October 27, 1997
Dear Fellow Stockholder:
On behalf of the Board of Directors and management of IFB
Holdings, Inc. (the "Company"), I cordially invite you to attend
the first Annual Meeting of Stockholders. The meeting will be
held at 2:00 p.m., Chillicothe, Missouri time on November 18,
1997 at the Grand River Inn, located at Highways 36 and 65,
Chillicothe, Missouri 64601.
The enclosed Notice of Annual Meeting and Proxy Statement
describe the formal business to be transacted. During the Annual
Meeting we will also report on the operations of the Company
since the completion of the conversion of Investors Federal Bank,
National Association (the "Bank") from mutual to stock form and
its reorganization into the holding company form of ownership.
An important aspect of the Annual Meeting process is the
stockholder vote on corporate business items. I urge you to
exercise your rights as a stockholder to vote and participate in
this process. Stockholders are being asked to consider and vote
upon the proposals to elect two directors of the Company, to
ratify the appointment of independent auditors of the Company for
the fiscal year ending June 30, 1998, and to ratify the adoption
of the 1997 Stock Option and Incentive Plan and the Recognition
and Retention Plan. The Board has carefully considered all of
these proposals and believes that their approval is in the best
interests of the Company and its stockholders. Accordingly, your
Board of Directors unanimously recommends that you vote for all
of the proposals.
I encourage you to attend the Annual Meeting in person.
Whether or not you attend the Annual Meeting, I hope that you
will read the enclosed Proxy Statement and then complete, sign
and date the enclosed proxy card and return it in the postage
prepaid envelope provided. Returning a properly executed and
dated proxy card will save the Company additional expense in
soliciting proxies and will ensure that your shares are
represented. Please note that you may vote in person at the
Annual Meeting even if you have previously returned the proxy.
Thank you for your attention to this important matter.
Sincerely,
Earle S. Teegarden, Jr.
President and Chief Executive Officer
IFB HOLDINGS, INC.
522 Washington Street
Chillicothe, Missouri 64601
(816) 646-3733
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
To be Held on November 18, 1997
Notice is hereby given that the Annual Meeting of
Stockholders (the "Meeting") of IFB Holdings, Inc. will be held
at the Grand River Inn, located at Highways 36 and 65,
Chillicothe, Missouri at 2:00 p.m., Chillicothe, Missouri time,
on November 18, 1997.
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 Company for three
year terms;
2. The ratification of the appointment of Lockridge,
Constant & Conrad, LLC as the auditors of the Company for the
fiscal year ending June 30, 1998;
3. The ratification of the adoption of the 1997 Stock
Option and Incentive Plan;
4. The ratification of the adoption of the Recognition and
Retention Plan;
and such other matters as may properly come before the Meeting,
or any adjournments thereof. The Board of Directors is not aware
of any other business to come before the Meeting.
Any action may be taken on the foregoing proposals at the
Meeting on the date specified above, or on any date or dates to
which the Meeting may be adjourned. Stockholders of record at
the close of business on October 10, 1997 are the stockholders
entitled to vote at the Meeting and any adjournments thereof.
You are requested to complete and sign the enclosed form of
proxy, which is solicited on behalf of the Board of Directors,
and to mail it promptly in the enclosed envelope. The proxy will
not be used if you attend and vote at the Meeting in person.
BY ORDER OF THE BOARD OF DIRECTORS
----------------------------------------
Larry R. Johnson
Secretary
Chillicothe, Missouri
October 27, 1997
- -----------------------------------------------------------------
IMPORTANT: THE PROMPT RETURN OF PROXIES WILL SAVE THE COMPANY
THE EXPENSE OF FURTHER REQUESTS FOR PROXIES TO ENSURE A QUORUM AT
THE MEETING. A SELF-ADDRESSED ENVELOPE IS ENCLOSED FOR YOUR
CONVENIENCE. NO POSTAGE IS REQUIRED IF MAILED WITHIN THE UNITED
STATES.
- -----------------------------------------------------------------
PROXY STATEMENT
IFB Holdings, Inc.
522 Washington Street
Chillicothe, Missouri 64601
(816) 646-3733
ANNUAL MEETING OF STOCKHOLDERS
To Be Held November 18, 1997
This Proxy Statement is furnished in connection with the
solicitation on behalf of the Board of Directors of IFB Holdings,
Inc. (the "Company"), the parent company of Investors Federal
Bank, National Association (the "Bank"), of proxies to be used at
the Annual Meeting of Stockholders of the Company (the "Meeting")
which will be held at the Grand River Inn, located at Highways 36
and 65, Chillicothe, Missouri on November 18, 1997, at 2:00 p.m.,
Chillicothe, Missouri time, and all adjournments of the Meeting.
The accompanying Notice of Annual Meeting and this Proxy
Statement are first being mailed to stockholders on or about
October 27, 1997.
At the Meeting, stockholders of the Company are being asked
to consider and vote upon the proposals to elect two directors of
the Company, to ratify the appointment of Lockridge, Constant &
Conrad, LLC as independent auditors of the Company for the fiscal
year ending June 30, 1998 and to ratify the adoption of the 1997
Stock Option and Incentive Plan ("Stock Option Plan") and the
Recognition and Retention Plan ("RRP").
Vote Required and Proxy Information
All shares of the Company's Common Stock, par value $.01 per
share (the "Common Stock"), represented at the Meeting by
properly executed proxies received prior to or at the Meeting,
and not revoked, will be voted at the Meeting in accordance with
the instructions thereon. If no instructions are indicated,
properly executed proxies will be voted for the proposals set
forth in this Proxy Statement. The Company does not know of any
matters, other than as described in the Notice of Annual Meeting,
that are to come before the Meeting. If any other matters are
properly presented at the Meeting for action, the persons named
in the enclosed form of proxy and acting thereunder will have the
discretion to vote on such matters in accordance with their best
judgment.
As to the election of directors, the proxy card being
provided by the Board of Directors enables a stockholder to vote
FOR the election of the nominees proposed by the Board, or to
WITHHOLD AUTHORITY to vote for one or more of the nominees being
proposed. One-third of the shares of the Common Stock entitled
to vote at the Meeting, present in person or represented by
proxy, shall constitute a quorum for purposes of the Meeting.
Under Delaware law and the Company's Certificate of Incorporation
and Bylaws, directors are elected by a plurality of votes cast,
without regard to either broker non-votes or proxies as to which
authority to vote for one or more
of the nominees being proposed is withheld. Abstentions and
broker non-votes are counted for purposes of determining a
quorum.
As to the ratification of the appointment of Lockridge,
Constant & Conrad, LLC as independent auditor of the Company, by
checking the appropriate box, a stockholder may: (i) vote FOR the
item; (ii) vote AGAINST the item; or (iii) ABSTAIN from voting on
the item. Under the Company's Certificate of Incorporation and
Bylaws, the ratification of this matter shall be determined by a
majority of the votes cast, without regard to broker non-votes,
or proxies marked ABSTAIN.
As to the proposals to adopt the Stock Option Plan and the
RRP, the proxy card being provided by the Board of Directors
enables a stockholder to check the appropriate box on the proxy
card to (i) vote FOR, (ii) vote AGAINST, or (iii) vote to ABSTAIN
from voting on, such matter. An affirmative vote of the holders
of a majority of the votes cast, in person or by proxy, and
entitled to vote is required to constitute stockholder approval,
without regard to broker non-votes, or proxies marked ABSTAIN.
Any other matters that may be brought before the Annual
Meeting will be determined by majority of the votes cast, without
regard to broker non-votes or any proxies as to which a
stockholder abstains.
A proxy given pursuant to the solicitation may be revoked at
any time before it is voted. Proxies may be revoked by: (i)
filing with the Secretary of the Company at or before the Meeting
a written notice of revocation bearing a later date than the
proxy, (ii) duly executing a subsequent proxy relating to the
same shares and delivering it to the Secretary of the Company at
or before the Meeting, or (iii) attending the Meeting and voting
in person (although attendance at the Meeting will not in and of
itself constitute revocation of a proxy). Any written notice
revoking a proxy should be delivered to Larry R. Johnson,
Secretary, IFB Holdings, Inc., 522 Washington Street,
Chillicothe, Missouri 64601.
Voting Securities and Certain Holders Thereof
Stockholders of record as of the close of business on
October 10, 1997 will be entitled to one vote for each share of
Common Stock then held. As of that date, the Company had 592,523
shares of Common Stock issued and outstanding. The following
table sets forth information as of October 10, 1997 regarding
share ownership of those persons or entities known by management
to own beneficially more than five percent of the Common Stock
and of all directors and executive officers of the Company and
the Bank as a group.
Shares
Beneficially Percent
Beneficial Owner Owned of Class
Investors Federal Bank 47,401 8.0%
Employee Stock Ownership Plan (1)
522 Washington Street
Chillicothe, Missouri 64601
Mortgage Investment Trust Corporation 52,100 8.8%
5200 West 94th Terrace
Prairie Village, KS 66207
Directors and executive officers of the 83,410(2) 14.1%
Company and the Bank as a group
(6 persons)
(1) The amount reported represents all shares held by the
Employee Stock Ownership Plan ("ESOP"), of which 2,211 shares
have been allocated to accounts of participants. First Bankers
Trust, of Quincy, Illinois, the trustee of the ESOP, may be
deemed to beneficially own the shares held by the ESOP which have
not been allocated to accounts of participants. Participants in
the ESOP are entitled to instruct the trustee as to the voting of
shares allocated to their accounts under the ESOP. Unallocated
shares held in the ESOP's suspense account are voted by the
trustee in the same proportion as allocated shares voted by
participants.
(2) Amount includes shares held directly, as well as shares held
jointly with family members, shares held in retirement accounts,
shares held in a fiduciary capacity or by certain family members,
with respect to which shares the group members may be deemed to
have sole or shared voting and/or investment power.
PROPOSAL I - ELECTION OF DIRECTORS
The Company's Board of Directors is presently composed of
six members, each of whom is also a director of the Bank. The
Directors are divided into three classes. Directors of the
Company are generally elected to serve for a three-year term
which is staggered to provide for the election of approximately
one-third of the directors each year.
The following table sets forth certain information regarding
the Company's Board of Directors, including their terms of office
and nominees for election as directors. It is intended that the
proxies solicited on behalf of the Board of Directors (other than
proxies in which the vote is withheld as to the nominee) will be
voted at the Meeting for the election of the nominees identified
in the following table. If any nominee is unable to serve, the
shares represented by all such proxies will be voted for the
election of such substitute as the Board of Directors may
recommend. At this time, the Board of Directors knows of no
reason why the nominee might be unable to serve, if elected.
Except as described herein, there are no arrangements or
understandings between any director or nominee and any other
person pursuant to which such director or nominee was selected.
PAGE
Shares of Common
Age at Current Stock Beneficially Percent
June 30, Positions Held Director Term to Owned at of
Name 1997 with the Bank Since(1) Expire October 10, 1997(2) Class
- -------------------------------------------------------------------------------------------------
BOARD NOMINEES FOR TERMS TO EXPIRE IN 2000
Earle S. Teegarden, Jr. 61 President and Chief 1964 1997 12,981 2.19%
Executive Officer,
and Director
Armand J. Peterson 60 Director 1978 1997 20,000 3.38
DIRECTORS CONTINUING IN OFFICE
Larry R. Johnson 49 Senior Executive Vice 1989 1998 10,329 1.74
President, Secretary
and Director
J. Michael Palmer 47 Director 1996 1998 20,000 3.38
Robert T. Fairweather 73 Chairman of the Board 1966 1999 100 .02
Edward P. Milbank 58 Vice Chairman of the 1974 1999 20,000 3.38
Board
/TABLE
- ----------------------------
(1) Includes service as a director of the Bank.
(2) Includes shares held directly, as well as shares held
jointly with family members, shares held in retirement accounts,
shares held by certain members of the named individuals'
families, or held by trusts of which the named individual is a
trustee or substantial beneficiary, with respect to which shares
the named individuals may be deemed to have sole or shared voting
and/or investment power. Also includes shares allocated to the
individual account of Messrs. Teegarden and Johnson under the
Company's Employee Stock Ownership Plan.
The business experience of each director and director
nominee is set forth below. All directors have held their
present positions for at least the past five years, except as
otherwise indicated.
Earle S. Teegarden, Jr. Mr. Teegarden has been employed by
the Bank since February 1964. As President and Chief Executive
Officer, Mr. Teegarden oversees the day-to-day operations of the
Bank. He is also responsible for investments and overseeing the
Bank's asset/liability management program.
Armand J. Peterson. Mr. Peterson is President and Treasurer
of Chillicothe Iron and Steel, Inc., a steel fabricating company.
Larry R. Johnson Mr. Johnson has been employed by the Bank
since December 1974. He is responsible for all lending
operations for the Bank and also serves as personnel officer for
the Bank.
J. Michael Palmer. Mr. Palmer is currently a private
investor. Until December 1995, he was Chairman of the Board and
Treasurer of Midwest Quality Gloves, Inc., in Chillicothe. Mr.
Palmer was elected to the Board of Directors in January 1996.
Robert T. Fairweather. Mr. Fairweather is retired. Until
his retirement, Mr. Fairweather was an owner/operator of a retail
hardware store in Chillicothe. Prior to that, he served as the
Chief Executive Officer of a credit union.
Edward P. Milbank. Mr. Milbank is Vice Chairman of the
Board of the Bank. Mr. Milbank is the President and CEO of
Milbank Mills, Inc., a feed manufacturing company.
Ownership Reports by Officers and Directors
The Common Stock of the Company is registered pursuant to
Section 12(g) of the 1934 Act. The officers and directors of the
Company and beneficial owners of greater than 10% of the
Company's Common Stock ("10% beneficial owners") are required to
file reports on Forms 3, 4, or 5 with the SEC disclosing changes
in beneficial ownership of the Common Stock. SEC rules require
disclosure in the Company's Proxy Statement and Annual Report on
Form 10-K of the failure of an officer, director or 10%
beneficial owner of the Company's Common Stock to file a Form 3,
4, or 5 on a timely basis. Based on the Company's review of such
ownership reports, no officer, director or 10% beneficial owner
of the Company failed to file ownership reports on a timely basis
for the fiscal year ended June 30, 1997.
Meetings of the Board of Directors and Committees
The Board of Directors met 18 times during the year ended
June 30, 1997. During fiscal 1997, no director of the Company
attended fewer than 75% of the aggregate of the total number of
Board meetings and the total number of meetings held by the
committees of the Board of Directors on which he served.
The Company formed standing Audit, Nominating and
Compensation Committees in connection with its organization in
October 1996.
The Audit Committee reviews audit reports and related
matters to ensure effective compliance with regulations and
internal policies and procedures. This committee also acts on
the recommendation by management of an accounting firm to perform
the Company's annual audit and acts as a liaison between the
auditors and the Board. The current members of this committee
are Directors Fairweather, Milbank, Palmer and Peterson. The
Company's Audit Committee met one time in fiscal 1997.
The Nominating Committee meets annually in order to nominate
candidates for membership on the Board of Directors. This
committee is comprised of the Board members who are not up for
election. The Nominating Committee met one time during fiscal
1997.
The Compensation Committee establishes the Company's
compensation policies and reviews compensation matters. This
Committee is currently composed of all members of the Board of
Directors. The Compensation Committee met one time during fiscal
1997.
Director Compensation
During fiscal 1997, the Company paid each director fees in
the amount of $475 for service on the Company's Board of
Directors. During fiscal 1997, all directors of the Bank
received a fee of $475 per month. In addition, during fiscal
1997, outside directors of the Bank serving on the Loan Committee
received a $15 fee for each loan reviewed at meetings of the Loan
Committee. In addition, each outside member serving on the
Compliance Committee of the Bank received a fee of $60 for each
meeting attended, and the Chairman of the Committee received a
fee of $75 for each meeting attended.
Director Emeritus Program. In order to encourage directors
to remain associated with the Bank's Board of Directors, in
January 1995 the Bank adopted a director emeritus program in
which the Board of Directors, in its discretion, may elect any
retiring director as a Director Emeritus, provided the retiring
director has served as a director until reaching mandatory
retirement age (or until being forced to retire due to medical
considerations) and such director has served as a director of the
Bank for at least 10 years. Directors Emeritus of the Bank shall
be compensated for their services at a rate of 50% of full
director fees for the first 10 years following election and at a
rate of 25% of full director fees for the second 10 years
following election. Thereafter, no fees shall be payable except
that, upon request from the then current Board of Directors, a
Director Emeritus may be invited to attend a Board meeting and as
such shall qualify to receive full board fees for that meeting.
Stock Benefit Plans. Subject to stockholder approval of the
stock benefit plans at this Meeting, it is expected that each
member of the Board of Directors will be granted awards pursuant
to the Stock Option Plan and the RRP following the effectiveness
of these plans in January 1998. The amount of the awards that
will be granted to directors will not be determined until the
plans become effective. For additional information regarding the
stock benefit plans, see Proposals III and IV hereinafter
discussed.
Executive Compensation
The Company has not paid any compensation to its executive
officers since its formation. However, the Company does
reimburse the Bank for services performed on behalf of the
Company by its officers. The Company does not presently
anticipate paying any compensation to such persons until it
becomes actively involved in the operation or acquisition of
businesses other than the Bank.
The following table sets forth the compensation paid or
accrued by the Bank for services rendered by Earle S. Teegarden,
Jr., the President and Chief Executive Officer of the Bank. No
other executive officer earned in excess of $100,000 during
fiscal year 1997.
Long-Term
Annual Compensation Compensation Awards
Restricted
Other Annual Stock Options/ All Other
Name and Salary Bonus Compensation Award(s) SARs Compensation
Principal Position Fiscal Year ($) ($) ($) ($) (#) ($)
- ---------------------------------------------------------------------------------------------------------------------
Earle S. Teegarden, 1997 $ 73,000 $13,786 $ --- $ ---(2) ---(3) -- $14,875(4)
Jr., President 1996 $ 69,450 $16,423 $ --- $ ---(2) ---(3) -- $12,293(5)
/TABLE
- ------------------------
(1) In accordance with the rules on executive officer and
director compensation disclosure adopted by the SEC, Summary
Compensation information is excluded for the fiscal year ended
June 30, 1995, as the Bank was not a public company during such
period.
(2) No awards of restricted stock were made during the fiscal
year presented. See Proposal IV herein for a description of
restricted stock awards that may be made in January 1998
following stockholder approval of the RRP.
(3) No options or Stock Appreciation Rights ("SARs") were
awarded during the fiscal years presented. See Proposal III
herein for options that may be awarded in January 1998 following
stockholder approval of the Stock Option Plan.
(4) Includes Board fee of $8,325, earned issuance commissions of
$1,743 and $4,807 contributed under the ESOP for the benefit of
Mr. Teegarden.
(5) Includes Board fees of $6,600, a profit-sharing contribution
of $4,381 and earned insurance commissions of $1,312.
Employment Agreements
The Bank entered into an employment agreement effective upon
consummation of the stock conversion, with Earle S. Teegarden,
Jr., President and Chief Executive Officer, providing for a term
of three years. The contract provides for payment to the
employee for the remaining term of the contract unless the
employee is terminated "for cause."
The employment agreement for Mr. Teegarden provides for an
annual base salary as determined by the Board of Directors, but
not less than the employee's current salary. Mr. Teegarden's
base salary (exclusive of director fees and bonuses) was $70,500
in calendar year 1996, and was increased to $73,000 in 1997. So
long as the contract remains in force, salary increases will be
reviewed not less often than annually thereafter, and are subject
to the sole discretion of the Board of Directors. The employment
contract provides for annual extensions of one additional year,
but only upon express authorization by the Board of Directors at
the end of each year. The contract provides for termination upon
the employee's death, for cause or in certain events specified by
OTS regulations. The employment contract is terminable by the
employee upon 90 days' notice to the Bank.
In the event there is a change in control of the Company or
the Bank, as defined in the agreement, and if employment
terminates involuntarily, as defined in the agreement, in
connection with such change in control or within 12 months
thereafter, the employment contract provides for a payment equal
to 299% of Mr. Teegarden's base amount of compensation as defined
in the Code. Assuming a change in control were to take place as
of June 30, 1997, the aggregate amounts payable to Mr. Teegarden
pursuant to this change in control provision would be
approximately $218,270.
The contract provides, among other things, for participation
in an equitable manner in employee benefits applicable to
executive personnel. The employment contract may have an "anti-
takeover" effect that could affect a proposed future acquisition
of control of the Bank.
The Bank also entered into an employment agreement with
Larry R. Johnson, Senior Executive Vice President and Secretary.
This agreement also provides for a term of three years and a
change of control payment equal to 299% of Mr. Johnson's prior
years' compensation plus certain additional benefits such as
health insurance. This agreement is otherwise similar to the
employment agreement with Mr. Teegarden.
Benefit Plans
General. The Bank currently provides health care benefits,
including medical and prescription plan benefits, subject to
certain deductibles and copayments by employees, and group life
insurance to its full time employees.
Profit Sharing Plan. Prior to the stock conversion, the
Bank maintained the Investors Federal Bank and Savings
Association Employee Profit Sharing Plan (the "Plan") which was a
qualified, tax-exempt retirement plan under Section 401(a) of the
Code. All employees who have reached the age of 18 and have
completed one year of service with the Bank (i.e., 12 months in
which the employee works at least 1,000 hours) were eligible to
participate. The Bank may, but was not required to, make
discretionary contributions to the Plan each year in amounts to
be determined annually. Contributions, when made, were allocated
to eligible plan participants based on the ratio of their
compensation to the total compensation for all eligible
participants for the plan year. The Plan operated on the basis
of a calendar plan year. Participants were vested in their
profit sharing account balances at the rate of 20% per year of
credited service under the Plan beginning in their third year of
credit service, with participants becoming fully vested in their
account balance after seven years of credited service. If the
Plan was top-heavy, participants became fully vested after six
years of credit service under the Plan. Participants also became
fully vested in their account balance upon attainment of normal
retirement age under the Plan (i.e., age 65), upon death or
disability, or upon termination of the Plan. During the 1997
Plan year, the Bank contributed $-0- to the account of Mr.
Teegarden, and contributed an aggregate of $-0- to the accounts
of all other eligible participants. In connection with the
conversion and adoption of the Employee Stock Ownership Plan, the
Bank terminated the Plan during fiscal 1997 and distributed its
assets.
Indebtedness of Management
The Bank has followed a policy of granting consumer loans
and loans secured by one- to four-family real estate to officers,
directors and employees. Loans to directors and executive
officers are made in the ordinary course of business and on the
same terms and conditions as those of
comparable transactions with the general public prevailing at the
time, in accordance with the Bank's underwriting guidelines, and
do not involve more than the normal risk of collectibility or
present other unfavorable features.
All loans by the Bank to its directors and executive
officers are subject to federal regulations restricting loan and
other transactions with affiliated persons of the Bank. Federal
law currently requires that all loans to directors and executive
officers be made on terms and conditions comparable to those for
similar transactions with non-affiliates. Loans to all
directors, executive officers, employees and their associates
totaled $464,085 at June 30, 1997, which was 5.37% of the
Company's stockholders' equity at that date. There were no loans
outstanding to any director, executive officer or their
affiliates at preferential rates or terms which in the aggregate
exceeded $60,000 during the three years ended June 30, 1997. All
loans to directors and officers were performing in accordance
with their terms at June 30, 1997.
PROPOSAL II - RATIFICATION OF APPOINTMENT
OF INDEPENDENT AUDITORS
The Company's independent auditors for the fiscal year ended
June 30, 1997 were Lockridge, Constant & Conrad, LLC. The
Company's Board of Directors has reappointed Lockridge, Constant
& Conrad, LLC to continue as independent auditors for the Company
for the fiscal year ending June 30, 1998, subject to ratification
of such appointment by the stockholders. Representatives of
Lockridge, Constant & Conrad, LLC are expected to attend the
Meeting. They will be given the opportunity to make a statement
if they desire to do so and will be available to respond to
appropriate questions from stockholders present at the Meeting.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE
RATIFICATION OF THE APPOINTMENT OF LOCKRIDGE, CONSTANT & CONRAD,
LLC AS THE INDEPENDENT AUDITORS OF THE COMPANY FOR THE FISCAL
YEAR ENDING JUNE 30, 1998.
PROPOSAL III -
RATIFICATION OF THE 1997 STOCK OPTION AND INCENTIVE PLAN
General
Establishment and implementation of the Stock Option Plan is
subject to approval by stockholders and the satisfaction of
certain other conditions. The Company has determined to submit
the Stock Option Plan to stockholders for approval prior to the
one-year anniversary of the conversion of the Bank to stock form
in order to avoid the additional expense of holding a special
meeting of stockholders in January 1998; however, the Stock
Option Plan will not take effect until January 1, 1998.
The 1997 Stock Option and Incentive Plan (the "Stock Option
Plan") has been adopted by the Board of Directors of the Company,
subject to ratification by stockholders at the Meeting. Pursuant
to the Stock Option Plan, ten percent (10%) of the total shares
issued in the Bank's
conversion to capital stock form are reserved for issuance by the
Company under the Stock Option Plan. The Company may determine
to reacquire shares in the open market for purposes of fulfilling
its obligations under the Stock Option Plan, or may alternatively
issue additional shares for this purpose. Since stockholders do
not have preemptive rights, to the extent the Company issues all
shares reserved for issuance under the Stock Option Plan, the
interests of current stockholders will be diluted 9.1%.
The Board of Directors believes that it is appropriate for
the Company to adopt a flexible and comprehensive stock option
and incentive plan which permits the granting of a variety of
long-term incentive awards to directors, advisory directors,
officers and employees as a means of enhancing and encouraging
the recruitment and retention of those individuals on whom the
continued success of the Company most depends. However, because
the awards are granted only to persons affiliated with the
Company, the adoption of the Stock Option Plan could make it more
difficult for a third party to acquire control of the Company and
therefore could discourage offers for the Company's stock that
may be viewed by the Company's stockholders to be in their best
interest. In addition, certain provisions included in the
Company's Certificate of Incorporation and Bylaws may discourage
potential takeover attempts, particularly those that have not
been negotiated directly with the Board of Directors of the
Company. Included in the Certificate of Incorporation and Bylaws
are provisions (i) limiting the voting power of shares held by
persons owning 10% or more of the Common Stock, (ii) requiring a
supermajority vote of shareholders for approval of certain
business combinations, (iii) establishing a staggered Board of
Directors, (iv) permitting special meetings of shareholders to be
called only by the Board of Directors and (v) authorizing a class
of preferred stock with terms to be established by the Board of
Directors. These provisions could prevent the sale or merger of
the Company even where a majority of the stockholders approve of
such transaction.
In addition, federal regulations generally prohibit the
beneficial ownership of more than 10% of the stock of a converted
savings institution or its holding company without prior approval
of the appropriate federal regulatory authority. Federal law
and regulations also require approval prior to the acquisition of
"control" (as defined in the regulations) of an insured
institution, including a holding company thereof. These
regulations could have the effect of discouraging takeover
attempts of the Company.
Attached as Appendix A to this Proxy Statement is the
complete text of the Stock Option Plan. The principal features
of the Stock Option Plan are summarized below.
Principal Features of the Stock Option Plan
The Stock Option Plan provides for awards in the form of
stock options, stock appreciation rights ("SARs") and limited
stock appreciation rights ("Limited SARs"). Each award shall be
on such terms and conditions, consistent with the Stock Option
Plan, as the committee administering the Stock Option Plan may
determine.
The term of stock options will not exceed ten years from the
date of grant. The Stock Option Committee may grant either
"Incentive Stock Options" as defined under Section 422 of the
Code or stock options not intended to qualify as such ("non-
qualified stock options").
Shares may be either authorized but unissued shares or
reacquired shares held by the Company in its treasury. Any
shares subject to an award which expires or is terminated
unexercised will again be available for issuance under the Stock
Option Plan. Generally, in the discretion of the Board, all or
any non-qualified stock options granted under the Stock Option
Plan may be transferable by the Participant but only to the
persons or classes of persons determined by the Board in any
determination permitting transferability. No other award or any
right or interest therein is assignable or transferable except
under certain limited exceptions set forth in the Stock Option
Plan.
The Stock Option Plan will be administered by a committee of
the Board (the "Stock Option Committee") consisting of either two
or more "non-employee directors" (as defined in the Stock Option
Plan), or the entire Board of Directors. The members of the
Stock Option Committee shall be appointed by the Board of
Directors of the Company. Pursuant to the terms of the Stock
Option Plan, any director, advisory director, officer or employee
of the Company or its affiliates is eligible to participate in
the Stock Option Plan. The Stock Option Committee will determine
to whom the awards will be granted under the Stock Option Plan,
in what amounts, and the period over which such awards will vest.
In granting awards under the Stock Option Plan, the Stock Option
Committee considers, among other things, position and years of
service, value of the participant's services to the Company and
the Bank and the added responsibilities of such individuals as
employees, directors and officers of a public company.
Stock Options
In general, stock options will not be exercisable after the
expiration of their terms. If a Participant to whom an Option or
Right was granted shall cease to maintain Continuous Service for
any reason (excluding death, disability, normal retirement or
following a change in control of the Bank or the Company, and
termination of employment by the Company or any Affiliate for
cause), such Participant may, but only within the period of three
months immediately succeeding such cessation of Continuous
Service and in no event after the expiration date of such Option
or Right, exercise such Option or Right to the extent that such
Participant was entitled to exercise such Option or Right at the
date of cessation, provided, however, that such right of exercise
after cessation of Continuous Service shall not be available to a
Participant if the Stock Option Committee otherwise determines
and so provides in the applicable instrument or instruments
evidencing the grant of such Option or Right. If a Participant
to whom an Option or Right was granted shall cease to maintain
Continuous Service by reason of death, disability, normal
retirement or following a change in control of the Bank or the
Company then, unless the Committee shall otherwise provide in the
instrument evidencing the grant of an Option or Right, all
Options and Rights granted and not fully exercisable shall become
exercisable in full upon the happening of such an event and shall
remain exercisable in the event of death for the period described
below and in the event of disability, normal retirement or
following a change in control for a period of one year following
such date. If the Continuous Service of a Participant to whom an
Option or Right was granted by the Company is terminated for
cause, all rights under any Option or Right of such Participant
shall expire immediately upon the effective date of such
termination.
In the event of the death of a Participant while in the
Continuous Service of the Company or an Affiliate or within the
one year period referred to above, the person to whom any Option
or Right held by the Participant at the time of his death is
transferred by will or the laws of descent and distribution, may,
but only to the extent such Participant was entitled to exercise
such Option or Right immediately prior to his death, exercise
such Option or Right at any time within a period of
one year succeeding the date of death of such Participant, but in
no event later than ten years from the date of grant of such
Option or Right. Following the death of any participant, the
Stock Option Committee may, as an alternative means of settlement
of an option, elect to pay to the holder an amount of cash equal
to the amount by which the market value of the shares covered by
the option on the date of exercise exceeds the exercise price,
multiplied by the number of shares with respect to which such
option is properly exercised. A stock option will automatically
terminate and will no longer be exercisable as of the date a
participant is terminated for cause.
The exercise price for the purchase of shares subject to a
stock option at the date of grant may not be less than 100% of
the market value of the shares covered by the option on that
date. The exercise price must be paid in full in cash or shares
of Common Stock, or a combination of both.
On or after January 1, 1998, the effective date of the Stock
Option Plan, the Committee intends to provide for the grant of a
substantial number of the options to the Company's non-employee
directors and senior management. As of the date of this Proxy
Statement, the Committee has not determined the amount of the
awards to each director and officer. The exercise price per
share of such options shall be equal to the fair market value of
the Common Stock on the date of grant.
Stock Appreciation Rights
The Stock Option Committee may grant SARs at any time,
whether or not the participant then holds stock options, granting
the right to receive the excess of the market value of the shares
represented by the SARs on the date exercised over the exercise
price. SARs generally will be subject to the same terms and
conditions and exercisable to the same extent as stock options,
as described above. Upon the exercise of a SAR, the participant
will receive the amount due in cash or shares, or a combination
of both, as determined by the Stock Option Committee. SARs may
be related to stock options ("tandem SARs"), in which case the
exercise of one will reduce to that extent the number of shares
represented by the other. If a SAR is granted with and related
to an Incentive Stock Option, the SAR must satisfy all the
restrictions and limitations to which the related Incentive Stock
Option is subject.
SARs will require an expense accrual by the Company each
year for the appreciation on the SARs which it is anticipated
will be exercised. The amount of the accrual is dependent upon
whether and the extent to which the SARs are granted and the
amount, if any, by which the market value of the SARs exceeds the
exercise price.
Limited Stock Appreciation Rights
Limited SARs will be exercisable only in the event of a
change in control of the Bank or the Company. The amount paid on
exercise of a Limited SAR will be the excess of the market value
of the shares on the date of exercise, over the exercise price.
Payment upon exercise of a Limited SAR will be in cash, or in the
event of a change in control in which pooling accounting
treatment is a condition to the transaction, for shares of stock
of the Company, or in the event of a merger transaction, for
shares of the acquiring corporation or its parent, as applicable.
Limited SARs may be granted at the time of, and must be
related to, the grant of a stock option or SAR. The exercise of
one will reduce to that extent the number of shares represented
by
the other. If a Limited SAR is granted with and related to an
Incentive Stock Option the Limited SAR must satisfy all the
restrictions and limitations to which the related Incentive Stock
Option is subject.
Effect of Adjustments
Shares as to which awards may be granted under the Stock
Option Plan, and shares then subject to awards, will be adjusted
by the Stock Option Committee in the event of any merger,
consolidation, reorganization, recapitalization, stock dividend,
stock split, combination or exchange of shares or other change in
the corporate structure of the Company.
In the case of any merger, consolidation or combination of
the Company with or into another bank holding company or other
entity, whereby either the Company is not the continuing bank
holding company or its outstanding shares are converted into or
exchanged for securities, cash or other property, or any
combination thereof, any participant to whom a stock option, SAR
and Limited SAR has been granted will have the right (subject to
the provisions of the Stock Option Plan and any applicable
vesting period) upon exercise of the option, SAR or Limited SAR
to an amount equal to the excess of fair market value on the date
of exercise of the consideration receivable in the merger,
consolidation or combination with respect to the shares covered
or represented by the stock option, SAR or Limited SAR over the
exercise price of the option multiplied by the number of shares
with respect to which the option, SAR or Limited SAR has been
exercised.
Amendment and Termination
The Board of Directors of the Company may at any time,
amend, suspend or terminate the Stock Option Plan or any portion
thereof, provided, however, that no such amendment, suspension or
termination shall impair the rights of any Participant, without
his consent, in any Award therefore made pursuant to the Plan.
Unless previously terminated, the Stock Option Plan shall
continue in effect for a term of ten years, after which no
further awards may be granted under the Stock Option Plan.
Federal Income Tax Consequences
Under present federal income tax laws, awards under the
Stock Option Plan will have the following consequences:
(1) The grant of an Award, by itself, will neither result in the
recognition of taxable income to the Participant nor entitle the
Company to a deduction at the time of such grant.
(2) The exercise of a stock option which is an "Incentive Stock
Option" within the meaning of Section 422 of the Code will
generally not, by itself, result in the recognition of taxable
income to the participant nor entitle the Company to a deduction
at the time of such exercise. However, the difference between
the exercise price and the fair market value of the option shares
on the date of exercise is an item of tax preference which may,
in certain situations, trigger the alternative minimum tax. The
alternative minimum tax is incurred only when it exceeds the
regular income tax. The alternative minimum tax will be payable
at the rate of 26% to the first $175,000 of "ordinary income"
in excess of $33,750 (single person) or $45,000 (married person
filing jointly). This tax applies at a flat rate of 28% of so
much of the taxable ordinary income in excess of $175,000. The
alternative minimum tax will be payable at a maximum rate of 20%
on net capital gain. If a taxpayer has alternative minimum
taxable income in excess of $150,000 (married persons filing
jointly) or $112,500 (single person), the $45,000 or $33,750
exemptions are reduced by an amount equal to 25% of the amount by
which the alternative minimum taxable income of the taxpayer
exceeds $150,000 or $112,500, respectively. The Participant will
recognize long term capital gain or loss upon the resale of the
shares received upon such exercise, provided the Participant
holds the shares for more than eighteen months from the date of
exercise.
(3) The exercise of a stock option which is not an Incentive
Stock Option will result in the recognition of ordinary income by
the Participant on the date of exercise in an amount equal to the
difference between the exercise price and the fair market value
on the date of exercise of the shares acquired pursuant to the
stock option.
(4) The exercise of a SAR will result in the recognition of
ordinary income by the Participant on the date of exercise in an
amount of cash, and/or the fair market value on that date of the
shares, acquired pursuant to the exercise.
(5) The Company will be allowed a deduction at the time, and in
the amount of, any ordinary income recognized by the Participant
under the various circumstances described above, provided that
the Company meets its federal withholding tax obligations.
THE BOARD OF DIRECTORS RECOMMENDS THAT STOCKHOLDERS VOTE
"FOR" THE RATIFICATION OF THE ADOPTION OF THE 1997 STOCK OPTION
AND INCENTIVE PLAN.
PROPOSAL IV -
RATIFICATION OF THE RECOGNITION AND RETENTION PLAN
General
Establishment and implementation of the RRP is subject to
approval by stockholders, and the satisfaction of certain other
conditions. The Company has determined to submit the Recognition
and Retention Plan to stockholders for approval prior to the one-
year anniversary of the conversion of the Bank to stock form;
however, the Recognition and Retention Plan will not take effect
until January 1, 1998.
Subject to ratification by stockholders, the Board of
Directors of the Company has adopted a Recognition and Retention
Plan (the "RRP") as a method of providing key officers and
directors with a proprietary interest in the Company in a manner
designed to encourage such individuals to remain with the
Company. Pursuant to the RRP, restricted stock awards covering
four percent (4%) of the total shares sold in the Bank's
conversion to stock form have been reserved for issuance under
the RRP.
Attached as Appendix B to this Proxy Statement is the
complete text of the form of the RRP. The principal features of
the RRP are summarized below.
Principal Features of the RRP
The RRP provides for the award of shares of Common Stock
("RRP Shares") subject to the restrictions described below. Each
award under the RRP will be made on such terms and conditions,
consistent with the RRP, as the RRP Committee administering the
RRP shall determine.
The RRP is administered by a committee of the Board
consisting of either (i) at least two "non-employee directors"
(as defined in the RRP) or (ii) the entire Board of Directors
(the "RRP Committee"). The members of the RRP Committee shall be
appointed by the Board of Directors of the Company. The RRP
Committee will select the recipients and terms of awards pursuant
to the RRP. In determining to whom and in what amount to grant
awards, the RRP Committee considers the position and
responsibilities of eligible employees, the value of their
services to the Company and the Bank and other factors it deems
relevant. Pursuant to the terms of the RRP, any director,
advisory director, officer or employee of the Company or its
affiliates may be selected by the RRP Committee to participate in
the RRP.
The RRP provides that RRP Shares used to fund awards under
such plan may be either authorized but unissued shares or issued
shares heretofore or hereafter reacquired by the Company in the
open market and held as treasury shares. Since stockholders do
not have preemptive rights, to the extent the Company utilizes
authorized but unissued shares to fund the RRP, the interests of
the current stockholders will be diluted by approximately 3.85%.
Award recipients earn (i.e., become vested in) awards, over
a period of time as determined by the RRP Committee, at the time
of grant. RRP Shares are subject to forfeiture if the recipient
fails to remain in the continuous service (as defined in the RRP)
as an employee, officer, director, or advisory director of the
Company or the Bank for a stipulated period (the "restricted
period").
The RRP Committee may, in its discretion, accelerate the
time at which any or all restrictions will lapse, or may remove
any or all of the restrictions. In the event a recipient ceases
to maintain continuous service with the Company or the Bank by
reason of normal retirement, death, disability, or a change in
control of the Bank or the Company, RRP Shares still subject to
restrictions will be free of these restrictions and shall not be
forfeited. In the event of termination for any other reason, all
nonvested shares will be forfeited and returned to the Company.
Prior to vesting of the nonvested RRP Shares, a recipient will
have the right to vote the nonvested RRP Shares which have been
awarded to the recipient and will receive any dividends declared
on such RRP Shares.
Effect of Adjustments
Restricted stock awarded under the RRP will be adjusted by
the RRP Committee in the event of a reorganization,
recapitalization, stock split, stock dividend, combination or
exchange of shares, merger, consolidation or other change in
corporate structure.
Federal Income Tax Consequences
Holders of restricted stock will recognize ordinary income
on the date that the shares of restricted stock are no longer
subject to a substantial risk of forfeiture, in an amount equal
to the fair market value of the shares on that date. In certain
circumstances, a holder may elect to recognize ordinary income
and determine such fair market value on the date of the grant of
the restricted stock.
Holders of restricted stock will also recognize ordinary income
equal to their dividend or dividend equivalent payments when such
payments are received. Generally, the amount of income
recognized by participants will be a deductible expense for tax
purposes by the Bank.
Amendment to the RRP
The Board of Directors of the Company may at any time amend,
suspend or terminate the RRP or any portion thereof, provided,
however, that no such amendment, suspension or termination shall
impair the rights of any award recipient, without his consent, in
any award therefore made pursuant to the RRP.
Awards Under the RRP
It is expected that, in January 1998, a substantial number
of the available RRP Shares will be awarded to directors,
officers and employees of the Company.
STOCKHOLDER PROPOSALS
In order to be eligible for inclusion in the Company's proxy
materials for the next annual meeting of stockholders, any
stockholder proposal to take action at such meeting must be
received at the Company's office located at 522 Washington
Street, Chillicothe, Missouri 64601 no later than June 30, 1998.
Any such proposal shall be subject to the requirements of the
proxy rules adopted under the Exchange Act.
OTHER MATTERS
The Board of Directors is not aware of any business to come
before the Meeting other than those matters described above in
this Proxy Statement. However, if any other matter should
properly come before the Meeting, it is intended that holders of
the proxies will act in accordance with their best judgment.
The cost of solicitation of proxies will be borne by the
Company. The Company will reimburse brokerage firms and other
custodians, nominees and fiduciaries for reasonable expenses
incurred by them in sending proxy materials to the beneficial
owners of Common Stock. In addition to solicitation by mail,
directors, officers and regular employees of the Company and the
Bank may solicit proxies personally or by telegraph or telephone
without additional compensation.
Chillicothe, Missouri
October 27, 1997
IFB HOLDINGS, INC.
ANNUAL MEETING OF STOCKHOLDERS
November 18, 1997
The undersigned hereby appoints Robert T. Fairweather and
Edward P. Milbank, with full powers of substitution, to act as
attorneys and proxies for the undersigned to vote all shares of
capital stock of IFB Holdings, Inc. (the "Company") which the
undersigned is entitled to vote at the Annual Meeting of
Stockholders (the "Meeting") to be held at the Grand River Inn,
located at Highways 36 and 65, Chillicothe, Missouri, on November
18, 1997 at 2:00 p.m., Chillicothe, Missouri time and at any and
all adjournments and postponements thereof.
1. The election as directors of all nominees listed below
(except as marked to the contrary):
/ / FOR / / VOTE WITHHELD
INSTRUCTION: To withhold your vote for any individual
nominee, strike a line in that nominee's name
below.
EARLE S. TEEGARDEN, JR.
ARMAND J. PETERSON
2. The ratification of the appointment of Lockridge, Constant &
Conrad, LLC as auditors for the Company for the fiscal year
ending June 30, 1998.
/ / FOR / / AGAINST / / ABSTAIN
3. The ratification of the adoption of the 1997 Stock Option
and Incentive Plan.
/ / FOR / / AGAINST / / ABSTAIN
4. The ratification of the adoption of the Recognition and
Retention Plan.
/ / FOR / / AGAINST / / ABSTAIN
In their discretion, the proxies are authorized to vote on
any other business that may properly come before the Meeting or
any adjournment or postponement thereof.
THIS PROXY WILL BE VOTED AS DIRECTED, BUT IF NO INSTRUCTIONS
ARE SPECIFIED, THIS PROXY WILL BE VOTED FOR THE PROPOSALS AND
EACH OF THE NOMINEES LISTED ABOVE. IF ANY OTHER BUSINESS IS
PRESENTED AT THE 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.
The Board of Directors recommends a vote "FOR" the proposals
and the election of the nominees listed above.
(Continued and to be SIGNED on Reverse Side)
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
Should the undersigned be present and choose to vote at the
Meeting or at any adjournments or postponements thereof, and
after notification to the Secretary of the Company at the Meeting
of the stockholder's decision to terminate this proxy, then the
power of such attorneys or proxies shall be deemed terminated and
of no further force and effect. This proxy may also be revoked
by filing a written notice of revocation with the Secretary of
the Company or by duly executing a proxy bearing a later date.
The undersigned acknowledges receipt from the Company, prior
to the execution of this proxy, of notice of the Meeting, a Proxy
Statement and an Annual Report to Stockholders.
Dated: --------------, 1997 -----------------------------------
Signature of Stockholder
Please sign exactly as your name(s)
appear(s) to the left. 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-PAID ENVELOPE