[ON PERRY COUNTY FINANCIAL CORPORATION LETTERHEAD]
December 22, 1999
Dear Fellow Stockholder:
On behalf of the Board of Directors and management of Perry
County Financial Corporation (the "Company"), we cordially invite
you to attend the Annual Meeting of Stockholders of the Company.
The meeting will be held at 9:30 a.m., Perryville, Missouri
time, on January 19, 2000 at the Walnut Room, American Legion
Hall, located at 98 Grand Avenue, Perryville, Missouri.
An important aspect of the annual meeting process is the
annual stockholder vote on corporate business items. I urge you
to exercise your rights as a stockholder to vote and participate
in this process. This year you are asked to vote on the election
of one director, the ratification of the appointment of Michael
Trokey & Company, P.C. as the Company's auditors for the fiscal
year ended September 30, 2000 and to vote on a resolution
proposed by a stockholder. Your Board of Directors unanimously
recommends that you vote FOR the director nominee named herein
and FOR the ratification of the appointment of independent
auditors. Your Board of Directors unanimously recommends that
you vote AGAINST the stockholder proposal.
We encourage you to attend the Meeting in person. Whether
or not you plan to attend, however, please read the enclosed
Proxy Statement and then complete, sign and date the enclosed
proxy and return it in the accompanying postpaid return envelope
as promptly as possible. This will save the Company additional
expense in soliciting proxies and will ensure that your shares
are represented at the Meeting.
Your Board of Directors and management are committed to the
continued success of Perry County Financial Corporation and the
enhancement of your investment. As President and Chief Executive
Officer, I want to express my appreciation for your confidence
and support.
Sincerely yours,
Leo J. Rozier
President and Chief Executive Officer
PERRY COUNTY FINANCIAL CORPORATION
14 North Jackson Street
Perryville, Missouri 63775
(573) 547-4581
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
To be Held on January 19, 2000
Notice is hereby given that the Annual Meeting of Stockholders
(the "Meeting") of Perry County Financial Corporation (the "Company")
will be held at the Walnut Room, American Legion Hall located at 98
Grand Avenue, Perryville, Missouri, at 9:30 a.m., Perryville, Missouri
time, on January 19,2000.
A Proxy Card and a Proxy Statement for the Meeting are enclosed.
The Meeting is for the purpose of considering and acting upon:
1. The election of one director of the Company;
2. The ratification of the appointment of Michael Trokey
& Company, P.C. as auditors for the Company for the fiscal
year ended September 30, 2000; and
3. A stockholder proposal that the Board of Directors
retain an investment banker or other qualified financial
advisor;
and such other matters as may properly come before the Meeting,
or any adjournments thereof. The Board of Directors is not aware
of any other business to come before the Meeting.
Any action may be taken on the foregoing proposals at the
Meeting on the date specified above, or on any date or dates to
which the Meeting may be adjourned. Stockholders of record at
the close of business on December 13, 1999, are the stockholders
entitled to vote at the Meeting and any adjournments thereof.
You are requested to complete and sign the enclosed form of
proxy which is solicited on behalf of the Board of Directors, and
to mail it promptly in the enclosed envelope. The Proxy will not
be used if you attend and vote at the Meeting in person.
By Order of the Board of Directors
Leo J. Rozier
President and Chief Executive Officer
Perryville, Missouri
December 22, 1999
IMPORTANT: THE PROMPT RETURN OF PROXIES WILL SAVE THE COMPANY THE EXPENSE
OF FURTHER REQUESTS FOR PROXIES TO ENSURE A QUORUM AT THE MEETING.
A SELF-ADDRESSED ENVELOPE IS ENCLOSED FOR YOUR CONVENIENCE.
NO POSTAGE IS REQUIRED IF MAILED WITHIN THE UNITED STATES.
PROXY STATEMENT
PERRY COUNTY FINANCIAL CORPORATION
14 North Jackson Street
Perryville, Missouri 63775
(573) 547-4581
ANNUAL MEETING OF STOCKHOLDERS
January 19, 2000
This Proxy Statement is furnished in connection with the
solicitation on behalf of the Board of Directors of Perry County
Financial Corporation (the "Company") of proxies to be used at
the Annual Meeting of Stockholders of the Company (the "Meeting")
which will be held at the Walnut Room, American Legion Hall
located at 98 Grand Avenue, Perryville, Missouri, on January 19,
2000 at 9:30 a.m., Perryville, Missouri time, and all
adjournments of the Meeting. The accompanying Notice of Meeting
and this Proxy Statement are first being mailed to stockholders
on or about December 22, 1999. Certain of the information
provided herein relates to Perry County Savings Bank, FSB (the
"Bank"), a wholly owned subsidiary of the Company.
At the Meeting, stockholders of the Company are being asked
to consider and vote upon (i) the election of one director of the
Company, (ii) a proposal to ratify the appointment of Michael
Trokey & Company, P.C. as the Company's auditors for the fiscal
year ending September 30, 2000 and (iii) a stockholder proposal
that the Board of Directors retain an investment banker or other
qualified financial advisor (the "Stockholder Proposal").
Vote Required and Proxy Information
All shares of Company common stock ("Common Stock")
represented at the Meeting by properly executed proxies received
prior to or at the Meeting, and not revoked, will be voted at the
Meeting in accordance with the instructions thereon. If no
instructions are indicated, properly executed proxies will be
voted FOR the nominee named herein, FOR the ratification of the
appointment of independent auditors and AGAINST the Stockholder
Proposal. The Company does not know of any matters, other than
as described in the Notice of Meeting, that are to come before
the Meeting. If any other matters are properly presented at the
Meeting for action, the persons named in the enclosed form of
proxy and acting thereunder will have the discretion to vote on
such matters in accordance with their best judgment.
Directors shall be elected by a plurality of the votes
present in person or represented by proxy at the Meeting and
entitled to vote on the election of directors. In all matters
other than the election of directors, the affirmative vote of the
majority of the shares voting on the matter shall be the act of
the shareholders. Proxies marked to abstain with respect to a
proposal have the same effect as votes against the proposal.
Broker non-votes have no effect on the vote. One-third of the
shares of the Company's Common Stock, present in person or
represented by proxy, shall constitute a quorum for purposes of
the Meeting. Abstentions and broker non-votes are counted for
purposes of determining a quorum.
A proxy given pursuant to the solicitation may be revoked at
any time before it is voted. Proxies may be revoked by: (i)
filing with the Secretary of the Company at or before the Meeting
a written notice of revocation bearing a later date than the
proxy; (ii) duly executing a subsequent proxy relating to the
same shares and delivering it to the Secretary of the Company at
or before the Meeting; or (iii) attending the Meeting and voting
in person (although attendance at the Meeting will not in and of
itself constitute revocation of a proxy). Any written notice
revoking a proxy should be delivered to James K. Young, Acting
Secretary, Perry County Financial Corporation, 14 North Jackson
Street, Perryville, Missouri 63775.
Voting Securities and Principal Holders Thereof
Stockholders of record as of the close of business on
December 13, 1999, (the "Record Date") will be entitled to one
vote for each share then held. As of that date, the Company had
741,928 shares of Common Stock issued and outstanding. The
following table sets forth information regarding share ownership
of: (i) those persons or entities known by management to
beneficially own more than five percent of the Company's Common
Stock and (ii) all directors and executive officers of the
Company and the Bank as a group.
Shares
Beneficially Percent
Beneficial Owner Owned of Class
Perry County Financial 66,523 8.97%
Corporation Employee Stock
Ownership Plan
14 North Jackson Street
Perryville, Missouri
63775(1)
The Roosevelt Group, L.L.C. 48,740 6.57
400 North Fifth Street,
Suite 200
St. Charles, Missouri 63301
and
Bradshaw Capital Management,
L.L.C.
P.O. Box 1972
Village of Pinehurst, North
Carolina 28370(2)
Gilster-Mary Lee Corporation 45,100 6.08
1037 State Street
Chester, Illinois 62233(3)
Leo J. Rozier 88,741 11.69
President and Chief
Executive Officer
14 North Jackson Street
Perryville, Missouri
63775(4)
Directors and executive 126,751 16.41
officers of the Company and
the Bank as a group (5
persons)(4)
(1) The amount reported represents shares held by the Employee
Stock Ownership Plan ("ESOP"), 20,995 of which were allocated to
accounts of participants. First Bankers Trust Co., N.A., Quincy,
Illinois, the trustee of the ESOP, may be deemed to beneficially
own the shares held by the ESOP which have not been allocated to
the accounts of participants. Pursuant to the terms of the ESOP,
participants have the right to direct the voting of shares
allocated to participant accounts.
(2) As reported on Amendment No. 1 to Schedule 13D dated
September 21, 1999. The Roosevelt Group, L.L.C. and
Bradshaw Capital Management, L.L.C. each reported sole
voting and dispositive power over the 48,740 shares of
Common Stock.
(3) As reported in a Schedule 13G dated January 29, 1999, in
which Gilster-Mary Lee Corporation reported sole voting and
dispositive power over 45,100 shares of Common Stock.
(4) Includes shares held directly, as well as jointly with
family members, and shares held in retirement accounts in a
fiduciary capacity or by certain family members, with
respect to which shares the listed individual or group
members may be deemed to have sole voting and/or investment
power. Included in the shares beneficially owned are
options to purchase shares of Common Stock granted under the
Company's 1995 Stock Option and Incentive Plan ("Stock
Option Plan"), which options are currently exercisable or
exercisable within 60 days of the Record Date, totaling
17,128 for Mr. Rozier and 30,691 for all directors and
executive officers of the Company and the Bank as a group.
2
I. ELECTION OF DIRECTORS
General
The Company's Board of Directors is currently composed of
five members, each of whom is also a director of the Bank.
Directors are generally elected to serve for three-year terms or
until their respective successors are elected and qualified. The
directors are divided into three classes, and approximately one-
third of the directors are elected annually.
The table below sets forth certain information, as of the
Record Date, regarding the composition of the Company's Board of
Directors, including each director's term of office. The entire
Board of Directors acts as the nominating committee and has
recommended and approved the nominee identified in the following
table. It is intended that the proxies solicited on behalf of
the Board of Directors (other than proxies in which the vote is
withheld as to the nominee) will be voted at the Meeting FOR the
election of the nominee identified below. If the nominee is
unable to serve, the shares represented by all valid proxies will
be voted for the election of such substitute nominee as the Board
of Directors may recommend. At this time, the Board of Directors
knows of no reason why the nominees may be unable to serve, if
elected. Except as disclosed herein, there are no arrangements
or understandings between the nominee and any other person
pursuant to which the nominee was selected.
Shares of
Name Age Position(s) Common Stock Percent
Held in the Director Term to Beneficially of
Company Since Expire Owned Class
NOMINEE
Thomas L. 51 Director 1995 2003 6,139 0.82%
Hoeh
DIRECTORS CONTINUING IN OFFICE
Leo J. 85 Chairman of the 1947 2001 88,741 11.69
Rozier Board, President
and Chief Executive
Officer
Stephen C. 48 Director, Assistant 1996 2001 13,097 1.76
Rozier Vice President and
Assistant Secretary
James K. 77 Director and Acting 1972 2002 8,637 1.16
Young Secretary
Milton A. 74 Director 1978 2002 10,137 1.36
Vogel
(1) Includes service as a director of the Bank.
(2) Amounts include shares held directly and jointly with family
members, as well as shares which are held in retirement
accounts, or held by certain members of the named
individuals' families, or held by trusts of which the named
individual is a trustee or substantial beneficiary, with
respect to which shares the respective directors may be
deemed to have sole or shared voting and/or investment
power. Included in the shares beneficially owned by the
named individuals are options to purchase shares of Common
Stock which options are currently exercisable or exercisable
within 60 days of the Record Date, totaling 17,128 for Leo
J. Rozier, 3,288 for Stephen C. Rozier, 3,425 for Mr. Young,
3,425 for Mr. Vogel and 3,425 for Mr. Hoeh.
The principal occupation of each director of the Company is
set forth below. All directors have held their present position
for at least five years unless otherwise indicated.
Thomas L. Hoeh. Mr. Hoeh has served as a Director of the
Company since June 1995. He is a graduate of the University of
Missouri Law School, having received a Juris Doctor Degree.
Since 1987, Mr. Hoeh has practiced law in Perry County, Missouri,
including serving as the County's Prosecuting Attorney.
Leo J. Rozier. Mr. Rozier serves as Chairman of the Board,
President and Chief Executive Officer for the Company, a position
he has held since its formation. Mr. Rozier has been associated
with the Bank as its attorney since 1946 and was elected to the
Board of Directors in 1947. Mr. Rozier served 4.5 years in the
Missouri House of Representatives and 8 years in the Missouri
State Senate. He is a graduate of the University of Missouri Law
School, having received a Juris Doctor Degree. He served as
President of the State Historical Society of Missouri and is now
3
a permanent Trustee. Mr. Rozier is a retired Colonel, having
served in the Infantry during World War II and subsequent thereto
in the Judge Advocate General Corps. He was a member of the
Advisory Committee for the Redevelopment Plan for Downtown
Perryville, Missouri 1990. Mr. Rozier is the father of
Stephen C. Rozier, the Company's Director, Assistant Vice
President and Assistant Secretary.
Stephen C. Rozier. Mr. Rozier has served as a Director of
the Company since September 1996, filling the vacancy caused by
the untimely death of Director Patricia E. Rozier. He is a 1974
graduate of Southeast Missouri University, having received a B.S.
degree in Secondary Education. After teaching in the Hannibal
and Ft. Zumwalt School District for six years, he joined the Bank
in 1980 and now serves as Assistant Vice President and Assistant
Secretary.
James K. Young. Mr. Young has served as a Director of the
Company since its formation and as a member of the Board of
Directors of the Bank for 27 years. Mr. Young is retired and was
a part owner/director of Young & Sons Funeral Home located in
Perryville, Missouri. He served on the Board of Directors for
the Conservation Federation of Missouri and also served as its
President and Vice President.
Milton A. Vogel. Mr. Vogel is a retired Owner/Operator of
the Lawrence & Moore Automobile Agency located in Perryville,
Missouri. Mr. Vogel has served as a Director of the Company
since its formation and of the Bank since 1978.
Meetings and Committees of the Board of Directors
Meetings and Committees of the Company. Meetings of the
Company's Board of Directors are generally held on a monthly
basis. The Board of Directors met five times in fiscal 1999.
During fiscal 1999, no incumbent director of the Company attended
fewer than 75% of the aggregate of the total number of Board
meetings and the total number of meetings held by the committees
of the Board of Directors on which he served. The Company's
directors were not paid a fee for serving on the Company's Board
during fiscal 1999.
The Board of Directors of the Company has standing Stock
Compensation, Audit, Executive and Nominating Committees.
The Stock Compensation Committee is responsible for
administering the Stock Option Plan and MRP. The Committee is
composed of Directors Vogel and Young. This Committee met once
during fiscal 1999.
The Company's Audit Committee is responsible for the review
of the Company's annual audit report prepared by the Company's
independent auditors. The review includes a detailed discussion
with the auditors and a recommendation to the full Board
concerning any action to be taken regarding the audit. The
entire Board of Directors acts as the Audit Committee, which met
once during fiscal 1999.
The Executive Committee of the Board of Directors generally
acts in lieu of the full Board of Directors between board
meetings. The members of this Committee are Chairman Rozier and
any two directors of the Company. This Committee did not meet
during the fiscal year ended September 30, 1999.
The entire Board of Directors acts as a Nominating Committee
for selecting nominees for election as directors. This Committee
met once in fiscal 1999. Nominations of persons for election to
the Board of Directors may be made only by or at the direction of
the Board of Directors or by any stockholder entitled to vote for
the election of directors who complies with the notice procedures
set forth in the Bylaws of the Company. Pursuant to the
Company's Bylaws, nominations by stockholders must be delivered
in writing to the Secretary of the Company at least 30 days prior
to the date of the annual meeting.
Meetings and Committees of the Bank. The Bank's Board of
Directors meets monthly and may have additional special meetings
as necessary. The Board of Directors met 12 times during the
year ended September 30, 1999. During fiscal 1999, no director
of the Bank attended fewer than 75% of the aggregate of the total
number of Board meetings and the total number of meetings held by
the committees of the Board of Directors on which they served.
All directors are paid fees of $787 per month. Board members
receive no additional fees for attendance of Committee meetings.
The Bank's Board has standing Audit and Executive
Committees.
4
The Audit Committee is composed of the entire Board of
Directors. The Audit Committee is responsible for reviewing the
Bank's accountant's actions. This Committee met once during the
year ended September 30, 1999.
The Executive Committee generally acts in lieu of the full
Board of Directors between Board meetings. The members of this
Committee are Chairman Rozier and any two directors of the Bank.
This Committee met twice in fiscal 1999.
Executive Compensation
The Company has not paid any compensation to its executive
officers since its formation. The Company does not presently
anticipate paying any compensation to such persons until it
becomes actively involved in the operation or acquisition of
businesses other than the Bank.
The following table sets forth information regarding
compensation paid by the Bank to its Chief Executive Officer for
services rendered during the fiscal year ended September 30,
1999. No other executive officer made in excess of $100,000
(salary plus bonus) during the fiscal year ended September 30,
1999.
SUMMARY COMPENSATION TABLE
Long-Term
Compensation
Annual Compensation Awards
Restricted
Stock Options/ All Other
Salary Bonus Award(s) SARs Compensation
Name and Principal Year ($)(1) ($) ($) (#) ($)
Position
Leo J. Rozier, 1999 $133,200 $5,363 $--- --- $2,842(2)
President and Chief
Executive Officer 1998 136,125 5,113 --- --- 3,587
1997 130,404 4,959 --- --- 2,851
(1) Includes board fees of $9,333, $8,925 and $8,625 paid in
fiscal 1999, 1998 and 1997, respectively.
(2) Includes $2,842 of life, health and accidental death
insurance premiums paid by the Bank on behalf of Mr. Rozier.
The following table provides information as to the value of
the options held by the Company's Chief Executive Officer on
September 30, 1999, none of which have been exercised. No stock
options or stock appreciation rights were granted during fiscal
1999.
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND FY-END
OPTION VALUES
Value of
Number of Unexercised
Unexercised In-the-Money
Options at Options at
FY-End (#)(1) FY-End ($)(2)
Shares
Acquired Value
Name on Realized Exercisable Unexercisable Exercisable Unexercisable
Exercise
(#) ($) (#) (#) ($) ($)
Leo J. --- $--- 12,847 8,564 $9,635 $6,423
Rozier
(1) Represents an option to purchase Common Stock awarded to
the Company's Chief Executive Officer. The option vests
in five equal annual installments. The three
installments vested on January 16, 1997, 1998 and 1999
with the remaining installments to vest equally on
January 16, 2000 and 2001.
(2) Represents the aggregate market value (market price of
the Common Stock less the exercise price) of the option
granted based upon the average of the closing bid and
the asked price of $19.75 per share of the Common Stock
as reported on the Nasdaq Small Cap Market on September
30, 1999.
5
Employment Agreement
The Bank has entered into an employment agreement with
Leo J. Rozier for a three year term. The employment
agreement provides for an annual base salary as determined by
the Board of Directors, but not less than Mr. Rozier's then
current salary. Salary increases are reviewed not less often
than annually thereafter and are subject to the sole
discretion of the Board of Directors. The employment
contract provides for an automatic extension for one
additional year by the Board of Directors at the end of each
year. The contract provides for termination upon the
employee's death, for cause or upon certain events specified
by OTS regulations. The employment contract is terminable by
the employee upon 90 days' notice to the Bank. The
employment contract provides for payment to the employee, in
the event there is a change in control of the Company or the
Bank, as defined in such agreement, where employment
terminates involuntarily in connection with such change in
control or within 12 months thereafter, of the remaining
salary payable under the contract, plus a termination payment
equal to 299% of Mr. Rozier's "base compensation" as defined
under Section 280G of the Internal Revenue Code of 1986, as
amended (the "Code"), provided that total payments under the
agreement may not exceed three times the employee's annual
salary or an amount that would cause certain adverse tax
consequences to the Bank and the employee under Section 280G
of the Code. Assuming a change in control were to take place
as of September 30, 1999, the aggregate amounts payable to
Mr. Rozier pursuant to this change in control provision would
be approximately $400,000. The contract provides, among
other things, for participation in an equitable manner in
employee benefits applicable to executive personnel. This
employment contract may be deemed to have an "anti-takeover"
effect that could affect a proposed future acquisition of
control of the Bank.
Certain Transactions
The Bank has followed a policy of granting loans to
eligible directors, officers, employees and members of their
immediate families for the financing of their personal
residences. All such loans to directors and executive
officers are required to be made in the ordinary course of
business and on the same terms, including collateral and
interest rates, as those prevailing at the time for
comparable transactions and do not involve more than the
normal risk of collectibility. Loans to employees (other
than executive officers) are made at reduced interest rates
which are one-half percent per annum off the stated rates for
customers, with a waiver of any initial service charge.
However, should the employee voluntarily leave the employment
of the Bank, the interest rate
would return to the regular rate at the time of departure.
At September 30, 1999, the Bank's loans to directors,
executive officers, employees and members of their immediate
families totaled $255,725 or 1.9% of the Company's
stockholders' equity.
All loans by the Bank to its executive officers and
directors are subject to OTS regulations restricting loans
and other transactions with affiliated persons of the Bank.
Federal law prohibits a savings association from making loans
to its executive officers and directors at favorable rates or
on terms not comparable to those prevailing to the general
public.
At September 30, 1999, the Bank had the following loans
to its directors, executive officers and their affiliates
whose aggregate indebtedness exceeded $60,000 at any time
since September 30, 1998.
Largest Balance
Amount at
Name and Position Date Type of Outstanding September Interest
Loan Loan Since 30, 1999 Rate
September
30, 1998
Thomas L. Hoeh 4/14/99 Mortgage $185,000 $182,620 6.85%
Director
Stephen C. 2/3/99 Mortgage 75,000 73,105 6.375
Rozier(1)
Director,
Assistant Vice
President and
Assistant
Secretary
(1) Stephen C. Rozier is the son of Leo Rozier.
6
II. RATIFICATION OF THE APPOINTMENT OF AUDITORS
The Board of Directors has renewed the Company's arrangement
with Michael Trokey & Company, P.C. to be its auditors for the
2000 fiscal year, subject to the ratification of the appointment
by the Company's stockholders. A representative of Michael
Trokey & Company, P.C. is expected to attend the Annual Meeting
to respond to appropriate questions and will have an opportunity
to make a statement if he so desires.
THE BOARD OF DIRECTORS RECOMMENDS THAT STOCKHOLDERS VOTE
"FOR" THE RATIFICATION OF THE APPOINTMENT OF MICHAEL TROKEY &
COMPANY, P.C. AS THE COMPANY'S AUDITORS FOR THE FISCAL YEAR
ENDING SEPTEMBER 30, 2000.
III. STOCKHOLDER PROPOSAL
Management receives suggestions and proposals throughout the
year from stockholders, customers of the Company and others.
Such proposals are welcomed, and management seeks to assure that
its views on the action it proposes to take in their
implementation or rejection are communicated to the proponent.
Some proposals from stockholders are presented to the Company in
the form of resolutions, and they may be adopted and implemented
by management after review with and agreement by their
proponents, and, therefore, need not be presented to the
stockholders. Other resolutions from stockholders, like the one
presented below, are properly presented to the Company, but are
regarded by management as not being in the best interests of the
Company or its stockholders, and are presented in the proxy
materials to the stockholders for a vote as required by law.
The name, address and number of shares held by the
stockholder submitting the following proposal will be furnished
by the Company to any person either orally or in writing as
requested, promptly upon the receipt of any oral or written
request therefor.
Proposed Resolution
"RESOLVED, that the shareholders of Perry County
Financial Corporation hereby authorize and direct the
Board of Directors to retain the services of an
investment banker or other qualified financial advisor
for the purpose of reviewing the Corporation's
financial performance and advising the Board of various
means to improve the value of the Corporation's stock
and otherwise provide the Corporation's shareholders
with a reasonable rate of return on their investment in
the Corporation, including, without limitation, the
potential sale of the Corporation."
"If you agree with this Proposal, please mark your
proxy FOR. Otherwise, abstentions may have the same
effect as "no" votes."
Supporting Statement
"The Corporation has been a publicly traded
company since February of 1995. The four and one half
years since the Corporation's initial public offering
is a sufficiently long time frame for the Corporation
to have developed and implemented an appropriate plan
to effectively deploy capital, grow corporate earnings
and create shareholder value.
During this period the Company has not
demonstrated that it can generate more than a 5% return
on shareholders' equity for any substantial period of
time. The Corporation's common stock first traded above
$20.00 per share during the fourth quarter of 1995 and
the weighted average trading price for July and August,
1999 was below $20.00 per share; meaning that the
Corporation's shareholders have lost value during a
four year period. In contrast, shareholders in other
comparable companies (as represented by the SNL
Securities Thrift Index) have enjoyed gains averaging
over 100% during the same time period.
During the relevant period the Corporation has
consistently operated with a loan-to-deposit ratio of
less than 25% - meaning that the Corporation has not
deployed, and therefore did not need all of its
existing shareholders' equity. During the period when
the
7
Corporation has underutilized its capital, the
financial institution industry's economic operating
environment has been ideal in terms of stable interest
rates and low inflation. Most financial experts
forecast a less positive economic operating environment
in terms of stable interest rates and low inflation for
the next four years.
To summarize, the Corporation's economic
performance has been poor during the past four years
despite ideal economic conditions. Because of the
substantial likelihood that economic conditions will
not be as favorable during the next four years,
prudence dictates that the Board of Directors take
proactive steps to maximize shareholder value. The
engagement of a financial advisor to assist in this
process is essential. The proponent strongly encourages
you to vote FOR the resolution on your ballot. Thank
you."
Response of the Board of Directors
The Company is served by an independent Board of Directors.
Three of the five current Board members have never been employed
by the Company. This Board, consistent with its fiduciary duties
to all stockholders, frequently considers actions, policies and
opportunities that it believes will maximize value for all
stockholders. In the exercise of its fiduciary duties, the Board
carefully considers all opportunities to increase stockholder
value, including all bona fide proposals for acquisitions or
mergers of, or by, the Company as they arise. Accordingly, we
believe that the Stockholder Proposal calls for redundant and
unnecessary Board activity.
In addition, the Board of Directors believes that the
proponent's statement is erroneous and misleading. The proponent
states that the Company has had poor economic performance, but,
in fact, the Company had earnings of $916,000 for the year ended
September 30, 1999, resulting in basic and diluted earnings per
share of $1.23 and $1.22, respectively. With regard to
stockholder value, the Company's stock has delivered an
annualized return of more than 16% since the initial public
offering ("IPO") price of $10.00 per share in February 1995. The
Company has paid an annual cash dividend since the first payment
in 1996, ranging from $0.30 per share in fiscal 1996 to $0.50 per
share in each of fiscal 1998 and 1999.
Finally, the Board of Directors believes that a "fire-sale"
atmosphere could be created if the Stockholder Proposal is
approved. In our judgment, this would disadvantage any efforts
to accomplish a merger or acquisition of, or by, the Company,
whether now or in the future. Approval of the Stockholder
Proposal might be regarded as a signal that the Board of
Directors, under pressure from dissident stockholders, has lost
its ability to determine the appropriateness of the timing of a
merger or acquisition of the Company, and thus has little
bargaining power and could be pressured into accepting less
advantageous financial terms than the Board and management might
otherwise negotiate. In the Board's view, this would be a
disservice to our stockholders, our depositors and the
communities we serve.
ACCORDINGLY, THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE
"AGAINST" THIS PROPOSAL, AND YOUR PROXY WILL BE SO VOTED UNLESS
YOU SPECIFY OTHERWISE.
The proposal will be approved if a majority of votes cast by
the holders of shares are cast in favor of the proposal. Failure
to vote or a vote to abstain is equivalent to voting against the
Stockholder Proposal. However, the proposal is only advisory and
is not binding on the Company's Board of Directors. The Board
has not decided what action, if any, it will take should the
proposal be approved.
STOCKHOLDER PROPOSALS
In order to be eligible for inclusion in the Company's proxy
materials for the next Annual Meeting of Stockholders, any
stockholder proposal to take action at such meeting must be
received at the Company's office located at 14 North Jackson
Street, Perryville, Missouri 63775, no later than August 24,
2000. Any such proposal shall be subject to the requirements of
the proxy rules adopted under the Exchange Act. Otherwise, any
stockholder proposal to take action at such meeting must be
received at the Company's office, at 14 North Jackson Street,
Perryville, Missouri 63775 between the dates of November 20, 2000
and December 20, 2000 (i.e., not less than 30 days nor more than
60 days prior to next years anticipated annual meeting date). In
the event that the date of next year's annual meeting changes, a
stockholder proposal must be received not less than 30 days nor
more
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than 60 days prior to the new date of such annual meeting;
provided, however, that in the event that less than 40 days
notice or prior public disclosure of the new date of annual
meeting is given or made to stockholders, notice of a proposal by
a stockholder to be timely must be received not latter than the
close of business on the tenth day following the day on which
notice of the new date of the annual meeting was mailed or public
announcement of the new date of such meeting was made. All
stockholder proposals must also comply with the Company's bylaws
and Missouri law.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934
requires the Company's directors and executive officers, and
persons who own more than 10% of the Company's Common Stock (or
any other equity securities, of which there is none), to file
with the Securities and Exchange Commission (the "SEC") initial
reports of ownership and reports of changes in ownership of the
Company's Common Stock. Officers, directors and greater than 10%
shareholders are required by SEC regulations to furnish the
Company with copies of all Section 16(a) forms they file.
To the Company's knowledge, based solely on a review of the
copies of such reports furnished to the Company and written
representations that no other reports were required during the
fiscal year ended September 30, 1999, all Section 16(a) filing
requirements applicable to its officers, directors and greater
than 10% beneficial owners were complied with except that Mr.
Stephen C. Rozier inadvertently failed to file a Form 3 within
ten days of becoming a director. Mr. Rozier filed the Form 3 on
November 18, 1999.
OTHER MATTERS
The Board of Directors is not aware of any business to come
before the Meeting other than those matters described above in
this Proxy Statement. However, if any other matter should
properly come before the Meeting, it is intended that holders of
the proxies will act in accordance with their best judgment.
The cost of solicitation of proxies will be borne by the
Company. The Company will reimburse brokerage firms and other
custodians, nominees and fiduciaries for reasonable expenses
incurred by them in sending proxy materials to the beneficial
owners of Common Stock. In addition to solicitation by mail,
directors, officers and regular employees of the Company and/or
the Bank may solicit proxies personally or by telegraph or
telephone without additional compensation.
BY ORDER OF THE BOARD OF DIRECTORS
Leo J. Rozier
President and Chief Executive
Officer
Perryville, Missouri
December 22, 1999
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