total options outstanding, have vested and
are outstanding.
Performance Vesting Schedules
Options Granted Prior to 1999
Percent Total Vested Cumulative Net Income (in thousands) Starting 1/1/96 Through
12/31/98 12/31/99 12/31/00
100% -- -- $93,900
75% -- -- $89,486
67% -- $70,900 $88,073
50% -- $67,737 $85,071
33% $50,000 $64,574 --
25% $45,940 -- --
0% -- -- --
9
Options Granted in 1999
Percent Total Vested Cumulative Net Income (in thousands) Starting 1/1/96 Through
12/31/99 12/31/00 12/31/01
100% -- -- $118,376
75% -- -- $113,641
67% -- $93,900 $110,682
50% -- $89,486 $107,130
33% $70,900 $88,073 $102,987
25% $67,737 $85,071 --
0% $64,574 -- --
The Plan also provides for prorated vesting upon normal retirement after
age 65 or with Committee approval prior to age 65, upon death or disability of
the optionee, or in the event the Company is sold, merged, or consolidated
with another company. If the optionee retires prior to age 65 without
approval or leaves the Company, the options that were exercisable by the
optionee will expire if not exercised within 90 days.
RESPECTFULLY SUBMITTED,
GARY M. CHRISTENSEN, WILLIAM H. BRENTON, JUNIUS C. BRENTON, AND RICHARD J.
OGGERO
Director Compensation - During 1999, directors C. Robert Brenton, William
H. Brenton, Robert C. Carr, Gary M. Christensen and Robert J. Currey received
directors' fees for their service on the Board of Directors and directors
Junius C. Brenton and Robert L. DeMeulenaere did not receive directors' fees
for their service on the Board of Directors. For 1999, the directors fees were
$2,500 for attendance at each regular Board of Directors' meeting and $500 for
attendance at each audit and compensation committee meeting. One-half of the
fees earned by a director for regular meetings are credited toward the
Director's Incentive Plan described below. During 1999, Robert C. Carr, Gary
M. Christensen and Robert J. Currey received $8,000, $6,000 and $6,000,
respectively, for their service as directors of the Company. C. Robert Brenton
received $8,000 for services as director of the Company, $5,500 for services as
a director of certain of the Company's affiliated banks and $97,500 pursuant to
his Employment/Retirement Arrangement. Junius C. Brenton received $500 for
committee meetings of the Company and $2,425 in consulting fees. William H.
Brenton received $9,000 for services as director of the Company, $7,000 for
services as a director of certain of the Company's affiliated banks and $67,650
pursuant to his Employment/Retirement Agreement.
C. Robert Brenton, William H. Brenton and Junius C. Brenton participate
in the Company's split-dollar life insurance program. The plan is designed to
encourage their continued participation in the Company following their
retirement and to aid them with their estate planning goals. The life
insurance program provides up to $3,500,000, $3,500,000 and $2,000,000 of life
insurance coverage to C. Robert Brenton, William H. Brenton and Junius C.
Brenton and their spouses, respectively. Pursuant to the terms of the
program, the insurance policies are held in a trust created for the benefit of
the named Director and their spouse. The Company is obligated to pay $114,000
of the premiums for a period of seven (7) years for both C. Robert Brenton and
William H. Brenton, and $48,314 of the premiums for a period of seven (7)
years for Junius C. Brenton. Upon the termination of the policies, the
Company is repaid the premiums together with interest in excess of $300,000,
$300,000 and $150,000 for C. Robert Brenton, William H. Brenton and Junius C.
Brenton, respectively, on the premiums at the rate of 5.2 percent per annum.
The amount of the premiums paid for 1999 were $114,000 for both C. Robert
Brenton and William H. Brenton and $48,314 for Junius C. Brenton. The Company
expensed $70,801 in connection with the payments.
10
In the third quarter of 1995, the Company adopted the Directors' Incentive
Plan to attract, retain and compensate directors of the Company. The Plan is a
non-qualified phantom stock deferred compensation plan and is administered by
the Board of Directors. Pursuant to the Plan's provisions, one-half of the
directors' fees payable to directors for regular Board of Directors meetings
are credited toward the Plan. Participants are awarded common stock share
credits to a special ledger account maintained by the Company. Within six
months following the participant no longer being a director of the Company, the
Company will pay to the participant the value of the share credits, which are
equated to the fair market value of the Company's common stock (assuming the
reinvestment of dividends). During 1999, the values of directors' fees
credited to C. Robert Brenton, William H. Brenton and Mr. Carr were $7,500
each, and to Mr. Christensen and Mr. Currey were $5,000 each. The decreases in
the fair market value of the stock credits for 1999 were $3,858, $11,837,
$2,444, $14,790 and $2,695 for C. Robert Brenton, William H. Brenton, Mr. Carr,
Mr. Christensen and Mr. Currey, respectively.
Agreement with Executive Officer - The Company entered into an agreement
with Robert L. DeMeulenaere, which provides him certain benefits upon a change
in control of the Company. A change in control occurs when there is a transfer
of substantially all of the Company's assets, when the stockholders of the
Company immediately preceding an event or transaction control less than a
majority of the voting power of the Company immediately following the event or
transaction, or when the Brenton family and their affiliates together, are no
longer the largest shareholder of the Company. Pursuant to the terms of this
contract, Mr. DeMeulenaere may receive up to $500,000 if there is a change in
control of the Company and he is terminated or there is a substantial change in
his duties within three years following a change in control. In the event of a
change in control where his employment is not terminated, his base salary for
the three years following the change in control shall not be less than the
amount immediately prior to the change in control. The maximum benefit payable
to Mr. DeMeulenaere is limited to the lessor of the amount deductible under the
Internal Revenue Code Section 280G or the amount set forth above. The benefits
payable to Mr. DeMeulenaere are subject to certain phase-out adjustments
beginning one year following the change in control.
II. APPROVAL OF SELECTION OF INDEPENDENT AUDITORS
The Board of Directors has selected KPMG LLP as independent auditors for
the Company for the year 2000. Such selection is being submitted to the
stockholders for approval. KPMG LLP has served for many years as the
independent auditors for the Company, including 1999, and was approved by the
stockholders at the last Annual Meeting of the Stockholders. Representatives
of KPMG LLP are expected to be present at the meeting, will be given an
opportunity to make a statement, if they so desire, and are expected to be
available to respond to appropriate questions.
The Board of Directors recommends a vote FOR approval of KPMG LLP as
independent auditors for the Company.
III. OTHER MATTERS
The Board of Directors does not know of any matters to be presented at the
Annual Meeting other than the approval of minutes and those mentioned above.
However, if any other matters properly come before the meeting or any
adjournments thereof, it is the intention of the persons named in the enclosed
proxy to vote the shares represented by them in accordance with their best
judgment pursuant to the discretionary authority granted in the proxy.
SUBMISSION OF SHAREHOLDER PROPOSALS
In accordance with the Parent Company's Bylaws, any stockholder proposal
for action at the Annual Meeting, including nominations for the Board of
Directors, must be submitted in writing to the Secretary of the Parent Company
at least five days prior to the date of the Annual Meeting to be considered and
voted upon at the meeting.
11
INCLUSION OF SHAREHOLDER PROPOSALS IN PROXY STATEMENT
Any stockholder may present a proposal for inclusion in the Parent
Company's proxy statement for the next Annual Meeting of the Stockholders to be
held on May 9, 2001, provided that at the time the proposal is submitted the
proponent is a record or beneficial owner of at least one percent or $2,000 in
market value of shares entitled to be voted at the meeting on a proposal and
has held the shares for at least one year, and provided that the proponent
shall continue to own the shares through the date of the meeting, May 9, 2001.
The proponent shall notify Brenton Banks, Inc. in writing of his or her
intention to appear personally at the meeting to present his or her proposal
for action. Any proposal must be received by Brenton Banks, Inc. no later than
November 27, 2000, in order to be included in the proxy statement of Brenton
Banks, Inc. for the May 9, 2001, meeting.
S.E.C. FORM 10-K AVAILABLE.
COPIES OF THE COMPANY'S 1999 ANNUAL REPORT ON FORM 10-K REQUIRED TO BE
FILED WITH THE SECURITIES AND EXCHANGE COMMISSION, INCLUDING THE FINANCIAL
STATEMENTS AND SCHEDULES, WILL BE AVAILABLE TO STOCKHOLDERS WITHOUT CHARGE BY
WRITTEN REQUEST ADDRESSED TO STEVEN T. SCHULER, SECRETARY, BRENTON BANKS, INC.,
P.O. BOX 961, DES MOINES, IOWA 50304-0961. IT IS ALSO AVAILABLE ON THE
SECURITIES AND EXCHANGE COMMISSION'S INTERNET WEB SITE AT
HTTP://WWW.SEC.GOV/CGI-BIN/SRCH-EDGAR.
The cost of soliciting proxies will be borne by Brenton Banks, Inc. In
addition to the solicitation of proxies by use of the mails, some of the
officers, directors and regular employees of Brenton Banks, Inc. or its
subsidiaries, none of whom will receive additional compensation therefor, may
solicit proxies by telephone, personal interview or other means. Brenton Banks,
Inc. will, upon request, reimburse nominees, custodians and fiduciaries for
expenses in forwarding proxy material to their principals.
Only stockholders of record at the close of business on March 6, 2000,
will be entitled to notice of and to vote at the meeting. Stockholders are
urged to sign and date the enclosed proxy, which is solicited on behalf of the
Board of Directors, and return it as promptly as possible. Proxies will be
voted for or against the proposals presented at the meeting, in accordance with
the stockholder's specifications marked thereon. If no specification is made,
proxies will be voted on matters presented at the meeting in accordance with
the recommendations of the Board of Directors set forth above in this Proxy
Statement. The proxy does not affect the right to vote in person at the
meeting, and may be revoked by appropriate notice to the Secretary of the
Parent Company at any time prior to the voting.
By order of the Board of Directors,
Steven T. Schuler
Secretary
12
PROXY PROXY
BRENTON BANKS, INC.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
FOR THE ANNUAL MEETING TO BE HELD ON MAY 17, 2000, DES MOINES, IOWA.
The undersigned hereby appoints William H. Brenton, C. Robert Brenton and
Junius C. Brenton, and each of them, with full powers of substitution,
attorney and proxy to represent the undersigned at the Annual Meeting of
Stockholders of Brenton Banks, Inc., to be held at the Polk County Convention
Complex, Des Moines, Iowa, at 5:00 p.m., on May 17, 2000, and at any
adjournments thereof, and to vote the shares of Brenton Banks, Inc. standing
in the name of the undersigned with all powers which the undersigned would
possess if he, she or they were personally present.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE NOMINEE LISTED ON THE REVERSE
SIDE IN PROPOSAL 1, AND FOR THE APPROVAL OF KPMG LLP AS INDEPENDENT AUDITORS
IN PROPOSAL 2.
THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER DIRECTED
HEREIN BY THE UNDERSIGNED STOCKHOLDER. IF NO DIRECTION IS MADE OR IF
AUTHORITY TO VOTE FOR NOMINEES IS NOT WITHHELD, THIS PROXY WILL BE VOTED FOR
THE NOMINEES LISTED ON THE REVERSE SIDE IN PROPOSAL 1, AND FOR PROPOSAL 2.
PLEASE MARK, AND SIGN ON REVERSE SIDE, DATE AND RETURN IN THE ENCLOSED
ENVELOPE.
Will you attend this meeting in person? [ ] Yes [ ] No If yes, there will be
_____ person(s) attending.
(Continued and to be signed on the reverse side.)
BRENTON BANKS, INC.
Please mark vote in oval in the following manner using dark ink only. [ ]
1. Election of Directors -
Nominees: William H. Brenton, C. Robert Brenton, Junius C. Brenton, Robert L.
DeMeulenaere, Robert C. Carr, Gary M. Christensen, and Robert J. Currey.
[ ] For [ ] Withhold [ ] For All
All All Except nominee(s) written in below
____________________________________________
2. Proposal to approve KPMG LLP, Des Moines, Iowa, as independent auditors for
the Company for 2000.
[ ] For [ ] Against [ ] Abstain
3. Upon the approval of minutes and such other matters as may properly come
before the meeting, in such a manner as he or they determine to be in the best
interest of the Company. The Board of Directors is not presently aware of any
other matters to be presented for action at the meeting.
Dated _______________________, 2000
___________________________________
Signature(s)
_______________________________________________
Joint owners must both sign exactly as shown hereon. Please sign and return
each proxy card you receive. If you are an administrator or other fiduciary,
please give your full title. Corporations should sign the full corporation
name by an authorized officer. A partnership should sign in the partnership
name by one of the partners.
FOLD AND DETACH HERE
YOUR VOTE IS IMPORTANT!
PLEASE MARK, SIGN, DATE AND RETURN THIS PROXY PROMPTLY
USING THE ENCLOSED ENVELOPE.