BRENTON BANKS, INC.
CAPITAL SQUARE, 400 LOCUST, DES MOINES, IOWA 50309
PROXY STATEMENT
ANNUAL MEETING OF STOCKHOLDERS TO BE HELD
MAY 12, 1995
This proxy statement is being mailed to the shareholders of Brenton
Banks, Inc., on March 31, 1995. 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 12, 1995, 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, 1995. However, the
Annual Meeting of Stockholders of Brenton Banks, Inc. is adjourned until
Friday, May 12, 1995.
The close of business on March 13, 1995, 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 7,916,346 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., (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 13, 1995, 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 1,491,967 (4) 18.62% 497,752 994,215
Capital Square
400 Locust
Des Moines, IA 50309
C. Robert Brenton 1,429,593 (4) 17.84% 381,732 1,047,861
Capital Square
400 Locust
Des Moines, IA 50309
Junius C. Brenton 1,548,725 19.33% 455,161 1,093,564
Capital Square
400 Locust
Des Moines, IA 50309
Jane Eddy 460,110 5.74% 159,060 301,050
2908 Forest Drive
Des Moines, IA 50312
Juliette Moen 466,070 5.57% 122,397 323,673
5801 Crescent Terrace
Edina, MN 55436
Carolyn O'Brien 517,890 6.46% 164,349 353,541
301 Tonawanda Drive
Des Moines, IA 50312
All executive officers and directors 2,680,654 (4)(5) 33.46% 1,481,137 (4)(5) 1,199,517 (5)
as a group (16 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 - 974,436 shares;
C. Robert Brenton - 974,436 shares; Junius C. Brenton - 974,436 shares; Jane Eddy - 286,101 shares; Juliette Moen - 323,673
shares; and Carolyn O'Brien - 286,101 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 - 6,000 shares; C. Robert Brenton - 21,000 shares; and seven
members of the executive officers and directors group (including William H. Brenton and C. Robert Brenton) - 99,700 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 July 1994, the Board of Directors appointed Hubert G. Ferguson to
serve as director, upon the retirement of Thomas R. Smith. In February 1995,
the Board of Directors increased the number of directors to be elected from
six to seven and appointed Gary M. Christensen to serve as director. Mr.
Ferguson and Mr. Christensen will serve as directors until the next Annual
Meeting of Stockholders and until their successors are 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
13, 1995 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 13, 1995 of Class
____ ___ ___________________________ _____ ______________ ________
C. Robert Brenton 64 Chairman of the Board,
Brenton Banks, Inc. 1960 1,429,593 (1)(2) 17.84%
William H. Brenton 70 Chairman of the Executive Committee,
Vice Chairman of the Board,
Brenton Banks, Inc. 1957 1,491,967 (1)(2) 18.62%
Junius C. Brenton 60 Director,
Brenton Banks, Inc. 1969 1,548,725 (1) 19.33%
Robert L. DeMeulenaere 55 President,
Brenton Banks, Inc. 1994 26,272 (2)(3) less than
1%
R. Dean Duben 68 Vice Chairman of the Board,
Brenton First National Bank,
Davenport* 1960 17,082 (4) less than
1%
Hubert G. Ferguson 67 Financial Services Consultant,
Minneapolis, Minnesota 1994 1,000 (5) less than
1%
Gary M. Christensen 51 President and Chief Operating
Officer, Pella Corporation 1995 -- --
<FN>
*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) 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 - 21,000 shares, William H. Brenton - 6,000 shares, and
Robert L. DeMeulenaere - 21,000 shares.
(3) Mr. DeMeulenaere has sole voting and investment power over 24,171 shares, and shared power over 2,101 shares.
(4) Mr. Duben has sole voting and investment power over 10,289 shares, and shared power over 6,793 shares.
(5) Mr. Ferguson has sole voting and investment power over all 1,000 shares.
3
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 President of the Parent Company through May 1990. William H.
Brenton served as Chairman of the Board of the Parent Company through May
1990. Junius C. Brenton served as President of the Parent Company from May
1990 to January 1994, Executive Vice President of the Parent Company through
May 1990 and CEO of Brenton National Bank of Des Moines from April 1988
through February 1990. Robert L. DeMeulenaere served as Senior Vice
President of the Parent Company and CEO of Brenton Bank and Trust Company of
Cedar Rapids from August 1990 through January 1994, and Senior Vice
President-Metro Bank Division of the Parent Company through August 1990. R.
Dean Duben served as Senior Vice President of the Parent Company and
President of Brenton First National Bank, Davenport through December 1991.
Hubert G. Ferguson served as Senior Vice President of Dain Bosworth,
Minneapolis, Minnesota, through December 1992. Gary M. Christensen served as
General Manager-Refrigeration Products for the Major Appliance Group of
General Electric from January 1989 through November 1990 and Senior Vice
President of Marketing and Sales for Pella Corporation from November 1990
through December 1993.
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 C. Robert Brenton, who is a
director of Pioneer Hi-Bred International, Inc.
At the beginning of 1994, the Audit Committee consisted of the following
members: R. Dean Duben, Carrol R. Collins; John C. Eddy; Joseph B. Ryan, Jr.;
Max A. Smith; and Thomas R. Smith. During 1994, the Committee membership was
revised and the Audit Committee was comprised of R. Dean Duben, John C. Eddy,
and Hubert G. Ferguson at the end of the fiscal year. R. Dean Duben and
Hubert G. Ferguson 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 1994, 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 Robert L. DeMeulenaere, consisted of C. Robert Brenton, William H.
Brenton, Robert L. DeMeulenaere, Phillip L. Risley, and Roger D. Winterhof
for 1994. During 1994, the Salary Policy Review Committee met once. See the
Compensation Committee Report on page 7.
Although the Board of Directors has no standing Nominating Committee,
the Board met once during February 1995, 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 July 1994, Thomas R. Smith retired from the Board and
Hubert G. Ferguson was elected to fill the vacated position. In February
1995, the Board of Directors increased the number of directors from six to
seven and named Gary M. Christensen 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 1994, the Board of Directors held thirteen meetings, including
seven regular meetings, and six special meetings. During 1994, 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
4
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.
EXECUTIVE COMPENSATION
The following sets forth information on the annual and long-term
compensation paid or accrued by the Company for services rendered in 1994,
1993 and 1992 of those persons who are the Chairman of the Board, Vice
Chairman of the Board, and the three most highly compensated officers of the
Company.
Summary Compensation Table
Long Term
Annual Compensation Compensation
__________________________________________ ____________
Other Annual Restricted All Other
Name and Current Principal Compensation Stock Compensation
Position Year Salary ($) Bonus ($) ($) Award(s) ($) $
________ ____ __________ _________ ____________ __________ ____________
C. Robert Brenton 1994 172,388 -- -- -- 138,165 (4)
Chairman of the Board 1993 165,758 21,756 -- -- 29,731 (5)
1992 157,116 32,994 -- -- 27,374 (6)
William H. Brenton 1994 172,388 -- -- -- 185,855 (7)
Chairman of the Executive Committee 1993 165,758 21,756 -- -- 26,591 (8)
and Vice Chairman of the Board 1992 157,116 32,994 -- -- 30,243 (9)
Robert L. DeMeulenaere 1994 150,000 -- 15,330 (1) 69,131 (3) 11,250 (10)
President 1993 126,209 20,502 -- 44,861 (3) 12,214 (10)
1992 118,000 32,893 -- 55,510 (3) 10,631 (10)
Phillip L. Risley 1994 146,300 -- -- 55,644 (3) 11,250 (10)
Executive Vice President 1993 140,000 26,950 -- 52,054 (3) 13,383 (10)
1992 119,000 30,049 -- 56,602 (3) 12,534 (10)
Larry A. Mindrup 1994 124,299 40,000 26,428 (2) 32,467 (3) 11,250 (10)
President and CEO of 1993 102,084 50,451 -- 30,363 (3) 9,284 (10)
Brenton Savings Bank, FSB 1992 96,429 25,864 -- 37,023 (3) 9,995 (10)
<FN>
(1) Includes a payment of $9,375 made to Mr. DeMeulenaere in connection with his relocation from Cedar Rapids, Iowa to Des
Moines, Iowa.
(2) Includes a payment of $18,319 made to Mr. Mindrup in connection with his relocation from Grinnell, Iowa to Ames, Iowa.
(3) 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 $18.25 for the 1994 grant and $20.00 for the 1993 grant,
$18.00 for the 1992 grant after restatement for the 3-for-2 stock split. Robert L. DeMeulenaere was granted 3,788, 2,564
and 3,202 restricted shares for the years 1994, 1993 and 1992, respectively. The market value of Mr. DeMeulenaere's
restricted stock holdings was $174,361 based on the closing price as of December 31, 1994. Phillip L. Risley was granted
3,049, 2,974 and 3,265 restricted shares for the years 1994, 1993 and 1992, respectively. The market value of Mr. Risley's
restricted holdings was $169,505 based on the closing price at December 31, 1994. Larry A. Mindrup was granted 1,779, 1,735
and 2,136 restricted shares for the years 1994, 1993 and 1992, respectively. The market value of Mr. Mindrup's restricted
holdings was $103,115 based on the closing price at December 31, 1994.
(4) Includes life insurance premium payments made by the Company on behalf of Mr. Brenton in the amount of $114,000, which
will be repaid to the Company upon the termination of such insurance policies. The Company expensed $24,342 in connection
with the payment of the premiums. This amount also includes contributions of $11,250 toward qualified retirement plans and
$12,915 of directors fees paid by affiliated banks.
(5) Consists of a $17,831 contribution toward qualified retirement plans and $11,900 of directors fees paid by affiliated
banks.
(6) Consists of a $16,834 contribution toward qualified retirement plans and $10,540 of directors fees paid by affiliated
banks.
(7) Includes life insurance premium payments made by the Company on behalf of Mr. Brenton in the amount of $114,000, which
will be repaid to the Company upon the termination of such insurance policies. The Company expensed $14,604 in connection
with the payment of the premiums. This amount also includes a one time payment of $50,000 made in accordance with Mr.
Brenton's employment contract with the Company; a contribution of $11,250 toward qualified retirement plans; and $10,605
of directors fees paid by affiliated banks.
(8) Consists of a $14,936 contribution toward qualified retirement plans and $11,655 of directors fees paid by affiliated
banks.
(9) Consists of a $18,618 contribution toward qualified retirement plans and $11,625 of directors fees paid by affiliated
banks.
(10) Constitutes the entire amount contributed to qualified retirement plans, on behalf of the named individual.
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, 1994 Option/SAR Values
Value of
Number of Securities Unexercised
Underlying Unexercised In the Money
Shares Options/SARs at Options/SARs at
Acquired on Value December 31, 1993 December 31, 1994
Name Exercise # Realized $ (Exercisable) (Exercisable)
____ __________ __________ _____________ _____________
C. Robert Brenton,
Chairman of the Board -- -- 21,000 $ 290,500
William H. Brenton,
Chairman of the Executive Committee
and Vice Chairman of the Board -- -- 6,000 $ 83,000
Robert L. DeMeulenaere,
President -- -- 21,000 $ 290,500
Phillip L. Risley,
Executive Vice President -- -- -- --
Larry A. Mindrup,
President and CEO of
Brenton Savings Bank, FSB 7,750 $108,708 5,000 $ 69,150
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 #
____ ________ _________ ___________ ________ _________
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 7,035 January 1, 1997 3,517 7,035 10,553 (1)
Phillip L. Risley,
Executive Vice President 5,663 January 1, 1997 2,831 5,663 8,494 (1)
Larry A. Mindrup,
President and CEO of
Brenton Savings Bank, FSB 3,303 January 1, 1997 1,651 3,303 4,955 (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, 1997, 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
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 SNL
Securities' Midwestern Bank Index for the five-year period ended December 31,
1994. In prior years the Company used the Chicago Corporation's Midwest Bank
Index as its peer group. During 1994 the Chicago Corporation discontinued
the publication and computation of the Index. The Chicago Corporation's
Midwest Bank Fund Index is reproduced below for the period of December 1989
through December 1993. Total return values for the Company, NASDAQ, Chicago
Corporation's Midwest Bank Index 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, 1989,
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
1989 1990 1991 1992 1993 1994
Brenton Banks, Inc. 100 90 145 181 187 199
SNL Securities Midwestern Bank Index* 100 84 146 188 181 189
CRSP Index for the NASDAQ Stock Market
(U.S. Companies)** 100 84 136 158 181 177
The Chicago Corp. Midwest Bank
Index*** 100 79 118 155 164 N/A
Compensation Committee Report - The Compensation Committee Report has
been prepared by the following individuals: Robert L. DeMeulenaere, C. Robert
Brenton, William H. Brenton, R. Dean Duben, 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,
Robert L. DeMeulenaere, Phillip L. Risley and Roger D. Winterhof. The
compensation of the executive officers of the Company, except Robert L.
DeMeulenaere, C. Robert Brenton, and William H. Brenton, is determined by
either Robert L. DeMeulenaere, or the Chairman of the Board, C. Robert
Brenton. Robert L. DeMeulenaere 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 (C.
Robert Brenton, William H. Brenton and Robert L. DeMeulenaere) is initially
considered by C. Robert Brenton and William H. Brenton. Robert L.
DeMeulenaere is the senior officer in charge of the daily operations of the
Company. C. Robert Brenton, William H. Brenton and Robert L. DeMeulenaere
share many of the responsibilities and duties of chief executive officer. C.
Robert Brenton and William H. Brenton apply the procedures established by the
Salary Policy Review Committee to formulate a recommendation regarding their
own compensation and the compensation of Robert L. DeMeulenaere. This
recommendation is then presented to the Company's Board of Directors for
discussion and approval.
7
The total compensation of the Company's executive officers, including C.
Robert Brenton, William H. Brenton and Robert L. DeMeulenaere, is 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 C. Robert
Brenton, William H. Brenton and Robert L. DeMeulenaere 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 the Company's senior executive officers have increased at an average
annual rate of 2.5% over the last three years. The base salaries of the
Company's executive officers, including C. Robert Brenton, William H. Brenton
and Robert L. DeMeulenaere, are not directly related to the Company's stock
performance. Executive officers of the Company received no increase in base
salary and will be paying a higher percentage of health insurance premiums
personally in 1995.
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 C. Robert Brenton, William H.
Brenton and Robert L. DeMeulenaere, 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 loans
and deposits, asset quality, net interest margin, net noninterest expense,
and noninterest income. 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 1994, all executive officers of the Company earned an average
of 3.4% of their base salaries through the Company's bonus plans.
C. Robert Brenton, William H. Brenton and Robert L. DeMeulenaere also
participate in the Company's bonus plans. All were eligible to receive up to
32.5% of their base salaries in bonuses, based on tiered achievement scales.
C. Robert Brenton's bonus was based on Company earnings, core deposit growth,
core loan growth, and net noninterest expense. William H. Brenton's bonus
was based on Company earnings, core deposit growth, and core loan growth.
Robert L. DeMeulenaere's bonus was based on Company earnings, core deposit
growth, core loan growth, noninterest income, and net noninterest expense.
The tiered achievement scales were the same for all executive officers and
ranged from $14.3 million to $16.5 million for Company earnings, 5% to 15%
for core deposit growth, 9% to 23% for core loan growth, $19.5 million to
$21.5 million for noninterest income, and $34.7 million to $32.4 million for
net noninterest expense. No bonuses were paid to these individuals for the
1994 bonus plan. The Salary Policy Review Committee believes that the bonus
plan potential to C. Robert Brenton, William H. Brenton and Robert L.
DeMeulenaere 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. The sole named
executive officer to receive a bonus for 1994 was Larry Mindrup.
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 1994, the Board of Directors approved the grant of 17,809 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 14.3% of the executive officers' anticipated base
salary over the three-year period the stock is restricted.
8
The Board of Directors granted 33,074 shares of performance stock grants
during 1994 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 26.5% 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 alliance with the
interests of shareholders. The Board of Directors did not award any
restricted or performance stock to 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, 1994,
there were 200 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 300,000 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.
The Board of Directors granted 8,400 options on July 21, 1994, 15,000
options on June 28, 1990; 21,000 options on April 19, 1990; 15,000 options on
September 14, 1988; and 250,500 options on July 13, 1987. The options are
exercisable at the market price on the date of grant: $19.63 in July 1994,
$9.46 in June 1990, $8.79 in April 1990, $6.42 in September 1988 and $4.42 in
July 1987. As of December 31, 1994, 143,950 options had been exercised and
9,900 had been forfeited. The weighted average per share exercise price of
the 156,050 options currently outstanding is $5.26. Of the 156,050 options
currently outstanding, 140,450 were vested and exercisable at the end of
1994. 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.
Split Dollar Insurance - The Company has instituted a life insurance
program for the benefit of C. Robert Brenton and William H. Brenton 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 of life insurance coverage to
both C. Robert Brenton and William H. Brenton and their spouses. Pursuant to
the terms of the program, the insurance policies are held in a trust created
for the benefit of the named executive officer and the officer's spouse. The
Company is obligated to pay up to $114,000 of the premiums for a period of
seven (7) years. Upon the termination of the policies, the Company is repaid
the premiums together with interest in excess of $300,000 on the premiums at
the rate of 5.2% per annum. The amount of the premiums paid for 1994 is set
forth in the Summary Compensation Table. The Company expensed $24,342 and
$14,605 for C. Robert Brenton and William H. Brenton, respectively, in
connection with the payments made pursuant to the life insurance program.
The benefits payable pursuant to the life insurance program are not related
to the performance of the Company.
RESPECTFULLY SUBMITTED,
C. ROBERT BRENTON, WILLIAM H. BRENTON, ROBERT L. DEMEULENAERE, R. DEAN DUBEN,
PHILLIP L. RISLEY AND ROGER D. WINTERHOF
9
Director Compensation - During 1994, each director who was not an
officer and full-time employee of the Company was eligible to receive
directors fees. Directors who were full-time employees, received no separate
compensation for service as director of the Parent Company. For 1994,
directors fees were initially set at $500 for each Board of Directors meeting
attended and $300 for each audit committee meeting attended. These fees were
increased in July 1994 to $2,500 for Board of Directors meetings and $500 for
audit committee meetings. During 1994, Thomas R. Smith and R. Dean Duben
earned $4,300 and $15,800, respectively for their service as directors of the
Company and its affiliated banks. Hubert G. Ferguson earned $10,500 for
services rendered as a Director of the Company and $2,250 for consulting
services rendered to the Company's brokerage operations. Junius C. Brenton
received no directors fees in 1994.
Agreements with Executive Officers - 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 remained employed with the
Parent Company through December 31, 1994. The Agreement set the lower limit
of his annual compensation and provides for certain death, disability and
retirement benefits. Mr. Brenton's annual salary during the term of his
employment was set by the Board of Directors and was equivalent to other
senior executive officers of the Parent Company, but not less than his base
salary for 1989 or the highest senior executive officer's salary then in
effect. In addition to his base salary, he was 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
received a lump sum payment of $50,000. In addition, he 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. Upon Mr. Brenton's
retirement, the Parent Company will also provide him with certain life
insurance benefits until age 70, medical insurance benefits equivalent to
those now in effect for ten (10) years following retirement, secretarial
support 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. 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, he or his spouse may elect to participate in a
similar agreement. However, he may only participate in such agreements
entered into after 1994 if such agreements are drawn in anticipation of a
change of control. Such post-1994, agreements are subject to certain phase
out adjustments.
During 1994, the Company entered into agreements with Robert L.
DeMeulenaere and Larry A. Mindrup which provide these officers 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 these contracts, Mr. DeMeulenaere and Mr. Mindrup
may receive up to $500,000 and $350,000, respectively, if there is a change
in control of the Company and they are terminated or there is a substantial
reduction in their duties within three years following the change in control.
In the event of a change in control where their employment is not terminated,
their 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 these individuals is limited to the lessor of the
amount deductible under the Internal Revenue Code Section 280G or the amounts
set forth above. The benefits payable to Mr. DeMeulenaere and Mr. Mindrup are
subject to certain phase out adjustments beginning one year following the
change in control and at age 61, with no benefit being payable after age 65.
II. APPROVAL OF SELECTION OF INDEPENDENT AUDITORS
The Board of Directors has selected KPMG Peat Marwick LLP as independent
auditors for the Company for the year 1995. Such selection is being
submitted to the stockholders for approval. KPMG Peat Marwick LLP has served
for many years as the independent auditors for the Company, including 1994,
and was approved by the stockholders at the last Annual Meeting of the
Stockholders. Representatives of KPMG Peat Marwick 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 PEAT
MARWICK LLP AS INDEPENDENT AUDITORS FOR THE COMPANY.
10
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 7, 1996, 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 7,
1996. 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 8, 1996, in order to be included in the proxy statement of
Brenton Banks, Inc. for the May 7, 1996 meeting.
S.E.C. FORM 10-K AVAILABLE.
COPIES OF THE COMPANY'S 1994 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 13, 1995,
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
11
PROXY BRENTON BANKS, INC. PROXY
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS FOR THE ANNUAL
MEETING TO BE HELD ON MAY 12, 1995, 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 Convention Center, Des
Moines, Iowa, at 5:00 p.m., on May 12, 1995, 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 PEAT MARWICK 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, R. Dean Duben, Hubert G. Ferguson, and Gary M. Christensen.
[ ] For All [ ] Withhold Authority [ ] For All
to Vote For All (Except Nominee(s) listed to right)
2. Proposal to approve KPMG Peat Marwick LLP, Des Moines, Iowa, as
independent auditors for the Company for 1995.
[ ] 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 _______________________, 1995
(Signatures)___________________________________
_______________________________________________
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.