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
[x] Definitive proxy statement
[ ] Definitive additional materials
[ ] Soliciting material pursuant to Rule 14a-11(c) or Rule 14a-12
LEXINGTON B & L FINANCIAL CORP.
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(Name of Registrant as Specified in Its Charter)
LEXINGTON B & L FINANCIAL CORP.
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(Name of Person(s) Filing Proxy Statement)
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 securities to which transaction applies:
N/A
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(2) Aggregate number of securities to which transactions applies:
N/A
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(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11:
N/A
- ----------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
N/A
- ----------------------------------------------------------------------------
[ ] 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 offsetting 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:
N/A
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(2) Form, schedule or registration statement no.:
N/A
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(3) Filing party:
N/A
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(4) Date filed:
N/A
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PAGE
December 13, 1996
Dear Shareholder:
You are cordially invited to attend the First Annual Meeting of
Shareholders of Lexington B & L Financial Corp. to be held at the office of B
& L Bank, 919 Franklin Avenue, Lexington, Missouri, on Monday, January 27,
1997, at 10:00 a.m., Central Time. The Corporation is the parent holding
company of B & L Bank.
The attached Notice of the First Annual Meeting of Shareholders and
Proxy Statement describe the formal business to be transacted at the meeting.
During the meeting, we will also report on the operations of the Corporation.
Directors and officers of the Corporation, as well as a representative of
Moore, Horton & Carlson, P.C., the Corporation's independent auditors, will
be present to respond to appropriate questions of shareholders.
To ensure proper representation of your shares at the meeting, the
Board of Directors requests that you sign, date and return the enclosed proxy
card in the enclosed postage-prepaid envelope as soon as possible, even if
you currently plan to attend the meeting. This will not prevent you from
voting in person, but will assure that your vote is counted if you are unable
to attend the meeting.
We look forward to seeing you at the meeting.
Sincerely,
/s/ Erwin Oetting, Jr.
Erwin Oetting, Jr.
President and Chief
Executive Officer
PAGE
LEXINGTON B & L FINANCIAL CORP.
919 Franklin Avenue
P.O. Box 190
Lexington, Missouri 64067
(816) 259-2247
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NOTICE OF FIRST ANNUAL MEETING OF SHAREHOLDERS
To Be Held on January 27, 1997
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NOTICE IS HEREBY GIVEN that the First Annual Meeting of Shareholders
("Meeting") of Lexington B & L Financial Corp. ("Corporation") will be held
at the office of B & L Bank, 919 Franklin Avenue, Lexington, Missouri, on
Monday, January 27, 1997, at 10:00 a.m., Central Time.
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 two directors of the Corporation;
2. The ratification of the adoption of the Lexington B & L
Financial Corp. 1996 Stock Option Plan;
3. The ratification of the adoption of the Lexington B & L
Financial Corp. 1996 Management Recognition and Development
Plan; and
4. Such other matters as may properly come before the Meeting or
any adjournments thereof.
NOTE: The Board of Directors is not aware of any other business to
come before the Meeting.
Any action may be taken on any one of the foregoing proposals at the
Meeting on the date specified above or on any date or dates to which, by
original or later adjournment, the Meeting may be adjourned. Pursuant to the
Corporation's Bylaws, the Board of Directors has fixed the close of business
on December 2, 1996 as the record date for the determination of the
shareholders entitled to notice of and to vote at the Meeting and any
adjournments thereof.
You are requested to complete and sign the enclosed form of proxy,
which is solicited by the Board of Directors, and to mail it promptly in the
enclosed envelope. The proxy will not be used if you attend the Meeting and
vote in person.
BY ORDER OF THE BOARD OF DIRECTORS
/s/ E. Steva Vialle
E. STEVA VIALLE
SECRETARY
Lexington, Missouri
December 13, 1996
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IMPORTANT: THE PROMPT RETURN OF PROXIES WILL SAVE THE CORPORATION THE
EXPENSE OF FURTHER REQUESTS FOR PROXIES IN ORDER TO ENSURE A QUORUM. A
SELF-ADDRESSED ENVELOPE IS ENCLOSED FOR YOUR CONVENIENCE. NO POSTAGE IS
REQUIRED IF MAILED IN THE UNITED STATES.
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PROXY STATEMENT
OF
LEXINGTON B & L FINANCIAL CORP.
919 Franklin Avenue
P.O. Box 190
Lexington, Missouri 64067
(816) 259-2247
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FIRST ANNUAL MEETING OF SHAREHOLDERS
January 27, 1997
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This Proxy Statement is furnished in connection with the
solicitation of proxies by the Board of Directors of Lexington B & L
Financial Corp. ("Corporation") to be used at the First Annual Meeting of
Shareholders of the Corporation ("Meeting"). The Meeting will be held at the
office of B & L Bank, 919 Franklin Avenue, Lexington, Missouri, on Monday,
January 27, 1997, at 10:00 a.m., Central Time. The Corporation is the
holding company for B & L Bank ("Bank"). The accompanying Notice of First
Annual Meeting of Shareholders and this Proxy Statement are being first
mailed to shareholders on or about December 13, 1996.
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REVOCATION OF PROXIES
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Shareholders who execute proxies retain the right to revoke them at
any time. Unless so revoked, the shares represented by such proxies will be
voted at the Meeting and at all adjournments thereof. Proxies may be revoked
by written notice delivered in person or mailed to the Secretary of the
Corporation at 919 Franklin Avenue, P.O. Box 190, Lexington, Missouri 64067,
or by the filing of a later-dated proxy prior to a vote being taken on a
particular proposal at the Meeting. A previously submitted proxy also will
be revoked if a shareholder attends the Meeting and votes in person. Proxies
solicited by the Board of Directors of the Corporation will be voted in
accordance with the directions given therein. Where no instructions are
indicated, proxies will be voted for the nominees for directors set forth
below and in favor of each of the other proposals set forth in this Proxy
Statement for consideration at the Meeting.
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VOTING SECURITIES AND SECURITY OWNERSHIP OF CERTAIN
BENEFICIAL OWNERS AND MANAGEMENT
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Shareholders of record as of the close of business on December 2,
1996 are entitled to one vote for each share of common stock of the
Corporation ("Common Stock") then held. Shareholders are not permitted to
cumulate their votes for the election of directors. As of December 2, 1996,
the Corporation had 1,265,000 shares of Common Stock issued and outstanding.
The presence, in person or by proxy, of at least a majority of the
total number of outstanding shares of Common Stock entitled to vote is
necessary to constitute a quorum at the Meeting. The two directors to be
elected at the Meeting will be elected by a plurality of the votes cast by
the shareholders present in person or by proxy and entitled to vote. With
regard to the election of directors, votes may be cast for or withheld from
each nominee. Votes that are withheld will have no effect on the outcome of
the election because directors will be elected by a plurality of votes cast.
Abstentions may be specified on all proposals submitted to a shareholder vote
other than the election of directors. Abstentions will be counted as present
for purposes of determining the existence of a quorum regarding the proposal
on which the abstention is noted. Thus, abstentions on the Corporation's
proposals to ratify the adoption of the 1996 Stock Option Plan and to ratify
the adoption of the Management Recognition and Development Plan will have the
effect of a vote against such proposals. Broker non-votes will be counted
for purposes of determining the existence of a quorum, but will not be
counted for determining the number of votes cast with respect to a proposal
and, accordingly, will have no effect on the outcome of such proposal.
Persons and groups who beneficially own in excess of 5% of the
Corporation's Common Stock are required to file certain reports with the
Securities and Exchange Commission ("SEC") regarding such ownership pursuant
to the Securities Exchange Act of 1934, as amended ("Exchange Act"). Based
upon such reports, the following table sets forth, as of December 2, 1996,
certain information as to those persons who were beneficial owners of more
than 5% of the outstanding shares of Common Stock. Management knows of no
persons other than those set forth below who owned more than 5% of the
outstanding shares of Common Stock at December 2, 1996. The table also sets
forth, as of December 2, 1996, information as to the shares of Common Stock
beneficially owned by each director, the "named executive officer" of the
Corporation, and all executive officers and directors of the Corporation as a
group.
Amount and Nature Percent of
of Beneficial Common Stock
Beneficial Owner Ownership(1) Outstanding
- ---------------- ------------ -----------
Beneficial Owners of More Than 5%
B & L Bank
Employee Stock
Ownership Plan Trust 101,200 8.00%
Jerome H. Davis
Susan B. Davis 109,200(2) 8.63(2)
Directors and Named Executive Officer (3)
Erwin Oetting, Jr.,
President and
Chief Executive Officer 15,000 1.19
Steve Oliaro 10,700 0.85
Norman Vialle 7,500 0.59
Charles R. Wilcoxon 7,000 0.55
E. Steva Vialle 7,500 0.59
Glenn H. Twente 5,000 0.40
All Executive Officers and
Directors as a
Group (8 persons) 57,730 4.56
____________________
(1) Pursuant to Rule 13d-3 under the Exchange Act, a person is deemed to be
the beneficial owner, for purposes of this table, of any shares of the
Corporation's Common Stock if he or she has voting and/or investment
power with respect to such security or has a right to acquire, through
the exercise of outstanding options or otherwise, beneficial ownership
at any time within 60 days from December 2, 1996. The table includes
shares owned by spouses, other immediate family members in trust, shares
held in retirement accounts or funds for the benefit of the named
individuals, and other forms of ownership, over which shares the named
persons possess voting and/or investment power.
(2) Based on a Schedule 13D dated September 11, 1996.
(3) Under SEC regulation, the term "named executive officer" is defined to
include the chief executive officer, regardless of compensation level,
and the four most highly compensated executive officers, other than the
chief executive officer, whose total annual salary and bonus for the
last completed fiscal year exceeded $100,000. Erwin Oetting, Jr. was
the Corporation's only "named executive officer" for the fiscal year
ended September 30, 1996. He is also a director of the Corporation.
2
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PROPOSAL I - ELECTION OF DIRECTORS
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The Corporation's Board of Directors consists of six members. The
Board is divided into three classes with staggered terms, and each director
is elected for a three-year term. Two directors will be elected at the
Meeting to serve for a three year period, or until their respective
successors have been elected and qualified. The Board of Directors has
nominated for election as directors Norman Vialle and Charles R. Wilcoxon.
The nominees are current members of the Boards of Directors of the
Corporation and the Bank. Each director of the Corporation is also a
director of the Bank.
If any nominee is unable to serve, the shares represented by all
valid proxies will be voted for the election of such substitute as the Board
of Directors may recommend. At this time, the Board knows of no reason why
any nominee might be unavailable to serve.
The Board of Directors recommends that shareholders vote "FOR" the
election of Messrs. N. Vialle and Wilcoxon.
The following table sets forth certain information regarding the
nominees for election at the Meeting, as well as information regarding those
directors continuing in office after the Meeting.
Principal Year
Occupations First Term
During Last Elected to
Name Age Five Years Directors(1) Expire
- ---- --- ----------- ------------ ------
BOARD NOMINEES
Norman Vialle(3) 70 Retired owner 1964 2000(4)
and operator
of Maid-Rite
Drive-In,
Lexington,
Missouri
Charles R. Wilcoxon 84 Retired 1962 2000(4)
businessman.
DIRECTORS CONTINUING IN OFFICE
Erwin Oetting, Jr. 56 President and 1966 1999
Chief Executive
Officer of the
Corporation
and President,
Chairman of
the Board and
Chief Executive
Officer of the
Bank.
Steve Oliaro 51 Owner of Baker 1989 1999
Memorials, Inc.
and sole proprietor
of Custom Grafix
Design, both in
Lexington,
Missouri.
E. Steva Vialle(3) 45 Treasurer, Chief 1992 1998
Financial Officer
and Secretary of
the Corporation
and Executive Vice
President, Chief
Operating Officer
and Secretary of
the Bank.
Glenn H. Twente 69 Retired 1981 1998
chiropractor.
(footnotes on following page)
3
- ------------------
(1) At September 30, 1996.
(2) Includes prior service on the Board of Directors of the Bank.
(3) Norman Vialle is the uncle of E. Steva Vialle.
(4) Assuming re-election at the Meeting.
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MEETINGS AND COMMITTEES OF THE BOARD OF DIRECTORS
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The Boards of Directors of the Corporation and the Bank conduct
their business through meetings and committees of the Boards. During the
fiscal year ended September 30, 1996, the Board of Directors of the
Corporation held one meeting in connection with its initial organization and
eight subsequent meetings and the Board of Directors of the Bank held 26
meetings. No director of the Corporation or the Bank attended fewer than 75%
of the total meetings of the Boards and committees on which such Board member
served during this period.
The entire Board of Directors functions as an audit committee to
receive and review reports prepared by the Bank's outside auditor and as a
compensation committee to review and establish annual employee salary
increases and bonuses. During the fiscal year ended September 30, 1996, the
Board of Directors met once in its capacity as an audit committee and once in
its capacity as a compensation committee.
The Executive Committee, consisting of Directors Oetting, E. Vialle,
N. Vialle and Oliaro, meets as needed. All actions of the Executive Committee
are subsequently ratified by the full Board of Directors. The Executive
Committee did not meet during the fiscal year ended September 30, 1996.
The Board of Directors of the Corporation acts as a nominating
committee for selecting the nominees for election as directors. Section 2.16
of the Corporation's Bylaws provides that if a shareholder intends to
nominate a candidate for election as a director, the shareholder must deliver
written notice of his or her intention to the Secretary of the Corporation
not less than thirty days nor more than sixty days prior to the date of a
meeting of shareholders; provided, however, that if less than forty days'
notice or prior public disclosure of the date of the meeting is given or made
to shareholders, such written notice must be delivered to the Secretary of
the Corporation not later than the close of the tenth day following the day
on which notice of the meeting was mailed to shareholders or such public
disclosure was made. The notice must set forth all information as would be
required to be included in a proxy statement soliciting proxies for the
election of the proposed nominee pursuant to the Exchange Act, including,
without limitation, such person's written consent to being named in the proxy
statement as a nominee and to serving as a director, if elected, and, as to
the shareholder giving such notice, his or her name and address as they
appear on the Corporation's books, and the class and number of shares of the
Corporation which are beneficially owned by such shareholder. The Board of
Directors met once in its capacity as the nominating committee to select the
nominees for election as directors at the Meeting.
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DIRECTORS' COMPENSATION
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All of the Directors of the Corporation currently serve on the Board
of Directors of the Bank. Directors of the Bank received a fee of $625 per
month during the year ended September 30, 1996. No additional compensation
is paid for service on the Board of Directors of the Corporation. Directors'
fees totalled $39,600 for the fiscal year ended September 30, 1996.
The Bank has adopted a retirement plan to help ensure the retention
of directors of experience and ability in key positions of responsibility by
providing such directors with a retirement benefit upon their retirement from
the Board of Directors. The plan provides that a director who retires from
the Board with specified years of service will be designated a director
emeritus and continue to receive the compensation payable to members of the
Board for a period of five years following retirement. The same benefit
would be payable to the director (or his designated
4
beneficiary) in the event of his death or disability while serving on the
Board if the director was otherwise eligible to receive the normal retirement
benefit. In the event of a change in control of the Bank (as defined in the
plan), the plan provides that all directors would be deemed retired and the
then present value of the normal retirement benefit would be payable in a
lump sum to each director on the effective date of the change in control.
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EXECUTIVE COMPENSATION
- ----------------------------------------------------------------------------
Summary Compensation Table. The following information is furnished
for the named executive officer.
Annual Compensation(1)
-------------------------------
Name and Other Annual
Position Year Salary Bonus Compensation
- -------- ---- ------ ----- -------------
Erwin Oetting, Jr., 1996 $71,899 $7,055 $10,073(2)
President and Chief 1995 70,849 6,875 7,565
Executive Officer
- ---------------------
(1) All compensation is paid by the Bank. Compensation information for
prior fiscal years has been omitted because the Corporation was neither
a public company nor a subsidiary thereof at such times. Excludes
certain additional benefits, the aggregate amounts of which do not
exceed 10% of total salary and bonus.
(2) Consists of directors' fees of $6,600 and a $3,473 salary received from
the Bank's service corporation.
Employment Agreements. The Corporation and the Bank (collectively,
the "Employers") have entered into a three-year employment agreement with Mr.
Oetting. Under the agreement, the salary level for Mr. Oetting is $71,899,
which amount will be paid by the Bank and may be increased at the discretion
of the Board of Directors or an authorized committee of the Board. In
determining the salary level for Mr. Oetting, the Board will consider
compensation levels for similarly situated executives at comparable
institutions, the financial performance of the Bank, as well as his
individual performance. On each anniversary of the commencement date of the
agreement, the term of the agreement may be extended for an additional year.
The agreement is terminable by the Employers at any time or upon the
occurrence of certain events specified by federal regulations.
The employment agreement provides for severance payments and other
benefits in the event of involuntary termination of employment in connection
with any change in control of the Employers. Severance payments also will be
provided on a similar basis in connection with a voluntary termination of
employment where, subsequent to a change in control, Mr. Oetting is assigned
duties inconsistent with his positions, duties, responsibilities and status
immediately prior to such change in control. The term "change in control" is
defined in the agreement as having occurred when, among other things, (a) a
person other than the Corporation purchases shares of Common Stock pursuant
to a tender or exchange offer for such shares, (b) any person (as such term
is used in Sections 13(d) and 14(d)(2) of the Exchange Act) is or becomes the
beneficial owner, directly or indirectly, of securities of the Corporation
representing 25% or more of the combined voting power of the Corporation's
then outstanding securities, (c) the membership of the Board of Directors
changes as the result of a contested election, or (d) shareholders of the
Corporation approve a merger, consolidation, sale or disposition of all or
substantially all of the Corporation's assets, or a plan of partial or
complete liquidation.
The severance payment from the Employers will equal 2.99 times the
executive's average annual compensation during the five-year period preceding
the change in control. Such amount will be paid in a lump sum within 10
business days following the termination of employment. Assuming that a
change in control had occurred at September 30, 1996, Mr. Oetting would have
been entitled to severance payments of approximately $215,000. Section 280G
of the Internal Revenue Code of 1986, as amended ("Code") states that
severance payments that equal or exceed three times the base compensation of
the individual are deemed to be "excess parachute payments" if they
5
are contingent upon a change in control. Individuals receiving excess
parachute payments are subject to a 20% excise tax on the amount of such
excess payments, and the Employers would not be entitled to deduct the amount
of such excess payments.
The agreement restricts the executive's right to compete against the
Employers for a period of one year from the date of termination of the
agreement if Mr. Oetting voluntarily terminates employment, except in the
event of a change in control.
The Employers have also entered into employment agreements with
other executive officers of the Corporation and the Bank on substantially
similar terms.
Salary Continuation Agreements. The Bank has entered into salary
continuation agreements with Mr. Oetting to ensure his continued service with
the Bank through retirement and to provide him with additional financial
security at retirement. The agreement provides that if Mr. Oetting remains
employed by the Bank through the retirement age specified in the Agreement,
the Bank will provide him with monthly benefits of $2,917 for a period of 180
months following retirement. The agreement provides for retirement at age 60
for Mr. Oetting. Under the agreement, Mr. Oetting will vest ratably in his
salary continuation benefit over the number of years remaining to the
specified retirement age. However, in the event of a change in control of
the Corporation or the Bank (as defined in the agreements), Mr. Oetting would
be fully vested as of the effective date of the change in control. In the
event that Mr. Oetting terminates his employment with the Corporation or the
Bank prior to the specified retirement age, the retirement benefit will be
reduced to the amount of the vested benefit on the date of termination. In
the event of the Mr. Oetting's death while employed by the Corporation or the
Bank, his designated beneficiary will receive the same benefit as Mr. Oetting
had retired at the specified retirement age. The Bank accrued compensation
expense of approximately $29,000 with respect to its liability to Mr. Oetting
under the terms of the salary continuation agreement.
The Bank has also entered into a salary continuation agreement with
another executive officer of the Corporation and the Bank on substantially
similar terms.
Defined Benefit Plan. The Bank is a participant in the Financial
Institution Retirement Fund ("FIRF"), a multi-employer, non-contributory
defined benefit retirement plan. The FIRF plan covers all employees who have
completed one year of service and have attained the age of 21 years and
provides for monthly retirement benefits determined based on the employee's
base salary and years of service after June 1, 1988. The normal retirement
age is 65 and the early retirement age is before age 65, but generally after
age 55. Normal retirement benefits are equal to 2.0% multiplied by the years
of service to the Bank and the employee's average salary for the five highest
consecutive years preceding retirement. Benefits under the plan are not
subject to offset for social security benefits. If an employee elects early
retirement, but defers the receipt of benefits until age 65, the formula for
computation of early retirement benefits is the same as if the employee had
retired at the normal retirement age. However, if the employee elects early
retirement and receives benefits prior to age 65, benefits are reduced by
applying an early retirement factor based on the number of years the early
retirement date precedes age 65. If a participant terminates employment
prior to the normal retirement date or early retirement date as a result of
disability, the participant would receive the vested percentage of benefits
at the participant's normal retirement date. Separate actuarial valuations
are not made for individual members of the plan. Pension costs and funding
include normal costs. According to FIRF, plan assets exceeded vested
benefits as of June 30, 1995, the date of the most current actuarial
valuation. Pension expense for the fiscal year ended September 30, 1996 was
$27,000. As of September 30, 1996, Mr. Oetting had 8.5 years of credited
service under the plan.
6
The following table illustrates annual pension benefits payable at
normal retirement age, based on various levels of compensation and years of
service.
Years of Service
Highest Five Year --------------------------------------------
Compensation 5 10 15 25 35
- ----------------- --------------------------------------------
$ 10,000 . . . . 1,000 2,000 3,000 5,000 7,000
20,000 . . . . 2,000 4,000 6,000 10,000 14,000
30,000 . . . . 3,000 6,000 9,000 15,000 21,000
40,000 . . . . 4,000 8,000 12,000 20,000 28,000
60,000 . . . . 6,000 12,000 18,000 30,000 42,000
80,000 . . . . 8,000 16,000 24,000 40,000 56,000
100,000 . . . . 10,000 20,000 30,000 50,000 70,000
120,000 . . . . 12,000 24,000 36,000 60,000 84,000
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COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT
- ----------------------------------------------------------------------------
Section 16(a) of the Exchange Act requires certain officers of the
Corporation and its directors, and persons who beneficially own more than 10%
of any registered class of the Corporation's equity securities, to file
reports of ownership and changes in ownership with the SEC.
Based solely on a review of the reports and written representations
provided to the Corporation by the above referenced persons, the Corporation
believes that during the fiscal year ended September 30, 1996 all filing
requirements applicable to its reporting officers, directors and greater than
ten percent beneficial owners were properly and timely complied with.
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TRANSACTIONS WITH MANAGEMENT
- ----------------------------------------------------------------------------
As required by federal regulations, all loans or extensions of
credit to executive officers and directors are made on substantially the same
terms, including interest rates and collateral, as those prevailing at the
time for comparable transactions with other persons and do not involve more
than the normal risk of repayment or present other unfavorable features. In
addition, loans made by the Bank to a director or executive officer in an
amount that, when aggregated with the amount of all other loans by the Bank
to such person and his or her related interests, are in excess of the greater
of $25,000, or 5% of the Bank's capital and surplus (up to a maximum of
$500,000), are subject to approval in advance by a majority of the
disinterested members of the Board of Directors. At September 30, 1996,
loans outstanding to directors, executive officers and their associates
totalled approximately $208,000.
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PROPOSAL II - RATIFICATION OF 1996 STOCK OPTION PLAN
- ----------------------------------------------------------------------------
The Corporation's Board of Directors adopted the 1996 Stock Option
Plan ("Option Plan") on November 27, 1996, subject to approval by the
Corporation's shareholders. Assuming shareholder approval, the Option Plan
will be effective on June 6, 1997. By postponing the effective date, the
Option Plan will not be subject to certain regulatory restrictions otherwise
applicable to plans implemented prior to the first anniversary of the Bank's
mutual to stock conversion. The following description of the Option Plan is
qualified in its entirety by reference to the complete text of the Option
Plan which is attached as Exhibit A.
7
PAGE
Administration of the Option Plan
The Option Plan is administered by a committee of the Board of
Directors ("Committee") consisting of not less than two non-employee members
of the Board of Directors. In addition to determining who will be granted
options, the Committee has the authority and discretion to determine when
options will be granted and the number of options to be granted. In making
such determination, the Committee will consider those non-employee directors,
officers and employees who are expected to make significant contributions to
the long-term success of the Corporation and the Bank. With respect to
awards to officers and employees, the Committee also determines which options
are intended to qualify for special treatment under the Internal Revenue Code
("Incentive Stock Options") or to be issued as options which are not intended
to so qualify ("Non-Qualified Stock Options"). The Option Plan provides that
all options granted to non-employee directors are Non-Qualified Stock
Options.
The Board of Directors may from time to time amend or terminate the
Option Plan in any respect. An amendment to the Option Plan may be subject
to shareholder approval if such approval is necessary to comply with any tax
or regulatory requirement. No amendment or termination may retroactively
impair the rights of any person with respect to an option.
Shares Subject to the Option Plan
The Corporation has reserved an aggregate of 126,500 shares of the
Corporation's Common Stock for issuance pursuant to the exercise of stock
options which may be granted to officers, employees and non-employee
directors.
In the event of a merger, consolidation, sale of all or
substantially all of the property of the Corporation, reorganization,
recapitalization, reclassification, stock dividend, stock split, reverse
stock split or other distribution, to the extent permitted by the
Corporation, an appropriate and proportionate adjustment shall be made in (i)
the maximum number of shares available, (ii) the number and kind of shares
subject to outstanding options, if any, and (iii) the price for each share.
Option Price
The exercise price of Non-Qualified Stock Options and Incentive
Stock Options may not be less than 100% of the fair market value of the
shares of Common Stock of the Corporation on the date of grant. Any
Incentive Stock Option granted to a person owning more than 10% of the
Corporation's outstanding Common Stock must have an exercise price of at
least 110% of fair market value on the date of grant. The maximum aggregate
fair market value (determined as of the date of grant) of the shares to which
Incentive Stock Options held by an individual become exercisable for the
first time during any calendar year may not exceed $100,000.
Terms of Options
In general, the Committee has the discretion to fix the term of each
option granted to an officer or employee under the Option Plan, except that
the maximum term of each option is 10 years, subject to earlier termination
as provided in the Option Plan (five years in the case of Incentive Stock
Options granted to an employee who owns over 10% of the total combined voting
power of all classes of the Corporation's stock). The Option Plan provides
that all awards under the Option Plan will become exercisable in equal
installments over a five-year period following the date of grant. However,
unvested options will become immediately exercisable in the event of the
option holder's death or disability, or upon a change in control (as defined
in the Option Plan) of the Corporation or the Bank.
Except in limited circumstances, an option may not be transferred
other than by will or by laws of descent and distribution and, during the
lifetime of the option holder, may be exercised only by such holder. If any
option expires or terminates for any reason without having been exercised in
full, the unpurchased shares subject to such option will be available again
for purposes of the Option Plan.
8
Federal Income Tax Consequences of Non-Qualified Options
An option holder who is granted a Non-Qualified Stock Option under
the Option Plan will not realize any income for Federal income tax purposes
on the grant of an option. An option holder will realize ordinary income for
Federal income tax purposes on the exercise of an option, provided the shares
are not then subject to a substantial risk of forfeiture within the meaning
of Section 83 of the Code ("Risk of Forfeiture"), in an amount equal to the
excess, if any, of the fair market value of the shares of Common Stock on the
date of exercise over the exercise price thereof. If the shares are subject
to a Risk of Forfeiture on the date of exercise, the option holder will
realize ordinary income for the year in which the shares cease to be subject
to a Risk of Forfeiture in an amount equal to the excess, if any, of the fair
market value of the shares at the date they cease to be subject to a Risk of
Forfeiture over the exercise price, unless the option holder shall have made
a timely election under Section 83 of the Code to include in his income for
the year of exercise an amount equal to the excess of the fair market value
of the shares of Common Stock on the date of exercise over the exercise
price. The amount realized for tax purposes by an option holder by reason of
the exercise of a Non-Qualified Stock Option granted under the Option Plan is
subject to withholding by the Corporation and the Corporation is entitled to
a deduction in an amount equal to the income so realized by an option holder,
provided all necessary withholding requirements under the Code are met.
Provided that the option holder satisfies certain holding period
requirements provided by the Code, an employee will realize long-term capital
gain or loss, as the case may be, if the shares issued upon exercise of a
Non-Qualified Stock Option are disposed of more than one year after (i) the
shares are transferred to the employee or (ii) if the shares were subject to
a Risk of Forfeiture on the date of exercise and a valid election under
Section 83 of the Code shall not have been made, the date as of which the
shares cease to be subject to a Risk of Forfeiture. The amount recognized
upon such disposition will be the difference between the option holder's
basis in such shares and the amount realized upon such disposition.
Generally, an option holder's basis in the shares will be equal to the
exercise price plus the amount of income recognized upon exercise of the
option.
Federal Income Tax Consequences of Incentive Stock Options
An Incentive Stock Option holder who meets the eligibility
requirements of Section 422 of the Code will not realize income for Federal
income tax purposes, and the Corporation will not be entitled to a deduction,
on either the grant or the exercise of an Incentive Stock Option. If the
Incentive Stock Option holder does not dispose of the shares acquired within
two years after the date the Incentive Stock Option was granted to him or
within one year after the transfer of the shares to him, (i) any proceeds
realized on a sale of such shares in excess of the option price will be
treated as long-term capital gain and (ii) the Corporation will not be
entitled to any deduction for Federal income tax purposes with respect to
such shares.
If an Incentive Stock Option holder disposes of shares during the
two-year or one-year periods referred to above (a "Disqualifying
Disposition"), the Incentive Stock Option holder will not be entitled to the
favorable tax treatment afforded to incentive stock options under the Code.
Instead, the Incentive Stock Option holder will realize ordinary income for
Federal income tax purposes in the year the Disqualifying Disposition is
made, in an amount equal to the excess, if any, of the fair market value of
the shares of Common Stock on the date of exercise over the exercise price.
An Incentive Stock Option holder generally will recognize long-term
capital gains or loss, as the case may be, if the Disqualifying Disposition
is made more than one year after the shares are transferred to the Incentive
Stock Option holder. The amount of any such gain or loss will be equal to
the difference between the amount realized on the Disqualifying Disposition
and the sum of (x) the exercise price and (y) the ordinary income realized by
the Incentive Stock Option holder as the result of the Disqualifying
Disposition.
The Corporation will be allowed in the taxable year of a
Disqualifying Disposition a deduction in the same amount as the ordinary
income recognized by the Incentive Stock Option holder provided all necessary
withholding requirements are met.
9
Notwithstanding the foregoing, if the Disqualifying Disposition is
made in a transaction with respect to which a loss (if sustained) would be
recognized to the Incentive Stock Option holder, then the amount of ordinary
income required to be recognized upon the Disqualifying Disposition will not
exceed the amount by which the amount realized from the disposition exceeds
the exercise price. Generally, a loss may be recognized if the transaction
is not a "wash" sale, a gift or a sale between certain persons or entities
classified under the Code as "related persons."
Alternative Minimum Tax
For purposes of computing the alternative minimum tax with respect to
shares acquired pursuant to the exercise of Incentive Stock Options, the
difference between the fair market value of the shares on the date of
exercise over the exercise price will be an item of tax preference in the
year of exercise if the shares are not subject to a Risk of Forfeiture; if
the shares are subject to a Risk of Forfeiture, the amount of the tax
preference taken into account in the year the Risk of Forfeiture ceased will
be the excess of the fair market value of the shares at the date they cease
to be subject to a Risk of Forfeiture over the exercise price. The basis of
the shares for alternative minimum tax purposes generally will be an amount
equal to the exercise price, increased by the amount of the tax preference
taken into account in computing the alternative minimum taxable income.
New Plan Benefits
The following table sets forth information regarding the number of
options anticipated to be granted under the Option Plan as of the effective
date of the Plan. Each option award specified below is intended to be
granted at 100% of the fair market value of the Corporation's Common Stock on
the date of grant and become exercisable in equal installments over a
five-year period.
Anticipated
Position with Stock
Name Corporation Option Grant
- ---- -------------- ------------
Erwin Oetting, Jr. President and Chief
Executive Officer 25,300
All current executive
officers as a group
(4 persons) -- 63,250
All non-employee
directors (4 persons) -- 25,300
All non-executive
officers/employees
as a group (6 persons) -- 12,650
The balance of the options that may be granted under the Option Plan
(options for 25,300 shares of Common Stock) are expected to be allocated in
the future to non-employee directors, subsidiary directors, officers and
employees.
Adoption of the Option Plan
Subject to approval by the Corporation's shareholders, the Board of
Directors adopted the Option Plan to encourage stock ownership by employees
and non-employee directors of the Corporation and its subsidiaries by issuing
options to purchase shares of the Corporation's Common Stock, thereby
enabling such directors, officers and employees to acquire or increase their
proprietary interest in the Corporation and encouraging them to remain in the
employ or remain directors of the Corporation and its subsidiaries. The
Board of Directors has determined that the Option Plan is desirable, cost
effective and produces incentives that will benefit the Corporation and its
shareholders.
10
Moreover, the Board of Directors believes that the terms of the Option Plan
are consistent with the terms of similar stock compensation programs
implemented by other recently converted financial institutions in the Bank's
peer group. The Option Plan must be approved by a majority of the
outstanding shares of Common Stock of the Corporation. The Board of
Directors recommends a vote "FOR" the adoption of the 1996 Stock Option Plan
attached as Exhibit A.
- ----------------------------------------------------------------------------
PROPOSAL III - RATIFICATION OF THE 1996 MANAGEMENT
RECOGNITION AND DEVELOPMENT PLAN
- ----------------------------------------------------------------------------
The Corporation's Board of Directors the 1996 Management Recognition
and Development Plan ("MRDP") on November 27, 1996 for the benefit of
officers, employees and non-employee directors of the Corporation and its
subsidiaries, subject to approval by the shareholders of the Corporation.
Assuming shareholder approval, the MRDP will be effective on June 6, 1997.
By postponing the effective date, the MRDP will not be subject to certain
regulatory restrictions otherwise applicable to plans implemented prior to
the first anniversary of the Bank's mutual to stock conversion. The
following description of the MRDP is qualified in its entirety by reference
to the complete text of the MRDP which is attached as Exhibit B.
The purpose of the MRDP is to encourage and provide an additional
incentive to non-employee directors, officers and employees of the
Corporation and its subsidiaries to increase the value of the Corporation and
its Common Stock by permitting them to acquire a significant equity interest
in the Corporation. The MRDP is also intended to assist the Corporation in
attracting and retaining superior personnel and to encourage them to remain
as directors or employees of the Corporation. All awards under the MRDP are
made by a committee of the Board of Directors consisting of at least two
non-employee directors.
MRDP awards are made in the form of restricted stock that is subject
to restrictions on transfer of ownership. MRDP awards vest over a five-year
period in equal installments beginning on the first anniversary of the
effective date of the MRDP. If the employee or non-employee director
terminates service for reasons other than death or disability, the employee
or director forfeits all rights to the allocated shares under restriction.
If the employee's or director's termination is caused by death or disability,
all restrictions expire and all shares allocated become unrestricted. MRDP
awards also will become fully vested upon a change in control (as defined in
the MRDP) of the Corporation or the Bank. Compensation expense in the amount
of the fair market value of the Common Stock at the date of the grant to the
officer or director will be recognized during the years in which the shares
vest. An eligible officer or director will not be entitled to voting and
other shareholder rights with respect to the shares while restricted.
Furthermore, the shares, while restricted, cannot be sold, pledged or
otherwise disposed of and dividends paid during the period of restriction
will be held in escrow.
A recipient of an award who receives a grant of restricted stock and
does not elect to be taxed at the time of grant will not recognize income
upon an award of shares of Common Stock, and the Corporation will not be
entitled to a deduction until the termination of the restrictions. Upon such
termination, the recipient will recognize ordinary income in an amount equal
to the fair market value of the Common Stock at the time (less any amount
paid by the recipient for such shares) and the Corporation will be entitled
to a deduction in the same amount after satisfying federal income tax
withholding requirements. However, the recipient may elect to recognize
ordinary income in the year the restricted stock is granted in an amount
equal to the fair market value of the shares at that time, determined without
regard to the restrictions. In that event, the Corporation will be entitled
to a deduction in such year and in the same amount. Any gain or loss
recognized by the recipient upon subsequent disposition of the stock will be
capital in nature.
The MRDP may utilize authorized but unissued shares of Common Stock
from the Corporation in fulfillment of awards. Any such use of shares by the
MRDP could dilute the holdings of the Corporation's shareholders. The MRDP
also may purchase Common Stock in the open market through a trust established
in connection with the MRDP and funded with contributions from the
Corporation. No more than 50,600 shares may be issued under the
11
MRDP, subject to adjustment in the event of a stock dividend, stock split, or
similar event. The Board of Directors can terminate the MRDP at any time,
and if it does so, any shares not allocated will revert to the Corporation.
New Plan Benefits
The following table sets forth information regarding the number of
restricted shares anticipated to be granted under the MRDP as of the date the
MRDP is approved by shareholders. Each award specified below is intended to
vest in equal installments over a five-year period.
Position with Anticipated MRDP
Name Corporation Grant
- ---- ----------- ----------------
Erwin Oetting, Jr. President and
Chief Executive
Officer 12,650
All current executive
officers as a group
(4 persons) -- 32,890
All non-employee
directors (4 persons) -- 10,120
All non-executive
officers/employees
as a group (6 persons) -- 7,590
Adoption of the MRDP
The Board of Directors has determined that the MRDP is desirable and
will produce incentives for management that will benefit the Corporation and
its shareholders. The Board of Directors believes that the MRDP will be a
significant factor in aligning the interests of management with those of
shareholders and that the terms of the MRDP are consistent with the terms of
similar stock compensation programs implemented by other recently converted
financial institutions in the Bank's peer group. The MRDP must be approved
by a majority of the outstanding shares of Common Stock of the Corporation.
The Board of Directors recommends a vote "FOR" the adoption of the MRDP
attached as Exhibit B.
- ----------------------------------------------------------------------------
INDEPENDENT AUDITORS
- ----------------------------------------------------------------------------
Moore, Horton & Carlson, P.C. served as the Corporation's
independent public accountants for the 1996 fiscal year. The Board of
Directors has appointed Moore, Horton & Carlson, P.C. to be its auditors for
the 1997 fiscal year. A representative of Moore, Horton & Carlson, P.C. is
expected to be present at the Meeting to respond to appropriate questions
from shareholders and will have the opportunity to make a statement should he
desire to do so.
- ----------------------------------------------------------------------------
OTHER MATTERS
- ----------------------------------------------------------------------------
The Board of Directors of the Corporation is not aware of any
business to come before the Meeting other than those matters described in
this Proxy Statement. However, if any other matters should properly come
before the Meeting, it is intended that proxies in the accompanying form will
be voted in respect thereof in accordance with the judgment of the person or
persons voting the proxies.
12
- ----------------------------------------------------------------------------
MISCELLANEOUS
- ----------------------------------------------------------------------------
The cost of solicitation of proxies will be borne by the
Corporation. In addition to solicitations by mail, directors, officers and
regular employees of the Corporation may solicit proxies personally or by
telephone without additional compensation. The Corporation also has retained
Regan & Associates, New York, New York, to assist in soliciting proxies at a
cost of $3,000 plus expenses up to $1,500.
The Corporation's Annual Report to Shareholders, including financial
statements, has been mailed to all shareholders of record as of the close of
business on December 2, 1996. Any shareholder who has not received a copy of
such Annual Report may obtain a copy by writing to the Secretary of the
Corporation. The Annual Report is not to be treated as part of the proxy
solicitation material or as having been incorporated herein by reference.
- ----------------------------------------------------------------------------
SHAREHOLDER PROPOSALS
- ----------------------------------------------------------------------------
In order to be eligible for inclusion in the Corporation's proxy
materials for next year's Annual Meeting of Shareholders, any shareholder
proposal to take action at such meeting must be received at the Corporation's
main office at 919 Franklin Avenue, Lexington, Missouri, no later than August
16, 1997. Any such proposals shall be subject to the requirements of the
proxy solicitation rules adopted under the Exchange Act.
BY ORDER OF THE BOARD OF DIRECTORS
/s/ E. Steva Vialle
E. STEVA VIALLE
SECRETARY
Lexington, Missouri
December 13, 1996
- ----------------------------------------------------------------------------
FORM 10-KSB
- ----------------------------------------------------------------------------
A copy of the Corporation's Form 10-KSB for the fiscal year ended September
30, 1996, as filed with the Securities and Exchange Commission, will be
furnished without charge to shareholders as of the record date upon written
request to E. Steva Vialle, Corporate Secretary, Lexington B & L Financial
Corp., 919 Franklin Avenue, Lexington, Missouri 64067.
- ----------------------------------------------------------------------------
13
REVOCABLE PROXY
LEXINGTON B & L FINANCIAL CORP.
- ----------------------------------------------------------------------------
FIRST ANNUAL MEETING OF SHAREHOLDERS
JANUARY 27, 1997
- ----------------------------------------------------------------------------
The undersigned hereby appoints the entire Board of Directors as the
official Proxy Committee with full powers of substitution, as attorneys and
proxies for the undersigned, to vote all shares of common stock of Lexington
B & L Financial Corp. which the undersigned is entitled to vote at the First
Annual Meeting of Shareholders, to be held at the main office of B & L Bank,
919 Franklin Avenue, Lexington, Missouri, on Monday, January 27, 1997, at
10:00 a.m., Central Time, and at any and all adjournments thereof, as
follows:
VOTE
FOR WITHHELD
1. The election as --- --------
directors of all
nominees listed [ ] [ ]
below (except as
marked to the
contrary below).
Norman Vialle
Charles R. Wilcoxon
INSTRUCTION: To withhold your vote
for any individual nominee, write
that nominee's name on the line below.
---------------------------------------
---------------------------------------
FOR AGAINST ABSTAIN
--- ------- -------
2. The ratification of
the adoption of the
Lexington B & L [ ] [ ] [ ]
Financial Corp. 1996
Stock Option Plan.
3. The ratification of
the adoption of the
Lexington B & L [ ] [ ] [ ]
Financial Corp.
Management Recognition
and Development Plan.
4. Such other matters as
may properly come before
the Meeting or any
adjournments thereof.
The Board of Directors recommends a vote "FOR" the above proposals.
- ----------------------------------------------------------------------------
THIS PROXY WILL BE VOTED AS DIRECTED, BUT IF NO INSTRUCTIONS ARE SPECIFIED,
THIS PROXY WILL BE VOTED FOR THE PROPOSITIONS STATED. IF ANY OTHER BUSINESS
IS PRESENTED AT SUCH MEETING, THIS PROXY WILL BE VOTED BY THOSE NAMED IN THIS
PROXY IN THEIR BEST JUDGMENT. AT THE PRESENT TIME, THE BOARD OF DIRECTORS
KNOWS OF NO OTHER BUSINESS TO BE PRESENTED AT THE MEETING.
- ----------------------------------------------------------------------------
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS
Should the undersigned be present and elect to vote at the First
Annual Meeting of Shareholders or at any adjournment thereof and after
notification to the Secretary of the Corporation at the Meeting of the
shareholder's decision to terminate this proxy, then the power of said
attorneys and proxies shall be deemed terminated and of no further force and
effect.
The undersigned acknowledges receipt from the Corporation prior to
the execution of this proxy of the Notice of First Annual Meeting of
Shareholders, a proxy statement for the First Annual Meeting of Shareholders,
and the 1996 Annual Report to Shareholders.
Dated: , 199___
- ------------------------- -------------------------
PRINT NAME OF SHAREHOLDER PRINT NAME OF SHAREHOLDER
- ------------------------ -------------------------
SIGNATURE OF SHAREHOLDER SIGNATURE OF SHAREHOLDER
Please sign exactly as your name appears on this proxy card. When signing as
attorney, executor, administrator, trustee or guardian, please give your full
title. If shares are held jointly, each holder should sign.
- ----------------------------------------------------------------------------
PLEASE COMPLETE, DATE, SIGN AND MAIL THIS PROXY PROMPTLY IN THE ENCLOSED
POSTAGE-PREPAID ENVELOPE.
- ----------------------------------------------------------------------------
Lexington B & L Financial Corp. EXHIBIT A
1996 Stock Option Plan
SECTION 1. Purpose. The purposes of the Lexington B & L Financial Corp.
1996 Stock Option Plan are to promote the interests of the Company, its
affiliates, and its stockholders by (i) attracting and retaining exceptional
executive personnel and other key employees and directors of the Company and
its affiliates; (ii) motivating such employees and Eligible Directors by means
of performance-related incentives to achieve longer-range performance goals;
and (iii) enabling such employees and Eligible Directors to participate in the
long-term growth and financial success of the Company.
SECTION 2. Definitions. As used in the Plan, the following terms shall have
the meanings set forth below:
"Affiliate" shall mean the Bank and any other "subsidiary" of the
Company as defined in Section 424(f) of the Code.
"Award" shall mean any grant of Options or Director Options.
"Award Agreement" shall mean any written agreement, contract, or other
instrument or document evidencing any Award, which may, but need not, be
executed or acknowledged by a Participant.
"Bank" shall mean B & L Bank, Lexington, Missouri.
"Board" shall mean the Board of Directors of the Company.
"Change in Control" shall mean an event deemed to occur if and when (a)
an offeror other than the Company purchases shares of the common stock of the
Company or the Bank pursuant to a tender or exchange offer for such shares,
(b) any person (as such term is used in Sections 13(d) and 14(d)(2) of the
Exchange Act) is or becomes the beneficial owner, directly or indirectly, of
securities of the Company or the Bank representing twenty-five percent (25%)
or more of the combined voting power of the Company's or the Bank's then
outstanding securities, (c) the membership of the board of directors of the
Company or the Bank changes as the result of a contested election, such that
individuals who were directors at the beginning of any twenty-four (24) month
period (whether commencing before or after the date of adoption of this Plan)
do not constitute a majority of the Board at the end of such period, or (d)
shareholders of the Company or the Bank approve a merger, consolidation, sale
or disposition of all or substantially all of the Company's or the Bank's
assets, or a plan of partial or complete liquidation. If any of the events
enumerated in clauses (a) - (d) occur, the Board shall determine the effective
date of the change in control resulting therefrom, for purposes of the Plan.
"Code" shall mean the Internal Revenue Code of 1986, as amended.
"Committee" shall mean a committee of the Board consisting of at least
two nonemployee directors designated by the Board to administer the Plan. If
a separate committee is not so designated, the Board shall serve as the
Committee for all purposes under the Plan.
"Company" shall mean Lexington B & L Financial Corp., a Missouri
corporation.
"Director Option" shall mean a Non-Qualified Stock Option granted to an
Eligible Director pursuant to Section 6(e).
A-1
"Disability" shall have the meaning set forth in Section 22(e)(3) of
the Code. For purposes of the Plan, all determinations as to whether a
Participant has become disabled shall be made by a majority of the Board upon
the basis of such evidence as it deems necessary or desirable, and shall be
final and binding on all interested persons.
"Effective Date" shall mean the date specified in Section 9(a) of the
Plan.
"Eligible Director" shall mean, on any date, a person who is serving as
a member of the Board but shall not include a person who is an Employee.
"Employee" shall mean an employee of the Company or any Affiliate.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended.
"Fair Market Value" shall be determined as follows:
(a) If the Shares are traded or quoted on the Nasdaq Stock Market or
other national securities exchange at the time of grant of the
Award, then the Fair Market Value shall be the average of the
highest and lowest selling price on such exchange on the date
such Award is granted or, if there were no sales on such date,
then on the next prior business day on which there was a sale.
(b) If the Shares are not traded or quoted on the Nasdaq Stock Market
or other national securities exchange, then the Fair Market Value
shall be a value determined by the Committee in good faith on
such basis as it deems appropriate.
"Incentive Stock Option" shall mean a right to purchase Shares from the
Company that is granted under Section 6 of the Plan and that is intended to
meet the requirements of Section 422 of the Code or any successor provision
thereto.
"Non-Qualified Stock Option" shall mean a right to purchase Shares from
the Company that is granted under Section 6 of the Plan and that is not
intended to be an Incentive Stock Option.
"Option" shall mean an Incentive Stock Option or a Non-Qualified Stock
Option but shall not include a Director Option.
"Participant" shall mean any Employee or Eligible Director selected by
the Committee to receive an Award of Options or Director Options, as
appropriate.
"Person" shall mean any individual, corporation, partnership,
association, joint-stock company, trust, unincorporated organization,
government or political subdivision thereof or other entity.
"Plan" shall mean the Lexington B & L Financial Corp. 1996 Stock Option
Plan.
"Rule 16b-3" shall mean Rule 16b-3 as promulgated and interpreted by
the SEC under the Exchange Act, or any successor rule or regulation thereto as
in effect from time to time.
"SEC" shall mean the Securities and Exchange Commission or any
successor thereto and shall include the staff thereof.
"Shares" shall mean common shares of the Company, or such other
securities of the Company as may be designated by the Committee from time to
time.
A-2
"Ten Percent Stockholder" shall mean any stockholder who, at the time
an Incentive Stock Option is granted to such stockholder, owns (within the
meaning of Section 424(d) of the Code) more than ten percent (10%) of the
voting power of all classes of stock of the Company.
"Termination for Cause" shall mean termination because of a
Participant's personal dishonesty, incompetence, willful misconduct, breach of
fiduciary duty involving personal profit, intentional failure to perform
stated duties, willful violation of any law, rule, or regulation (other than
traffic violations or similar offenses) or material breach of any provision of
any employment agreement between the Company and/or, the Bank and a
Participant.
SECTION 3. Administration.
(a) The Plan shall be administered by the Committee. Subject to the
terms of the Plan and applicable law, and in addition to other express powers
and authorizations conferred on the Committee by the Plan, the Committee
shall: (i) designate Participants; (ii) determine the type or types of Awards
to be granted to an eligible Employee; (iii) determine the number of Shares to
be covered by, or with respect to which payments, rights, or other matters are
to be calculated in connection with, Awards; (iv) determine the terms and
conditions of any Award; (v) determine whether, to what extent, and under what
circumstances Awards may be settled or exercised in cash, Shares, other
securities, other Awards or other property, or canceled, forfeited, or
suspended; (vi) determine whether, to what extent, and under what
circumstances cash, Shares, other securities, other Awards, other property,
and other amounts payable with respect to an Award shall be deferred either
automatically or at the election of the holder thereof or of the Committee;
(vii) interpret and administer the Plan and any instrument or agreement
relating to, or Award made under, the Plan; (viii) establish, amend, suspend,
or waive such rules and regulations and appoint such agents as it shall deem
appropriate for the proper administration of the Plan; and (ix) make any other
determination and take any other action that the Committee deems necessary or
desirable for the administration of the Plan.
(b) Unless otherwise expressly provided in the Plan, all
designations, determinations, interpretations, and other decisions under or
with respect to the Plan or any Award shall be within the sole discretion of
the Committee, may be made at any time and shall be final, conclusive, and
binding upon all Persons, including the Company, and Participant, any holder
or beneficiary of any Award, any shareholder and any Employee.
SECTION 4. Shares Available for Awards.
(a) Shares Available. Subject to adjustment as provided in Section
4(b), the number of Shares with respect to which Options and Director Options
may be granted under the Plan shall be 126,500. If, after the effective date
of the Plan, any Shares covered by an Option or Director Option granted under
the Plan, or to which such an Option or Director Option relates, are
forfeited, or if an Option or Director Option otherwise terminates or is
canceled without the delivery of Shares, then the Shares covered by such
Option or Director Option, or to which such Option or Director Option relates,
or the number of Shares otherwise counted against the aggregate number of
Shares with respect to which Options and Director Options may be granted, to
the extent of any such settlement, forfeiture, termination or cancellation,
shall again be, or shall become, Shares with respect to which Options and
Director Options may be granted. In the event that any Option or Director
Option is exercised through the delivery of Shares, the number of Shares
available for Awards under the Plan shall be increased by the number of Shares
surrendered.
(b) Adjustments. In the event that any dividend or other
distribution (whether in the form of cash, Shares, other securities, or other
property), recapitalization, stock split, reverse stock split, reorganization,
merger, consolidation, split-up, spin-off, combination, repurchase, or
exchange of Shares or other securities of the Company, issuance of warrants or
other rights to purchase Shares or other securities of the Company, or other
similar corporate transaction or event affects the Shares such that an
adjustment is necessary in order to prevent dilution or enlargement of the
benefits or potential benefits intended to be made available under the Plan,
then the Committee shall proportionately adjust any or all (as necessary) of
(i) the number of Shares or other securities of the Company (or number and
kind of other securities or property) with respect to which Awards may be
granted, (ii) the number
A-3
of Shares or other securities of the Company (or number and kind of other
securities or property) subject to outstanding Awards, and (iii) the grant or
exercise price with respect to any Award; provided, in each case, that with
respect to Awards of Incentive Stock Options no such adjustment shall be
authorized to the extent that such authority would cause the Plan to violate
Section 422(b)(1) of the Code, as from time to time amended.
(c) Sources of Shares. Any Shares delivered pursuant to an Option or
Director Option may consist, in whole or in part, of authorized and unissued
Shares or of treasury Shares.
SECTION 5. Eligibility. An Employee, including any officer or
employee-director of the Company, shall be eligible to be designated a
Participant. Each Eligible Director shall be eligible to receive Director
Options in accordance with Section 6(e) hereof.
SECTION 6. Options and Director Options.
(a) Grant. Subject to the provisions of the Plan and the
recommendation of the Board, the Committee shall determine the Employees to
whom Options shall be granted, the number of Shares to be covered by each
Option, the option price therefor and the conditions and limitations
applicable to the exercise of the option. The Committee shall have the
authority to grant Incentive Stock Options, or to grant Non-Qualified Stock
Options, or to grant both types of options. In such case of Incentive Stock
Options, the terms and conditions of such grants shall be subject to and
comply with such rules as may be prescribed by Section 422 of the Code, as
from time to time amended, and any regulations implementing such statute,
including without limitation, the requirements of Code Section 422(d), which
limits the aggregate fair market value of Shares of which Incentive Stock
Options are exercisable for the first time to one hundred thousand dollars
($100,000) per calendar year. Each provision of the Plan and of each written
option agreement relating to an Option designated an Incentive Stock Option
shall be construed so that such Option qualifies as an Incentive Stock Option,
and any provision that cannot be so construed shall be disregarded.
(b) Exercise Price. The Committee shall establish the exercise price
at the time each Option or Director Option is granted, which price shall not
be less than one hundred percent (100%) of the per Share Fair Market Value on
the date of grant. Notwithstanding any provision contained herein, in the
case of an Incentive Stock Option, the exercise price at the time such
Incentive Stock Option is granted to any Employee who, at the time of such
grant, is a Ten Percent Stockholder, shall not be less than one hundred ten
percent (110%) of the per Share Fair Market Value on the date of grant.
(c) Exercise. Each Option shall be exercisable at such times and
subject to such terms and conditions as the Committee may, in its sole
discretion, specify in the applicable Award Agreement or thereafter; provided,
however, that in the case of an Incentive Stock Option, a Participant may not
exercise such Option as an Incentive Stock Option after the earlier of (i) the
date which is ten (10) years (five (5) years in the case of a Participant who
is a Ten Percent Stockholder) after the date on which such Incentive Stock
Option is granted, or (ii) the date which is three (3) months (twelve (12)
months in the case of a Participant who becomes Disabled, or who dies) after
the date on which he ceases to be an employee of the Company or an Affiliate;
provided, further, that no Award of Options under the Plan shall vest more
rapidly than ratably over a five (5) year period whereby twenty percent (20%)
of the Award shall vest on each of the first through the fifth anniversaries
of the date of grant so long as the Participant remains an Employee of the
Company or an Affiliate; provided, further, that an Award of Options shall be
one hundred percent (100%) vested upon a Participant's death or Disability.
In the event of an Employee's Termination for Cause, his Options shall be
canceled on the date he ceases to be an Employee. The Committee may impose
such conditions with respect to the exercise of Options, including without
limitation, any relating to the application of federal or state securities
laws, as it may deem necessary or advisable.
(d) Payment. No Shares shall be delivered pursuant to any exercise
of an Option or Director Option until payment in full of the option price
therefor is received by the Company. Such payment may be made in cash or its
equivalent, or, if and to the extent permitted by the Committee, by exchanging
Shares owned by the optionee
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(which are not the subject of any pledge or other security interest), or by a
combination of the foregoing, provided that the combined value of all cash and
cash equivalents and the Fair Market Value of any such Shares so tendered to
the Company as of the date of such tender is at least equal to such option
price. The Committee may, in its discretion, arrange procedures for the
payment of the exercise price with one or more stock brokerage firms for the
purpose of allowing a Participant to make a "cashless exercise" of an Option
or Director Option.
(e) Director Options. Subject to the provisions of the Plan and the
recommendation of the Board, the Committee shall determine the Eligible
Directors to whom Director Options shall be granted, the number of shares to
be covered by each Director Option and the condition and limitations
applicable to the exercise of each Director Option. Each Award of Director
Options shall vest ratably over a five (5) year period whereby twenty percent
(20%) of the Award shall vest on each of the first through the fifth
anniversaries of the date of grant so long as the Eligible Director continues
to serve as a member of the Board; provided, however, that the Award shall be
one hundred percent (100%) vested in the event of the Eligible Director's
death or Disability. A Director Option shall be exercisable until the earlier
to occur of the following two (2) dates (i) the tenth anniversary of the date
of grant of such Director Option or (ii) one (1) year (two (2) years in the
case of an Eligible Director who becomes Disabled, or who dies) after the date
the Eligible Director ceases to be a member of the Board, except that if the
Eligible Director ceases to be a member of the Board upon Termination for
Cause, his Director Option shall be canceled on the date he ceases to be a
member of the Board. An Eligible Director may pay the exercise price of a
Director Option in the manner described in Section 6(d).
(f) Effect of a Change in Control. In the event of a Change in
Control, all then outstanding Options and Director Options, shall become one
hundred percent (100%) vested and exercisable as of the effective date of the
Change in Control. If, in connection with or as a consequence of a Change in
Control, the Company or the Bank is merged into or consolidated with another
corporation, or if the Company or the Bank sells or otherwise disposes of
substantially all of its assets to another corporation, then unless provisions
are made in connection with such transaction for the continuance of the Plan
and/or the assumption or substitution of then outstanding Options and Director
Options with new options covering the stock of the successor corporation, or
parent or subsidiary thereof, with appropriate adjustments as to the number
and kind of shares and prices, such Options or Director Options shall be
canceled as of the effective date of the merger, consolidation, or sale and
the Participant or Eligible Director shall be paid in cash an amount equal to
the difference between the Fair Market Value of the Shares subject to the
Options or Director Options as of the effective date of the such corporate
event and the exercise price of the Options or Director Options, as
appropriate.
(g) Limitation on Awards. Notwithstanding anything herein to the
contrary, (i) no Employee shall receive an Award covering in excess of twenty
five percent (25%), (ii) no Eligible Director shall receive an Award covering
in excess of five percent (5%) and (iii) Eligible Directors shall not receive
Awards covering in excess of thirty percent (30%) in the aggregate, of the
number of shares reserved for issuance under the Plan.
SECTION 7. Amendment and Termination.
(a) Amendments to the Plan. The Board may amend, alter, suspend,
discontinue, or terminate the Plan or any portion thereof at any time;
provided that no such amendment, alteration, suspension, discontinuation or
termination shall be made without shareholder approval if such approval is
necessary to comply with any tax or regulatory requirement with which the
Committee deems it necessary or appropriate to comply.
(b) Amendments to Awards. The Committee may waive any conditions or
rights under, amend any terms of, or alter, suspend, discontinue, cancel or
terminate, any Award theretofore granted, prospectively or retroactively;
provided, however, that any such waiver, amendment, alteration, suspension,
discontinuance, cancellation or termination that would impair the rights of
any Participant or any holder or beneficiary of any Award theretofore granted
shall not to that extent be effective without the consent of the affected
Participant, holder or beneficiary.
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(c) Cancellation. Any provision of this Plan or any Award Agreement
to the contrary notwithstanding, the Committee may cause any Award of Options
granted hereunder to be canceled in consideration of the granting to the
holder of an alternative Award of Options having a Fair Market Value equal to
the Fair Market Value of such canceled Award.
SECTION 8. General Provisions.
(a) Nontransferability.
(i) Each Award, and each right under any Award, shall be
exercisable only by the Participant during his lifetime, or, if permissible
under applicable law, by the Participant's guardian or legal representative or
a transferee receiving such Award pursuant to a domestic relations order or
Section 8(a)(ii) as determined by the Committee.
(ii) No Award may be assigned, alienated, pledged, attached,
sold or otherwise transferred or encumbered by a Participant otherwise than by
will or by the laws of descent and distribution or pursuant to a domestic
relations order, and any such purported assignment, alienation, pledge,
attachment, sale, transfer or encumbrance shall be void and unenforceable
against the Company; provided, however, that the designation of a beneficiary
shall not constitute an assignment, alienation, pledge, attachment, sale,
transfer or encumbrance. Notwithstanding the preceding sentence, the
Committee shall have discretionary authority to permit the transfer of any
Non-Qualified Stock Option to members of a Participant's immediate family,
including trusts for the benefit of such family members and partnerships in
which such family members are the only partners; provided, however, that a
transferred Non-Qualified Stock Option may be exercised by the transferee on
any date only to the extent that the Participant would have been entitled to
exercise the Non-Qualified Stock Option on such date had the Non-Qualified
Stock Option not been transferred. Any transferred Non-Qualified Stock Option
shall remain subject to the terms and conditions of the Participant's Award
Agreement.
(b) No Rights to Awards. No Employee, Participant or other Person
shall have any claim to be granted any Award, and there is no obligation for
uniformity of treatment of Employees, Participants, or holders or
beneficiaries of Awards. The terms and conditions of Awards need not be the
same with respect to each recipient.
(c) Share Certificates. All Shares or other securities of the
Company delivered under the Plan pursuant to any Award or the exercise thereof
shall be subject to such stop transfer orders and other restrictions as the
Committee may deem advisable under the Plan or the rules, regulations, and
other requirements of the SEC, any stock exchange or national securities
association upon which such Shares or other securities are then listed, and
any applicable Federal or state laws, and the Committee may cause a legend or
legends to be put on any certificates representing such Shares or other
securities to make appropriate reference to such restrictions.
(d) Delegation. Subject to the terms of the Plan and applicable law,
the Committee may delegate to one or more officers or managers of the Company,
or to a committee of such officers or managers, the authority, subject to such
terms and limitations as the Committee shall determine, to grant Awards to, or
to cancel, modify or waive rights with respect to, or to alter, discontinue,
suspend, or terminate Awards held by, Employees who are not officers or
directors of the Company for purposed of Section 16 of the Exchange Act, or
any successor section thereto, or who are otherwise not subject to such
Section.
(e) Withholding. A Participant shall be required to pay to the
Company and the Company is hereby authorized to withhold from any Award, from
any payment due or transfer made under any Award or from any compensation or
other amount owing to a Participant the amount of any applicable withholding
taxes in respect of an Award, its exercise, or any payment or transfer under
an Award and to take such other action as may be necessary in the opinion of
the Company to satisfy all obligations for the payment of such taxes,
including, but not limited to, the withholding of the issuance of Shares to be
issued upon the exercise of any Option or Director Option until the
Participant reimburses the Company for any amount required to be withheld.
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(f) Award Agreements. Each Award hereunder shall be evidenced by an
Award Agreement which shall be delivered to the Participant and shall specify
the terms and conditions of the Award and any rules applicable thereto.
(g) No Limit on Other Compensation Arrangements. Nothing contained
in the Plan shall prevent the Company or any Affiliate from adopting or
continuing in effect other compensation arrangements, which may, but need not,
provide for the grant of options, restricted stock, Shares and other types of
Awards provided for hereunder (subject to shareholder approval if such
approval is required), and such arrangements may be either generally
applicable or applicable only in specific cases.
(h) No Right to Employment. The grant of an Award shall not be
construed as giving a Participant the right to be retained in the employ of
the Company or an Affiliate. Further, the Company may at any time dismiss a
Participant from employment, free from any liability or any claim under the
Plan, unless otherwise expressly provide in the Plan or in any Award
Agreement.
(i) No Rights as Stockholder. Subject to the provisions of the
applicable Award, no Participant or holder or beneficiary of any Award shall
have any rights as a stockholder with respect to any Shares to be distributed
under the Plan until he has become the holder of such Shares.
(j) Governing Law. The validity, construction, and effect of the
Plan and any rules and regulations relating to the Plan and any Award
Agreement shall be determined in accordance with the laws of the State of
Missouri, without giving effect to the choice of law principles thereof.
(k) Severability. If any provisions of the Plan or any Award is or
becomes or is deemed to be invalid, illegal, or unenforceable in any
jurisdiction or as to any Person or Award, or would disqualify the Plan or any
Award under any law deemed applicable by the Committee, such provision shall
be construed or deemed amended to conform to the applicable laws, or if it
cannot be construed or deemed amended without, in the determination of the
Committee, materially altering the intent of the Plan or the Award, such
provision shall be stricken as to such jurisdiction, Person or Award and the
remainder of the Plan and any such Award shall remain in full force and
effect.
(l) Other Laws. The Committee may refuse to issue or transfer any
Shares or other consideration under an Award if, acting in its sole
discretion, it determines that the issuance or transfer of such Shares or such
other consideration might violate any applicable law or regulation or entitle
the Company to recovery under Section 16(b) of the Exchange Act, and any
payment tendered to the Company by a Participant, other holder or beneficiary
in connection with the exercise of such Award shall be promptly refunded to
the relevant Participant, holder or beneficiary. Without limiting the
generality of the foregoing, no Award granted hereunder shall be construed as
an offer to sell securities of the Company, and no such offer shall be
outstanding, unless and until the Committee in its sole discretion has
determined that any such offer, if made, would be in compliance with all
applicable requirements of the U.S. federal securities laws.
(m) No Trust or Fund Created. Neither the Plan nor any Award shall
create or be construed to create a trust or separate fund of any kind or a
fiduciary relationship between the Company and a Participant or any other
Person. To the extent that any Person acquires a right to receive payments
from the Company pursuant to an Award, such rights shall be no greater than
the right of any unsecured general creditor of the Company.
(n) Rule 16b-3 Compliance. With respect to persons subject to
Section 16 of the Exchange Act, transactions under this Plan are intended to
comply with all applicable terms and conditions of Rule 16b-3 and any
successor provisions. To the extent that any provision of the Plan or action
by the Committee fails to so comply, it shall be deemed null and void, to the
extent permitted by law and deemed advisable by the Committee.
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(o) Headings. Headings are given to the Sections and subsections of
the Plan solely as a convenience to facilitate reference. Such headings shall
not be deemed in any way material or relevant to the construction or
interpretation of the Plan or any provision thereof.
(p) No Impact on Benefits. Unless specifically provided under any
other benefit plan of the Company or its Affiliates, Awards shall not be
treated as compensation for purposes of calculating an Employee's or Eligible
Director's rights under such benefit plans.
(q) Indemnification. Each person who is or shall have been a member
of the Committee or of the Board shall be indemnified and held harmless by the
Company against and from any loss, cost, liability, or expense that may be
imposed upon or reasonably incurred by him in connection with or resulting
from any claim, action, suit, or proceeding to which he may be made a party or
in which he may be involved by reason of any action taken or failure to act
under the Plan and against and from any and all amounts paid by him in
settlement thereof, with the Company's approval, or paid by him in
satisfaction of any judgement in any such action, suit, or proceeding against
him, provided he shall give the Company an opportunity, at its own expense, to
handle and defend the same before he undertakes to handle and defend it on his
own behalf. The foregoing right of indemnification shall not be exclusive and
shall be independent of any other rights of indemnification to which such
persons may be entitled under the Company's articles of incorporation or
bylaws, by contract, as a matter of law, or otherwise.
SECTION 9. Term of the Plan.
(a) Effective Date. The Plan shall become effective on June 6, 1997
but only if, prior to such date, the Plan is approved by a majority of the
Company's stockholders at an annual or special meeting of stockholders of the
Company held not less than six (6) months after the date of consummation of
the Company's mutual-to-stock conversion nor more than twelve (12) months
after the date of adoption of the Plan by the Board.
(b) Expiration Date. The Plan shall terminate on and no Award shall
be granted under the Plan after the tenth anniversary of the Effective Date.
Unless otherwise expressly provided in the Plan or in an applicable Award
Agreement, any Award granted hereunder may, and the authority of the Board or
the Committee to amend, alter, adjust, suspend, discontinue, or terminate any
such Award or to waive any conditions or rights under any such Award shall,
continue after the tenth anniversary of the Effective Date.
* * *
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Lexington B & L Financial Corp. EXHIBIT B
1996 Management Recognition and Development Plan
1. Purpose; Definitions.
The purpose of the Plan is to increase the proprietary and vested
interest of the key Employees and Eligible Directors of the Company and its
Affiliates in the growth, development and financial success of the Company and
its Affiliates by granting them awards of Restricted Shares.
Whenever the following terms are used in the Plan, they shall have the
meaning specified below unless the context clearly indicated to the contrary.
"Affiliate" shall mean the Bank and any other "subsidiary" of the
Company as defined in Section 424(f) of the Code.
"Award" shall mean an award of Restricted Shares under the Plan.
"Bank" shall mean B & L Bank, Lexington, Missouri, or any successor
thereto.
"Board" shall mean the Board of Directors of the Company.
"Change in Control" shall mean an event deemed to occur if and when (a)
an offeror other than the Company purchases shares of the common stock of the
Company or the Bank pursuant to a tender or exchange offer for such shares,
(b) any person (as such term is used in Sections 13(d) and 14(d)(2) of the
Exchange Act) is or becomes the beneficial owner, directly or indirectly, of
securities of the Company or Bank representing twenty-five percent (25%) or
more of the combined voting power of the Company's or the Bank's then
outstanding securities, (c) the membership of the board of directors of the
Company or the Bank changes as the result of a contested election, such that
individuals who were directors at the beginning of any twenty-four (24) month
period (whether commencing before or after the date of adoption of this Plan)
do not constitute a majority of the Board at the end of such period, or (d)
shareholders of the Company or the Bank approve a merger, consolidation, sale
or disposition of all or substantially all of the Company's or the Bank's
assets or a plan of partial or complete liquidation. If any of the events
enumerated in clauses (a) - (d) occur, the Board shall determine the effective
date of the change in control resulting therefrom.
"Code" shall mean the Internal Revenue Code of 1986, as amended.
"Committee" shall mean a committee of the Board consisting of at least
two nonemployee directors designated by the Board to administer the Plan. If
a separate committee is not designated by the Board, the Board shall serve as
the Committee for all purposes under the Plan.
"Company" shall mean Lexington B & L Financial Corp., a Missouri
corporation.
"Designated Beneficiary" shall have the meaning set forth in Section
2.2 hereof.
"Disability" shall have the meaning set forth in Section 22(e)(3) of
the Code. For purposes of the Plan, all determinations as to whether a
Participant has become disabled shall be made by a majority of the Committee,
upon the basis of such evidence as it deems necessary or desirable, and shall
be final and binding on all interested persons.
"Effective Date" shall have the meaning set forth in Section 5.1
hereof.
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"Eligible Director" shall mean a member of the Board on the Effective
Date who is not also an Employee.
"Employee" shall mean any person who is employed by the Company or an
Affiliate.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended.
"Participant" shall mean an Employee or Eligible Director to whom an
award of Restricted Shares is granted pursuant to the Plan.
"Plan" shall mean this Lexington B & L Financial Corp. 1996 Management
Recognition and Development Plan, as hereinafter amended from time to time.
"Restricted Shares" shall mean Shares which are awarded to an Employee
or Eligible Director that are subject to the transfer and forfeitability
restrictions described in Section 4.2.
"Share" shall mean a share of the Company's common stock, par value
$.01 per share.
2. Administration.
2.1 Administration
The Plan shall be administered by the Committee, which shall have the
power to interpret the Plan and to adopt such rules for the administration,
interpretation and application of the Plan and Awards thereunder as are
consistent with its terms and provisions and to interpret, amend or revoke any
such rules. All actions taken and all interpretations and determinations made
by the Committee shall be binding upon all persons, including the Company,
shareholders, Participants and Designated Beneficiaries. The Secretary of the
Company shall be authorized to implement the Plan in accordance with its
terms, and to take such actions of a ministerial nature as shall be necessary
to effectuate the intent and purposes thereof. No member of the Committee
shall be personally liable for any action, determination or interpretation
made in good faith with respect to the Plan or the Awards thereunder, and all
members of the Committee shall be fully protected by the Company in respect to
any such action, determination or interpretation.
2.2 Designated Beneficiaries
If a Participant dies prior to receiving any payment due under the
Plan, such payment shall be made to his Designated Beneficiary. A
Participant's Designated Beneficiary shall be the beneficiary specifically
designated by a Participant in writing to receive amounts due the Participant
in the event of the Participant's death. In the absence of an effective
designation by the Participant, Designated Beneficiary shall mean the
Participant's surviving spouse or, if none, his estate.
3. Shares Subject To The Plan.
3.1 Shares Subject to the Plan
The maximum number of Shares that may be the subject of Awards under
this Plan shall be 50,600. The Company shall reserve such number of Shares
for the purposes of the Plan out of its authorized but unissued Shares or out
of Shares held in the Company's treasury, or partly out of each. In the event
that a trust is established in connection with the Plan pursuant to Section
5.4, the Company may authorize the trustees of the trust to purchase Shares in
the open market with funds contributed by the Company or an Affiliate and such
shares shall be included in the number of shares that may be the subject of
Awards. In the event that Restricted Shares are forfeited for any reason,
such Shares shall thereafter again be available for award pursuant to the
Plan.
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3.2 Changes in the Company's Shares
In the event that the Committee shall determine that any
recapitalization, reorganization, merger, consolidation, stock split,
spin-off, combination, or exchange of Shares, or other similar corporate event
affects the Shares such that an adjustment is required in order to preserve
the benefits or potential benefits intended under this Plan, the Committee
shall, in such manner as it may deem equitable, adjust any or all of the
number and kind of Shares which thereafter may be awarded under the Plan, or
the number and kind of Shares subject to outstanding awards; provided,
however, that the number of Shares subject to any award shall always be a
whole number.
4. Restricted Shares
4.1 Eligibility; Awards Under the Plan
(a) Eligibility. Employees (including officers and employee
directors of the Bank) and Eligible Directors shall be eligible to participate
in the Plan upon designation by the Committee. To the extent that Shares are
available for grant under the Plan, then upon recommendation of the Board, the
Committee shall determine which of the Employees and Eligible Directors shall
be granted an Award and the number of Restricted Shares covered by each Award.
In selecting those Employees to whom Awards will be granted and the number of
Shares covered by such Awards, the Committee shall consider the position and
responsibilities of the eligible Employees, the length and value of their
services to the Company and its Affiliates, the compensation paid to the
Employees and any other factors the Committee may deem relevant, and the
Committee may request the written recommendation of the chief executive
officer and other senior executive officers of the Company and its Affiliates.
(b) Limitation on Awards. Notwithstanding anything herein to the
contrary, (i) no Employee shall receive Awards covering in excess of twenty
five percent (25%), (ii) no Eligible Director shall receive Awards covering in
excess of five percent (5%) and (iii) Eligible Directors shall not receive
Awards covering in excess of thirty percent (30%) in the aggregate, of the
number of shares reserved for issuance under the Plan.
(c) Fractions of Shares. Whenever under the terms of the Plan a
fractional share would be required to be issued, the fractional share shall be
rounded up to the next full share.
4.2 Terms of Awards
The Restricted Shares awarded hereunder shall be awarded only pursuant
to a written agreement, which shall be executed by the Participant and a duly
authorized officer of the Company and which shall contain the following terms
and conditions:
(a) Acceptance of Award. An award of Restricted Shares must be
accepted by the Participant within a period of sixty (60) days (or such other
period as the Committee may specify at grant) after the award date by the
execution of a Restricted Share award agreement in the form provided by the
Company.
(b) Restrictions and Conditions. The Restricted Shares awarded to a
participant pursuant to this Section 4 shall be subject to the following
restrictions and conditions:
(i) A Participant shall not be permitted to vote, sell,
transfer, pledge, assign or otherwise encumber Restricted Shares awarded under
the Plan prior to the date on which such shares vest in accordance with clause
(iii), except in accordance with the laws of descent and distribution.
(ii) On the date an Award of Restricted Shares vests in
accordance with clause (iii), a Participant (or his beneficiary) shall be
entitled to receive any cash dividends previously paid with respect to the
Restricted Shares, together with interest accrued thereon (at a reasonable
rate established from time to time by the Committee). Prior to such date,
cash dividends shall be held by the Company for the account of the
Participant.
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Stock dividends, if any, issued with respect to Restricted Shares shall be
treated as additional Restricted Shares that are subject to the same
restrictions and other terms and conditions that apply with respect to the
Restricted Shares with respect to which such dividends are paid.
(iii) Subject to the applicable provisions of the Restricted
Share award agreement and this Section, a Participant's interest in Shares
shall immediately become fully vested and nonforfeitable, and the restrictions
set forth in this Section 4.2 shall lapse (x) ratably over a five (5) year
period whereby twenty percent (20%) of the Award shall vest on each of the
first through the fifth anniversaries of the date of grant so long as the
Participant remains an Employee or Eligible Director (y) upon the
Participant's death or Disability, or (z) upon a Change in Control.
4.3 Stock Certificates
Except as otherwise provided herein, a stock certificate registered in
the name of each Participant receiving a Restricted Share award (or in the
name of a trustee for the benefit of each Participant) shall be issued in
respect of such shares. Such certificate shall bear whatever appropriate
legend referring to the terms, conditions, and restrictions applicable to such
award as the Committee shall determine. The Committee may, in its sole
discretion, require that the stock certificates evidencing Restricted Shares
be held in custody by the Company (or in trust by a trustee) until the
restrictions thereon shall have lapsed. If a trust is established in
connection with the Plan, a certificate or certificates may be solely issued
in the name of the trust; provided, however, that the trustee shall maintain a
record of Awards authorized under the Plan and the amount of cash dividends
payable to a Participant upon the vesting of any Award or installment thereof.
5. Miscellaneous.
5.1 Shareholder Approval; Effective Date; Term
The Plan shall become effective on June 6, 1997 but only if, prior to
such date, the Plan is approved by a majority of the Company's shareholders at
an annual or special meeting of shareholders of the Company held not less than
six (6) months after the date of consummation of the Bank's mutual-to-stock
conversion. The Plan shall continue in effect until the tenth anniversary of
the Effective Date.
5.2 Amendment, Suspension or Termination of the Plan
The Plan may be wholly or partially amended or otherwise modified,
suspends or terminated at any time or from time to time by the Board;
provided, however, that no amendment or modification shall be made without
shareholder approval if such approval is necessary to comply with any tax or
regulatory requirement with which the Board deems it necessary or appropriate
to comply.
From and after the Effective Date, neither the amendment, suspension
nor termination of the Plan shall, without the consent of the Participant,
alter or impair any rights or obligations under any award theretofore granted.
No awards may be granted during any period of suspension nor after termination
or expiration of the Plan.
5.3 Regulations and Other Approvals
(a) The obligation of the Company to deliver Shares with respect to
any award granted under the Plan shall be subject to all applicable laws,
rules and regulations, including all applicable federal and state securities
laws, and the obtaining of all such approvals by governmental agencies as may
be deemed necessary or appropriate by the Board.
(b) The Board may make such changes to the Plan as may be necessary
or appropriate to comply with the rules or requirements of any governmental
authority.
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(c) Each award of Shares is subject to the requirement that, if at
any time the Board determines, in its sole discretion, that the listing,
registration or qualification of Shares issuable pursuant to the Plan is
required by any securities exchange or under any United States, state or
federal law, or the consent or approval of any governmental regulatory body is
necessary or desirable as a condition of, or in connection with, issuance of
Shares, no Shares shall be issued, in whole or in part, unless listing,
registration, qualification, consent or approval has been effected or obtained
free of any conditions as acceptable to the Board.
(d) In the event that the disposition of Shares acquired pursuant to
the Plan is not covered by a then current registration statement under the
Securities Act of 1933, and is not otherwise exempt from such registration,
such Shares shall be restricted against transfer to the extent required by the
Securities Act of 1933 or regulations thereunder, and the Board may require
any individual receiving Shares pursuant to the Plan, as a condition precedent
to receipt of such Shares, to represent to the Company in writing that the
Shares acquired by such individual are acquired for investment only and not
with a view to distribution. The certificate for any Shares acquired pursuant
to the Plan shall include any legend that the Board deems appropriate to
reflect any restrictions on transfer.
(e) At the time of grant of any award, the Board may provide in the
Restricted Share award agreement that any Shares received as a result of such
grant shall be subject to a right of first refusal in favor of the Company,
pursuant to which the Participant shall be required to offer to the Company
any Shares that he wishes to sell, with the price being the then fair market
value of such Shares, subject to such other terms and conditions as the Board
may specify in the award agreement.
(f) With respect to persons subject to Section 16 of the Exchange
Act, transactions under this Plan are intended to comply with all applicable
terms and conditions of Rule 16b-3 and any successor provisions. To the
extent that any provision of the Plan or action by the Committee fails to so
comply, it shall be deemed null and void, to the extent permitted by law and
deemed advisable by the Committee.
(g) A Participant shall be required to pay to the Company or an
Affiliate the amount of any applicable withholding taxes in respect of an
Award and the Company shall be authorized to take such other action as may be
necessary in the opinion of the Company to satisfy all obligations for the
payment of such taxes, including, but not limited to, the withholding of the
issuance of Shares to be issued upon the vesting of any Award, until the
Participant reimburses the Company for any amount required to be withheld.
5.4 Trust Arrangement
All benefits under the Plan represent an unsecured promise to pay by
the Company. The Plan shall be unfunded and the benefits hereunder shall be
paid only from the general assets of the Company resulting in the Participants
having no greater rights than the Company's general creditors; provided,
however, that nothing herein shall prevent or prohibit the Company from
establishing a trust or other arrangement for the purpose of providing for the
payment of the benefits payable under the Plan.
5.5 Governing Law
The Plan and the rights of all persons claiming hereunder shall be
construed and determined in accordance with the laws of the State of Missouri
without giving effect to the choice of law principles thereof.
5.6 Titles; Construction
Titles are provided herein for convenience only and are not to serve as
a basis for interpretation or construction of the Plan. The masculine pronoun
shall include the feminine and neuter and the singular shall include the
plural, when the context so indicates.
* * *
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