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SCHEDULE 14A
(RULE 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement [ ] Confidential, for Use of the
Commission Only (as permitted by
Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
COMMUNITY FEDERAL BANCORP, INC.
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(Name of Registrant as Specified in Its Charter)
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(Name of Person(s) Filing Proxy Statement if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and
0-11.
(1) Title of each class of securities to which transaction applies:
- --------------------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
- --------------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
- --------------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid:
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[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the 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:
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(2) Form, schedule or registration statement no.:
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(3) Filing party:
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(4) Date filed:
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February 24, 1997
Dear Stockholder:
You are cordially invited to attend the Annual Meeting of Stockholders
of Community Federal Bancorp, Inc. The meeting will be held at Community
Federal Bancorp, Inc.'s office located at 333 Court Street, Tupelo,
Mississippi, on Thursday, March 27, 1997 at 5:00 p.m., Central Time. The
matters to be considered by stockholders at the Annual Meeting are described in
the accompanying materials.
It is very important that you be represented at the Annual Meeting
regardless of the number of shares you own or whether you are able to attend
the meeting in person. We urge you to mark, sign, and date your proxy card
today and return it in the envelope provided, even if you plan to attend the
Annual Meeting. This will not prevent you from voting in person, but will
ensure that your vote is counted if you are unable to attend.
Your continued support of and interest in Community Federal Bancorp,
Inc. are sincerely appreciated.
Sincerely,
Jim Ingram
President and Chief Executive Officer
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COMMUNITY FEDERAL BANCORP, INC.
333 COURT STREET
TUPELO, MISSISSIPPI 38802
(601) 842-3981
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON MARCH 27, 1997
NOTICE IS HEREBY GIVEN that an Annual Meeting of Stockholders of
Community Federal Bancorp, Inc, ("Company") will be held at Community Federal
Bancorp, Inc.'s office located at 333 Court Street, Tupelo, Mississippi, on
Thursday, March 27, 1997, at 5:00 p.m., Central Time, for the following
purposes, all of which are more completely set forth in the accompanying Proxy
Statement:
1. To elect three directors of the Company for a three-year term and
until their successors are elected and qualified;
2. To consider and approve the 1997 Stock Option Plan;
3. To consider and approve the 1997 Management Recognition Plan and
Trust;
4. To ratify the appointment of Arthur Andersen, LLP as the Company's
independent auditors for the fiscal year ending September 30, 1997; and
5. To transact such other business as may properly come before the
meeting or any adjournment thereof.
The Board of Directors of the Company has fixed February 14, 1997 as
the voting record date for the determination of stockholders entitled to notice
of and to vote at the Annual Meeting. Only those stockholders of record as of
the close of business on that date will be entitled to vote at the Annual
Meeting or at any such adjournment.
BY ORDER OF THE BOARD OF DIRECTORS
Judy Ballard, Secretary
February 24, 1997
Tupelo, Mississippi
YOU ARE CORDIALLY INVITED TO ATTEND THE ANNUAL MEETING. IT IS IMPORTANT
THAT YOUR SHARES BE REPRESENTED REGARDLESS OF THE NUMBER YOU OWN. EVEN IF YOU
PLAN TO BE PRESENT, YOU ARE URGED TO COMPLETE, SIGN, DATE AND RETURN THE
ENCLOSED PROXY PROMPTLY IN THE ENVELOPE PROVIDED. IF YOU ATTEND THIS MEETING,
YOU MAY VOTE EITHER IN PERSON OR BY YOUR PROXY. ANY PROXY GIVEN MAY BE REVOKED
BY YOU IN WRITING OR IN PERSON AT ANY TIME PRIOR TO THE EXERCISE THEREOF.
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COMMUNITY FEDERAL BANCORP, INC.
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PROXY STATEMENT
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ANNUAL MEETING OF STOCKHOLDERS
MARCH 27, 1997
GENERAL
This Proxy Statement is being furnished to the stockholders of the
Company in connection with the solicitation of proxies by the Board of
Directors for use at its Annual Meeting of Stockholders ("Annual Meeting") to
be held at the Company's office located at 333 Court Street, Tupelo,
Mississippi, on Thursday, March 27, 1997, at 5:00 p.m., Central Time, and at
any adjournment thereof, for the purposes set forth in the Notice of Annual
Meeting of Stockholders. This Proxy Statement is first being mailed to
stockholders on or about February 24, 1997.
VOTING RIGHTS
Only the holders of record of the outstanding shares of the common stock,
$0.01 par value per share, of the Company ("Common Stock") at the close of
business on February 14, 1997 (the "Voting Record Date") will be entitled to
notice of and to vote at the Annual Meeting. At such date, there were
4,628,750 shares of Common Stock issued and outstanding.
Each share of Common Stock is entitled to one vote at the Annual Meeting
on all matters properly presented at the meeting. Directors are elected by a
plurality of the votes cast with a quorum present. The affirmative vote of
the holders of a majority of the total votes present, in person or by proxy, at
the Annual Meeting is required for approval of the proposal to approve the 1997
Stock Option Plan ("Option Plan") and the 1997 Management Recognition Plan and
Trust ("Recognition Plan") and to ratify the independent auditors. The
presence, either in person or by proxy, of the holders of a majority of the
shares of Common Stock outstanding on the Voting Record Date is necessary to
constitute a quorum at the Annual Meeting. Abstentions are considered in
determining the presence of a quorum, but abstentions and broker non-votes will
not effect the vote required to approve the proposals presented at the Annual
Meeting.
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PROXIES
Shares of Common Stock represented by properly executed proxies, if such
proxies are received in time and not revoked, will be voted in accordance with
the instructions indicated on the proxies. IF NO INSTRUCTIONS ARE INDICATED,
SUCH PROXIES WILL BE VOTED FOR THE MATTERS DESCRIBED BELOW AND, IN THE
DISCRETION OF THE PROXY HOLDER, AS TO ANY OTHER MATTER WHICH MAY PROPERLY COME
BEFORE THE ANNUAL MEETING. ANY HOLDER OF COMMON STOCK WHO RETURNS A SIGNED
PROXY BUT FAILS TO PROVIDE INSTRUCTIONS AS TO THE MANNER IN WHICH SUCH SHARES
ARE TO BE VOTED WILL BE DEEMED TO HAVE VOTED IN FAVOR OF THE MATTERS SET FORTH
IN THE PRECEDING SENTENCE.
Any Company stockholder who has given a proxy may revoke it at any time
prior to its exercise at the Annual Meeting by (i) giving written notice of
revocation to the Secretary of the Company, (ii) properly submitting to the
Company a duly-executed proxy bearing a later date, or (iii) attending the
Annual Meeting and voting in person. All written notices of revocation and
other communications with respect to revocation of proxies should be addressed
as follows: Community Federal Bancorp, Inc., 333 Court Street, Tupelo,
Mississippi, 38802, Attention: Secretary.
BENEFICIAL OWNERSHIP
The following table sets forth information as to the Common Stock
beneficially owned, as of February 14, 1997, by (i) the only persons or
entities known to the Company to be the beneficial owners of more than 5% of
the Common Stock and (ii) all directors and officers of the Company as a group.
Amount and Nature Percent
of Beneficial of
Name and Address of Beneficial Owner Ownership(1) Class
------------------------------------ -------------- ---------
Community Federal Bancorp, Inc. Employee Stock
Ownership Plan
333 Court Street
Tupelo, Mississippi 38802 363,200 7.80%
All directors and executive officers
of the Company as a
group (eleven persons) 339,931(2) 7.34%
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(1) Pursuant to rules promulgated by the Securities and Exchange Commission
("SEC") under the Securities Exchange Act of 1934, as amended ("Exchange
Act"), a person or entity is considered to beneficially own shares of
Common Stock if the person or entity has or shares (i) voting power,
which includes the power to vote or to direct the voting of the shares,
or (ii) investment power, which includes the power to dispose or direct
the disposition of the shares. Unless otherwise indicated, a person or
entity has sole voting and sole investment power with respect to the
indicated shares. Shares which are subject to stock options and which
may be exercised within 60 days of the Voting Record Date are deemed to
be outstanding for the purpose of computing the percentage of Common
Stock beneficially owned by such person.
(2) Includes in the case of all directors and officers of the Company as a
group, 7,144 shares of Common Stock allocated to the account of the
officers in the Company's Employee Stock Ownership Plan (the "ESOP").
INFORMATION WITH RESPECT TO NOMINEES FOR DIRECTOR
ELECTION OF DIRECTORS
The Bylaws of the Company provide that the Board of Directors shall be
divided into three classes which are as equal in number as possible, and that
the members of each class of directors are to be elected for a term of three
years and until their successors are elected and qualified.
At the Annual Meeting, stockholders of the Company will be asked to
elect three directors of the Company for a three-year term and until their
successors are elected and qualified. The nominees for election as directors
were selected by the Nominating Committee of the Board of Directors and, each
nominee currently serves as a director of the Company. There are no
arrangements or understandings between the persons named and any other person
pursuant to which such person was selected as a nominee for election as a
director at the Annual Meeting. No director or nominee for director is related
to any other director or executive officer of the Company by blood, marriage or
adoption.
If any person named as nominee should be unable or unwilling to stand
for election at the time of the Annual Meeting, the proxies will nominate and
vote for any replacement nominee or nominees recommended by the Board of
Directors of the Company. At this time, the Board of Directors knows of no
reason why any of the nominees may not be able to serve as a director if
elected.
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INFORMATION WITH RESPECT TO NOMINEES FOR DIRECTOR
AND DIRECTORS WHOSE TERMS CONTINUE
The following tables present information concerning each nominee for
director and each director whose term continues and reflects his tenure as a
director of the Company, his principal occupation during the past five years as
well as the number of shares of Common Stock beneficially owned by each such
person as of the Voting Record Date.
NOMINEES FOR DIRECTOR FOR THREE-YEAR TERM
Common Stock
Position with Beneficially
the Company and Owned as of
Age as of Principal Occupation February 14, 1997(1)
September 30, During the Director ---------------------
Name 1996 Past Five Years Since No. %
---- ---- ---------------- -------- ----- ---
Robert R. Black, Sr. 55 Periodontist with 1993 35,000 *
practice in Tupelo,
Mississippi, retired in
1995.
Jim Ingram 65 President and chief 1973 38,476(2) *
executive officer of the
Bank since 1984 and of
the Company since 1996.
L.F. Sams, Jr. 57 Member of the law firm of 1986 35,000 *
Mitchell, McNutt,
Threadgill, Smith and
Sams since 1971.
DIRECTORS WITH TERMS EXPIRING IN 1998
Common Stock
Position with Beneficially
the Company and Owned as of
Principal Occupation February 14, 1997(1)
During the Director ---------------------
Name Age Past Five Years Since No. %
---- --- ------------------ -------- ----- ----
Charles V. Imbler, Sr. 64 President and chief 1988 35,025 *
executive officer of
Truck Center Inc.,
Tupelo, Mississippi,
since 1970.
Medford M. Leake 68 Chairman of the Board 1974 35,000(2) *
since 1995, president of
Steele City Lumber
Company, Birmingham,
Alabama, from 1970 to
1996, chairman of the
board since 1997.
Michael R. Thomas 47 President of Washington 1994 65,330(4) 1.4
Furniture MFG. Co., Inc.,
Houlka, Mississippi from
1988 - 1993 and from 1996
to present. Real estate
developer in Tupelo,
Mississippi from 1993 to
1996.
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DIRECTORS WITH TERMS EXPIRING IN 1999
Common Stock
Position with Beneficially
the Company and Owned as of
Principal Occupation February 14, 1997(1)
During the Director ---------------------
Name Age Past Five Years Since No. %
---- --- ------------------ -------- ----- ----
J. Leighton Pettis, Jr. 63 Ophthalmologist in 1977 42,900 *
Tupelo, Mississippi,
since 1962.
Robert W. Reed, III 41 Account executive and 1995 5,932(5) *
director of Reed
Manufacturing since 1992;
sales representative of
New York life insurance
1990-1992.
THE BOARD OF DIRECTORS RECOMMENDS THAT THE
NOMINEES BE ELECTED AS DIRECTORS
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(1) Based on information furnished by the respective individuals.
Pursuant to rules promulgated by the SEC under the Exchange Act, a
person or entity is considered to beneficially own shares of Common
Stock if the person or entity has or shares (i) voting power, which
includes the power to vote or to direct the voting of the shares, or
(ii) investment power, which includes the power to dispose or direct
the disposition of the shares. Unless otherwise indicated, a person
or entity has sole voting and sole investment power with respect to
the indicated shares. Shares which are subject to stock options and
which may be exercised within 60 days of the Voting Record Date are
deemed to be outstanding for the purpose of computing the percentage
of Common Stock beneficially owned by such person. An asterisk
indicates that the ownership interest is less than one percent.
(2) Includes 30,200 shares held jointly with Mr. Ingram's wife and 3,476
shares allocated to his account in the ESOP.
(3) Includes 21,606 shares held jointly with Mr. Leake's wife and 1,471
shares held by Mr. Leake's wife.
(4) Includes 8,000 shares held in an individual retirement account, 30,00
shares held jointly with Mr. Thomas's wife, 13,500 shares held jointly
with Jim Wiygul and 12,000 shares held in a trust.
(5) Includes 5,000 shares held jointly with Mr. Reed's wife.
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EXECUTIVE OFFICERS WHO ARE NOT DIRECTORS
The following table sets forth certain information with respect to the
persons who currently serve as executive officers of the Savings Bank and who
initially will serve as executive officers of the Company and who are not, and
will not be, directors. There are no arrangements or understandings between
the Savings Bank and/or the Company and any such person pursuant to which such
person was or will be elected an executive officer of the Savings Bank or the
Company and no such officer is related to any director or other officer of the
Savings Bank or the Company by blood, marriage or adoption.
AGE AS OF
NAME SEPTEMBER 30, 1996 POSITIONS
- --------------------------------- ------------------ -----------------------------
Gill Simmons 62 Vice President - Mortgage
Loans
Jack Johnson 57 Vice President - Operations
and Compliance
Mark Burleson 30 Vice President - Consumer/
Commercial Lending
Set forth below is a brief description of the background of each person
who serves as an executive officer of the Company and the Savings Bank
and who is not a director.
Gill Simmons is Vice President for Mortgage Loans. Mr. Simmons joined
the Savings Bank in 1955 and during his tenure also has served as
Secretary/Treasurer.
Jack Johnson is Vice President for Operations and Compliance. Mr.
Johnson joined the Savings Bank in 1958 and during his tenure also has served
as cashier.
Mark Burleson is Vice President - Consumer/Commercial Lending. Mr.
Burleson joined the Savings Bank in 1994 after being employed at a Tupelo-area
commercial bank for five years where he served, among other positions, as an
assistant vice president and a branch manager.
THE BOARD OF DIRECTORS AND ITS COMMITTEES
Regular meetings of the Board of Directors of the Company are held
quarterly and special meetings of the Board of Directors of the Company are
held from time-to-time as needed. There were seven meetings of the Board of
Directors of the Company held during fiscal 1996. No director attended fewer
than 75% of the total number of meetings of the Board of Directors of the
Company held during fiscal 1996 and the total number of meetings held by all
committees of the Board on which the director served during such year.
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The Company's business is primarily conducted through Community Federal
Savings Bank (the "Savings Bank"), a federally chartered savings bank and a
wholly owned subsidiary of the Company. The Board of Directors of Community has
established various committees, including an Executive Committee.
The Executive Committee generally has the power and authority to act
on behalf of the Board of Directors on important matters between scheduled
directors meetings unless specific Board of Directors action is required or
unless otherwise restricted by the Savings Bank's charter or bylaws or its
Board of Directors. The Executive Committee also serves as the Savings Bank's
Compensation Committee. The Executive Committee is currently chaired by Mr.
Ingram with Messrs. Leake and Imbler as members. The Executive Committee met
four times in fiscal 1996.
The full Board of Directors also serves as the Loan Committee which
meets monthly to review the loans requiring committee approval pursuant to the
Savings Bank's loan policy statement.
The Savings Bank has not established a permanent nominating committee
pursuant to the Bylaws of the Savings Bank but names such a committee prior to
each annual meeting.
OTHER COMMITTEES
In addition to committees of the Board of Directors, the Savings Bank
has also established other committees composed of officers and key personnel,
as set forth below.
The Investment Committee meets on an as needed basis, no less than
quarterly, and is responsible for reviewing pricing strategies and the Savings
Bank's investment results, preparing various analyses and discussing possible
transactions. In addition, on a quarterly basis the Committee examines the
recording and reporting of securities activities to ensure consistency with
policies set forth in the Savings Bank's Portfolio and Investment Policy
Statement. Currently, Mr. Ingram serves as chairman of the Investment
Committee with Messrs. Simmons, Johnson and Burleson and Sherry McCarty,
Controller, as members. The Investment Committee met six times in fiscal 1996.
The Audit Committee reviews (i) the independent auditors' reports and
results of their examination, prior to review by and with the entire Board of
Directors and (ii) the Office of Thrift Supervision ("OTS") and Federal Deposit
Insurance Corporation ("FDIC") and other regulatory reports, prior to review by
and with the entire Board of Directors. Currently, Mr. Johnson serves as
chairman of the Audit Committee and Ms. McCarty and Dana Adams, Accounting
Clerk, serve as members. The Audit Committee met four times during fiscal
1996.
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DIRECTORS' COMPENSATION
Beginning January 1, 1996, each member of the Board of Directors was
paid $116 for each Board meeting attended. During the first quarter of fiscal
1996, they were paid $110 for each meeting attended. In addition, in fiscal
1996 prior to January 1, 1997, directors were paid a $500 monthly fee and
thereafter were paid a $525 monthly fee. During the same period, each member
of a Board Committee described above, who is an outside director was paid an
attendance fee at the same rate as the Board meeting attendance fee. Committee
members otherwise do not receive fees for committee meetings.
EXECUTIVE COMPENSATION
SUMMARY
The following table sets forth a summary of certain information
concerning the compensation awarded to or paid by the Savings Bank for services
rendered in all capacities during the last two fiscal years to the President
and Chief Executive Officer of the Savings Bank and any other executive officer
of the Savings Bank who received salary and bonuses aggregating more than
$100,000 during the last fiscal year.
SUMMARY COMPENSATION TABLE
================================================================================================================================
ANNUAL COMPENSATION LONG TERM COMPENSATION
----------------------------------------------------------------------------
OTHER AWARDS PAYOUTS
NAME AND ANNUAL ------------------------------------- ALL OTHER
PRINCIPAL POSITION YEAR SALARY(1) BONUS COMPENSATION(1) COMPENSATION
RESTRICTED
STOCK LTIP
OPTIONS AWARDS PAYOUTS
- --------------------------------------------------------------------------------------------------------------------------------
Jim Ingram 1996 $119,407 $30,000 -- -- $ -- -- $
President and Chief 1995 104,738 20,000 -- -- -- --
Executive Officer 1994 99,750 14,250 -- -- -- --
================================================================================================================================
(1) Does not include amounts attributable to miscellaneous benefits
received by the named executive officer, including the payment of club
membership dues. The costs to the Savings Bank of providing such
benefits to the named executive officer during the year ended
September 30, 1996 did not exceed the lesser of $50,000 or 10% of the
total of annual salary and bonus reported for such individual.
COMPENSATION COMMITTEE
The Compensation Committee determines executive compensation and its
members include Messrs. Leake and Imbler as well as Mr. Ingram who is an
executive officer of the Company and does not participate in decisions
regarding his compensation. The report of the Compensation
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Committee with respect to compensation for the chief executive officer
and all other executive officers is set forth below.
REPORT OF THE COMPENSATION COMMITTEE
The goals of the Committee are to assist the Savings Bank in attracting
and retaining qualified management, motivating executives to achieve
performance goals, rewarding management for outstanding performance and to
ensure that the financial interests of the Company's management and
shareholders are satisfied.
The Committee considered several financial and non-financial
accomplishments in setting the compensation of the Chief Executive Officer and
other executive officers, including but not limited to, net income of the
Savings Bank, profitability ratios, satisfactory regulatory examinations, and
market value of the Savings Bank. The Committee reviewed and considered the
SNL Executive Compensation Review for a comparison of compensation paid by the
Savings Bank's peer group.
The compensation set by the Committee includes a base salary and a
bonus component. Based upon the above factors, the Committee on behalf of the
Company offered an employment agreement to Mr. Ingram which provided for a
rolling three-year term of employment commencing on March 25, 1996 and set his
fiscal 1996 salary at $119,407. In addition, the Committee provided for salary
increases for the other executive officers and determined their respective
bonuses for fiscal 1996.
Medford M. Leake
Charles V. Imbler, Sr.
Jim Ingram
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PERFORMANCE GRAPH
The following graph compares the yearly cumulative total return on the
Common Stock over the measurement period since the Savings Bank issued stock to
the public in March 1996 with (i) the yearly cumulative total return on the
stocks included in the Standard and Poor's 500 Market Index and (ii) the yearly
cumulative total return on the stocks included in the SNL Securities Thrift
Stock Index.
[GRAPH]
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DIRECTORS' RETIREMENT PLAN
In order to secure the continuing service of members of the Board of
Directors and to recognize the contributions of such individuals to the Savings
Bank, the Savings Bank established a Directors' Retirement Plan ("DRP") in
fiscal 1993. A director becomes eligible to receive benefits from the DRP upon
completion of ten years of continuous service as a director of the Savings
Bank, including service as such prior to the adoption of the DRP. Under the
DRP, a retired director or his beneficiary would receive for a ten-year period
annual retirement benefits equal to 100% of the annual directors' fees being
paid to the Savings Bank directors on the date of the director's retirement.
Payments under the DRP will terminate if a retired director becomes affiliated
with another financial institution that is a competitor of the Savings Bank.
Any claim under the DRP by a participant is that of an unsecured creditor. Six
members of the Savings Bank's current Board of Directors qualify to receive
benefits under the DRP at retirement.
EMPLOYMENT AGREEMENTS
During fiscal 1996 the Company entered into an employment agreement
with Mr. Ingram (the "Executive") which provides for an annual salary, subject
to annual adjustment by the Boards of Directors. At September 30, 1996, Mr.
Ingram's annual salary was $119,407 plus an annual bonus determined at year end
by the Board of Directors. The form of employment agreement provides for a
rolling three-year term of employment commencing on March 25, 1996, which term
is automatically extended each day for an additional day such that the
remaining term of the agreement continues to be for three years. However, on
the first anniversary of the agreement and each anniversary thereafter, the
Board of Directors of the Savings Bank shall consider and review extension of
the terms of the agreement and shall continue to extend under such terms unless
either party gives notice of non-renewal to the other party so that the term of
Mr. Ingram's employment under the agreement would not be less than three years
unless such notice had been given.
The employment agreement is terminable with or without cause by the
Savings Bank. The Executive has no right to compensation or other benefits
pursuant to the employment agreement for any period after voluntary termination
or termination by the Savings Bank for cause, disability, retirement or death.
However, in the event that (i) the Executive terminates his employment because
of failure of the Savings Bank to comply with any material provision of the
employment agreement or (ii) the employment agreement was terminated by the
Executive for Good Reason, as defined, the Executive would be entitled to 2.99
times the average annual compensation paid to him by the Savings Bank during
the five most recent taxable years ending during the calendar year in which the
notice of termination occurs or such portion of such period in which the
Executive served as senior officer of the Savings Bank as well as continued
participation in employee benefit plans of the Savings Bank (other than
retirement plans and stock compensation plans) until the expiration of the
remaining term of employment. "Good Reason" is generally defined in the
employment agreement to include the assignment by the Savings Bank to the
Executive of any duties which, in the Executive's good faith determination, are
materially inconsistent
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with the Executive's positions, duties, responsibilities and status with the
Savings Bank prior to such assignment or prior to a change in control of the
Savings Bank. The employment agreement would not be automatically terminated
upon a change in control. If the employment agreement of Mr. Ingram had been
terminated for Good Reason during fiscal 1996, he would have been entitled to a
payment of $357,000.
The employment agreement provides that in the event that any of the
payments to be made thereunder or otherwise upon termination of employment are
deemed to constitute "excess parachute payments" within the meaning of Section
280G of the Internal Revenue Code of 1986, as amended (the "Code"), then such
payments and benefits received thereunder would be reduced, in the manner
determined by the Savings Bank, by the amount, if any, which is the minimum
necessary to result in no portion of the payments and benefits being
nondeductible by the Savings Bank for federal income tax purposes. Excess
parachute payments generally are defined as payments in excess of three times
the recipient's average annual compensation from the Savings Bank includable in
the recipients gross income during the most recent five taxable years ending
before the date on which a change in control of the Savings Bank or other
triggering events occurred ("base amount"). A recipient of excess parachute
payments is subject to a 20% excise tax on the amount by which such payments
exceed the base amount, in addition to regular income taxes, and payments in
excess of the base amount would not be deductible by the Savings Bank as
compensation expense for federal income tax purposes.
RETIREMENT PLAN
The Savings Bank has a defined benefit pension plan ("Retirement Plan")
for all employees who have attained the age of 21 years and have completed one
year of service with the Savings Bank. In general, the Retirement Plan
provides for annual benefits payable monthly upon retirement at age 65 in an
amount equal to approximately 1.667% of the "Average Compensation" of the
employee (which is equal to the average of the compensation paid to him or her
during the five successive calendar years within the final ten calendar years
of service affording the highest average, excluding bonuses, commissions,
overtime pay and other special compensation) for each year of service, not in
excess of 40 years. Under the Retirement Plan, an employee's benefits are
fully vested after six years of qualifying service. A year of service is any
year in which an employee works a minimum of 1,000 hours. The Retirement Plan
provides for an early retirement option with reduced benefits for participants
who are age 50 and who have 15 years of service.
The following table illustrates annual pension benefits for retirement
at age 65 under various levels of compensation and years of service. The
figures in the table assume that the Retirement Plan continues in its present
form and that the participants elect a straight life annuity form of benefit.
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FIVE YEAR
AVERAGE 10 YEARS OF 15 YEARS OF 20 YEARS OF 25 YEARS OF 30 YEARS OF 35 YEARS OF
COMPENSATION SERVICE SERVICE SERVICE SERVICE SERVICE SERVICE
------------ ---------- ----------- ---------- --------- --------- ----------
$ 40,000 $ 7,314 $10,970 $14,627 $18,284 $21,941 $25,598
50,000 9,145 13,717 18,290 22,862 27,434 32,007
60,000 10,965 16,448 21,930 27,413 32,895 38,378
70,000 12,796 19,194 25,592 31,990 38,388 44,787
80,000 14,627 21,941 29,255 36,568 43,882 51,196
90,000 16,448 24,671 32,895 41,119 49,343 57,566
100,000 18,279 27,418 36,557 45,697 54,836 63,975
110,000 20,110 30,165 40,220 50,275 60,329 70,384
120,000 21,930 32,895 43,860 54,825 65,790 76,755
At September 30, 1996, Mr. Ingram had 35 years of credited service
under the Retirement Plan.
EMPLOYEE STOCK OWNERSHIP PLAN
During fiscal 1996, the Company established an Employee Stock
Ownership Plan for employees age 21 or older who have at least one year of
credited service with the Savings Bank (including years of service with the
Savings Bank in its mutual form). The ESOP was funded by the contributions
from the Company and the Savings Bank made in cash (which primarily were
invested in Common Stock) or Common Stock. Benefits may be paid either in
shares of Common Stock or in cash.
The ESOP borrowed $3,632,000 from the Company sufficient to purchase
363,200 shares of the Common Stock. The Savings Bank will make scheduled
discretionary cash contributions to the ESOP sufficient to amortize the
principal and interest on the loan, which has a maturity of 17 years. The
Savings Bank may, in any plan year, make additional discretionary contributions
for the benefit of plan participants in either cash or shares of Common Stock,
which may be acquired through the purchase of outstanding shares in the market
or from individual stockholders, upon the original issuance of additional
shares by the Company or upon the sale of Treasury shares by the Company. Such
purchases, if made, would be funded through additional borrowings by the ESOP
or additional contributions from the Savings Bank. The timing, amount and
manner of future contributions to the ESOP will be affected by various factors,
including prevailing regulatory policies, the requirements of applicable laws
and regulations and market conditions.
Generally accepted accounting principles ("GAAP") require that any
borrowing by the ESOP be reflected as a liability on the Company's statement of
financial condition. In addition, shares purchased with borrowed funds will,
to the extent of the borrowings, be excluded from equity, representing unearned
compensation to employees for future services not yet performed.
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Consequently, if the ESOP purchases already issued shares in the open market,
the Company's consolidated liabilities will increase to the extent of the
ESOP's borrowings, and total and per share equity will be reduced to reflect
such borrowings. If the ESOP purchases newly issued shares from the Company,
total equity would neither increase nor decrease, but per share equity and per
share net income would decrease because of the increase in the number of shares
outstanding. In either case, as the borrowings used to fund ESOP purchases are
repaid, total equity will correspondingly increase.
Shares purchased by the ESOP with the proceeds of the loan are held in
a loan suspense account and released on a pro rata basis as debt service
payments are made. Discretionary contributions to the ESOP and shares released
from the suspense account will be allocated among participants on the basis of
compensation. Forfeitures will be reallocated among remaining participating
employees and may reduce any amount the Savings Bank might otherwise have
contributed to the ESOP. Benefits may be payable upon retirement, early
retirement, disability or separation from service. The Savings Bank's
contributions to the ESOP are not fixed, so benefits payable under the ESOP
cannot be estimated.
A Committee appointed by the Board of Directors of the Savings Bank
administers the ESOP ("ESOP Committee") and Messrs. Ingram, Leake and Johnson
will act as trustees of the related trust. The ESOP Committee may instruct the
trustees regarding investment of funds contributed to the ESOP. Under the
ESOP, the trustees must vote all allocated shares held in the ESOP in
accordance with the instructions of the participating employees, and allocated
shares for which employees do not give instructions will be voted in the same
ratio on any matter as to those shares for which instructions are given.
Unallocated shares held in the ESOP will be voted by the ESOP trustees in the
same proportion for and against proposals as participants vote shares allocated
to their individual accounts.
The ESOP is subject to the requirements of the Employee Retirement
Income Security Act of 1974, as amended ("ERISA"), and the regulations of the
Internal Revenue Service and the Department of Labor promulgated thereunder.
INDEBTEDNESS OF MANAGEMENT
The Savings Bank, in the ordinary course of business, makes available
to its directors and executive officers all types of loans that it makes
available to the general public. Such loans 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 collectability or present other unfavorable features.
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PROPOSAL TO ADOPT THE 1997 STOCK OPTION PLAN
GENERAL
The Board of Directors has adopted the 1997 Stock Option Plan ("Option
Plan") which is designed to attract and retain qualified personnel in key
positions, provide officers and key employees with a proprietary interest in
the Company as an incentive to contribute to the success of the Company and
reward key employees for outstanding performance and the attainment of targeted
goals. The Option Plan is also designed to retain qualified directors for the
Company. The Option Plan provides for the grant of incentive stock options
intended to comply with the requirements of Section 422 of the Code ("incentive
stock options"), non-incentive or compensatory stock options and stock
appreciation rights (collectively "Awards"). Awards will be available for
grant to directors and key employees of the Company and any subsidiaries,
except that non-employee directors will be eligible to receive only
non-incentive stock options pursuant to a set formula. If shareholder approval
is obtained, options to acquire shares of Common Stock will be awarded to key
employees of the Company and the Savings Bank and directors of the Company with
an exercise price equal to the fair market value of the Common Stock on the
date of such approval.
DESCRIPTION OF THE OPTION PLAN
The following description of the Option Plan is a summary of its terms
and is qualified in its entirety by reference to the Option Plan, a copy of
which is attached hereto as Appendix A.
Administration. The Option Plan will be administered and interpreted
by a committee of the Board of Directors ("Committee") which is "disinterested"
pursuant to applicable regulations under the federal securities laws. The
current members of the Committee are Messrs. Leake and Black.
Stock Options. Under the Option Plan, the Committee will determine
which officers and key employees will be granted options, whether such options
will be incentive or compensatory options, the number of shares subject to each
option, the exercise price of each compensatory option, whether such options
may be exercised by delivering other shares of Common Stock and when such
options become exercisable. The per share exercise price of an incentive stock
option shall at least equal the fair market value of a share of Common Stock on
the date the option is granted, and the per share exercise price of a
compensatory stock option shall at least equal the greater of par value or 100%
of the fair market value of a share of Common Stock on the date the option is
granted.
Stock options shall become vested and exercisable in the manner
specified by the Committee. Each stock option or portion thereof shall be
exercisable at any time on or after it vests and will be exercisable until ten
years after its date of grant or three months after the date on which the
optionee's employment or his service as a board member terminates, unless
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extended by the Committee to a period not to exceed three years from such
termination. If an optionee's employment or his service as a board member is
terminated due to death, the optionee's estate will have up to one year
following the termination of employment or service to exercise the option. If
an employees employment terminates due to disability, the optionee or his
estate will have up to one year following the termination of his employment to
exercise the option. Stock options are non-transferable except by will or the
laws of descent and distribution.
Stock Appreciation Rights. Under the Option Plan, the Committee is
authorized to grant rights to optionees ("stock appreciation rights") under
which an optionee may surrender any exercisable incentive stock option or
compensatory stock option or part thereof in return for payment by the Company
to the optionee of cash or Common Stock in an amount equal to the excess of the
fair market value of the shares of Common Stock subject to option at the time
over the option price of such shares, or a combination of cash and Common
Stock. Stock appreciation rights may be granted concurrently with the stock
options to which they relate or at any time thereafter which is prior to the
exercise or expiration of such options.
Grants to Directors. Options granted to non-employee directors under
the Option Plan will be awarded under a formula pursuant to which each
non-employee director will receive an option to purchase 19,837 shares of
Common Stock upon approval of the Option Plan by stockholders. An option
granted to directors will be exercisable until ten years after its date of
grant. However, if an optionee dies while serving as a non-employee director
without having fully exercised his options, the optionee's executors,
administrators legatees or distributes of his estate shall have the right to
exercise such options during the twelve-month period following such death,
provided no option will be exercisable more than ten years from the date it was
granted.
Number of Shares Covered by the Option Plan. A total of 462,875
shares of Common Stock has been reserved for future issuance pursuant to the
Option Plan. In the event of a stock split, reverse stock split or stock
dividend, the number of shares of Common Stock under the Option Plan, the
number of shares to which any Award relates and the exercise price per share
under any option or stock appreciation right shall be adjusted to reflect such
increase or decrease in the total number of shares of Common Stock outstanding.
In addition, in the event the Company declares a special cash dividend or
return of capital in an amount per share which exceeds 10% of the fair market
value of a share of Common Stock as of the date of declaration, the per share
exercise price of all previously granted Awards which remain unexercised as of
the date of such declaration shall be proportionately adjusted to give effect
to such special cash dividend or return of capital as of the date of payment of
such special cash dividend or return of capital, subject to certain
limitations.
Amendment and Termination of the Option Plan. Unless sooner
terminated, the Option Plan shall continue in effect for a period of ten years
from January 17, 1997, the date the Option Plan was adopted by the Board of
Directors. Termination of the Option Plan shall not affect any previously
granted Awards.
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Federal Income Tax Consequences. Under current provisions of the
Code, the federal income tax treatment of incentive stock options and
compensatory stock options is different. As regards incentive stock options,
an optionee who meets certain holding period requirements will not recognize
income at the time the option is granted or at the time the option is
exercised, and a federal income tax deduction generally will not be available
to the Company at any time as a result of such grant or exercise. With respect
to compensatory stock options, the difference between the fair market value on
the date of exercise and the option exercise price generally will be treated as
compensation income upon exercise, and the Company will be entitled to a
deduction in the amount of income so recognized by the optionee. Upon the
exercise of a stock appreciation right, the holder will realize income for
federal income tax purposes equal to the amount received by him, whether in
cash, shares of stock or both, and the Company will be entitled to a deduction
for federal income tax purposes in the same amount.
The above description of tax consequences under federal law is
necessarily general in nature and does not purport to be complete. Moreover,
statutory provisions are subject to change, as are their interpretations, and
their application may vary in individual circumstances. Finally, the
consequences under applicable state and local income tax laws may not be the
same as under the federal income tax laws.
Accounting Treatment. Stock appreciation rights will, in most cases,
require a charge against the earnings of the Company each year representing
appreciation in the value of such rights over periods in which they become
exercisable. Such charge is based on the difference between the exercise price
specified in the related option and the current market price of the Common
Stock. In the event of a decline in the market price of the Common Stock
subsequent to a charge against earnings related to the estimated costs of stock
appreciation rights, a reversal of prior charges is made in the amount of such
decline (but not to exceed aggregate prior charges).
Neither the grant nor the exercise of an incentive stock option or a
non-qualified stock option under the Option Plan currently requires any charge
against earnings under GAAP. This treatment currently is being evaluated by
the Financial Accounting Standards Board, which has issued an exposure draft
which would require the recognition of expense under GAAP based upon the fair
market value of stock compensation awards when stock options and similar awards
are granted, and thus could change in the future. In certain circumstances,
shares issuable pursuant to outstanding options under the Option Plan might be
considered outstanding for purposes of calculating earnings per share.
Shareholder Approval. No Awards will be granted under the Option Plan
unless the Option Plan is approved by shareholders. Shareholder ratification
of the Option Plan will enable recipients of Awards under the Option Plan to
qualify for certain exemptive treatment from the short-swing profit provisions
of Section 16(b) of the Exchange Act.
Awards to be Granted. The Board of Directors of the Company adopted
the Option Plan and approved the grant of the non-incentive options to
non-employee directors pursuant to the
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formula set forth therein and the Committee established thereunder approved the
grant of incentive options to executive officers and employees of the Company.
The grants shall be effective upon shareholder approval of the Option Plan with
a per share exercise price equal to the fair market value of a share of Common
Stock on the date of such approval. The following table sets forth certain
information with respect to such grants.
NUMBER OF SHARES
NAME OF INDIVIDUAL OR SUBJECT TO
NUMBER OF PERSONS IN GROUP TITLE STOCK OPTIONS
- ----------------------------------- ------------------------------ ------------------
Jim Ingram President and Chief Executive 90,000
Officer
All executive officers as 230,000
a group (four persons)
All non-employee directors 138,863
as a group (seven persons)
All employees, not 72,000
including executive officers,
as a group
The terms of the options granted to all recipients provide that they
will be vested and exercisable 20% per year over a five-year period commencing
on September 30, 1997.
On February 14, 1997, the closing price of a share of Common Stock as
reported by the Nasdaq National Market System was $19.375.
THE BOARD OF DIRECTORS RECOMMENDS THAT SHAREHOLDERS VOTE FOR ADOPTION
OF THE 1997 STOCK OPTION PLAN.
PROPOSAL TO ADOPT THE 1997 RECOGNITION AND RETENTION
PLAN AND TRUST
GENERAL
The Board of Directors of the Company has adopted the Recognition
Plan, the objective of which is to enable the Company to provide officers, key
employees and directors with a proprietary interest in the Company as an
incentive to contribute to its success. Officers and key employees of the
Company who are selected by members of a committee appointed by the Board of
Directors of the Company will be eligible to receive benefits under the
Recognition Plan. Non-employee directors of the Company are eligible to
participate in the Recognition Plan, which sets forth a formula for awards to
be made pursuant thereto. If stockholder approval is obtained, shares will be
granted to employees as determined by the Committee and non-employee directors
will be awarded shares pursuant to a formula.
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DESCRIPTION OF THE RECOGNITION PLAN
The following description of the Recognition Plan, is a summary of its
terms and is qualified in its entirety by reference to the Recognition Plan, a
copy of which is attached hereto as Appendix B.
ADMINISTRATION. A committee of the Board of Directors of the Company
will administer the Recognition Plan and the initial members of that committee
also will serve as trustees of the trust established pursuant to the
Recognition Plan ("Trust"). The trustees will have the responsibility to
invest all funds contributed by the Company to the Trust.
Upon stockholder approval of the Recognition Plan, the Company will
acquire Common Stock on behalf of the Recognition Plan, in an amount necessary
to purchase the number of shares of Common Stock equal to 4% of the Common
Stock sold in its 1996 public stock offering, or 185,150 shares. These shares
will be acquired through open market purchases or from authorized but unissued
shares.
GRANTS. Shares of Common Stock granted pursuant to the Recognition
Plan generally will be in the form of restricted stock payable over a period
specified by the Committee. The shares, while restricted, may not be sold,
pledged or otherwise disposed of and are required to be held in the Trust.
Under the terms of the Recognition Plan, the trustees will be authorized to
vote all Recognition Plan shares which have not yet been earned and allocated
in its sole discretion. If a recipient terminates employment for reasons other
than death, retirement or disability, or in the event of a change in control of
the Company, the recipient will forfeit all rights to the allocated shares
under restriction. If the recipient's termination is caused by death,
retirement or disability, or in the event of a change in control of the
Company, all restrictions will expire and all allocated shares will become
unrestricted. The Board of Directors of the Company can terminate the
Recognition Plan at any time, and if it does so, any shares not allocated will
revert to the Company.
Pursuant to the terms of the Recognition Plan, each of the
non-employee directors of the Company will receive 7,935 shares upon approval
of the Recognition Plan by stockholders.
FEDERAL INCOME TAX CONSEQUENCES. Pursuant to Section 83 of the Code,
recipients of Recognition Plan awards will recognize ordinary income in an
amount equal to the fair market value of the shares of Common Stock granted to
them at the time that the shares vest and become transferable. A recipient of a
Recognition Plan award may also elect, however, to accelerate the recognition
of income with respect to his or her grant to the time when shares of Common
Stock are first transferred to him or her, notwithstanding the vesting schedule
of such awards. the Company will be entitled to deduct as a compensation
expense for tax purposes the same amounts recognized as income by recipients of
Recognition Plan awards in the year in which such amounts are included in
income.
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ACCOUNTING TREATMENT. For accounting purposes, the Company will also
recognize a compensation expense as shares of Common Stock granted pursuant to
the Recognition Plan vest. Unlike the treatment of Recognition Plan awards for
tax purposes, however, the compensation expense recognized for accounting
purposes is limited to the fair market value of the Common Stock at the date of
grant to recipients, rather than the fair market value of the Common Stock at
the time that a Recognition Plan grant vests.
STOCKHOLDER APPROVAL. No shares will be granted under the Recognition
Plan unless the Recognition Plan is approved by stockholders. Stockholder
ratification of the Recognition Plan will enable recipients of shares under the
Recognition Plan to qualify for certain exemptive treatment from the
short-swing profit provisions of Section 16(b) of the Exchange Act.
SHARES TO BE GRANTED. The Board of Directors of the Company adopted
the Recognition Plan and approved the awards of shares to non-employee
directors pursuant to the formula set forth therein and the Committee
established thereunder approved the grant of shares to executive officers and
employees of the Bank. The awards shall be effective upon stockholder approval
of the Recognition Plan. The following table sets forth certain information
with respect to such grants.
NAME OF INDIVIDUAL OR NUMBER OF SHARES
NUMBER OF PERSONS IN GROUP TITLE AWARDED
- -------------------------------------- ------------------------------ ----------------
Jim Ingram President and Chief Executive 43,000
Officer
All executive officers as 91,000
a group (four persons)
All non-employee directors 55,545
as a group (seven persons)
All employees not including executive 24,000
officers as a group
The above grants of restricted stock to all recipients will vest over
five years at the rate of 20% per year commencing on September 30, 1997.
THE BOARD OF DIRECTORS RECOMMENDS THAT STOCKHOLDERS VOTE FOR ADOPTION OF THE
RECOGNITION AND RETENTION PLAN.
RATIFICATION OF SELECTION OF INDEPENDENT AUDITORS
The Board of Directors of the Company has appointed Arthur Andersen
LLP as independent auditors for the Company for the year ending September 30,
1997, and further
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directed that the selection of auditors be submitted for ratification by the
stockholders at the Annual Meeting. The Company has been advised by Arthur
Andersen LLP that neither the firm nor any of its associates has any
relationship with the Company other than the usual relationship that exists
between independent public accountants and clients. Arthur Andersen LLP will
have representatives at the Annual Meeting who will have an opportunity to make
a statement, if they so desire, and will be available to respond to appropriate
questions.
THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE FOR THE RATIFICATION
OF THE APPOINTMENT OF ARTHUR ANDERSEN LLP, AS INDEPENDENT AUDITORS FOR THE YEAR
ENDING SEPTEMBER 30, 1997.
OTHER MATTERS
Management is not aware of any business to come before the Annual
Meeting other than those matters described in this Proxy Statement. However,
if any other matters should properly come before the Annual Meeting, it is
intended that the proxies solicited hereby will be voted with respect to those
other matters in accordance with the judgment of the persons voting the
proxies.
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 the Common Stock. In addition to solicitations by
mail, directors, officers and employees of the Company may solicit proxies
personally or by telephone without additional compensation. The Company has
also retained the firm of Regan & Associates for a fee of $4,000 to assist it
in the solicitation of proxies for the Annual Meeting.
STOCKHOLDER PROPOSALS
Any proposal which a stockholder wishes to have included in the proxy
solicitation materials to be used in connection with the next Annual Meeting of
Stockholders of the Company must be received at the office of the Company no
later than October 27, 1997. If such proposal is in compliance with all of the
requirements of Rule 14a-8 under the Exchange Act, it will be included in the
Proxy Statement and set forth on the form of proxy issued for the next Annual
Meeting of Stockholders. It is urged that any such proposals be sent by
certified mail, return receipt requested.
ANNUAL REPORTS AND FINANCIAL STATEMENTS
Stockholders of the Company as of the record date for the Annual
Meeting have been forwarded under separate cover a copy of the Company's Annual
Report to Stockholders for the
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year ended September 30, 1996 ("Annual Report"). Included in the Annual Report
are the financial statements of the Company as of September 30, 1996 and 1995
and for each of the years in the three-year period ended September 30, 1996,
prepared in accordance with GAAP, and the related report of the Company's
independent public accountants. The Annual Report is not a part of this Proxy
Statement.
UPON RECEIPT OF A WRITTEN REQUEST, THE COMPANY WILL FURNISH TO ANY
STOCKHOLDER WITHOUT CHARGE A COPY OF ITS ANNUAL REPORT ON FORM 10-K (AND
AMENDMENT NO. 1 THERETO) FILED WITH THE SEC UNDER THE EXCHANGE ACT FOR THE YEAR
ENDED SEPTEMBER 30, 1996. UPON WRITTEN REQUEST, THE COMPANY WILL FURNISH TO
ANY SUCH STOCKHOLDER A COPY OF THE EXHIBITS TO THE ANNUAL REPORT ON FORM 10-K.
SUCH WRITTEN REQUESTS SHOULD BE DIRECTED TO COMMUNITY FEDERAL BANCORP, INC.,
333 COURT STREET, TUPELO, MISSISSIPPI 33802, ATTENTION: CONTROLLER. THE ANNUAL
REPORT ON FORM 10-K IS NOT A PART OF THIS PROXY STATEMENT.
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APPENDIX A
FORM OF
COMMUNITY FEDERAL BANCORP, INC.
1996 STOCK OPTION PLAN
ARTICLE I
ESTABLISHMENT OF THE PLAN
Community Federal Bancorp, Inc. (the "Corporation") hereby establishes
this 1996 Stock Option Plan (the "Plan") upon the terms and conditions
hereinafter stated.
ARTICLE II
PURPOSE OF THE PLAN
The purpose of this Plan is to improve the growth and profitability of
the Corporation and its Subsidiary Companies by providing Employees and
Non-Employee Directors with a proprietary interest in the Corporation as an
incentive to contribute to the success of the Corporation and its Subsidiary
Companies, and rewarding those Employees for outstanding performance and the
attainment of targeted goals. All Incentive Stock Options issued under this
Plan are intended to comply with the requirements of Section 422 of the Code,
and the regulations thereunder, and all provisions hereunder shall be read,
interpreted and applied with that purpose in mind.
ARTICLE III
DEFINITIONS
3.01 "Award" means an Option or Stock Appreciation Right granted pursuant
to the terms of this Plan.
3.02 "Bank" means Community Federal Savings Bank, the wholly owned
subsidiary of the Corporation.
3.03 "Board" means the Board of Directors of the Corporation.
3.04 "Change in Control" of the Corporation means a change in control of
a nature that would be required to be reported in response to Items 6(e) of
Schedule 14A of Regulation 14A promulgated under the Exchange Act, or any
successor thereto, whether or not the Corporation in fact is required to
comply with Regulation 14A hereunder.
3.05 "Code" means the Internal Revenue Code of 1986, as amended.
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3.06 "Committee" means a committee of two or more directors appointed by
the Board pursuant to Article IV hereof, none of whom shall be an Officer or
Employee of the Corporation, and each of whom shall be a "disinterested
person" within the meaning of Rule 16b-3 under the Exchange Act, or any
successor thereto.
3.07 "Common Stock" means shares of the common stock, $0.01 par value per
share, of the Corporation.
3.08 "Disability" means any physical or mental impairment which qualifies
an Employee for disability benefits under the applicable long-term disability
plan maintained by the Corporation or a Subsidiary Company, or, if no such
plan applies, which would qualify such Employee for disability benefits under
the Federal Social Security System.
3.09 "Effective Date" means the day upon which the Board adopts this
Plan.
3.10 "Employee" means any person who is employed by the Corporation or a
Subsidiary Company, or is an Officer of the Corporation or a Subsidiary
Company, but not including directors who are not also Officers of or otherwise
employed by the Corporation or a Subsidiary Company.
3.11 "Exchange Act" means the Securities Exchange Act of 1934, as
amended.
3.12 "Fair Market Value" shall be equal to the fair market value per
share of the Corporation's Common Stock on the date an Award is granted. For
purposes hereof, the Fair Market Value of a share of Common Stock shall be the
closing sale price of a share of Common Stock on the date in question (or, if
such day is not a trading day in the U.S. markets, on the nearest preceding
trading day), as reported with respect to the principal market (or the
composite of the markets, if more than one) or national quotation system in
which such shares are then traded, or if no such closing prices are reported,
the mean between the high bid and low asked prices that day on the principal
market or national quotation system then in use, or if no such quotations are
available, the price furnished by a professional securities dealer making a
market in such shares selected by the Committee.
3.13 "Incentive Stock Option" means any Option granted under this Plan
which the Board intends (at the time it is granted) to be an incentive stock
option within the meaning of Section 422 of the Code or any successor thereto.
3.14 "Non-Employee Director" means a member of the Board who is not an
Officer or Employee of the Corporation or any Subsidiary Company.
3.15 "Non-Qualified Option" means any Option granted under this Plan
which is not an Incentive Stock Option.
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3.16 "Offering" means the offering of Common Stock to the public pursuant
to a Plan of Conversion and Agreement and Plan of Reorganization adopted by
the Bank and Community Federal Mutual Holding Company.
3.17 "Officer" means an Employee whose position in the Corporation or
Subsidiary Company is that of a corporate officer, as determined by the Board.
3.18 "OTS" means the Office of Thrift Supervision.
3.19 "Option" means a right granted under this Plan to purchase Common
Stock.
3.20 "Optionee" means an Employee or Non-Employee Director or former
Employee or Non-Employee Director to whom an Option is granted under the Plan.
3.21 "Retirement" means a termination of employment which constitutes a
"retirement" under any applicable qualified pension benefit plan maintained by
the Corporation or a Subsidiary Company, or, if no such plan is applicable,
which would constitute "retirement" under any qualified pension benefit plan
maintained by the Corporation or a Subsidiary Company, if such individual were
a participant in such plan.
3.22 "Stock Appreciation Right" means a right to surrender an Option in
consideration for a payment by the Corporation in cash and/or Common Stock, as
provided in the discretion of the Committee in accordance with Section 8.11.
3.23 "Subsidiary Companies" means those subsidiaries of the Corporation,
including the Bank, which meet the definition of "subsidiary corporations" set
forth in Section 425(f) of the Code, at the time of granting of the Option in
question.
ARTICLE IV
ADMINISTRATION OF THE PLAN
4.01 DUTIES OF THE COMMITTEE. The Plan shall be administered and
interpreted by the Committee, as appointed from time to time by the Board
pursuant to Section 4.02. The Committee shall have the authority in its
absolute discretion to adopt, amend and rescind such rules, regulations and
procedures as, in its opinion, may be advisable in the administration of the
Plan, including, without limitation, rules, regulations and procedures which
(i) deal with satisfaction of an Optionee's tax withholding obligation
pursuant to Section 12.02 hereof, (ii) include arrangements to facilitate the
Optionee's ability to borrow funds for payment of the exercise or purchase
price of an Award, if applicable, from securities brokers and dealers, and
(iii) include arrangements which provide for the payment of some or all of
such exercise or purchase price by delivery of previously owned shares of
Common Stock or other property and/or by withholding some of the shares of
Common Stock which are being acquired. The
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interpretation and construction by the Committee of any provisions of the
Plan, any rule, regulation or procedure adopted by it pursuant thereto or of
any Award shall be final and binding.
4.02 APPOINTMENT AND OPERATION OF THE COMMITTEE. The members of the
Committee shall be appointed by, and will serve at the pleasure of, the Board.
The Board from time to time may remove members from, or add members to, the
Committee, provided the Committee shall continue to consist of two or more
members of the Board, none of whom shall be an officer or employee of the
Corporation, and each of whom shall be a "disinterested person" within the
meaning of Rule 16b-3 under the Exchange Act. The Committee shall act by vote
or written consent of a majority of its members. Subject to the express
provisions and limitations of the Plan, the Committee may adopt such rules,
regulations and procedures as it deems appropriate for the conduct of its
affairs. It may appoint one of its members to be chairman and any person,
whether or not a member, to be its secretary or agent. The Committee shall
report its actions and decisions to the Board at appropriate times but in no
event less than one time per calendar year.
4.03 REVOCATION FOR MISCONDUCT. The Committee may by resolution
immediately revoke, rescind and terminate any Option, or portion thereof, to
the extent not yet vested, or any Stock Appreciation Right, to the extent not
yet exercised, previously granted or awarded under this Plan to an Employee
who is discharged from the employ of the Corporation or a Subsidiary Company
for cause, which, for purposes hereof, shall mean termination because of the
Employee'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 final cease-and-desist order.
Options granted to a Non-Employee Director who is removed for cause pursuant
to the Corporation's Certificate of Incorporation or Bylaws shall terminate as
of the effective date of such removal.
4.04 LIMITATION ON LIABILITY. No member of the Committee shall be liable
for any action or determination made in good faith with respect to the Plan,
any rule, regulation or procedure adopted by it pursuant thereto or any Awards
granted under it. If a member of the Committee is a party or is threatened to
be made a party to any threatened, pending or completed action, suit or
proceeding, whether civil, criminal, administrative or investigative, by
reason of anything done or not done by him in such capacity under or with
respect to the Plan, the Corporation shall, subject to the requirements of
applicable laws and regulations, indemnify such member against all liabilities
and expenses (including attorneys' fees), judgments, fines and amounts paid in
settlement actually and reasonably incurred by him in connection with such
action, suit or proceeding if he acted in good faith and in a manner he
reasonably believed to be in the best interests of the Corporation and its
Subsidiary Companies and, with respect to any criminal action or proceeding,
had no reasonable cause to believe his conduct was unlawful.
4.05 COMPLIANCE WITH LAW AND REGULATIONS. All Awards granted hereunder
shall be subject to all applicable Federal and state laws, rules and
regulations and to such approvals by any government or regulatory agency as
may be required. The Corporation shall not be required
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to issue or deliver any certificates for shares of Common Stock prior to the
completion of any registration or qualification of or obtaining of consents or
approvals with respect to such shares under any Federal or state law or any
rule or regulation of any government body, which the Corporation shall, in its
sole discretion, determine to be necessary or advisable. Moreover, no Option
or Stock Appreciation Right may be exercised if such exercise would be
contrary to applicable laws and regulations.
4.06 RESTRICTIONS ON TRANSFER. The Corporation may place a legend upon
any certificate representing shares acquired pursuant to an Award granted
hereunder noting that the transfer of such shares may be restricted by
applicable laws and regulations.
ARTICLE V
ELIGIBILITY
Awards may be granted to such Employees or Non-Employee Directors of the
Corporation and its Subsidiary Companies as may be designated from time to
time by the Committee. Awards may not be granted to individuals who are not
Employees or Non-Employee Directors of either the Corporation or its
Subsidiary Companies. Non-Employee Directors shall be eligible to receive
only Non-Qualified Options pursuant to Section 8.02 of the Plan.
ARTICLE VI
COMMON STOCK COVERED BY THE PLAN
6.01 OPTION SHARES. The aggregate number of shares of Common Stock which
may be issued pursuant to this Plan, subject to adjustment as provided in
Article IX, shall be 462,875 shares, which is equal to 10.0% of the shares of
Conversion Stock issued in the Offering. None of such shares shall be the
subject of more than one Award at any time, but if an Option as to any shares
is surrendered before exercise, or expires or terminates for any reason
without having been exercised in full, or for any other reason ceases to be
exercisable, the number of shares covered thereby shall again become available
for grant under the Plan as if no Awards had been previously granted with
respect to such shares. Notwithstanding the foregoing, if an Option is
surrendered in connection with the exercise of a Stock Appreciation Right, the
number of shares covered thereby shall not be available for grant under the
Plan.
6.02 SOURCE OF SHARES. The shares of Common Stock issued under the Plan
may be authorized but unissued shares, treasury shares or shares purchased by
the Corporation on the open market or from private sources for use under the
Plan.
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ARTICLE VII
DETERMINATION OF
AWARDS, NUMBER OF SHARES, ETC.
The Committee shall, in its discretion, determine from time to time which
Employees will be granted Awards under the Plan, the number of shares of
Common Stock subject to each Award, and whether each Option will be an
Incentive Stock Option or a Non-Qualified Stock Option. In making all such
determinations there shall be taken into account the duties, responsibilities
and performance of each respective Employee, his present and potential
contributions to the growth and success of the Corporation, his salary and
such other factors as the Committee shall deem relevant to accomplishing the
purposes of the Plan. Non-Employee Directors shall be eligible to receive
only Non-Qualified Options pursuant to Section 8.02 of the Plan.
ARTICLE VIII
OPTIONS AND STOCK APPRECIATION RIGHTS
Each Option granted hereunder shall be on the following terms and
conditions:
8.01 STOCK OPTION AGREEMENT. The proper Officers on behalf of the
Corporation and each Optionee shall execute a Stock Option Agreement which
shall set forth the total number of shares of Common Stock to which it
pertains, the exercise price, whether it is a Non-Qualified Option or an
Incentive Stock Option, and such other terms, conditions, restrictions and
privileges as the Committee in each instance shall deem appropriate, provided
they are not inconsistent with the terms, conditions and provisions of this
Plan. Each Optionee shall receive a copy of his executed Stock Option
Agreement.
8.02 INITIAL GRANTS TO NON-EMPLOYEE DIRECTORS. Each Non-Employee
Director of the Corporation as of the day that the Plan is approved by
stockholders of the Corporation shall be granted an Option to purchase 19,837
shares of Common Stock effective at such time and with a per share exercise
price equal to the Fair Market Value of a share of Common Stock on such date.
8.03 OPTION EXERCISE PRICE.
(a) INCENTIVE STOCK OPTIONS. The per share price at which the
subject Common Stock may be purchased upon exercise of an Incentive Stock
Option shall be no less than one hundred percent (100%) of the Fair Market
Value of a share of Common Stock at the time such Incentive Stock Option is
granted, except as provided in Section 8.10(b).
(b) NON-QUALIFIED OPTIONS. The per share price at which the
subject Common Stock may be purchased upon exercise of a Non-Qualified Option
shall be no less than one hundred percent (100%) of the Fair Market Value of a
share of Common Stock at the time such Non-Qualified Option is granted.
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8.04 VESTING AND EXERCISE OF OPTIONS.
(a) GENERAL RULES. Incentive Stock Options and Non-Qualified
Options granted hereunder shall become vested and exercisable at the rate
determined by the Committee and the right to exercise shall be cumulative.
Notwithstanding the foregoing, no vesting shall occur on or after an
Employee's employment with the Corporation and all Subsidiary Companies is
terminated for any reason other than his death, Retirement or Disability or in
the event of a Change in Control. In determining the number of shares of
Common Stock with respect to which Options are vested and/or exercisable,
fractional shares will be rounded up to the nearest whole number if the
fraction is 0.5 or higher, and down if it is less.
(b) ACCELERATED VESTING UPON DEATH, RETIREMENT OR DISABILITY OR IN
THE EVENT OF A CHANGE IN CONTROL. Unless the Committee shall specifically
state otherwise at the time an Option is granted, all Options granted
hereunder shall become vested and exercisable in full on the date an Optionee
terminates his employment with or service to the Corporation or a Subsidiary
Company because of his death, Retirement or Disability or in the event of a
Change in Control of the Corporation.
8.05 DURATION OF OPTIONS.
(a) GENERAL RULE. Except as provided in Sections 8.05(b) and 8.10,
each Option or portion thereof granted to Employees and Non-Employee Directors
shall be exercisable at any time on or after it vests and becomes exercisable
until the earlier of (i) ten (10) years after its date of grant or (ii) three
(3) months after the date on which the Optionee ceases to be employed (or in
the service of the Board of Directors) by the Corporation and all Subsidiary
Companies, unless the Committee in its discretion decides at the time of grant
or thereafter to extend such period of exercise to a period not exceeding
three (3) years.
(b) EXCEPTION FOR TERMINATION DUE TO DEATH OR DISABILITY. If an
Employee dies while in the employ of the Corporation or a Subsidiary Company
or terminates employment with the Corporation or a Subsidiary Company as a
result of Disability without having fully exercised his Options, the Optionee
or the executors, administrators, legatees or distributees of his estate shall
have the right, during the twelve-month period following the earlier of his
death or Disability, to exercise such Options to the extent vested on the date
of such death or Disability. If a Non-Employee Director dies while serving as
a Non-Employee Director without having fully exercised his Options, the
Non-Employee Director's executors, administrators, legatees or distributees of
his estate shall have the right, during the twelve-month period following such
death, to exercise such Options. In no event, however, shall any Option be
exercisable within six (6) months after the date of grant or more than ten
(10) years from the date it was granted.
8.06 NONASSIGNABILITY. Options shall not be transferable by an Optionee
except by will or the laws of descent or distribution, and during an
Optionee's lifetime shall be exercisable only by such Optionee or the
Optionee's guardian or legal representative.
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8.07 MANNER OF EXERCISE. Options may be exercised in part or in whole
and at one time or from time to time. The procedures for exercise shall be
set forth in the written Stock Option Agreement provided for in Section 8.01
above.
8.08 PAYMENT FOR SHARES. Payment in full of the purchase price for
shares of Common Stock purchased pursuant to the exercise of any Option shall
be made to the Corporation upon exercise of the Option. All shares sold under
the Plan shall be fully paid and nonassessable. Payment for shares may be
made by the Optionee in cash or, at the discretion of the Committee in the
case of Awards to Employees, by delivering shares of Common Stock (including
shares acquired pursuant to the exercise of an Option) or other property equal
in Fair Market Value to the purchase price of the shares to be acquired
pursuant to the Option, by withholding some of the shares of Common Stock
which are being purchased upon exercise of an Option, or any combination of
the foregoing.
8.09 VOTING AND DIVIDEND RIGHTS. No Optionee shall have any voting or
dividend rights or other rights of a stockholder in respect of any shares of
Common Stock covered by an Option prior to the time that his name is recorded
on the Corporation's stockholder ledger as the holder of record of such shares
acquired pursuant to an exercise of an Option.
8.10 ADDITIONAL TERMS APPLICABLE TO INCENTIVE STOCK OPTIONS. All Options
issued under the Plan as Incentive Stock Options will be subject, in addition
to the terms detailed in Sections 8.01 to 8.09 above, to those contained in
this Section 8.10.
(a) Notwithstanding any contrary provisions contained elsewhere in
this Plan and as long as required by Section 422 of the Code, the aggregate
Fair Market Value, determined as of the time an Incentive Stock Option is
granted, of the Common Stock with respect to which Incentive Stock Options are
exercisable for the first time by the Optionee during any calendar year, under
this Plan and stock options that satisfy the requirements of Section 422 of
the Code under any other stock option plan or plans maintained by the
Corporation (or any parent or Subsidiary Company), shall not exceed $100,000.
(b) LIMITATION ON TEN PERCENT STOCKHOLDERS. The price at which
shares of Common Stock may be purchased upon exercise of an Incentive Stock
Option granted to an individual who, at the time such Incentive Stock Option
is granted, owns, directly or indirectly, more than ten percent (10%) of the
total combined voting power of all classes of stock issued to stockholders of
the Corporation or any Subsidiary Company, shall be no less than one hundred
and ten percent (110%) of the Fair Market Value of a share of the Common Stock
of the Corporation at the time of grant, and such Incentive Stock Option shall
by its terms not be exercisable after the earlier of the date determined under
Section 8.04 or the expiration of five (5) years from the date such Incentive
Stock Option is granted.
(c) NOTICE OF DISPOSITION; WITHHOLDING; ESCROW. An Optionee shall
immediately notify the Corporation in writing of any sale, transfer,
assignment or other disposition (or action constituting a disqualifying
disposition within the meaning of Section 421
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of the Code) of any shares of Common Stock acquired through exercise of an
Incentive Stock Option, within two (2) years after the grant of such Incentive
Stock Option or within one (1) year after the acquisition of such shares,
setting forth the date and manner of disposition, the number of shares
disposed of and the price at which such shares were disposed of. The
Corporation shall be entitled to withhold from any compensation or other
payments then or thereafter due to the Optionee such amounts as may be
necessary to satisfy any withholding requirements of Federal or state law or
regulation and, further, to collect from the Optionee any additional amounts
which may be required for such purpose. The Committee may, in its discretion,
require shares of Common Stock acquired by an Optionee upon exercise of an
Incentive Stock Option to be held in an escrow arrangement for the purpose of
enabling compliance with the provisions of this Section 8.10(c).
8.11 STOCK APPRECIATION RIGHTS.
(a) GENERAL TERMS AND CONDITIONS. The Committee may, but shall not
be obligated to, authorize the Corporation, on such terms and conditions as it
deems appropriate in each case, to grant rights to Optionees to surrender an
exercisable Option, or any portion thereof, in consideration for the payment
by the Corporation of an amount equal to the excess of the Fair Market Value
of the shares of Common Stock subject to the Option, or portion thereof,
surrendered over the exercise price of the Option with respect to such shares
(any such authorized surrender and payment being hereinafter referred to as a
"Stock Appreciation Right"). Such payment, at the discretion of the
Committee, may be made in shares of Common Stock valued at the then Fair
Market Value thereof, or in cash, or partly in cash and partly in shares of
Common Stock.
The terms and conditions set with respect to a Stock Appreciation Right
may include (without limitation), subject to other provisions of this Section
8.11 and the Plan, the period during which, date by which or event upon which
the Stock Appreciation Right may be exercised (which shall be on the same
terms as the Option to which it relates pursuant to Section 8.04 hereunder);
the method for valuing shares of Common Stock for purposes of this Section
8.11; a ceiling on the amount of consideration which the Corporation may pay
in connection with exercise and cancellation of the Stock Appreciation Right;
and arrangements for income tax withholding. The Committee shall have
complete discretion to determine whether, when and to whom Stock Appreciation
Rights may be granted. Notwithstanding the foregoing, the Corporation may not
permit the exercise of a Stock Appreciation Right issued pursuant to this Plan
until the Corporation has been subject to the reporting requirements of
Section 13 of the Exchange Act for a period of at least one year prior to the
exercise of any such Stock Appreciation Right and until a Stock Appreciation
Right issued pursuant to this Plan has been outstanding for at least six
months from the date of grant.
(b) TIME LIMITATIONS. If a holder of a Stock Appreciation Right
terminates service with the Corporation as an Officer or Employee, the Stock
Appreciation Right may be exercised only within the period, if any, within
which the Option to which it relates may be exercised. Notwithstanding the
foregoing, any election by an Optionee to exercise the Stock
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Appreciation Rights provided in this Plan shall be made during the period
beginning on the third business day following the release for publication of
quarterly or annual financial information required to be prepared and
disseminated by the Corporation pursuant to the requirements of the Exchange
Act and ending on the twelfth business day following such date. The required
release of information shall be deemed to have been satisfied when the
specified financial data appears on or in a wire service, financial news
service or newspaper of general circulation or is otherwise first made
publicly available.
(c) EFFECTS OF EXERCISE OF STOCK APPRECIATION RIGHTS OR OPTIONS.
Upon the exercise of a Stock Appreciation Right, the number of shares of
Common Stock available under the Option to which it relates shall decrease by
a number equal to the number of shares for which the Stock Appreciation Right
was exercised. Upon the exercise of an Option, any related Stock Appreciation
Right shall terminate as to any number of shares of Common Stock subject to
the Stock Appreciation Right that exceeds the total number of shares for which
the Option remains unexercised.
(d) TIME OF GRANT. A Stock Appreciation Right may be granted
concurrently with the Option to which it relates or at any time thereafter
prior to the exercise or expiration of such Option.
(e) NON-TRANSFERABLE. The holder of a Stock Appreciation Right may
not transfer or assign the Stock Appreciation Right otherwise than by will or
in accordance with the laws of descent and distribution, and during a holder's
lifetime a Stock Appreciation Right may be exercisable only by the holder.
ARTICLE IX
ADJUSTMENTS FOR CAPITAL CHANGES
The aggregate number of shares of Common Stock available for issuance
under this Plan, the number of shares to which any outstanding Award relates,
the maximum number of shares that can be covered by Awards to each Employee
and each Non-Employee Director and the exercise price per share of Common
Stock under any outstanding Option shall be proportionately adjusted for any
increase or decrease in the total number of outstanding shares of Common Stock
issued subsequent to the Effective Date of this Plan resulting from a split,
subdivision or consolidation of shares or any other capital adjustment, the
payment of a stock dividend, or other increase or decrease in such shares
effected without receipt or payment of consideration by the Corporation. If,
upon a merger, consolidation, reorganization, liquidation, recapitalization or
the like of the Corporation, the shares of the Corporation's Common Stock
shall be exchanged for other securities of the Corporation or of another
corporation, each recipient of an Award shall be entitled, subject to the
conditions herein stated, to another corporation, each recipient of an Award
shall be entitled, subject to the conditions herein stated, to purchase or
acquire such number of shares of Common Stock or amount of other securities of
the Corporation or such other corporation as were exchangeable for the number
of shares of Common Stock of the
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Corporation which such optionees would have been entitled to purchase or
acquire except for such action, and appropriate adjustments shall be made to
the per share exercise price of outstanding Options. In the event the
Corporation declares a special cash dividend or return of capital in an amount
per share which exceeds 10% of the Fair Market Value of a share of Common
Stock as of the date of declaration, the per share exercise price of all
previously granted Awards which remain unexercised as of the date of such
declaration shall be proportionately adjusted to give effect to such special
cash dividend or return of capital as of the date of payment of such special
cash dividend or return of capital; provided that the adjustments to the per
share exercise price shall satisfy the criteria set forth in Emerging Issues
Task Force 90-9 (or any successor thereto) so that the adjustments do not
result in compensation expense, and provided further that if such adjustment
with respect to Incentive Stock Options would be treated as a modification of
the outstanding Incentive Stock Options with the effect that, for purposes of
Section 422 and 425(h) of the Code, and the rules and regulations thereunder,
new Incentive Stock Options would be deemed to be granted, then no adjustment
to the per share exercise price of outstanding Incentive Stock Options shall
be made.
ARTICLE X
ADJUSTMENT TO EXERCISE PRICE
The Exercise Price of shares subject to outstanding Awards shall be
proportionately adjusted upon payment of a special large and nonrecurring
dividend that has the effect of a return of capital to the stockholder.
ARTICLE XI
AMENDMENT AND TERMINATION OF THE PLAN
The Board may, by resolution, at any time terminate or amend the Plan
with respect to any shares of Common Stock as to which Awards have not been
granted, subject to regulations of the OTS and any required stockholder
approval or any stockholder approval which the Board may deem to be advisable
for any reason, such as for the purpose of obtaining or retaining any
statutory or regulatory benefits under tax, securities or other laws or
satisfying any applicable stock exchange listing requirements. The Board may
not, without the consent of the holder of an Award, alter or impair any Award
previously granted or awarded under this Plan as specifically authorized
herein. Notwithstanding anything contained in this Plan to the contrary, the
provisions of Articles V, VII and VIII of this Plan relating to Awards granted
to Non-Employee Directors shall not be amended more than once every six
months, other than to comport with changes in the Code, the Employee
Retirement Income Security Act of 1974, as amended, or the rules and
regulations promulgated under such statutes.
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ARTICLE XII
EMPLOYMENT RIGHTS
Neither the Plan nor the grant of any Awards hereunder nor any action
taken by the Committee or the Board in connection with the Plan shall create
any right on the part of any Employee or Non-Employee Director of the
Corporation or a Subsidiary Company to continue in such capacity.
ARTICLE XIII
WITHHOLDING
13.01 TAX WITHHOLDING. The Corporation may withhold from any cash
payment made under this Plan sufficient amounts to cover any applicable
withholding and employment taxes, and if the amount of such cash payment is
insufficient, the Corporation may require the Optionee to pay to the
Corporation the amount required to be withheld as a condition to delivering
the shares acquired pursuant to an Award. The Corporation also may withhold
or collect amounts with respect to a disqualifying disposition of shares of
Common Stock acquired pursuant to exercise of an Incentive Stock Option, as
provided in Section 8.10(c).
13.02 METHODS OF TAX WITHHOLDING. The Committee is authorized to adopt
rules, regulations or procedures which provide for the satisfaction of an
Optionee's tax withholding obligation by the retention of shares of Common
Stock to which the Employee would otherwise be entitled pursuant to an Award
and/or by the Optionee's delivery of previously owned shares of Common Stock
or other property.
ARTICLE XIV
EFFECTIVE DATE OF THE PLAN; TERM
14.01 EFFECTIVE DATE OF THE PLAN. This Plan shall become effective on the
Effective Date, and Awards may be granted hereunder as of or after the
Effective Date and prior to the termination of the Plan, provided that no
Incentive Stock Option issued pursuant to this Plan shall qualify as such
unless this Plan is approved by the requisite vote of the holders of the
outstanding voting shares of the Corporation at a meeting of stockholders of
the Corporation held within twelve (12) months of the Effective Date.
Notwithstanding the foregoing or anything to the contrary in this Plan, the
implementation of this Plan and any Awards granted pursuant hereto are subject
to the approval of the Corporation's stockholders.
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14.02 TERM OF PLAN. Unless sooner terminated, this Plan shall remain
in effect for a period of ten (10) years ending on the tenth anniversary of
the Effective Date. Termination of the Plan shall not affect any Awards
previously granted and such Awards shall remain valid and in effect until they
have been fully exercised or earned, are surrendered or by their terms expire
or are forfeited.
ARTICLE XV
MISCELLANEOUS
15.01 GOVERNING LAW. To the extent not governed by Federal law, this
Plan shall be construed under the laws of the State of Mississippi.
15.02 PRONOUNS. Wherever appropriate, the masculine pronoun shall include
the feminine pronoun, and the singular shall include the plural.
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APPENDIX B
FORM OF
COMMUNITY FEDERAL BANCORP, INC.
1996 MANAGEMENT RECOGNITION PLAN AND TRUST AGREEMENT
ARTICLE I
ESTABLISHMENT OF THE PLAN AND TRUST
1.01 Community Federal Bancorp, Inc. (the "Corporation") hereby
establishes a Management Recognition Plan (the "Plan") and Trust (the "Trust")
upon the terms and conditions hereinafter stated in this 1996 Management
Recognition Plan and Trust Agreement (the "Agreement").
1.02 The Trustee hereby accepts this Trust and agrees to hold the Trust
assets existing on the date of this Agreement and all additions and accretions
thereto upon the terms and conditions hereinafter stated.
ARTICLE II
PURPOSE OF THE PLAN
2.01 The purpose of the Plan is to retain personnel of experience and
ability in key positions by providing Employees and Non-Employee Directors of
the Corporation and of Community Federal Savings Bank (the "Bank") with a
proprietary interest in the Corporation as compensation for their
contributions to the Corporation, the Bank, and any other Subsidiaries and as
an incentive to make such contributions in the future.
ARTICLE III
DEFINITIONS
The following words and phrases when used in this Agreement with an
initial capital letter, unless the context clearly indicates otherwise, shall
have the meanings set forth below. Wherever appropriate, the masculine
pronouns shall include the feminine pronouns and the singular shall include
the plural.
3.01 "Bank" means Community Federal Savings Bank, the wholly owned
subsidiary of the Corporation.
3.02 "Beneficiary" means the person or persons designated by a Recipient
to receive any benefits payable under the Plan in the event of such
Recipient's death. Such person or persons shall be designated in writing on
forms provided for this purpose by the Committee and may be
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changed from time to time by similar written notice to the Committee. In the
absence of a written designation, the Beneficiary shall be the Recipient's
surviving spouse, if any, or if none, his estate.
3.03 "Board" means the Board of Directors of the Corporation.
3.04 "Change in Control" of the Corporation means a change in control of
a nature that would be required to be reported in response to Items 6(e) of
Schedule 14A of Regulation 14A promulgated under the Exchange Act, or any
successor thereto, whether or not the Corporation in fact is required to
comply with Regulation 14A hereunder.
3.05 "Code" means the Internal Revenue Code of 1986, as amended.
3.06 "Committee" means the committee appointed by the Board pursuant to
Article IV hereof.
3.07 "Common Stock" means shares of the common stock, $0.01 par value per
share, of the Corporation.
3.08 "Disability" means any physical or mental impairment which qualifies
an Employee for disability benefits under the applicable long-term disability
plan maintained by the Corporation or any Subsidiary or, if no such plan
applies, which would qualify such Employee for disability benefits under the
Federal Social Security System.
3.09 "Effective Date" means the day upon which the Board adopts this
Plan.
3.10 "Employee" means any person who is employed by the Corporation, the
Bank, or any Subsidiary, or is an officer of the Corporation, the Bank, or any
Subsidiary, including officers or other employees who may be directors of the
Corporation.
3.11 "Exchange Act" means the Securities Exchange Act of 1934, as
amended.
3.12 "Non-Employee Director" means a member of the Board who is not an
Employee.
3.13 "OTS" means the Office of Thrift Supervision.
3.14 "Plan Shares" or "Shares" means shares of Common Stock held in the
Trust which may be distributed to a Recipient pursuant to the Plan.
3.15 "Plan Share Award" or "Award" means a right granted under this Plan
to receive a distribution of Plan Shares upon completion of the service
requirements described in Article VII.
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3.16 "Recipient" means an Employee or Non-Employee Director who receives
a Plan Share Award under the Plan.
3.17 "Retirement" means a termination of employment which constitutes a
"retirement" under any applicable qualified pension benefit plan maintained by
the Corporation or a Subsidiary Corporation, or, if no such plan is
applicable, which would constitute "retirement" under any qualified pension
benefit plan maintained by the Corporation or a Subsidiary Corporation if such
individual were a participant in such plan.
3.18 "Subsidiary" means Community Federal Savings Bank and any other
subsidiaries of the Corporation or the Bank which, with the consent of the
Board, agree to participate in this Plan.
3.19 "Trustee" means such firm, entity or persons nominated by the
Committee and approved by the Board pursuant to Sections 4.01 and 4.02 to hold
legal title to the Plan for the purposes set forth herein.
ARTICLE IV
ADMINISTRATION OF THE PLAN
4.01 ROLE OF THE COMMITTEE. The Plan shall be administered and
interpreted by the Committee, which shall consist of two or more members of
the Board, none of whom shall be an officer or employee of the Corporation and
each of whom shall be a "disinterested person" within the meaning of Rule
16b-3 under the Exchange Act. The Committee shall have all of the powers
allocated to it in this and other Sections of the Plan. The interpretation
and construction by the Committee of any provisions of the Plan or of any Plan
Share Award granted hereunder shall be final and binding. The Committee shall
act by vote or written consent of a majority of its members. Subject to the
express provisions and limitations of the Plan, the Committee may adopt such
rules, regulations and procedures as it deems appropriate for the conduct of
its affairs. The Committee shall report its actions and decisions with
respect to the Plan to the Board at appropriate times, but in no event less
than one time per calendar year. The Committee shall recommend to the Board a
firm or other entity to act as Trustee in accordance with the provisions of
this Plan and Trust and the terms of Article VIII hereof.
4.02 ROLE OF THE BOARD. The members of the Committee and the Trustee
shall be appointed or approved by, and will serve at the pleasure of, the
Board. The Board may in its discretion from time to time remove members from,
or add members to, the Committee, and may remove or replace the Trustee,
provided that any directors who are selected as members of the Committee shall
not be officers or employees of the Corporation and shall be "disinterested
persons" within the meaning of Rule 16b-3 promulgated under the Exchange Act.
4.03 LIMITATION ON LIABILITY. No member of the Board or the Committee
shall be liable for any determination made in good faith with respect to the
Plan or any Plan Shares or Plan Share Awards granted under it. If a member of
the Board or the Committee is a party or
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is threatened to be made a party to any threatened, pending or completed
action, suit or proceeding, whether civil, criminal, administrative or
investigative, by reason of anything done or not done by him in such capacity
under or with respect to the Plan, the Corporation shall, subject to the
requirements of applicable laws and regulations, indemnify such member against
all liabilities and expenses (including attorneys' fees), judgments, fines and
amounts paid in settlement actually and reasonably incurred by him in
connection with such action, suit or proceeding if he acted in good faith and
in a manner he reasonably believed to be in the best interests of the
Corporation and any Subsidiaries and, with respect to any criminal action or
proceeding, had no reasonable cause to believe his conduct was unlawful.
4.04 COMPLIANCE WITH LAWS AND REGULATIONS. All Awards granted hereunder
shall be subject to all applicable federal and state laws, rules and
regulations and to such approvals by any government or regulatory agency or
stockholders as may be required.
ARTICLE V
CONTRIBUTIONS
5.01 AMOUNT AND TIMING OF CONTRIBUTIONS. The Board shall determine the
amount (or the method of computing the amount) and timing of any contributions
by the Corporation and any Subsidiaries to the Trust established under this
Plan. Such amounts may be paid in cash or in shares of Common Stock and shall
be paid to the Trust at the designated time of contribution. No contributions
by Employees or Directors shall be permitted.
5.02 INVESTMENT OF TRUST ASSETS; NUMBER OF PLAN SHARES. Subject to
Section 8.02 hereof, the Trustee shall invest all of the Trust's assets
primarily in Common Stock. The aggregate number of Plan Shares available for
distribution pursuant to this Plan shall be 185,150 shares of Common Stock,
which shares shall be purchased from the Corporation and/or from stockholders
thereof by the Trust with funds contributed by the Corporation.
ARTICLE VI
ELIGIBILITY; ALLOCATIONS
6.01 AWARDS TO NON-EMPLOYEE DIRECTORS. Plan Share Awards equal to 7,935
shares shall be made to Non-Employee Directors.
6.02 AWARDS TO EMPLOYEES. Plan Share Awards may be made to such
Employees as may be selected by the Committee. In selecting those Employees
to whom Plan Share Awards may be granted and the number of Shares covered by
such Awards, the Committee shall consider the duties, responsibilities and
performance of each respective Employee, his present and potential
contributions to the growth and success of the Corporation, his salary and
such other factors as the Committee shall deem relevant to accomplishing the
purposes of the Plan. The Committee
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may but shall not be required to request the written recommendation of the
Chief Executive Officer of the Corporation other than with respect to Plan
Share Awards to be granted to him.
6.03 FORM OF ALLOCATION. As promptly as practicable after a
determination is made pursuant to Sections 6.01 or 6.02 that a Plan Share
Award is to be issued, the Committee shall notify the Recipient in writing of
the grant of the Award, the number of Plan Shares covered by the Award, and
the terms upon which the Plan Shares subject to the Award shall be distributed
to the Recipient. The date on which the Committee so notifies the Recipient
shall be considered the date of grant of the Plan Share Award. The Committee
shall maintain records as to all grants of Plan Share Awards under the Plan.
6.04 ALLOCATIONS NOT REQUIRED TO ANY SPECIFIC EMPLOYEE. Notwithstanding
anything to the contrary in Section 6.02 hereof, no Employee shall have any
right or entitlement to receive a Plan Share Award hereunder, such Awards
being at the total discretion of the Committee.
ARTICLE VII
EARNING AND DISTRIBUTION OF PLAN SHARES; VOTING RIGHTS
7.01 EARNING PLAN SHARES; FORFEITURES.
(a) GENERAL RULES. Subject to the terms hereof, Plan Share Awards
shall be earned by a Recipient at the rate determined by the Committee. If
the employment of an Employee or service as a Non-Employee Director is
terminated prior to a Plan Share Award being earned for any reason other than
for death, Retirement or Disability, or a Change in Control, the Recipient
shall forfeit the right to any Shares subject to the Award which have not
theretofore been earned. In the event of a forfeiture of the right to any
Shares subject to an Award, such forfeited Shares shall become available for
allocation pursuant to Section 6.02 hereof as if no Award had been previously
granted with respect to such Shares. No fractional shares shall be
distributed pursuant to this Plan.
(b) EXCEPTION FOR TERMINATIONS DUE TO DEATH, RETIREMENT OR
DISABILITY OR IN THE EVENT OF A CHANGE IN CONTROL. Notwithstanding the
general rule contained in Section 7.01(a), all Plan Shares subject to a Plan
Share Award held by a Recipient whose employment or service with the
Corporation or any Subsidiary terminates due to death, Retirement or
Disability or in the event of a Change in Control shall be deemed earned as of
the Recipient's last day of employment or service with the Corporation or any
Subsidiary and shall be distributed as soon as practicable thereafter;
provided, however, that Awards shall be distributed in accordance with Section
7.03(a).
(c) REVOCATION FOR MISCONDUCT. Notwithstanding anything
hereinafter to the contrary, the Board may by resolution immediately revoke,
rescind and terminate any Plan Share Award, or portion thereof, previously
awarded under this Plan, to the extent Plan Shares have not been distributed
hereunder to the Recipient, whether or not yet earned, in the case of an
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Employee who is discharged from the employ of the Corporation or any
Subsidiary for cause (as hereinafter defined). Termination for cause shall
mean termination because of the Employee'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
final cease-and-desist order. Plan Share Awards granted to a Non-Employee
Director who is removed for cause pursuant to the Corporation's Certificate of
Incorporation or Bylaws shall terminate as of the effective date of such
removal.
7.02 DISTRIBUTION OF DIVIDENDS. Any cash dividends or stock dividends
declared in respect of each invested Plan Share Award will be paid to the
Recipient as soon as practicable as if the unvested Plan Share Award had
vested.
7.03 DISTRIBUTION OF PLAN SHARES.
(a) TIMING OF DISTRIBUTIONS: GENERAL RULE. Plan Shares shall be
distributed to the Recipient or his Beneficiary, as the case may be, as soon
as practicable after they have been earned.
(b) FORM OF DISTRIBUTIONS. All Plan Shares, together with any
Shares representing stock dividends, shall be distributed in the form of
Common Stock. One share of Common Stock shall be given for each Plan Share
earned and distributable. Payments representing cash dividends shall be made
in cash.
(c) WITHHOLDING. The Trustee may withhold from any cash payment or
Common Stock distribution made under this Plan sufficient amounts to cover any
applicable withholding and employment taxes, and if the amount of a cash
payment is insufficient, the Trustee may require the Recipient or Beneficiary
to pay to the Trustee the amount required to be withheld as a condition of
delivering the Plan Shares. The Trustee shall pay over to the Corporation or
any Subsidiary which employs or employed such Recipient any such amount
withheld from or paid by the Recipient or Beneficiary.
(d) RESTRICTIONS ON SELLING OF PLAN SHARES. Plan Share Awards may
not be sold, assigned, pledged or otherwise disposed of prior to the time that
they are earned and distributed pursuant to the terms of this Plan. Following
distribution, the Committee may require the Recipient or his Beneficiary, as
the case may be, to agree not to sell or otherwise dispose of his distributed
Plan Shares except in accordance with all then applicable Federal and state
securities laws, and the Committee may cause a legend to be placed on the
stock certificate(s) representing the distributed Plan Shares in order to
restrict the transfer of the distributed Plan Shares for such period of time
or under such circumstances as the Committee, upon the advice of counsel, may
deem appropriate.
7.04 VOTING OF PLAN SHARES. All Plan Shares which have not yet been
earned and allocated shall be voted by the Trustee in its sole discretion.
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ARTICLE VIII
TRUST
8.01 TRUST. The Trustee shall receive, hold, administer, invest and make
distributions and disbursements from the Trust in accordance with the
provisions of the Plan and Trust and the applicable directions, rules,
regulations, procedures and policies established by the Committee pursuant to
the Plan.
8.02 MANAGEMENT OF TRUST. It is the intent of this Plan and Trust that
the Trustee shall have complete authority and discretion with respect to the
arrangement, control and investment of the Trust, and that the Trustee shall
invest all assets of the Trust in Common Stock to the fullest extent
practicable, except to the extent that the Trustee determine that the holding
of monies in cash or cash equivalents is necessary to meet the obligations of
the Trust. In performing their duties, the Trustee shall have the power to do
all things and execute such instruments as may be deemed necessary or proper,
including the following powers:
(a) To invest up to one hundred percent (100%) of all Trust assets
in Common Stock without regard to any law now or hereafter in force limiting
investments for trustees or other fiduciaries. The investment authorized
herein may constitute the only investment of the Trust, and in making such
investment, the Trustee are authorized to purchase Common Stock from the
Corporation or from any other source, and such Common Stock so purchased may
be outstanding, newly issued, or treasury shares.
(b) To invest any Trust assets not otherwise invested in accordance
with (a) above, in such deposit accounts, and certificates of deposit,
obligations of the United States Government or its agencies or such other
investments as shall be considered the equivalent of cash.
(c) To sell, exchange or otherwise dispose of any property at any
time held or acquired by the Trust.
(d) To cause stocks, bonds or other securities to be registered in
the name of a nominee, without the addition of words indicating that such
security is an asset of the Trust (but accurate records shall be maintained
showing that such security is an asset of the Trust).
(e) To hold cash without interest in such amounts as may in the
opinion of the Trustee be reasonable for the proper operation of the Plan and
Trust.
(f) To employ brokers, agents, custodians, consultants and
accountants.
(g) To hire counsel to render advice with respect to their rights,
duties and obligations hereunder, and such other legal services or
representation as they may deem desirable.
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(h) To hold funds and securities representing the amounts to be
distributed to a Recipient or his Beneficiary as a consequence of a dispute as
to the disposition thereof, whether in a segregated account or held in common
with other assets of the Trust.
Notwithstanding anything herein contained to the contrary, the Trustee
shall not be required to make any inventory, appraisal or settlement or report
to any court, or to secure any order of court for the exercise of any power
herein contained, or give bond.
8.03 RECORDS AND ACCOUNTS. The Trustee shall maintain accurate and
detailed records and accounts of all transactions of the Trust, which shall be
available at all reasonable times for inspection by any legally entitled
person or entity to the extent required by applicable law, or any other person
determined by the Committee.
8.04 EXPENSES. All costs and expenses incurred in the operation and
administration of this Plan shall be borne by the Corporation.
8.05 INDEMNIFICATION. Subject to the requirements of applicable laws and
regulations, the Corporation shall indemnify, defend and hold the Trustee
harmless against all claims, expenses and liabilities arising out of or
related to the exercise of the Trustee's powers and the discharge of their
duties hereunder, unless the same shall be due to their gross negligence or
willful misconduct.
ARTICLE IX
MISCELLANEOUS
9.01 ADJUSTMENTS FOR CAPITAL CHANGES. The aggregate number of Plan
Shares available for distribution pursuant to the Plan Share Awards and the
number of Shares to which any Plan Share Award relates shall be
proportionately adjusted for any increase or decrease in the total number of
outstanding shares of Common Stock issued subsequent to the effective date of
the Plan resulting from any split, subdivision or consolidation of shares or
other capital adjustment, or other increase or decrease in such shares
effected without receipt or payment of consideration by the Corporation.
9.02 AMENDMENT AND TERMINATION OF PLAN. The Board may, by resolution, at
any time amend or terminate the Plan, subject to regulations of the OTS and
any required stockholder approval or any stockholder approval which the Board
may deem to be advisable for any reason, such as for the purpose of obtaining
or retaining any statutory or regulatory benefits under tax, securities or
other laws or satisfying any applicable stock exchange listing requirements.
The Board may not, without the consent of the Recipient, alter or impair his
Plan Share Award except as specifically authorized herein. Upon termination
of the Plan, the Recipient's Plan Share Awards shall be distributed to the
Recipient in accordance with the terms of Article VII hereof. Notwithstanding
anything contained in this Plan to the contrary, the provisions of Articles VI
and VII of this Plan shall not be amended more than once every six months,
other than to comport
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with changes in the Code, the Employee Retirement Income Security Act of 1974,
as amended, or the rules and regulations promulgated under such statutes.
9.03 NONTRANSFERABLE. Plan Share Awards and rights to Plan Shares shall
not be transferable by a Recipient, and during the lifetime of the Recipient,
Plan Shares may only be earned by and paid to a Recipient who was notified in
writing of an Award by the Committee pursuant to Section 6.03. No Recipient
or Beneficiary shall have any right in or claim to any assets of the Plan or
Trust, nor shall the Corporation or any Subsidiary be subject to any claim for
benefits hereunder.
9.04 EMPLOYMENT OR SERVICE RIGHTS. Neither the Plan nor any grant of a
Plan Share Award or Plan Shares hereunder nor any action taken by the Trustee,
the Committee or the Board in connection with the Plan shall create any right
on the part of any Employee or Non-Employee Director to continue in such
capacity.
9.05 VOTING AND DIVIDEND RIGHTS. No Recipient shall have any voting or
dividend rights or other rights of a stockholder in respect of any Plan Shares
covered by a Plan Share Award, except as expressly provided in Sections 7.02
and 7.04 above, prior to the time said Plan Shares are actually earned and
distributed to him.
9.06 GOVERNING LAW. To the extent not governed by Federal law, the Plan
and Trust shall be governed by the laws of the State of Mississippi.
9.07 EFFECTIVE DATE. This Plan shall be effective as of the Effective
Date, and Awards may be granted hereunder as of or after the Effective Date
and as long as the Plan remains in effect. Notwithstanding the foregoing or
anything to the contrary in this Plan, the implementation of this Plan and any
Awards granted pursuant hereto are subject to the approval of the
Corporation's stockholders.
9.08 TERM OF PLAN. This Plan shall remain in effect until the earlier of
(1) ten (10) years from the Effective Date, (2) termination by the Board, or
(3) the distribution to Recipients and Beneficiaries of all assets of the
Trust.
9.09 TAX STATUS OF TRUST. It is intended that the trust established
hereby be treated as a Grantor Trust of the Corporation under the provisions
of Section 671 et seq. of the Code, as the same may be amended from time to
time.
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IN WITNESS WHEREOF, the Corporation has caused this Agreement to be
executed by its duly authorized officers and the corporate seal to be affixed
and duly attested, and the initial Trustee of the Trust established pursuant
hereto have duly and validly executed this Agreement, all on this 17th day of
January 1997.
COMMUNITY FEDERAL BANCORP, INC.
By:
---------------------------
Jim Ingram
President
ATTEST:
By:
----------------------
-----------------
Secretary
TRUSTEES:
--------------------------------------
--------------------------------------
--------------------------------------
--------------------------------------
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REVOCABLE PROXY
COMMUNITY FEDERAL BANCORP, INC.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF COMMUNITY
FEDERAL BANCORP, INC. FOR USE ONLY AT THE ANNUAL MEETING OF STOCKHOLDERS TO BE
HELD ON MARCH 27, 1997 AND AT ANY ADJOURNMENT THEREOF.
The undersigned hereby appoints the Board of Directors of the Company, or
any successors thereto, as proxies, with full powers of substitution, to vote
the shares of the undersigned at the Annual Meeting of Stockholders of the
Company to be held at the Company's office, located at 333 Court Street,
Tupelo, Mississippi, on March 27, 1997, at 5:00 p.m., Central Time, or at any
adjournment thereof, with all the powers that the undersigned would possess if
personally present, as specified on the reverse side.
The Board of Directors recommends that you vote FOR the Board of
Directors' nominees listed on the reverse side and FOR Proposals 2, 3 and 4.
You are encouraged to specify your choices by marking the appropriate boxes on
the reverse side, but you need not mark any boxes if you wish to vote in
accordance with the Board of Directors' recommendations. This proxy may not be
voted for any person who is not a nominee of the Board of Directors of the
Company. THIS PROXY MAY BE REVOKED AT ANY TIME BEFORE IT IS EXERCISED.
Shares of common stock of the Company will be voted as specified. IF NO
SPECIFICATION IS MADE, SHARES WILL BE VOTED FOR THE ELECTION OF THE BOARD OF
DIRECTORS' NOMINEES TO THE BOARD OF DIRECTORS, FOR PROPOSALS 2, 3 AND 4 AND
OTHERWISE AT THE DISCRETION OF THE PROXIES.
(CONTINUED AND TO BE SIGNED ON REVERSE SIDE)
50
Please mark
your vote as
indicated in
this example
[X]
1. Election of Directors Nominees for three-year term: Robert R. Black, Sr.; Jim Ingram; and L.F.
Sams, Jr.
FOR all nominees WITHHOLD authority To withhold authority to vote for any individual nominee, write the
listed to the right to vote for all nominees name of the nominee in the space below:
(except as marked to listed to the right
the contrary) ------------------------------------------------------------------------
[ ] [ ]
2. Proposal to approve the 1997 Stock Option Plan.
FOR AGAINST ABSTAIN
[ ] [ ] [ ]
3. Proposal to approve the 1997 Management Recognition Plan and Trust.
FOR AGAINST ABSTAIN
[ ] [ ] [ ]
4. Proposal to ratify the appointment of Arthur Andersen, LLP as the Company's In their discretion, the proxies are
independent auditors for the year ended September 30, 1997. authorized to vote with respect to the
election of any person as a director
FOR AGAINST ABSTAIN if the nominee is unable to serve or for
[ ] [ ] [ ] good cause will not serve, matters incident
to the conduct of the meeting, and upon such
other matters as may properly come before
the meeting.
The undersigned hereby acknowledges receipt
of the Notice of Annual Meeting of Stock-
holders of Community Federal Bancorp, Inc.
called for March 27, 1997, a Proxy
Statement for the Annual Meeting [AND
THE 1996 ANNUAL REPORT TO STOCKHOLDERS.]
Dated: , 1997
-------------------------
------------------------------------
------------------------------------
Signature(s)
PLEASE SIGN EXACTLY AS YOUR NAME(S) APPEAR ON
THIS PROXY. ONLY ONE SIGNATURE IS REQUIRED IN
THE CASE OF A JOINT ACCOUNT. WHEN SIGNING IN
PLEASE MARK, SIGN, DATE AND PROMPTLY RETURN THIS PROXY CARD USING THE A REPRESENTATIVE CAPACITY, PLEASE GIVE TITLE.
ENCLOSED ENVELOPE