Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
Filed by the Registrant [ X ]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement [ ] Confidential, for Use of the
Commission Only (as permitted
by Rule 14a-6(e)(2))
[ X ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Section 240.14a-11(c) or Section
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):
_________________________________________________________________
4) Proposed maximum aggregate value of transaction:
_________________________________________________________________
5) Total fee paid:
_________________________________________________________________
[ ] 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:
_________________________________________________________________
2) Form, Schedule or Registration Statement No.:
_________________________________________________________________
3) Filing Party:
_________________________________________________________________
4) Date Filed:
_________________________________________________________________
BRENTON BANKS, INC.
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
MAY 19, 1999
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 West Des Moines Marriott Hotel,
1250 74th Street, West Des Moines, Iowa, on Wednesday, May 19, 1999, 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 Peat Marwick LLP as
independent auditors for Brenton Banks, Inc. for the year 1999; 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 1998. The 1998 summary annual report and appendix to the proxy
statement, including financial statements, are enclosed for your information.
The close of business on March 8, 1999, 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 25, 1999
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 19, 1999
This proxy statement is being mailed to the shareholders of Brenton Banks,
Inc. (the "Parent Company") on March 25, 1999. 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 19, 1999, 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 5, 1999. However, the
Annual Meeting of Stockholders of Brenton Banks, Inc. is adjourned until May
19, 1999.
The close of business on March 8, 1999, 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 18,730,840 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 8, 1999, 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:
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 3,675,019 19.18% 1,170,047 2,504,972
Capital Square
400 Locust
Des Moines, IA 50309
C. Robert Brenton 3,541,598 18.48% 932,555 2,609,043
Capital Square
400 Locust
Des Moines, IA 50309
Junius C. Brenton 3,826,708 19.97% 1,057,351 2,769,357
Capital Square
400 Locust
Des Moines, IA 50309
Jane Eddy 1,224,800 6.39% 423,416 801,384
2908 Forest Drive
Des Moines, IA 50312
Carolyn O'Brien 1,373,168 7.17% 437,491 935,677
4004 Grand Avenue, #402
Des Moines, IA 50312
Robert L. DeMeulenaere 116,339 (4) Less than 1% 111,594 (4) 4,745
Larry A. Mindrup 60,156 (4) Less than 1% 60,156 (4) ---
Phillip L. Risley 54,433 (4) Less than 1% 39,530 (4) 14,903
Steven T. Schuler 56,881 (4) Less than 1% 25,982 (4) 30,899
Norman D. Schuneman 67,247 (4) Less than 1% 67,247 (4) ---
All executive officers and directors 6,624,809 (4)(5) 34.57% 3,585,843 (4)(5) 3,038,966 (5)
as a group (15 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 - 2,452,253 shares; C. Robert Brenton - 2,452,253 shares; Junius C. Brenton - 2,452,253 shares;
Jane Eddy - 761,593 shares; and Carolyn O'Brien - 761,593 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 - 17,569 shares; Robert L. DeMeulenaere -
61,492 shares; Larry A. Mindrup - 39,530 shares; Phillip L. Risley - 39,530 shares; Steven T. Schuler -
21,961 shares; Norman D. Schuneman - 21,961 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) - 276,710 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 8, 1999, 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 8, 1999 of Class
____ ___ ___________________________ _____ ______________ ________
C. Robert Brenton 68 Chairman of the Board
Brenton Banks, Inc. 1960 3,541,598 (1) 18.48%
William H. Brenton 74 Director
Brenton Banks, Inc. 1957 3,675,019 (1) 19.18%
Junius C. Brenton 64 Director
Brenton Banks, Inc. 1969 3,826,708 (1) 19.97%
Robert L. DeMeulenaere 59 President and Chief Executive Officer
Brenton Banks, Inc. 1994 116,339 (2) less than
1%
Robert C. Carr 58 Vice President 1998 -- --
Amoco Corporation
Gary M. Christensen 55 President and Chief Executive
Officer, Pella Corporation 1995 -- --
Robert J. Currey 53 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 111,594 shares, including 61,492 vested options, and
shared power over 4,745 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 Chairman of Brenton Bank from October 1995 to November 1997. William H.
Brenton served as Chairman of the Executive Committee and Vice Chairman of the
Board of the Parent Company through December 1994. Junius C. Brenton served as
President of the Parent Company from May 1990 to January 1994. 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. 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 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 C. Robert Brenton, who is a
director of Pioneer Hi-Bred International, Inc. and Robert J. Currey, who is a
director of McLeodUSA Incorporated.
The Audit Committee was comprised of Robert J. Currey and Gary M.
Christensen. 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 1998, the Audit
Committee met twice.
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 1998. Richard J. Oggero is a
member of the Board of Directors of Brenton Bank, a subsidiary of Brenton
Banks, Inc. During 1998, the Compensation Committee met once. See the
Compensation Committee Report on page 8.
Although the Board of Directors has no standing Nominating Committee, the
Board met once during January 1999 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 1998, the Board of Directors held ten meetings, including six
regular meetings and four dividend declaration meetings. During 1998, 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.
4
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.
EXECUTIVE COMPENSATION
The following sets forth information on the annual and long-term
compensation paid or accrued by the Company for services rendered in 1998, 1997
and 1996 of those persons who are the Chairman of the Board, President and
Chief Executive Officer, the four most highly compensated executive officers of
the Company and one highly compensated individual.
Summary Compensation Table
Annual Compensation Long Term Compensation
__________________________________ ______________________
Awards Payouts
_______ _______
Securities
Name Other Annual Underlying LTIP All Other
And Current Principal Compensation Options/ Payouts Compensation
Position Year Salary ($) Bonus ($) ($) SARS (#) ($)(2) ($)
________ ____ __________ _________ ____________ ________ _______ ____________
C. Robert Brenton 1998 107,500 -- -- -- -- 146,550(3)
Chairman of the Board 1997 189,800 71,175 -- -- -- 129,030(4)
1996 189,800 45,903 -- 53,240 -- 129,218(5)
Robert L. DeMeulenaere 1998 227,760 81,994 -- -- -- 12,800(6)
President and Chief 1997 189,800 71,175 -- -- 470,248 11,550(6)
Executive Officer 1996 189,800 45,903 -- 186,340 -- 10,062(6)
Larry A. Mindrup 1998 169,800 61,128 -- -- -- 12,800(6)
President/Chief Banking 1997 169,800 63,675 -- -- 339,643 11,550(6)
Officer 1996 165,800 41,066 -- 119,790 -- 37,343(7)
Brenton Bank*
Phillip L. Risley 1998 156,100 56,196 -- -- -- 12,626(6)
Executive Vice President/ 1997 156,100 58,538 -- -- 382,239 11,550(6)
Chief Administrative Officer 1996 156,100 37,753 -- 119,790 -- 10,859(6)
Brenton Bank*
Steven T. Schuler 1998 129,600 46,656 -- -- -- 12,800(6)
Chief Financial Officer/ 1997 121,700 45,638 -- -- 264,167 11,286(6)
Treasurer/Secretary 1996 120,900 29,240 -- 66,550 -- 8,662(6)
Norman D. Schuneman 1998 139,800 50,328 -- -- -- 12,800(6)
Chief Credit Officer 1997 139,800 52,425 -- -- 337,812 11,550(6)
Brenton Bank* 1996 137,600 33,811 -- 66,550 -- 9,553(6)
Mark J. Hoffschneider 1998 100,000 150,000 -- -- -- 12,800(6)
President 1997 100,000 70,498 -- -- -- 14,578(8)
Brenton Mortgages, Inc.** 1996 83,333 25,140 6,363(1) 13,310 -- --
* A subsidiary of the Parent Company
** A subsidiary of Brenton Savings Bank, FSB, which is a subsidiary of the Parent Company
5
<FN>
(1) Consists of a payment of $6,363 made to Mr. Hoffschneider in connection with his relocation from Davenport, Iowa to
Des Moines, Iowa.
(2) 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.
(3) Includes life insurance premium payments made 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 $29,211 in connection
with the payment of the premiums. This amount also includes contributions of $12,800 toward qualified retirement
plans and $19,750 of director fees paid by the Company and affiliated banks.
(4) Includes life insurance premium payments made 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 $29,211 in connection
with the payment of the premiums. This amount also includes contributions of $11,550 toward qualified retirement
plans and $3,480 of director fees paid by affiliated banks.
(5) Includes life insurance premium payments made 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 $29,211 in connection
with the payment of the premiums. This amount also includes contributions of $9,988 toward qualified retirement
plans and $5,230 of director fees paid by affiliated banks.
(6) Constitutes the entire amount contributed to qualified retirement plans, on behalf of the named individual.
(7) Includes $10,844 contributed toward qualified retirement plans and $26,499 discretionary payment to adjust the
total compensation among the Company's senior executive officers.
(8) Consists of $3,750 contributed toward qualified retirement plans and $10,828 discretionary payment to adjust for
employee benefit coverage.
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 one highly compensated individual and the year-end
values of options held by such individuals pursuant to the Company's non-
qualified stock option plan.
Aggregated Option/SAR Exercises in Last Fiscal Year
and December 31, 1998, 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, 1998 December 31, 1998
Name Exercise #(c) Realized $ (Exercisable)/(Unexercisable)(c)(d) (Exercisable)/(Unexercisable)(d)
____ _____________ __________ ___________________________________ _______________________________
C. Robert Brenton
Chairman of the Board -- -- 17,569/35,671 $133,400/$270,900
Robert L. DeMeulenaere
President and Chief -- -- 61,492/124,848 $467,000/$948,000
Executive Officer
Larry A. Mindrup
President/Chief Banking -- -- 39,530/80,260 $300,200/$609,400
Officer
Brenton Bank(a)
Phillip L. Risley
Executive Vice President/ -- -- 39,530/80,260 $300,200/$609,400
Chief Administrative
Officer
Brenton Bank(a)
Steve T. Schuler
Chief Financial Officer/ -- -- 21,961/44,589 $166,700/$338,600
Treasurer/Secretary
Norman D. Schuneman
Chief Credit Officer 39,930 $570,160 21,961/44,589 $166,700/$338,600
Brenton Bank(a)
Mark Hoffschneider
President
Brenton Mortgages, Inc.(b) -- -- 4,392/8,918 $33,400/$67,700
6
<FN>
(a) A subsidiary of the Parent Company
(b) A subsidiary of Brenton Savings Bank, FSB, which is a subsidiary of the Parent Company.
(c) Restated for 2-for-1 stock split effective February 10, 1998 and June 1998 and May 1997 ten percent stock
dividends.
(d) 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 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, 1998. 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, 1993, 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
1993 1994 1995 1996 1997 1998
Brenton Banks, Inc. 100 107 127 186 302 283
SNL Securities' Index for the NASDAQ
Stock Market (U.S. Companies)* 100 98 138 170 209 293
SNL Securities' Midwestern Bank Index** 100 97 143 194 315 335
7
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 shareholder.
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 the
oversight of executive compensation for the Chief Executive Officer and other
senior officers of the Company who report to the Chief Executive Officer;
communicate with the full Board of Directors; and 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.
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 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 Compensation Committee believes that the
base salary of Robert L. DeMeulenaere is set at a level below average base
salaries of Chief Executive Officers of other comparable bank holding
companies. The base salaries of the Company's executive officers, including
Robert L. DeMeulenaere, are not directly related to the Company's stock
performance. During 1998, the Committee adjusted C. Robert Brenton's
compensation to match his level of involvement in managing the Company. Prior
to January 29, 1998, C. Robert Brenton and Robert L. DeMeulenaere were co-
CEO's of the Company. On January 29, 1998, Mr. C. Robert Brenton retired as
an officer of the Company but remained Chairman of the Board. As Chairman of
8
the Board, the Committee determined the components of his compensation as base
salary, plus a supplemental retirement component. He was not included in the
bonus plan for 1998 (see below).
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 1998, 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 and the bonus plans for
other officers of the Company were 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 37.5 to 45.0 percent of base pay.
For 1998, Robert L. DeMeulenaere was eligible to receive a bonus of up to
45.0 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 $20,000,000 and 100 percent of bonus was earned if consolidated net
income was above $21,000,000. Based on the financial performance of the
Company Robert L. DeMeulenaere earned 80 percent of his bonus potential.
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 1,331,000
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 1,134,012 options on September 12, 1996
and 5,324 options on November 14, 1996. The options are exercisable at the
market price on the date of grant: $9.16 in September 1996 and $9.76 in
November 1996. During 1997, an additional 95,898 options were granted by the
Board of Directors to officers and key employees at a weighted average
exercise price of $12.64. During 1998, an additional 131,400 options were
granted by the Board of Directors to officers and key employees at a weighted
average exercise price of $18.71. 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, 1998, 65,164 options have been forfeited.
The weighted average per share exercise price of the 1,301,470 options
currently outstanding is $10.35. At December 31, 1998, there were 29,530
shares still available for grant.
To date a total of 838,530 option shares have been granted to the
executive officers as a group, with 53,240 granted to C. Robert Brenton and
186,340 granted to Robert L. DeMeulenaere. The smaller amount granted to C.
Robert Brenton is in recognition of the fact that his interests are already
closely allied with the interests of shareholders due to his substantial stock
holdings. The amounts granted to C. Robert Brenton and Robert L. DeMeulenaere
are in recognition of their past and future expected contribution and impact
on the financial results of the Company.
Under the provisions of the Stock Option Agreements granted to date, 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 cumulative net
income goals specified in the option agreement include performance periods
beginning January 1, 1996, and continuing through December 31, 1998, 1999 and
2000. To the extent the Company's cumulative net income meets or exceeds the
thresholds set forth in the Performance Vesting Schedule 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. At December 31, 1998, 429,467 options, or 33 percent of
total options outstanding, became vested.
9
Performance Vesting Schedule
% 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% -- -- --
The Plan also provides for prorated vesting upon normal retirement after
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.
Long-Term Stock Compensation Plan - 1987 Non-Qualified Stock Option Plan
- - - The Company also maintained a 1987 Non-Qualified Stock Option Plan which
permitted the Board of Directors to grant options to officers of the Company
(Brenton Banks, Inc. and its subsidiaries) through May 6, 1997. There were no
grants of options under this plan in 1998 and no further grants are allowed
under the plan. The options were intended to be non-qualified under the
Internal Revenue Code.
The Board of Directors granted 22,361 options on July 21, 1994; 39,930
options on June 28, 1990; 55,902 options on April 19, 1990; 39,930 options on
September 14, 1988; and 666,831 options on July 13, 1987. The options were
exercisable at the market price on the date of grant: $7.38 in July 1994,
$3.55 in June 1990, $3.30 in April 1990; $2.41 in September 1988; and $1.66 in
July 1987. As of December 31, 1998, 765,059 options have been exercised and
59,895 have been forfeited. There are no outstanding options under this plan
as of December 31, 1998.
Split Dollar Insurance - The Company has instituted a life insurance
program for the benefit of C. Robert Brenton to encourage his continued
participation in the Company following his retirement and to aid him with his
estate planning goals. The life insurance program provides up to $3,500,000
of life insurance coverage to C. Robert Brenton and his spouse. 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 $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 percent per annum. The amount of the premiums paid for 1998 was
$114,000. The Company expensed $29,211 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,
GARY M. CHRISTENSEN, WILLIAM H. BRENTON, JUNIUS C. BRENTON, AND RICHARD J.
OGGERO
Director Compensation - During 1998, 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 1998, 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 1998, Robert C. Carr, Gary
M. Christensen and Robert J. Currey received $2,500, $7,250 and $5,500,
respectively, for their service as directors of the Company. C. Robert Brenton
received $10,250 for services as director of the Company and $9,500 for
services as a director of certain of the Company's affiliated banks. Junius C.
Brenton received $1,500 for services as a director of certain of the Company's
affiliated banks, $500 for committee meetings and $2,400 in consulting fees.
William H. Brenton received $9,500 for services as director of the Company,
$6,500
10
for services as a director of certain of the Company's affiliated banks and
$67,650 pursuant to his Employment/Retirement Agreement.
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 and $2,000,000 of life insurance coverage to 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 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 and $150,000
for 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 1998
was $114,000 for William H. Brenton and $48,314 for Junius C. Brenton. The
Company expensed $41,591 in connection with the payments.
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). Accordingly, during 1998 the Company paid $33,459
and $55,052 to Mr. R. Dean Duben and Mr. Hubert G. Ferguson, respectively, upon
their retirement from the Company's Board of Directors. During 1998, the
values of the credits awarded to C. Robert Brenton, William H. Brenton, Mr.
Carr, Mr. Christensen and Mr. Currey were $6,670, $8,703, $2,224, $8,761 and
$4,377, respectively.
Agreements with Executive Officers - 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 Peat Marwick LLP as independent
auditors for the Company for the year 1999. 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 1998, 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.
11
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, 2000, provided that at the time the proposal is submitted the
proponent is a record or beneficial owner of at least 1 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 3, 2000.
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
December 2, 1999, in order to be included in the proxy statement of Brenton
Banks, Inc. for the May 3, 2000, meeting.
S.E.C. FORM 10-K AVAILABLE.
COPIES OF THE COMPANY'S 1998 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 8, 1999,
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 BRENTON BANKS, INC. PROXY
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS FOR THE ANNUAL
MEETING TO BE HELD ON MAY 19, 1999, WEST 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 West Des Moines
Marriott Hotel, West Des Moines, Iowa, at 5:00 p.m., on May 19, 1999, 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, 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 Peat Marwick LLP, Des Moines, Iowa, as
independent auditors for the Company for 1999.
[ ] 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 _______________________, 1999
(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.
FOLD AND DETACH HERE
YOUR VOTE IS IMPORTANT!
PLEASE MARK, SIGN, DATE AND RETURN THIS PROXY PROMPTLY
USING THE ENCLOSED ENVELOPE.