BRENTON BANKS, INC.
CAPITAL SQUARE, 400 LOCUST, DES MOINES, IOWA 50309
PROXY STATEMENT
ANNUAL MEETING OF STOCKHOLDERS TO BE HELD
MAY 20, 1994
This proxy statement is furnished in connection with the solicitation by
the Board of Directors of Brenton Banks, Inc., (the "Parent Company") of
proxies for use at the Annual Meeting of Stockholders of Brenton Banks, Inc.,
to be held on May 20, 1994, and any adjournments thereof. The Bylaws of
Brenton Banks, Inc. provide that the Annual Meeting of Stockholders is to be
held on May 4, 1994. However, the Annual Meeting of Stockholders of Brenton
Banks, Inc. is adjourned until Friday, May 20, 1994.
The close of business on March 14, 1994, 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 5,254,351 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 the Parent Company. 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
The following table sets forth, as of March 14, 1994, information as to
(a) the only persons who were known by the Parent Company to own beneficially
more than 5% of the outstanding Common Stock (the only voting securities) of
the Parent Company, and (b) the number of shares of such Common Stock
beneficially owned by all executive officers and directors as a group:
1
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 997,978 (4) 18.60% 335,168 662,810
Capital Square
400 Locust
Des Moines, IA 50309
C. Robert Brenton 953,062 (4) 17.76% 254,488 698,574
Capital Square
400 Locust
Des Moines, IA 50309
Junius C. Brenton 1,032,484 19.24% 303,441 729,043
Capital Square
400 Locust
Des Moines, IA 50309
Jane Eddy 306,740 5.72% 106,040 200,700
2908 Forest Drive
Des Moines, IA 50312
Juliette Moen 297,380 5.54% 81,598 215,782
5801 Crescent Terrace
Edina, MN 55436
Carolyn O'Brien 345,260 6.43% 109,566 235,694
301 Tonawanda Drive
Des Moines, IA 50312
The Banc Funds 383,071 7.14% -- 383,071
208 S. LaSalle Street
Chicago, IL 60604
All executive officers and directors 1,796,025 (4)(5) 33.47% 995,692 800,333
as a group (14 persons including
William H. Brenton, C. Robert
Brenton and Junius C. Brenton)
<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 - 649,624 shares;
C. Robert Brenton - 649,624 shares; Junius C. Brenton - 649,624 shares; Jane Eddy - 190,734 shares; Juliette Moen - 215,782
shares; and Carolyn O'Brien - 190,734 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 Non-Qualified
Stock Option Plan in the following amounts: William H. Brenton - 4,000 shares; C. Robert Brenton - 14,000 shares; and eleven
members of the executive officers and directors group (including William H. Brenton and C. Robert Brenton) - 76,200 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. In January 1994, the Board of Directors increased the number of
directors to be elected from five to six and appointed Robert L. DeMeulenaere
to serve as director until the next Annual Meeting of Stockholders and until
a successor is duly elected and qualified. 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
14, 1994 is set forth below:
NOMINIEES
Has Served Shares Beneficially
Position with the Parent Company as a Director Owned as of Percent
Name Age and/or Principal Occupation Since March 14, 1994 of Class
____ ___ ___________________________ _____ ______________ ________
C. Robert Brenton* 63 Chairman of the Board,
Brenton Banks, Inc. 1960 953,062 (1)(5) 17.76%
William H. Brenton* 69 Chairman of the Executive Committee,
Vice Chairman of the Board,
Brenton Banks, Inc. 1957 997,978 (1)(5) 18.60%
Junius C. Brenton 59 President (1990-1993),
Brenton Banks, Inc. 1969 1,032,484 (1) 19.24%
Robert L. DeMeulenaere* 54 President (1994),
Brenton Banks, Inc. 1994 16,651 (4)(5) less than
1%
Thomas R. Smith 71 Principal, Tom Smith and Associates,
Marshalltown, Iowa 1959 25,927 (2) less than
1%
R. Dean Duben 67 Vice Chairman of the Board,
Brenton First National Bank,
Davenport** 1960 11,388 (3) less than
1%
<FN>
*Member of Executive Committee.
**A subsidiary of the Parent Company.
(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. Smith has sole voting and investment power over all 25,927 shares.
(3) Mr. Duben has sole voting and investment power over all 11,388 shares.
(4) Mr. DeMeulenaere has sole voting and investment power over 15,280 shares, and shared power over 1,371 shares.
(5) Amount includes vested options for the purchase of the Parent Company's Common Stock pursuant to the Non-Qualified
Stock Option Plan in the following amounts: C. Robert Brenton - 14,000 shares, William H. Brenton - 4,000 shares, and
Robert L. DeMeulenaere - 14,000 shares.
All of the foregoing nominees have been employed in their respective
positions listed above during the past five years except for Robert L.
DeMeulenaere, who served as Senior Vice President of the Parent Company and
CEO of Brenton Bank and Trust Company of Cedar Rapids from August 1990
through December 1993, and Senior Vice President-Metro Bank
3
Division of the Parent Company through August 1990; R. Dean Duben, who served
as Senior Vice President of the Parent Company through December 1991, and
President of Brenton First National Bank, Davenport through December 1991; C.
Robert Brenton, who served as President of the Parent Company through May
1990; William H. Brenton who served as Chairman of the Board of the Parent
Company through May 1990; and Junius C. Brenton, who served as Executive Vice
President of the Parent Company through May 1990, President/CEO of Brenton
National Bank of Des Moines from November 1984 through April 1988, and CEO of
Brenton National Bank of Des Moines from April 1988 through February 1990.
None of the nominees, current directors or executive officers of the
Parent Company are related except that William H. Brenton, C. Robert Brenton
and Junius C. Brenton 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 C. Robert Brenton, who is a
director of Pioneer Hi-Bred International, Inc.
R. Dean Duben; Carrol R. Collins; John C. Eddy; Joseph B. Ryan Jr.; Max
A. Smith; and Thomas R. Smith constituted the Audit Committee during the last
fiscal year. R. Dean Duben and Thomas R. Smith are also members of the Board
of Directors. 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 1993, the Audit Committee met twice.
The Salary Policy Review Committee, which sets and confirms the salaries
of officers and employees other than C. Robert Brenton, William H. Brenton
and Junius C. Brenton, consisted of Junius C. Brenton, C. Robert Brenton,
William H. Brenton, Phillip L. Risley, and Roger D. Winterhof for 1993.
During 1993, the Salary Policy Review Committee met once. See the
Compensation Committee Report on page 7.
The Executive Committee, which is the senior management advisory
committee of the Board of Directors, consisted of William H. Brenton, C.
Robert Brenton, Junius C. Brenton, Robert L. DeMeulenaere, Phillip L. Risley,
Roger D. Winterhof, and Steven T. Schuler for 1993. During 1993, the
Executive Committee met informally.
Although the Board of Directors has no standing Nominating Committee,
the Board met once during January 1994, for the purpose of naming nominees
for the Board of Directors and has selected R. Dean Duben to report to the
stockholders at the Annual Meeting on the nominees recommended by the Board
of Directors. In January 1994, the Board of Directors increased the number
of directors from five to six and elected Robert L. DeMeulenaere to fill this
Board position. 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 1993, the Board of Directors held ten meetings, including six
regular meetings, and four special meetings. During 1993, each of the
incumbent directors who are nominees for the Board of Directors attended at
least 75% 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 of the Securities and Exchange Act of 1934 requires the
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 1993,
1992 and 1991 of those persons who are the President (1990-1993), Chairman of
the Board, Vice Chairman of the Board, President and Executive Vice President
of the Company.
Summary Compensation Table
Long Term
Annual Compensation Compensation
____________
Restricted All Other
Name and Current Principal Stock Award(s) Compensation
Position Year Salary ($) Bonus ($) ($) $
________ ____ __________ _________ ___ _
Junius C. Brenton 1993 $177,890 16,232 -- 19,498 (2)
President (1990-1993) 1992 168,616 36,360 -- 15,584 (2)
1991 149,634 25,036 -- 15,968 (2)
C. Robert Brenton 1993 165,758 21,756 -- 29,731 (3)
Chairman of the Board 1992 157,116 32,994 -- 27,374 (4)
1991 149,634 47,894 -- 29,139 (5)
William H. Brenton
Chairman of the Executive Committee 1993 165,758 21,756 -- 26,591 (6)
and Vice Chairman of the Board 1992 157,116 32,994 -- 30,243 (7)
1991 149,634 47,894 -- 29,686 (8)
Robert L. DeMeulenaere 1993 126,209 20,502 44,861 (1) 12,214 (2)
President 1992 118,000 32,893 55,510 (1) 10,631 (2)
1991 110,005 18,332 -- 11,046 (2)
Phillip L. Risley 1993 140,000 26,950 52,054 (1) 13,383 (2)
Executive Vice President 1992 119,000 30,049 56,602 (1) 12,534 (2)
1991 112,138 21,003 -- 11,601 (2)
<FN>
(1) The restricted stock awards are a part of the Company's Long-Term Incentive Stock Compensation Plan. Under the terms
of the restricted stock grant, an individual receiving a grant must be continuously employed by the Company for 3 fiscal
years beginning in the year of the grant for the restricted stock to vest, unless vested prior to this date due to death,
disability, retirement or change in control of the Company. No dividends are paid on the restricted stock. The market
value per share of the restricted stock on the date of grant was $30.00 for the 1993 grant and $27.00 for the 1992 grant.
The total number of restricted shares granted to Robert L. DeMeulenaere was 1,709 for the 1993 grant and 2,135 for the 1992
grant. The market value of Mr. DeMeulenaere's restricted stock holdings was $100,371 based on the closing price as of
December 31,1993. The total number of restricted shares granted to Phillip L. Risley was 1,983 for the 1993 grant and 2,177
for the 1992 grant. The market value of Mr. Risley's restricted stock holdings was $108,656 based on the closing price on
December 31, 1993.
(2) Constitutes the entire amount contributed to qualified retirement plans, on behalf of the named individual.
(3) Consists of a $17,831 contribution toward qualified retirement plans and $11,900 of directors fees paid by affiliated
banks.
(4) Consists of a $16,834 contribution toward qualified retirement plans and $10,540 of directors fees paid by affiliated
banks.
(5) Consists of a $17,229 contribution toward qualified retirement plans and $11,910 of directors fees paid by affiliated
banks.
(6) Consists of a $14,936 contribution toward qualified retirement plans and $11,655 of directors fees paid by affiliated
banks.
(7) Consists of a $18,618 contribution toward qualified retirement plans and $11,625 of directors fees paid by affiliated
banks.
(8) Consists of a $17,811 contribution toward qualified retirement plans and $11,875 of directors fees paid by affiliated
banks.
5
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. All
of the options granted to the named executive officers are exercisable.
Aggregated Option/SAR Exercises in Last Fiscal Year
and December 31, 1993 Option/SAR Values
Value of
Number of Securities Unexercised
Shares Options/SARs at In the Money
Acquired on Value December 31, 1993 December 31, 1993
Name Exercise # Realized $ (Exercisable) (Exercisable)
____ __________ __________ _____________ _____________
Junius C. Brenton,
President (1990-1993) -- -- -- --
C. Robert Brenton,
Chairman of the Board -- -- 14,000 $ 280,000
William H. Brenton,
Chairman of the Executive Committee
and Vice Chairman of the Board 5,000 $120,625 4,000 $ 80,000
Robert L. DeMeulenaere,
President -- -- 14,000 $ 280,000
Phillip L. Risley,
Executive Vice President 4,800 $ 96,000 -- --
Long-Term Incentive Plans - Awards in Last Fiscal Year - The following
table sets forth information regarding the number of Incentive Stock Grants
granted to the named executive officers pursuant to the Company's Long-Term
Incentive Stock Compensation Plan that was adopted in 1992. The Company does
not offer any other long-term incentive plans which would be included in this
table.
Long-Term Incentive Plans - Awards in Last Fiscal Year
Number of Performance or Estimated Future Payouts
Shares, Units Other Period under Non-Stock Price-Based Plans
or Other Until Maturation
Name Rights # or Payout Threshold # Target # Maximum #
____ ________ _________ ___________ ________ _________
Junius C. Brenton
President (1990-1993) -- -- -- -- --
C. Robert Brenton
Chairman of the Board -- -- -- -- --
William H. Brenton
Chairman of the Executive Committee
and Vice Chairman of the Board -- -- -- -- --
Robert L. DeMeulenaere
President 3,175 January 1, 1996 1,587 3,175 4,762 (1)
Phillip L. Risley
Executive Vice President 3,682 January 1, 1996 1,841 3,682 5,523 (1)
<FN>
(1) Amounts in excess of the target amounts awarded under the Company's Long-Term Incentive Stock Compensation Plan are
required to be paid in cash. The amount of cash paid pursuant to the Plan is determined by the value of the Company's
Common Stock on January 1, 1996, multiplied by the number of shares awarded to the individual in excess of the target amount
as determined by the tiered achievement scale established by the Plan.
6
COMPENSATION COMMITTEE REPORT - The Compensation Committee Report has
been prepared by the following individuals: Junius C. Brenton, C. Robert
Brenton, William H. Brenton, R. Dean Duben, Thomas R. Smith, Phillip L.
Risley and Roger D. Winterhof. The Salary Policy Review Committee is a
committee appointed by the Board of Directors to establish the policies and
procedures regarding the compensation to be paid to all executive officers of
the Company. The Salary Policy Review Committee is composed of C. Robert
Brenton, William H. Brenton, Junius C. Brenton, Phillip L. Risley and Roger
D. Winterhof. The compensation of the executive officers of the Company,
except Junius C. Brenton, C. Robert Brenton, and William H. Brenton, is
determined by the President (1990-1993), Junius C. Brenton, or the Chairman
of the Board, C. Robert Brenton. Junius C. Brenton and C. Robert Brenton
determine the actual level of compensation of each executive officer in
accordance with the policies established by the Salary Policy Review
Committee. The compensation of each executive officer is then presented to
the Company's Board of Directors for approval.
The compensation of the Company's most senior executive officers:
Junius C. Brenton, C. Robert Brenton, William H. Brenton, are initially
considered by the senior executive officers themselves. Junius C. Brenton,
was the President from 1990 through 1993 and was the senior officer in charge
of the daily operations of the Company. C. Robert Brenton and William H.
Brenton share many of the responsibilities and duties of chief executive
officer. The senior executive officers apply the procedures established by
the Salary Policy Review Committee to formulate a recommendation regarding
their own compensation. This recommendation is then presented to the
Company's Board of Directors for discussion and approval.
The total compensation of the Company's executive officers, including
Junius C. Brenton, C. Robert Brenton, and William H. Brenton, are comprised
of three distinct components: base salary, bonuses and long-term
compensation plans. In addition to each of the foregoing, the executive
officers of the Company are allowed to participate in the Company's Profit
Sharing/401(k) Plan, Employee Stock Purchase Plan and other employee benefit
programs generally available to all Company employees.
Base Salaries - The Salary Policy Review Committee sets the base salary
of each of the Company's executive officers 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 Board of Directors believes that the base
salary (including directors fees paid by affiliated banks) of Junius C.
Brenton, C. Robert Brenton and William H. Brenton are set at levels below
that of Chief Executive Officers of other comparable bank holding companies,
as documented by independent survey companies. The base salaries of Junius
C. Brenton, C. Robert Brenton and William H. Brenton have increased at an
average annual rate of 5.8% over the last three years. The base salaries of
the Company's executive officers, including Junius C. Brenton, C. Robert
Brenton and William H. Brenton, are not directly related to the Company's
stock performance.
Bonuses - The bonus plans implemented by the Company are designed to
promote the interests of the Company by tying the Company's financial and
customer service goals to each executive officer's compensation. Pursuant to
the Company's bonus plans, as established by the Salary Policy Review
Committee, each executive officer, including Junius C. Brenton, C. Robert
Brenton and William H. Brenton, is granted a bonus based upon the achievement
of certain defined performance goals covering areas directly influenced or
controlled by the officer. The performance goals for each executive officer
are defined and quantified in a tiered achievement scale during the first
quarter of each year. The executive officer's success in the achievement of
assigned goals determines the amount of the bonus to be paid. The goals
established for the executive officers include both Company financial
performance goals and/or customer service goals. The financial performance
goals include total dollar earnings, percentage growth in assets, asset
quality, net interest margin and net noninterest margin. An executive
officer may earn up to 32.5% of base salary through the Company's bonus plans
if all of the stated goals are achieved. For 1993, the executive officers
earned an average of 14.8% of their base salaries through the Company's bonus
plans.
Junius C. Brenton, C. Robert Brenton, and William H. Brenton also
participate in the Company's bonus plans. As President of the Company,
Junius C. Brenton was eligible to receive up to 32.5% of his base salary in
a bonus, based upon tiered achievement scales of the Company's earnings,
asset growth, net noninterest margin, and the Metro Bank Division's earnings.
These tiered scales ranged from $13.0 million to $15.5 million for earnings,
6% to 18% for asset growth, 2.31% to 2.22% for net noninterest margin, and
$8.0 million to $9.0 million for the Metro Bank Division's earnings. The
total bonus paid to Junius C. Brenton for 1993 was $16,232 or 9.1% of his
base salary. C. Robert Brenton and William H. Brenton were each eligible to
receive up to 32.5% of their base salary in a bonus, if targeted achievement
scales for earnings and asset growth were achieved by the Company. The
ranges of the tiered scales for earnings and asset growth were the same as
those for Junius C. Brenton. C. Robert Brenton's and William H. Brenton's
bonuses for 1993 were $21,756 each, or 13.1% of each of their 1993 base
salaries. The Salary Policy Review Committee believes that the bonus plan
potential to Junius C.
7
Brenton, C. Robert Brenton and William H. Brenton and all other executive
officers under the Company's bonus plans are comparable to the bonus plans of
other similar sized midwest bank holding companies, as documented by
independent survey companies.
Long-term Compensation Plans - Long-term Incentive Stock Compensation
Plan - The purpose of the Company's Long-term Incentive Stock Compensation
Plan is to increase the stock held by the Company's executive officers and
key employees and to provide long-term incentives to participants in the
Plan. The long-term incentives are designed to closely ally the interest of
executive officers to the interests of the shareholders of the Company.
Stock is granted under the Plan to achieve value equal to a specific multiple
of the individual's base salary, with 35% designated as restricted stock and
65% as performance stock. Executive officers granted restricted and
performance stock by the Board of Directors, must remain employed by the
Company through the third calendar year following the grant, in order to
receive the stock without the restrictions. Additionally, performance
criteria described below must be met to earn performance stock. In the event
of death, disability or retirement after the age of 65 by the executive
officer or a change in control of the Company, up to 100% of the restricted
or performance stock granted to the executive officer will be transferred to
the participant without restrictions.
During 1993, the Board of Directors approved the grant of 10,741 shares
of restricted stock to the executive officer group of the Company. Assuming
all restricted stock grants are awarded, the value of all restricted stock
grants (based upon the value on the date of grant) awarded to executive
officers of the Company is 17.6% of the executive officers' anticipated base
salary over the three-year period the stock is restricted.
The Board of Directors granted 19,948 shares of performance stock grants
during 1993 to the executive officers of the Company. The performance stock
grants awarded to the executive officers of the Company will be transferable
to the participants at the beginning of the fourth calendar year, if the
Company's average annual increase in earnings per common and common
equivalent share reaches tiered levels for the three-year performance period.
The threshold, target and maximum average annual earnings per share growth
under the terms of the Plan are 7.50%, 10.00 to 11.99%, and greater than
16.00%, respectively; for example, none of the performance shares will be
earned if the average annual earnings per share growth over the performance
period is less than 7.50%, 100% will be earned if the earnings per share
growth is 10.00% to 11.99%, and 150% will be earned if the earnings per share
growth is 16.00% or more. The threshold, target and maximum amounts awarded
under the Plan for the named executive officers under this program are set
forth in the prior table titled "Long-Term Incentive Plans - Awards in the
Last Fiscal Year". The maximum amount available to a participant granted
performance stock is 150% of the performance stock granted. Amounts in
excess of 100% of the stock awarded are to be paid in cash to the
participant. Assuming the target performance levels are reached, the value
of the performance stock grants (based upon the value on the date of grant)
will be 37.3% of the executive officer's anticipated base salary over the
three year performance period.
When granting both the restricted and performance stock awards under the
Plan, the Board of Directors considered the position of the executive
officer, the executive officer's past and anticipated contribution to the
Company's profitability and the executive officer's current connection with
the interests of shareholders. The Board of Directors did not award any
restricted or performance stock to Junius C. Brenton, C. Robert Brenton or
William H. Brenton because these individuals' interests already closely ally
the interests of shareholders due to their substantial stock holdings in the
Company.
Long-term Compensation Plan - Non-qualified Stock Option Plan - The
Company also maintains a Non-Qualified Stock Option Plan which permits the
Board of Directors to grant options to officers of the Company (Brenton
Banks, Inc. and its subsidiaries) through May 6, 1997. At December 31, 1993,
there were 206 officers of the Company eligible to participate in the
Non-Qualified Stock Option Plan. The total aggregate amount of stock that
can be issued pursuant to the exercise of the options is 200,000 shares of
the Parent Company's $5 par value common stock. The options are intended to
be non-qualified options under the Internal Revenue Code.
The Board of Directors has adopted Administrative Rules ("Rules") for
the Non-Qualified Stock Option Plan. The Rules set the term of the options
at 10 years and 30 days after the date of grant and provide for a ratable 5
year vesting schedule for the options. The Rules also provide for full
vesting upon normal retirement after age 60, upon the 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 60 without the
Board of Directors' approval or is terminated by the Company, the options
that were then exercisable by the optionee will expire if not exercised
within 90 days.
8
The Board of Directors granted 10,000 options on June 28, 1990; 14,000
options on April 19, 1990; 10,000 options on September 14, 1988; and 167,000
options on July 13, 1987. The options are exercisable at the market price on
the date of grant: $14.19 in June, 1990; $13.19 in April, 1990; $9.63 in
September, 1988; and $6.63 in July, 1987. As of December 31, 1993, 71,400
options had been exercised and 6,600 had been forfeited. The weighted
average per share exercise price of the 123,000 options currently outstanding
is $8.23. Of the 123,000 options currently outstanding, 113,400 were vested
and exercisable at the end of 1993. Unless exercised or forfeited earlier,
options expire 10 years and 30 days following the date the options are
granted.
No options were granted under the Company's Non-Qualified Stock Option
Plan during 1993. When granting options under the Plan the Company's Board
of Directors considered the position of the executive officer, the executive
officer's past and anticipated contribution to the Company's profitability.
RESPECTFULLY SUBMITTED,
C. ROBERT BRENTON, WILLIAM H. BRENTON, JUNIUS C. BRENTON,
R. DEAN DUBEN, THOMAS R. SMITH, PHILLIP L. RISLEY AND
ROGER D. WINTERHOF
Shareholder Return Performance Presentation - Set forth below 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 U.S. companies and the Chicago
Corporation's Midwest Bank Index for the five-year period ended December 31,
1993. Total return values for the Company, NASDAQ, and Chicago Corporation's
Midwest Bank Index were calculated based on cumulative total return values
assuming reinvestment of dividends. The graph represents a $100 investment
on December 31, 1988, 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.
Brenton Banks Inc., Stock Price Performance
1988 1989 1990 1991 1992 1993
Brenton Banks, Inc. 100 159 143 230 287 296
The Chicago Corp. Midwest Bank Index* 100 123 96 145 191 201
CRSP Index for the NASDAQ Stock Market
(U.S. Companies)** 100 121 102 165 192 219
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DIRECTOR COMPENSATION - During 1993, each director who was not an
officer and full-time employee of the Company received director's fees of
$500 for each Board of Directors meeting attended and $300 for each audit
committee meeting attended. Directors who were officers and full-time
employees received no separate compensation for service as a director of the
Parent Company. During 1993, Thomas R. Smith and R. Dean Duben received
$5,430 and $7,100, respectively for their service as directors of the Company
and its affiliated banks.
EMPLOYMENT AGREEMENT WITH WILLIAM H. BRENTON - In July 1989, William H.
Brenton entered into an Employment Agreement with the Parent Company. The
Agreement sets forth the terms under which Mr. Brenton will remain employed
with the Parent Company through December 31, 1994. The Agreement sets the
lower limits of Mr. Brenton's annual compensation and provides for certain
death, disability and retirement benefits.
Mr. Brenton's annual salary during the term of his employment will be
set by the Board of Directors and will be equivalent to other senior
executive officers of the Parent Company, but shall not be less than Mr.
Brenton's base salary for 1989 or the highest senior executive officer's
salary then in effect. In addition to Mr. Brenton's base salary, he will
remain entitled to participate in all other compensation plans offered to the
other senior executive officers of the Parent Company.
Upon retirement in December 1994, Mr. Brenton will receive a lump sum
payment of $50,000 and an additional amount, if any, necessary to bring his
total compensation for the years actually worked since January 1, 1990, to
$160,000 per year. In addition to the lump sum payment, Mr. Brenton will
receive supplemental retirement income equal to $50,000 per year for ten (10)
years after his retirement from the Parent Company, which shall be adjusted
every five years based upon the Consumer Price Index. Additionally, upon Mr.
Brenton's retirement, the Parent Company will provide Mr. Brenton with
certain life insurance benefits until age 70, medical insurance benefits
equivalent to those now in effect for ten (10) years following retirement,
and office space. Retirement benefits are vested and payable to Mr. Brenton
or his spouse in the event of his death. If Mr. Brenton becomes permanently
disabled or dies prior to retirement, he will be deemed to have retired as of
the date of disability or death and shall receive those benefits he would
have received had he retired.
In the event the contract is terminated by either party as a result of
a change in control of the Parent Company and adverse tax consequences would
result from the making of these payments, a smaller lump sum payment will be
made in lieu of the above described payments. Furthermore, the contract
provides that if the Parent Company agrees prior to January 1, 2000 to more
favorable employment benefits for other senior executive officers than those
provided to Mr. Brenton, Mr. Brenton or his spouse may elect to participate
in a similar agreement. However, Mr. Brenton may only participate in such
agreements entered into after 1994 if such agreements are drawn in
anticipation of a change of control. In addition, such post-1994 agreements
are subject to certain phase out adjustments.
In the event the Company terminates Mr. Brenton for just cause, the
retirement provisions set forth above will be paid to Mr. Brenton pursuant to
the terms of the Agreement. In the event that Mr. Brenton is terminated by
the Company without just cause or Mr. Brenton terminates his employment for
just cause prior to retirement, all of the benefits that would have been paid
to Mr. Brenton had he remained employed by the Company will be paid to Mr.
Brenton.
II. APPROVAL OF SELECTION OF INDEPENDENT AUDITORS
The Board of Directors has selected KPMG Peat Marwick as independent
auditors for the Company for the year 1994. Such selection is being
submitted to the stockholders for approval. KPMG Peat Marwick has served for
many years as the independent auditors for the Company, including 1993, and
was approved by the stockholders at the last Annual Meeting of the
Stockholders.
Representatives of KPMG Peat Marwick 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 PEAT
MARWICK AS INDEPENDENT AUDITORS FOR THE COMPANY.
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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.
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 3, 1995, provided that at the time the proposal is submitted
the proponent is a record or beneficial owner of at least 1% or $1,000 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 3,
1995. 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 January 3, 1995, in order to be included in the proxy statement of
Brenton Banks, Inc. for the May 3, 1995 meeting.
S.E.C. FORM 10-K AVAILABLE.
COPIES OF THE COMPANY'S 1993 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.
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 14, 1994,
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
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