UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14A
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES
EXCHANGE ACT OF 1934
Filed by the Registrant [X]
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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 (S) 240.14a-11(c) or (S) 240.14a-12
BLUE VALLEY BAN CORP
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(Name of Registrant as Specified In Its Charter)
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NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
AND PROXY STATEMENT
FOR
ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD
MAY 14, 2003
5:45 P.M.
BLUE VALLEY BAN CORP
11935 RILEY
OVERLAND PARK, KANSAS 66225
[LOGO] Blue Valley Ban Corp
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD MAY 14, 2003
The Annual Meeting of Stockholders of Blue Valley Ban Corp ("Blue Valley" or the
"Company") will be held in the lobby at the Bank of Blue Valley office located
at 7900 College Boulevard, Overland Park, Kansas, 66212 on May 14, 2003, at 5:45
p.m. to consider and vote on the following matters:
1. The election of directors to hold office until the expiration of
his/her three-year term, or until his/her successor shall be elected
and qualified;
2. The approval of an amendment to the Company's 1998 Equity Incentive
Plan authorizing, among other changes, the issuance of an additional
200,000 shares of common stock;
Only stockholders of record at the close of business on April 7, 2003, will be
entitled to notice of, or to vote at, this meeting or any adjournments thereof.
It is important that your shares be represented at the meeting and we invite you
to attend. However, if you are unable to personally attend, we urge you to
exercise your right to vote by completing and returning the enclosed proxy in
the envelope provided. If you are a stockholder of record and attend the
meeting, you may revoke your proxy by voting in person.
By Order of the Board of Directors,
Patricia L. Day
Corporate Secretary
The date of this notice is April 14, 2003.
PLEASE SIGN AND DATE THE ACCOMPANYING PROXY AND MAIL IT PROMPTLY, regardless of
the number of shares you may own and whether or not you plan to attend the
meeting in person. You may revoke your proxy and vote your shares in person if
revoked in accordance with the procedures described in the attached proxy
statement.
BLUE VALLEY BAN CORP
11935 RILEY
OVERLAND PARK, KANSAS 66225
PROXY STATEMENT
GENERAL INFORMATION
This Proxy Statement and the accompanying proxy will first be sent on or about
April 14, 2003, to the stockholders of record of the common stock, par value one
dollar ($1.00) per share, of Blue Valley Ban Corp ("Blue Valley" or the
"Company") as of April 7, 2003 (the "record date"). The Company's Board of
Directors (the "Board") is soliciting proxies to be used at the 2003 Annual
Meeting of its stockholders which will be held at 5:45 p.m. on May 14, 2003, in
the Bank of Blue Valley office located at 7900 College Boulevard, Overland Park,
Kansas, 66212 and any adjournment thereof (the "Annual Meeting").
Attendance at the Annual Meeting is limited to stockholders of record or their
proxies, beneficial owners of Company common stock having evidence of such
ownership, and guests of the Company.
Proxies are being solicited to give all stockholders of record an opportunity to
vote on matters to be presented at the Annual Meeting. In the following pages of
this Proxy Statement, you will find information on matters to be voted upon at
the Annual Meeting of stockholders or any adjournment of that meeting.
Only record holders of the Company's common stock at the close of business on
April 7, 2003 are entitled to notice of and to vote at the Annual Meeting. As of
the record date, there were 2,235,736 shares of Company common stock issued and
outstanding. Each share is entitled to one vote on each matter properly brought
before the meeting. Shares can be voted at the meeting only if the shareholder
is present or represented by a valid proxy.
Your vote is important. Since many stockholders cannot personally attend the
meeting, a large number must be represented by proxy. Any stockholder giving the
accompanying proxy has the power to revoke it at any time before it is exercised
at the Annual Meeting by (i) written notice to the Corporate Secretary, (ii) a
properly executed, later-dated written or electronic proxy, or (iii) voting by
ballot at the Annual Meeting. The method by which you vote will in no way limit
your right to vote at the Annual Meeting if you later decide to attend in
person. If your shares are held in the name of a bank, broker or other holder of
record, you must obtain a proxy, executed in your favor, from the holder of
record to be able to vote at the meeting.
All shares entitled to vote and represented by properly executed proxies
received prior to the Annual Meeting and not revoked will be voted at the Annual
Meeting in accordance with the instructions indicated on those proxies. If you
sign the proxy but do not specify how you want your shares to be voted, your
shares will be voted in the manner recommended by the board of directors on all
matters subject to vote by proxy. Votes will be counted by the inspectors of the
election appointed by the Chairman at the meeting.
If any other matters are properly presented for consideration at the Annual
Meeting, including, among other things, consideration of a motion to adjourn the
Annual Meeting to another time or place, the persons named in the enclosed form
of proxy will have discretion to vote on those matters according to their best
judgment to the same extent as you would be entitled to vote. The Company does
not anticipate that any other matters will be raised at the Annual Meeting.
SOLICITATION OF PROXIES
The Company will pay the cost of this solicitation of proxies. In addition to
the use of the mails, proxies may be solicited personally, or by telephone by
directors or by employees of the Company. In addition, the Company will
reimburse brokers and other custodians, nominees or fiduciaries for their
expenses in forwarding proxy materials to stockholders.
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REQUIRED VOTES--ELECTION OF DIRECTOR NOMINEES
The board of directors of the Company is divided into three classes. At each
Annual Meeting of stockholders, the directors constituting one class are elected
for a three-year term.
Any shares not voted (whether by abstention, withheld votes, broker non-votes or
otherwise) have no impact on the election of directors except to the extent that
the failure to vote for an individual results in other individuals receiving a
larger proportion of the total votes. If you sign the proxy but do not specify
how you want your shares to be voted, your shares will be voted in favor of the
election of all nominees listed on the proxy.
Each nominee must be elected by a plurality of the votes of the shares entitled
to vote on the election of the directors and represented in person or by proxy
at a meeting at which a quorum is present.
While it is not expected that any of the nominees will be unable to qualify or
accept office, if for any reason one or more is unable to do so, the proxies
will be voted for substitute nominees selected by the Board of Directors of the
Company.
REQUIRED VOTES--OTHER MATTERS
The approval of any other matter properly presented for a stockholder vote, will
be determined by a vote of the majority of the outstanding shares of common
stock represented at the Annual Meeting. Voting on these matters will be one
vote per share.
(THIS SPACE INTENTIONALLY LEFT BLANK)
2
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth information with respect to the beneficial
ownership of the Company's common stock as of April 7, 2003 by (1) persons known
by the Company to own of record or beneficially five percent or more of the
outstanding common stock; (2) the Company's directors; (3) each of the executive
officers of the Company named in the Summary Compensation Table; and (3) all of
the directors, nominees and executive officers of the Company as a group. Unless
otherwise indicated, the address of each person listed below is c/o 11935 Riley,
Overland Park, Kansas 66225-6128. This information has been prepared based upon
the SEC's "beneficial ownership" rules. Under these rules a person is deemed to
be a beneficial owner of a security if that person has or shares voting power,
which includes the power to vote or to direct the voting of a security, or
investment power, which includes the power to dispose or to direct the
disposition of a security. Unless otherwise indicated, each of the following
persons has sole voting and investment power with respect to the shares of
common stock beneficially owned.
Amount and
Nature of
Beneficial Percentage
Name and Address of Beneficial Owner Ownership of Class
- ------------------------------------ ---------- ----------------
Robert D. Regnier 569,335 (1) 25.47 % (2)
Donald H. Alexander 149,432 (1) 6.68 % (2)
Thomas A. McDonnell 142,352 6.37 % (2)
Wayne A. Henry, Jr. 132,280 (1) 5.92 % (2)
C. Ted McCarter 80,984 (1) 3.62 % (2)
Mark A. Fortino 14,800 (1) 0.66 % (2)
John Markert 7,000 (1) 0.31 % (2)
Edward A. Herman 3,550 (1) 0.16 % (2)
Sheila Stokes -- (1) -- % (2)
All directors and executive
officers, 11 in number, as a group 1,111,733 (1) 49.94 % (2)
(1) Includes shares of common stock held directly by the individuals as
well as by members of such individuals' immediate family who share the
same household, shares held in trust and other indirect forms of
ownership over which shares the individuals exercise sole or shared
voting and/or investment power. Also includes options that are
currently exercisable, or become exercisable within 60 days of April
14, 2003, to purchase from us the number of shares of common stock
indicated for the following persons: Robert D. Regnier, 18,000; Donald
H. Alexander, 8,400; Wayne A. Henry, Jr., 13,900; C. Ted McCarter,
12,400; Mark A. Fortino, 9,800; Edward A. Herman, 3,550; and Penny T.
Hershman, 11,800.
(2) Based on the number of shares of common stock outstanding on April 7,
2003, which was 2,235,736 shares.
COMMITTEES OF THE BOARD OF DIRECTORS AND MEETING ATTENDANCE
The Board of Directors had four meetings during the last fiscal year. No
director attended fewer than 75% of the meetings of the entire board or of the
committees on which he or she served.
The board of directors has a standing Audit Committee appointed from among its
members. In addition, the board of directors determined that Messrs. Henry and
Alexander qualify as Audit Committee financial experts due to their:
- Understanding of generally accepted accounting principles and
financial statements;
- Ability to assess the general application of such principles in
connection with the accounting for estimates, accruals and reserves;
- Experience analyzing and evaluating financial statements; and
- Experience directly supervising persons preparing financial
statements.
3
The board of directors does not have a standing Nominating Committee or
Compensation Committee. The full board of directors nominates persons to serve
as directors of the Company. The compensation of the executive officers and
employees of the Company's subsidiary bank (the "Bank") is determined jointly by
the full boards of directors of the Company and the Bank.
AUDIT COMMITTEE REPORT
The Company has an Audit Committee consisting of four "independent" directors,
as defined by the listing standards of the American Stock Exchange. The Audit
Committee reports to the full board of directors in performing its
responsibilities relating to our accounting, reporting and financial control
practices. The Audit Committee has general responsibility for oversight of
financial controls, as well as our accounting, regulatory and audit activities,
and annually reviews the qualifications of our independent auditors. The Audit
Committee operates pursuant to a written charter which was last revised and
approved on January 16, 2003. As stated in the charter, the preparation,
integrity, and fair presentation of the Company's financial statements are the
responsibility of management as are the establishment and maintenance of an
internal control structure over financial reporting, and safeguarding and
management of assets and ensuring compliance with federal and state laws and
regulations. The Company's independent auditors are responsible for auditing the
Company's financial statements and expressing an opinion on their conformity
with accounting standards generally accepted in the United States of America.
Members of the Audit Committee:
Wayne A. Henry, Jr.
Donald H. Alexander
Harvey S. Bodker
Suzanne E. Dotson
During the year ended December 31, 2002, the Audit Committee met four times and
the Audit Committee discussed with management and the independent auditors the
interim financial information prior to public release.
In executing its oversight responsibility as to the audit process, the Audit
Committee obtained from the independent auditors a formal written statement
describing all relationships between the auditors and the Company that might
bear on the auditors' independence consistent with Independence Standards Board
Standard No. 1, "Independence Discussions with Audit Committees," and discussed
with the independent auditor the independent auditor's independence, including
but not limited to any relationships that may impact their objectivity and
independence and satisfied itself as to the independent auditors' independence.
The Audit Committee also discussed with management, the internal auditors and
the independent auditors the quality and adequacy of the Company's internal
controls and the internal audit function's organization, responsibilities,
budget and staffing, and concurred in the appointment of a new Vice President of
internal audit. The Committee reviewed with both the independent and the
internal auditors their audit plans, audit scope, and identification of audit
risks.
The Audit Committee discussed and reviewed with the independent auditors all
communications required by generally accepted auditing standards, including
those described in Statement on Auditing Standards No. 61, as amended,
"Communication with Audit Committees" and discussed and reviewed the results of
the independent auditors' examination of the financial statements.
The Audit Committee reviewed the audited financial statements of the Company as
of and for the fiscal year ended December 31, 2002, with management and the
independent auditors. Pursuant to this review, the Audit Committee recommended
to the Board that the audited financial statements be included in the Company's
Annual Report on Form 10-K for the year ended December 31, 2002 to be filed with
the Securities and Exchange Commission.
4
INDEPENDENT AUDITORS
The Board of Directors, upon recommendation of its Audit Committee, has
determined to continue the services of BKD, LLP for the current fiscal year
ending December 31, 2003. BKD, LLP has served as independent auditor of the
Company since 1989. Such services will include the audit of the financial
statements of the Company for the fiscal year ending on such date, review of the
Company's quarterly financial statements during that period and other
appropriate services. A member of BKD, LLP will attend the annual meeting and
will have the opportunity to make a statement if desired. Such member will also
be available to respond to appropriate questions from the stockholders.
AUDIT FEES
The aggregate fee billed by BKD, LLP for professional services rendered for the
audit of the Company's annual financial statements for the fiscal year ended
December 31, 2002 and for the reviews of the financial statements included in
the Company's quarterly reports on Form 10-Q for that fiscal year were $76,000.
FINANCIAL INFORMATION SYSTEMS DESIGN AND IMPLEMENTATION FEES
There were no fees billed by BKD, LLP for professional services rendered for
information technology services relating to financial information systems design
and implementation for the fiscal year ended December 31, 2002.
ALL OTHER FEES
The aggregate fees billed by BKD, LLP for services rendered to the Company for
the fiscal year ended December 31, 2002, other than for services described
above, were $16,000, and related primarily to preparation of the Company's
income tax returns and estimated income tax payments.
Audit Committee:
Wayne A. Henry, Jr.
Donald H. Alexander
Harvey S. Bodker
Suzanne E. Dotson
5
EXECUTIVE COMPENSATION
The Summary Compensation Table below provides summary information concerning
compensation that we paid or accrued during 2002, 2001 and 2000 to or on behalf
of our Chief Executive Officer and the three other highest paid executive
officers whose salary and bonus for 2002 was in excess of $100,000:
LONG-TERM
COMPENSATION
ANNUAL COMPENSATION (1) AWARDS
---------------------------------- ----------
OTHER SECURITIES ALL
ANNUAL UNDERLYING OTHER
NAME AND PRINCIPAL POSITIONS YEAR SALARY BONUS(2) COMP.(3) OPTIONS COMP.
---------------------------- ----- -------- --------- -------- ---------- ------
Robert D. Regnier.............................. 2002 $230,000 $200,000 $ 22,218 8,000 $ --
President, Chief Executive Officer and 2001 215,000 100,000 20,492 10,000 --
Chairman of the Board of Directors of Blue 2000 200,000 85,000 22,188 10,000 --
Valley; Chief Executive Officer and
Director of the Bank
Mark A. Fortino ............................... 2002 $110,000 $ 75,000 $ 13,459 2,400 $ --
Treasurer of Blue Valley; Senior Vice 2001 100,000 50,000 9,609 3,000 --
President and Chief Financial Officer of 2000 90,000 35,000 15,191 3,000 --
the Bank
Edward A. Herman .............................. 2002 $ 90,000 $ 35,000 $ 8,332 2,400 $ --
Senior Vice President - Chief Lending Officer
of the Bank
Sheila Stokes ................................. 2002 $ 90,000 $ 40,000 $ -- 2,400 $ --
Senior Vice President - Retail Division of
the Bank
John Markert .................................. 2002 $150,000 $412,652 $ 12,310 -- $ --
Senior Vice President - Internet Mortgage 2001 143,750 124,575 4,082 2,000
Division of the Bank -- -- -- -- --
- ----------------
(1) The salary column does not include the cost to us of benefits executive
officers receive in addition to salary and cash bonuses. Those amounts are
included in the column "Other Annual Comp."
(2) Mr. Markert's bonus is calculated based upon a formula which takes into
account his division's profitability. The bonus amounts for the other
executive officers are awarded at the discretion of the Company's board of
directors.
(3) Includes the amount of our contributions to our Profit Sharing Plan
allocated to the accounts of each of the named executive officers.
6
GRANTS OF STOCK OPTIONS
The following table sets forth information with respect to the executive
officers identified in the prior table concerning the grants of options during
2002.
AGGREGATED OPTION GRANTS
IN 2002
POTENTIAL REALIZABLE VALUE AT
ASSUMED ANNUAL RATES OF STOCK
PRICE APPRECIATION FOR OPTION
INDIVIDUAL GRANTS TERM (2)
- --------------------------------------------------------------------------------------- -----------------------------
(a) (b) (c) (d) (e) (f) (g)
NUMBER OF
SECURITIES % OF TOTAL EXERCISE
UNDERLYING OPTIONS GRANTED OR BASE
OPTIONS GRANTED TO EMPLOYEES IN PRICE EXPIRATION
NAME (#) FISCAL YEAR ($/SH) DATE 5% ($) 10% ($)
- -------------------- --------------- --------------- -------- ----------- -------- --------
Robert D. Regnier(1) .. 8,000 15.50% $25.00 12/12/2012 $125,779 $318,748
Mark A. Fortino(1) .... 2,400 4.70% $25.00 12/12/2012 $ 37,734 $ 95,625
Edward Herman(1) ...... 2,400 4.70% $25.00 12/12/2012 $ 37,734 $ 95,625
Sheila Stokes(1) ...... 2,400 4.70% $25.00 12/12/2012 $ 37,734 $ 95,625
John Markert(1) ....... -- -- -- -- -- --
(1) Options were granted under the Company's 1998 Equity Incentive Plan. The
exercise price of each option represents fair market value of the common
stock on the date of grant. Options vest two years from the date of grant,
and have a 10 year term unless they are exercised or expire earlier upon
the occurrence of certain events described in the plan.
2) These amounts represent certain assumed rates of appreciation only. Actual
gains, if any, on stock option exercises are dependent upon a number of
factors, including the development of an active trading market for the
Company's common stock, the performance of the Company's common stock,
overall market conditions and the executive's continued employment with
the Company. The amounts represented in this table may not be achieved.
7
EXERCISES OF STOCK OPTIONS
The following table sets forth information with respect to the executive
officers identified in the prior table concerning the exercise of options during
2002, and unexercised options held as of December 31, 2002.
AGGREGATED OPTION EXERCISES IN 2002 AND
2002 YEAR-END OPTION VALUES
Number of
Shares Number of Unexercised Options at Value of Unexercised In-the-Money
Acquired Year-End: Options at Year-end (1):
Through Value -------------------------------- ---------------------------------
NAME Exercise Realized Exercisable Unexercisable Exercisable Unexercisable
- ---- -------- -------- ----------- ------------- ----------- -------------
Robert D. Regnier ..... 29,160 $357,200 28,000 -- $140,000 $ --
Mark A. Fortino ....... -- -- 9,800 5,400 $106,500 $ 16,500
Edward Herman ......... -- -- 2,550 5,400 $ 28,000 $ 16,500
Sheila Stokes ......... -- -- -- 6,400 $ -- $ 22,000
John Markert .......... -- -- -- 2,000 $ -- $ 11,000
(1) Shares of the Company's common stock are traded on the Over-The-Counter
Bulletin Board; however, there were no trades on December 31, 2002.
Management's estimate of the fair value of our common stock at December
31, 2002 was $25.00 per share.
1998 EQUITY INCENTIVE PLAN
In April 1998, our board of directors and stockholders approved the Blue Valley
Ban Corp 1998 Equity Incentive Plan (the "Plan"), which superceded our 1994
Stock Option Plan. The Company is proposing, for shareholder approval, an
amendment to the Plan authorizing, among other changes, the issuance of an
additional 200,000 shares of common stock. In addition, a provision to grant
reload options has been removed from the plan and certain other non-substantial
or non-applicable terms of the original plan have been modified to comply with
current conditions of the Company.
We believe that equity incentive compensation has been a key contributing factor
to the success of the Company as it provides an inducement to attract, retain
and motivate high-performing employees. Due to the recent and anticipated growth
and expansion of the company, additional shares need to be authorized under the
plan for future grants.
The Plan is administered by our full board of directors and authorizes the board
of directors to grant equity awards to substantially all of our employees and
directors. The total number of shares of our common stock reserved for
outstanding awards under the Plan is 55,434. Awards granted under the Plan may
consist of any of the following:
- nonqualified stock options and incentive stock options, which
entitle the holder to purchase a stated number of shares of our
common stock;
- restricted shares of our common stock, which are subject to
forfeiture; and
- deferred share units, which entitle the holder to receive a future
cash payment equal to the increase in the value of shares of our
common stock.
The period of any award granted under the Plan may not exceed ten years, and
awards vest based on the determination by our board of directors The exercise
price of any nonqualified stock option may be less
8
than, greater than or equal to the fair market value of a share of our common
stock on the grant date. The exercise price of any incentive stock option
granted under the Plan may not be less than the fair market value of a share of
our common stock on the date of grant. The consideration to be received by the
Company in exchange for any award of restricted shares may not be less than the
minimum amount for which our shares of common stock can be issued under Kansas
law. The initial value of a deferred share unit generally will equal the fair
market value of a share of our common stock on the grant date. The Plan provides
for increases in the number of shares and to the exercise price, if applicable,
in the event of a declaration of a stock dividend or any recapitalization
resulting in a stock split-up, combination or exchange of shares of our common
stock.
The Plan further provides that in most instances unvested restricted share or
deferred share unit awards and any unexercised options are forfeited upon the
termination of the recipient's employment with the Company for cause. If
employment is terminated due to an award recipient's death or disability,
unvested awards generally vest, and in the case of options, may be exercised
within 12 months thereafter. If employment is terminated for any other reason,
unvested options, restricted shares and deferred share units are generally
forfeited, and vested options may be exercised within three months after the
termination of employment.
DIRECTOR COMPENSATION
We pay each of our non-employee directors a fee of $1,500 for each meeting of
our board of directors, and a fee of $350 for each committee meeting, that they
attend in person. Directors are also eligible to receive stock options,
restricted stock and deferred share unit grants under our 1998 Equity Incentive
Plan. In 2002, each non-employee director of the Company received options to
purchase 2,400 shares of our common stock. Mr. Regnier received options to
purchase 8,000 shares of our common stock.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
All of our executive officers and employees are employed by the Bank and do not
receive separate compensation for positions held with the Company, Blue Valley
Investment Corp. or Blue Valley Building Corp. Executive compensation is
determined jointly by the full boards of directors of the Company and the Bank.
During 2002, Robert D. Regnier, who is a director of the Company and the Bank,
and President and Chief Executive Officer of the Company and the Bank, Mark A.
Fortino, who is Senior Vice President and Chief Financial Officer of the Bank
and Treasurer of the Company, participated in the deliberations of the boards of
directors of the Company and the Bank concerning executive compensation. There
are no other reportable compensation committee interlocks or insider
participation matters.
9
PROPOSAL # 1: ELECTION OF DIRECTORS
The Company's directors are divided into three classes as nearly equal in number
as the total number of directors constituting the entire board of directors
permits. In order to implement this staggered board, at the 2000 annual meeting,
the directors of class 1 were elected to hold office for a term of one year, the
directors of class 2 were elected to hold office for a term of two years, and
the directors of class 3 were elected to hold office for a term of three years.
Thereafter, at each succeeding annual meeting, the directors of each class that
were elected were to serve a three-year term, and were to continue to hold
office until their successors were elected and qualified. Each of our directors
has been elected for a term to expire at the respective annual meeting. None of
our executive officers have employment contracts assuring continued employment.
Two Class III Directors are to be elected at the Annual Meeting to serve until
expiration of his or her three-year term at the Company's 2006 Annual Meeting of
Stockholders, or until his or her successor shall be elected and qualified. The
persons named in the accompanying Proxy will vote the shares represented by the
Proxy for the election of the following:
NOMINEES FOR ELECTION
Class III Directors: Terms expiring in 2006
DIRECTOR
NAME AGE POSITION WITH THE COMPANY SINCE
---- --- ------------------------- --------
Robert D. Regnier 55 President, Chief Executive
Officer and Chairman of the
Board of Directors;
President, Chief Executive
Officer and Director of the
Bank 1989
Thomas A. McDonnell 57 Director 1996
DIRECTORS WHO WILL CONTINUE IN OFFICE
Class I Director: Term expiring in 2004
Wayne A. Henry, Jr. 49 Director 1992
Class II Directors: Terms expiring in 2005
C. Ted McCarter 66 Director and Chairman of
the Board of Directors of
the Bank 1992
Donald H. Alexander 64 Director of the Company and
of the Bank 1992
Below we have provided information regarding the principal occupations and
business experience of each director of the Company named above. Unless
otherwise indicated, each person has held the indicated positions for at least
the past five years. Except as otherwise indicated below, there are no
reportable family relationships among our directors and executive officers.
ROBERT D. REGNIER has been a director and the President and Chief Executive
Officer of Blue Valley and the Bank since their formation in 1989. He has also
been the sole director and President and Chief Executive Officer of Blue Valley
Investment Corp. since its formation in 1995, and of Blue Valley Building Corp.
since its formation in 1994. Prior to joining Blue Valley, Mr. Regnier held
various managerial positions with Boatmen's Bank and Trust and Boatmen's First
National Bank of Kansas City. Mr. Regnier has nearly 30 years of experience in a
number of banking areas, including lending, investments, personnel,
administration, trust, operations, new business development and mergers.
THOMAS A. MCDONNELL has been a director of Blue Valley since 1996. Mr. McDonnell
has also served as Chief Executive Officer of DST Systems, Inc. in Kansas City,
Missouri, a provider of information processing and software services to the
financial services industry, since 1984, and as a director of DST since 1971.
From August 1983 to November 1995, Mr. McDonnell was Executive Vice President
and a director of Kansas City Southern Industries, Inc. in Kansas City,
Missouri, a holding company and the former parent of DST. Mr. McDonnell has also
been a director of Informix Corp. in Menlo Park,
10
California, a developer, manufacturer and marketer of relational database
management systems, connectivity interfaces and gateways, since 1988; a director
of BHA Group, Inc. in Kansas City, Missouri, a manufacturer of pollution control
devices, since 1993; a director of Computer Sciences Corporation in El Segundo,
California, an information technology company, since 1997; a director of Euronet
Services, Inc. in Budapest, Hungary, an operator of automatic teller machines,
since 1997; a director of Janus Capital Corporation in Denver, Colorado, a
registered investment advisor, since 1985.
WAYNE A. HENRY, JR. has been a director of Blue Valley since 1992. Mr.
Henry has also been the President and Treasurer and a director of Personal
Financial Designs, Inc. in Holden Missouri, a registered investment
advisory firm providing portfolio management and financial planning
services, since 1986. Mr. Henry is a licensed financial planning
practitioner and has served on the board of directors of the Kansas City
Chapter of the International Association of Financial Planning and as
President and Chairman of the Heart of America Society of the Institute of
Certified Financial Planners.
C. TED MCCARTER has been a director of Blue Valley since 1992. Mr. McCarter has
also been the Chairman of the board of directors of the Bank and a member of the
Loan Committee, Trust Committee and Audit Committee of the Bank since 1990. He
has served as the Chairman of Agency Premium Resource in Lenexa, Kansas, an
insurance premium finance company, since 1990; the Chairman and President of
Valley Investment Co. in Mission Woods, Kansas, a consulting company, since
1990; a director and co-owner of Huebert Fiberboard Co. in Boonville, Missouri,
a manufacturing company, since 1996; and a director and co-owner of Emco
Specialty Products, Inc. in Kansas City, Kansas, a manufacturing company, since
1996. Mr. McCarter has a background in commercial banking having served as
President, Chief Executive Officer, and director of Boatmen's Bank in Kansas
City from 1974 to 1990. He has also served as a director of Century Acceptance
Corporation of Kansas City and Boatmen's Bancshares of St. Louis.
DONALD H. ALEXANDER has been a director of Blue Valley and member of its Audit
Committee since 1992. Mr. Alexander has also been a director of the Bank since
its formation in 1989. Mr. Alexander is a private investor with a background in
commercial banking. In addition to his positions with Blue Valley and the Bank,
Mr. Alexander has also been Chairman of Ventaire Corporation in Tulsa, Oklahoma,
a metal fabrication company, since 1989; Chairman of Tulsa Power, LLC in Tulsa,
Oklahoma, a machinery fabrication company, since 1998; Chairman of Huebert
Fiberboard Corp. in Boonville, Missouri, a manufacturing company, since 1996; a
director of BHA Group, Inc. in Raytown, Missouri, an air pollution control
equipment manufacturer, since 1986; and President and director of Alexander &
Associates, Inc. in Kansas City, Missouri, a private investment company, since
1987.
The Board of Directors recommends a vote "FOR" the election of Mr.
McDonnell and Mr. Regnier.
PROPOSAL # 2: AMENDMENT TO THE COMPANY'S 1998 EQUITY INCENTIVE PLAN
We believe that equity incentive compensation has been a key contributing factor
to the success of the Company. Due to the recent and anticipated growth and
expansion of the company an additional 200,000 shares need to be authorized
under the plan for future grants in addition to other non-substantial changes to
the plan.
The Board of Directors recommends a vote "FOR" the authorization of the
additional shares and other changes to the plan.
11
OTHER MATTERS
The Board of Directors knows of no matters expected to be presented for
consideration at the Annual Meeting that are not described herein. However, if
other matters properly come before the meeting, persons named in the
accompanying form of proxy may vote thereon in accordance with their best
judgment.
COMPLIANCE WITH EXCHANGE ACT FILING REQUIREMENTS
Section 16(a) of the Securities Exchange Act of 1934, as amended, (the "Exchange
Act") requires every person owning directly or indirectly more than 10% of any
class of equity security which is registered pursuant to Section 12 of the
Exchange Act, to file reports of ownership and changes in ownership with the
Securities and Exchange Commission. Because the Company's shares are not
registered pursuant to Section 12 of the Exchange Act, the Company's directors
are not subject to such reporting requirements.
STOCKHOLDER PROPOSALS FOR THE 2004 ANNUAL MEETING OF STOCKHOLDERS
PROPOSALS IN THE COMPANY'S PROXY STATEMENT
Stockholder proposals submitted for inclusion as a stockholder proposal in the
Company's proxy materials for the 2004 Annual Meeting of Stockholders must be
received by the Company at its office at 11935 Riley, Overland Park, Kansas
66225 no later than one hundred twenty (120) days before the mailing date of
this proxy statement (no later than December 5, 2003).
PROPOSALS TO BE INTRODUCED AT THE ANNUAL MEETING BUT NOT INTENDED TO BE
INCLUDED IN THE COMPANY'S PROXY STATEMENT
A stockholder intending to introduce a proposal to nominate a director at the
2004 Annual Meeting of Stockholders, but not intending the proposal to be
included in the Company's proxy materials, should give notice to the Company's
Secretary no later than February 20, 2004.
By Order of the Board of Directors
/s/ Robert D. Regnier
Chairman of the Board and Chief Executive Officer
April 7, 2003
12
APPENDIX A
BLUE VALLEY BAN CORP
AUDIT COMMITTEE CHARTER
I. ORGANIZATION
There shall be a committee of the Board of Directors to be known as the
Audit Committee. The Audit Committee shall consist of three or more
directors of the company or of the Company's wholly owned subsidiary, Bank
of Blue Valley, as determined by the Board of Directors. Each director
shall not be an officer or employee of the Company, but shall be
independent of the management of the Company and free of any relationship
that, in the opinion of the Board of Directors, would interfere with their
exercise of independent judgment as a committee member. When a member of
the Audit Committee is a party to any relationship that might call into
question such member's independence, as when such member has a short-term
consulting contract with a major customer, the member should recuse
himself from any decisions that might be affected by the relationship.
The following persons are not considered independent:
(1) A director who is employed by the Company or any of its affiliates
for the current year or any of the past three years;
(2) A director who accepts compensation from the Company or any of its
affiliates during the previous fiscal year, other than compensation
for board service;
(3) A director who is a member of the immediate family of an individual
who is, or has been in any of the past three years, employed by the
Company or any of its affiliates as an executive officer. Immediate
family includes a person's spouse, parents, children, siblings,
mother-in-law, father-in-law, brother-in-law, sister-in-law,
son-in-law, daughter-in-law, and anyone who resides in such person's
home;
(4) A director who is a partner in, or a controlling stockholder or an
executive officer of, and for profit business organization from
which the Company or any of its affiliates received payments (other
than those arising from investments in the Company's securities or
repayments of borrowings to the Company or any of its affiliates)
that exceed 5% of the Company's or business organization's
consolidated gross revenue for that year, or $200,000, whichever is
more; or
(5) A director who is employed as an executive of another entity where
any of the Company's executives serve on that entity's compensation
committee.
All members of the Audit Committee shall be able to read and understand
fundamental financial statements, including a financial institution's
balance sheet, income statement, and cash flow statement or will become
able to do so within a reasonable time after their appointment to the
Audit Committee, and at least one member of the Audit Committee shall have
past employment experience in finance or accounting, requisite
professional certification in accounting, or any other comparable
experience or background which results in the individual's financial
sophistication, including having been a chief executive officer, chief
financial officer or other senior officer with financial oversight
responsibilities.
1
APPENDIX A
The members of the Audit Committee shall be elected by the Board of
Directors at the annual meeting of the Board of Directors to serve a term
of 1year or until their successors shall be duly elected and qualified.
The Board of Directors will appoint a Chair to preside at the Audit
Committee meetings and schedule meetings as appropriate. The Chairman
shall be responsible for Committee leadership, including scheduling and
presiding over meetings and making regular reports to the Board of
Directors. In the event the chairman is unable to attend a meeting, he may
appoint an alternate to assume his responsibilities.
A simple majority, in person or conference, constitutes a quorum.
The committee is empowered to investigate any matter relating to the
Company's accounting, auditing, internal control or financial reporting
practices with full access to all Company books, records, facilities and
personnel.
The Committee may engage independent counsel or other advisors, as it
determines necessary to carry out its duties.
II. PURPOSE
The primary function of the Audit Committee is to assist the Board of
Directors in fulfilling its oversight responsibilities by reviewing the
financial reports and other financial information provided by the Company
to any governmental body or the public; the Company's systems of internal
controls regarding finance, accounting, legal compliance and ethics that
management and the Board of Directors has established; and the Company's
auditing, accounting and financial reporting processes. Consistent with
this function, the Audit Committee should encourage continuous improvement
of, and should foster compliance with, the Company's policies, procedures
and practices at all levels. The Audit Committee's primary duties and
responsibilities are as follows:
- To serve as an independent and objective party to monitor the
Company's financial reporting process and internal control system.
- To review and appraise the audit efforts of the Company's
independent auditors and internal auditing functions.
- To provide an open avenue of communication among the independent
auditors, financial and senior management, the Internal Auditing
Department, and the Board of Directors.
- To report committee actions and make appropriate recommendations to
the full Board of Directors.
- To do whatever else the law, the Company's charter or bylaws or the
Board of Directors requires.
The Audit Committee will primarily fulfill these responsibilities by
carrying out the activities enumerated in Section IV of this Charter.
III. MEETINGS
The Audit Committee shall meet at least four times a year and at such
times as requested by the Chair. The Chair of the Audit Committee shall
prepare or approve an agenda in advance of each meeting. The Company's
chief executive officer, chief financial officer, supervisor of the
internal
2
APPENDIX A
audit function, outside legal counsel, and representatives from the
independent auditors may be invited to any meetings. Other management may
be invited as necessary. Non-committee members may be excused from
attendance at any meeting or portion of any meeting by the Chair. No
member of the Audit Committee shall vote on any matter as to which his or
her independence may be in question.
As part of its job to foster open communication, the Audit Committee
should meet at least annually with management, the director of Internal
Audit and the independent auditors in separate executive sessions to
discuss any matter that the Audit Committee or each of these groups
believes should be discussed privately. In addition, the Audit Committee
or its Chair should meet with the independent auditors and management
quarterly to review the Company's financial statements and significant
findings based upon the auditor's limited review procedures.
IV. RESPONSIBILITIES
To fulfill its duties and responsibilities the Audit Committee shall:
Financial Statements
1. Review the Company's audited financial statements prior to the
filing of the Company's Annual Report on Form 10-K.
2. Review the Company's quarterly financial results prior to the filing
of the Company's Quarterly Report on Form 10-Q.
3. Review, as appropriate, any other material financial information
submitted to any governmental or public body, including any
certification, report, opinion, or review rendered by the
independent auditors but not including any tax returns.
4. In connection with the Company's year-end financials, discuss with
financial management and the independent auditors significant issues
regarding accounting principals, practices and judgments and any
items required to be communicated by the independent auditors in
accordance with Statement on Accounting Standards No. 61.
5. In connection with the Company's interim financials, discuss with
financial management and independent auditors any significant
changes to the Company's accounting principles and any items
required to be communicated by the independent auditors in
accordance with Statement on Accounting Standards No. 71. The Chair
of the Audit Committee may represent the entire Audit Committee for
purposes of the quarterly review and communication.
6. Consider and approve, if appropriate, significant changes to the
Company's auditing and accounting principles and practices as
suggested by the independent auditors, management, or the director
of Internal Auditing.
7. Review and cause action to be taken, as appropriate, for (1)
complaints received by the Company regarding accounting, internal
accounting controls, auditing matters, and (2) confidential
submissions by employees regarding questionable accounting or
auditing methods.
Independent Auditors
8. The independent auditors are ultimately accountable to the Audit
Committee and the Board of Directors, as representatives of the
Company's stockholders. The Audit Committee and the Board of
Directors have the ultimate authority and responsibility to select,
evaluate and, where appropriate, replace the independent auditors
(or to nominate the independent auditors to be proposed for
stockholder approval in any proxy statement).
3
APPENDIX A
9. Ensure annual receipt from the independent auditors of a formal
written statement delineating all relationships between the auditor
and the Company, consistent with Independence Standards Board
Standard No. 1.
10. Ensure receipt of written confirmation from the independent auditors
that they are registered with the Public Company Accounting
Oversight Board ("Public Oversight Board") and are in compliance and
in good standing with the Public Oversight Board
11. Actively engage in dialogue with the independent auditors and legal
counsel with respect to any disclosed relationships or services that
may impact the objectivity and independence of the independent
auditors.
12. Take, or recommend that the full Board of Directors take,
appropriate action to oversee the independence of the independent
auditors.
13. Meet with the independent auditors to review the scope of the
proposed audit for the current year, the audit procedures to be
utilized, the location, reliance on management, and staffing for the
audit.
14. Approve, in advance, engagement of the independent auditors to
perform audit services. In addition, approve, in advance, any
non-audit service, including tax services, unless the aggregate
amount of all such non-audit services provided to the issuer
constitutes not more than 5 percent of the total amount of revenues
paid by the issuer to its auditor during the fiscal year in which
the nonaudit services are provided.
a. The audit committee of an issuer may delegate to 1 or more
designated members of the audit committee who are independent
directors of the board of directors, the authority to grant
preapprovals required by this section. The decisions of any
member to whom authority is delegated under this paragraph to
preapprove an activity under this subsection shall be
presented to the full audit committee at each of its scheduled
meetings
15. Following each audit by the independent auditors, obtain from the
independent auditors assurance that Section 10A of the Private
Securities Litigation Reform Act of 1995 has not been implicated.
16. Supervise the coordination of the internal and external audits in a
manner designed to produce completeness of coverage, reduce
redundancy and use audit resources effectively.
Internal Controls
17. Review, as appropriate, with the independent accountant and the
director of Internal Audit, the adequacy of the Company's internal
controls, including computerized information system controls and
security, and any significant findings and recommendations made by
the independent accountant or director of Internal Audit, together
with management's responses to them.
18. Meet periodically with management, the director of Internal Auditing
and the independent auditor regarding significant risks and
exposures and assess management's steps to minimize them.
19. Meet periodically with management, the primary independent auditor,
and the director of Internal Audit if any thinks there might be a
need to engage additional auditors. The Audit Committee will
determine whether to engage an additional firm and, if so, which
one.
Internal Audit
20. The Audit Committee will review and have veto power over the
appointment, replacement, reassignment or dismissal of the director
of Internal Audit.
4
APPENDIX A
21. Review the regular Internal Audit reports with management's
response.
22. Review, as appropriate, with the director of Internal Audit, the
Internal Auditing Department's charter, organization, activities,
independence, budget and staffing, and whether the Internal Auditing
Department has complied with the Institute of Internal Auditing's
Standards for the Professional Practice of Internal Auditing.
23. Review, as appropriate, any difficulties the Internal Auditors
encountered while conducting audits, including any restrictions on
the scope of their work or access to required information, and any
changes to the planned scope of management's Internal Audit plan
that the Audit Committee thinks advisable.
Compliance
24. Review the effectiveness of the system for monitoring compliance
with laws and regulations, management responses, and follow-up of
any instances of noncompliance.
25. Review the findings of any examinations by regulatory agencies and
any auditor observations.
26. Obtain regular updates from management, internal audit, compliance,
independent auditors, and company legal counsel regarding compliance
matters.
Proxy Statement
27. Approve the report of the Audit Committee required by the rules of
the SEC to be included in the Company's annual proxy statement.
28. Oversee the publication of this Charter at least every three years
in the Company's annual proxy statement in accordance with SEC
regulations.
Ethical Compliance
29. Establish, review and update periodically a Code of Ethical Conduct
(the "Ethical Code").
30. Review management's monitoring of the Company's compliance with the
Ethical Code.
31. Obtain reports from management, the Company's director of Internal
Audit and the independent auditor that the Company's subsidiary
entities are in conformity with applicable legal requirements and
the Company's Ethical Code.
32. Advise the Board of Directors on the Company's policies and
procedures regarding compliance with the Ethical Code.
Miscellaneous
33. Review and reassess the adequacy of this Charter at least annually.
34. Review with the Company's general counsel legal matters that may
have a material impact on the financial statements, the Company's
compliance policies related to financial matters or the Ethical Code
and any material reports or inquiries related to financial matters
that are received from regulators or governmental agencies.
35. Periodically conduct a self-assessment of the Audit Committee's
performance.
5
APPENDIX A
36. Advise the Board of Directors on the Company's policies and
procedures regarding compliance with applicable laws and regulations
related to financial matters.
37. Review, as appropriate, policies and procedures regarding officers'
expense accounts and perquisites, including the use of corporate
assets, and consider the results of any review of those areas by the
director of Internal Audit or the independent accounts.
38. Submit the minutes of all meetings of the Audit Committee to, and
discuss the matters discussed at each Audit Committee meeting with,
the Board of Directors, as appropriate.
39. Discuss with management proper review systems to see that the
Company's financial statements, reports and other financial
information are disseminated to governmental organizations and the
public in accordance with legal requirements.
40. Perform any other activities consistent with this Charter, the
Company's Bylaws and governing law, as the Audit Committee or the
Board of Directors deems necessary or appropriate.
V. CONCLUDING STATEMENT
While the Audit Committee has the responsibilities and powers set forth in
this Charter, management is ultimately responsible for:
- The preparation, integrity, and fair presentation of the Company's
financial statements
- Establishing and maintaining an internal control structure over
financial reporting, and safeguarding and management of assets
- Ensuring compliance with federal and state laws and regulations
6
APPENDIX B
BLUE VALLEY BAN CORP.
1998 EQUITY INCENTIVE PLAN
(AMENDED AND RESTATED AS OF MARCH 31, 2003)
(NOT FOR DISTRIBUTION TO STOCKHOLDERS)
APPENDIX B
TABLE OF CONTENTS
<Table>
ARTICLE 1. ESTABLISHMENT, EFFECTIVE DATE, OBJECTIVES AND DURATION................................................1
1.1 ESTABLISHMENT OF THE PLAN................................................................................1
1.2 OBJECTIVES OF THE PLAN...................................................................................1
1.3 DURATION OF THE PLAN.....................................................................................1
ARTICLE 2. DEFINITIONS...........................................................................................1
2.1 ARTICLE..................................................................................................1
2.2 AWARD....................................................................................................1
2.3 AWARD AGREEMENT..........................................................................................1
2.4 BOARD....................................................................................................1
2.5 CAUSE....................................................................................................1
2.6 CODE.....................................................................................................2
2.7 COMMITTEE................................................................................................2
2.8 COMMON STOCK.............................................................................................2
2.9 COMPANY..................................................................................................2
2.10 DEFERRED SHARE UNITS..................................................................................2
2.11 DISABILITY............................................................................................2
2.12 DISQUALIFYING DISPOSITION.............................................................................2
2.13 ELIGIBLE PERSON.......................................................................................2
2.14 EXCHANGE ACT..........................................................................................2
2.15 FAIR MARKET VALUE.....................................................................................2
2.16 GRANT DATE............................................................................................3
2.17 GRANTEE...............................................................................................3
2.18 INCENTIVE STOCK OPTION................................................................................3
2.19 MATURE SHARES.........................................................................................3
2.20 MINIMUM CONSIDERATION.................................................................................3
2.21 OPTION................................................................................................3
2.22 OPTION PRICE..........................................................................................3
2.23 OPTION TERM...........................................................................................3
2.24 PERFORMANCE-BASED EXCEPTION...........................................................................3
2.25 PERIOD OF RESTRICTION.................................................................................3
2.26 PERSON................................................................................................4
2.27 PLAN..................................................................................................4
2.28 REQUIRED WITHHOLDING..................................................................................4
2.29 RESTRICTED SHARES.....................................................................................4
2.30 RULE 16B-3............................................................................................4
2.31 SEC...................................................................................................4
2.32 SECTION...............................................................................................4
2.33 SHARE.................................................................................................4
2.34 SUBSIDIARY............................................................................................4
2.35 TERMINATION OF AFFILIATION............................................................................4
2.36 10% OWNER.............................................................................................4
</Table>
APPENDIX B
<Table>
ARTICLE 3. ADMINISTRATION........................................................................................4
3.1 COMMITTEE................................................................................................4
3.2 POWERS OF COMMITTEE......................................................................................5
3.3 COMPLIANCE WITH CODE SECTION 162(M)......................................................................6
ARTICLE 4. SHARES SUBJECT TO THE PLAN AND MAXIMUM AWARDS.........................................................6
4.1 NUMBER OF SHARES AVAILABLE FOR GRANTS....................................................................6
4.2 ADJUSTMENTS IN AUTHORIZED SHARES.........................................................................6
ARTICLE 5. ELIGIBILITY AND GENERAL CONDITIONS OF AWARDS..........................................................7
5.1 ELIGIBILITY..............................................................................................7
5.2 GRANT DATE...............................................................................................7
5.3 MAXIMUM TERM.............................................................................................7
5.4 AWARD AGREEMENT..........................................................................................7
5.5 RESTRICTIONS ON SHARE TRANSFERABILITY....................................................................7
5.6 TERMINATION OF AFFILIATION...............................................................................7
5.7 NONTRANSFERABILITY OF AWARDS.............................................................................9
5.8 CANCELLATION AND RESCISSION OF AWARDS....................................................................9
ARTICLE 6 STOCK OPTIONS.........................................................................................9
6.1 GRANT OF OPTIONS.........................................................................................9
6.2 AWARD AGREEMENT..........................................................................................9
6.3 OPTION PRICE.............................................................................................9
6.4 GRANT OF INCENTIVE STOCK OPTIONS.........................................................................9
6.5 PAYMENT.................................................................................................11
ARTICLE 7. RESTRICTED SHARES....................................................................................11
7.1 GRANT OF RESTRICTED SHARES..............................................................................11
7.2 AWARD AGREEMENT.........................................................................................11
7.3 CONSIDERATION...........................................................................................12
7.4 EFFECT OF FORFEITURE....................................................................................12
7.5 ESCROW; LEGENDS.........................................................................................12
ARTICLE 8. BENEFICIARY DESIGNATION..............................................................................12
ARTICLE 9. DEFERRED SHARE UNITS/DEFERRALS.......................................................................12
9.1 DEFERRED SHARE UNITS....................................................................................12
9.2 DEFERRALS...............................................................................................13
ARTICLE 10. RIGHTS OF EMPLOYEES/DIRECTORS.......................................................................13
10.1 EMPLOYMENT...........................................................................................13
10.2 PARTICIPATION........................................................................................13
ARTICLE 11. AMENDMENT, MODIFICATION, AND TERMINATION............................................................13
11.1 AMENDMENT, MODIFICATION, AND TERMINATION.............................................................13
11.2 ADJUSTMENT OF AWARDS UPON THE OCCURRENCE OF CERTAIN UNUSUAL OR NONRECURRING EVENTS...................13
</Table>
ii
APPENDIX B
<Table>
11.3 AWARDS PREVIOUSLY GRANTED............................................................................13
ARTICLE 12. WITHHOLDING.........................................................................................14
12.1 WITHHOLDING..........................................................................................14
12.2 NOTIFICATION UNDER CODE SECTION 83(B)................................................................15
ARTICLE 13. SUCCESSORS..........................................................................................15
ARTICLE 14. ADDITIONAL PROVISIONS...............................................................................15
14.1 GENDER AND NUMBER....................................................................................15
14.2 SEVERABILITY.........................................................................................15
14.3 REQUIREMENTS OF LAW..................................................................................15
14.4 SECURITIES LAW COMPLIANCE............................................................................15
14.5 NO RIGHTS AS A STOCKHOLDER...........................................................................16
14.6 NATURE OF PAYMENT....................................................................................16
14.7 GOVERNING LAW........................................................................................16
</Table>
iii
APPENDIX B
BLUE VALLEY BAN CORP.
1998 EQUITY INCENTIVE PLAN
Article 1. Establishment, Effective Date, Objectives and Duration
1.1 Establishment of the Plan. By prior approval of the Board of
Directors and shareholders of Blue Valley Ban Corp, a Kansas corporation (the
"Company"), the Company established the Blue Valley Ban Corp. 1998 Equity
Incentive Plan (the "Plan") effective as of April 9 , 1998 (the "Effective
Date"). The Company now proposes to amend and restate the Plan in its entirety
effective as of March 31, 2003 (the "Restated Effective Date"), subject to the
approval of the Company's shareholders.
1.2 Objectives of the Plan. The Plan is intended to allow selected
employees and directors of the Company and its Subsidiaries to acquire or
increase equity ownership in the Company, thereby strengthening their commitment
to the success of the Company and stimulating their efforts on behalf of the
Company, and to assist the Company and its Subsidiaries in attracting new
employees and directors and retaining existing employees and directors. The Plan
is also intended to optimize the profitability and growth of the Company through
incentives which are consistent with the Company's goals; to provide employees
and directors with an incentive for excellence in individual performance; and to
promote teamwork among employees and directors.
1.3 Duration of the Plan. The Plan shall commence on the Effective Date
and shall remain in effect, subject to the right of the Board to amend or
terminate the Plan at any time pursuant to Article 11 hereof, until all Shares
subject to it shall have been purchased or acquired according to the Plan's
provisions. However, in no event may an Incentive Stock Option be granted under
the Plan on or after the date 10 years following the earlier of (i) the date the
Plan was adopted and (ii) the date the Plan was approved by the shareholders of
the Company.
Article 2. Definitions
Whenever used in the Plan, the following terms shall have the meanings
set forth below:
2.1 "Article" means an Article of the Plan.
2.2 "Award" means Options (including Incentive Stock Options),
Restricted Shares or Deferred Share Units granted under the Plan.
2.3 "Award Agreement" means the written agreement by which an Award
shall be evidenced.
2.4 "Board" means the Board of Directors of the Company.
2.5 "Cause" means, unless otherwise defined in an Award Agreement, any
one or more of the following, as determined by the Committee:
APPENDIX B
(i) a Grantee's commission of a crime which, in the judgment
of the Committee, is likely to result in injury to the Company or a Subsidiary;
(ii) the material violation by the Grantee of written policies
of the Company or a Subsidiary;
(iii) the habitual neglect by the Grantee in the performance
of his or her duties to the Company or a Subsidiary; or
(iv) action or inaction by the Grantee in connection with his
or her duties to the Company or a Subsidiary resulting, in the judgment of the
Committee, in a material injury to the Company or a Subsidiary.
2.6 "Code" means the Internal Revenue Code of 1986, as amended from
time to time, and regulations and rulings thereunder. References to a particular
section of the Code include references to successor provisions.
2.7 "Committee" has the meaning set forth in Article 3.
2.8 "Common Stock" means the common stock, $1.00 par Value, of the
Company.
2.9 "Company" has the meaning set forth in Section 1.1.
2.10 "Deferred Share Units" means units granted under Section 9.1 of
the Plan.
2.11 "Disability" means, unless otherwise defined in an Award
Agreement, for purposes of the exercise of an Incentive Stock Option after
Termination of Affiliation, a disability within the meaning of Section 22(e)(3)
of the Code, and for all other purposes, a mental or physical condition which,
in the judgment of the Committee, renders a Grantee unable to perform any of the
principal job responsibilities which such Grantee held or the tasks to which
such Grantee was assigned at the time the disability was incurred, and which
condition is expected to be permanent or for an indefinite duration exceeding
two years.
2.12 "Disqualifying Disposition" has the meaning set forth in Section
6.4.
2.13 "Eligible Person" means (i) any employee (including any officer)
of the Company or any Subsidiary, including any such employee who is on an
approved leave of absence, layoff, or has been subject to a disability which
does not qualify as a Disability and (ii) any director of the Company or any
Subsidiary.
2.14 "Exchange Act" means the Securities Exchange Act of 1934, as
amended from time to time. References to a particular section of the Exchange
Act include references to successor provisions.
2.15 "Fair Market Value" means (A) with respect to any property other
than Shares, the fair market value of such property determined by such methods
or procedures as shall be
2
APPENDIX B
established from time to time by the Committee, and (B) with respect to Shares,
unless otherwise determined in the good faith discretion of the Committee, as of
any date, (i) the closing price on the date of determination on the New York
Stock Exchange (or, if no sale of Shares was reported for such date, on the next
preceding date on which a sale of Shares was reported), (ii) if the Shares are
not listed on the New York Stock Exchange, the closing price of the Shares on
such other national exchange on which the Shares are principally traded or as
reported by the National Market System, or similar organization, or if no such
quotations are available, the average of the high bid and low asked quotations
in the over-the-counter market as reported by the National Quotation Bureau
Incorporated or similar organizations; or (iii) in the event that there shall be
no public market for the Shares, the fair market value of the Shares as
determined (which determination shall be conclusive) in good faith by the
Committee.
2.16 "Grant Date" has the meaning set forth in Section 5.2.
2.17 "Grantee" means an individual who has been granted an Award.
2.18 "Incentive Stock Option" means an option granted under Article 6
of the Plan that is intended to meet the requirements of Section 422 of the Code
or any successor provisions thereto.
2.19 "Mature Shares" means Shares for which the holder thereof has good
title, free and clear of all liens and encumbrances, and which such holder
either (i) has held for at least six months or (ii) has purchased on the open
market.
2.20 "Minimum Consideration" means $.01 per Share or such other amount
that is from time to time considered to be capital under applicable law.
2.21 "Option" means an option granted under Article 6 of the Plan.
2.22 "Option Price" means the price at which a Share may be purchased
by a Grantee pursuant to an Option.
2.23 "Option Term" means the period beginning on the Grant Date of an
Option and ending on the expiration date of such Option, as specified in the
Award Agreement for such Option.
2.24 "Performance-Based Exception" means the performance-based
exception from the tax deductibility limitations of Code Section 162(m).
2.25 "Period of Restriction" means the period during which the transfer
of Restricted Shares is limited in some way (the length of the period being
based on the passage of time, the achievement of performance goals, or upon the
occurrence of other events as determined by the Committee, in its discretion),
and the Shares are subject to a substantial risk of forfeiture, as provided in
Article 7.
3
APPENDIX B
2.26 "Person" shall have the meaning ascribed to such term in Section
3(a)(9) of the Exchange Act and used in Sections 13(d) and 14(d) thereof,
including a "group" as defined in Section 13(d) thereof.
2.27 "Plan" has the meaning set forth in Section 1.1.
2.28 "Required Withholding" has the meaning set forth in Article 12.
2.29 "Restricted Shares" means Shares that are subject to forfeiture if
the Grantee does not satisfy the conditions, if any, specified in the Award
Agreement applicable to such Shares.
2.30 "Rule 16b-3 " means Rule 16b-3 promulgated by the SEC under the
Exchange Act, as amended from time to time, together with any successor rule, as
in effect from time to time.
2.31 "SEC" means the United States Securities and Exchange Commission,
or any successor thereto.
2.32 "Section" means, unless the context otherwise requires, a Section
of the Plan.
2.33 "Share" means a share of Common Stock.
2.34 "Subsidiary" means, for purposes of grants of Incentive Stock
Options, a corporation as defined in Section 424(f) of the Code (with the
Company being treated as the employer corporation for purposes of this
definition) and, for all other purposes, a United States or foreign corporation
with respect to which the Company owns, directly or indirectly, 50% or more of
the combined voting power of the then outstanding securities entitled to vote
generally in the election of directors of such corporation.
2.35 "Termination of Affiliation" occurs on the first day on which an
individual is for any reason no longer providing services to the Company or any
Subsidiary in the capacity of an employee or director, or with respect to an
individual who is an employee or director of a Subsidiary, the first day on
which the Company no longer owns, directly or indirectly, voting securities
possessing at least 50% of the combined voting power of the then outstanding
securities entitled to vote generally in the election of directors of such
Subsidiary.
2.36 "10% Owner" means a person who owns capital stock (including stock
treated as owned under Section 424(d) of the Code) possessing more than 10% of
the total combined voting power of all classes of capital stock of the Company
or any Subsidiary.
Article 3. Administration
3.1 Committee. Subject to Article 11, and to Section 3.2, the Plan
shall be administered by the Board, or a committee appointed by the Board to
administer the Plan. Any references herein to "Committee" are references to the
Board, or a committee established by the Board, as applicable. To the extent the
Board considers it desirable to comply with or qualify under Rule
4
APPENDIX B
16b-3 or meet the Performance-Based Exception, the Committee shall consist of
two or more directors of the Company, all of whom qualify as "outside directors"
as defined for purposes of the regulations under Code Section 162(m) and
"non-employee directors" within the meaning of Rule 16b-3. The number of members
of the Committee shall from time to time be increased or decreased, and shall be
subject to such conditions, in each case as the Board deems appropriate to
permit transactions in Shares pursuant to the Plan to satisfy such conditions of
Rule 16b-3 and the Performance-Based Exception as then in effect.
3.2 Powers of Committee. Subject to the express provisions of the Plan,
the Committee has full and final authority and sole discretion as follows:
(i) to determine when, to whom and in what types and amounts
Awards should be granted and the terms and conditions applicable to each Award,
and whether or not specific Awards shall be granted in connection with other
specific Awards, and if so whether they shall be exercisable cumulatively with,
or alternatively to, such other specific Awards;
(ii) to determine the amount, if any, that a Grantee shall pay
for Restricted Shares, whether to permit or require the payment of cash
dividends thereon to be deferred and the terms related thereto, when Restricted
Shares (including Restricted Shares acquired upon the exercise of an Option)
shall be forfeited and whether such shares shall be held in escrow;
(iii) to construe and interpret the Plan and to make all
determinations necessary or advisable for the administration of the Plan;
(iv) to make, amend, and rescind rules relating to the Plan,
including rules with respect to the exercisability and nonforfeitability of
Awards upon the Termination of Affiliation of a Grantee;
(v) to determine the terms and conditions of all Award
Agreements (which need not be identical) and, with the consent of the Grantee,
to amend any such Award Agreement at any time, among other things, to permit
transfers of such Awards to the extent permitted by the Plan; provided that the
consent of the Grantee shall not be required for any amendment which (A) does
not adversely affect the rights of the Grantee, or (B) is necessary or advisable
(as determined by the Committee) to carry out the purpose of the Award as a
result of any new or change in existing applicable law;
(vi) subject to Sections 1.3 and 5.3, to extend the time
during which any Award or group of Awards may be exercised; and
(vii) to take any other action with respect to any matters
relating to the Plan for which it is responsible.
The determination of the Committee on all matters relating to the Plan
or any Award Agreement shall be final, conclusive and binding on all Persons. No
member of the Committee shall be liable for any action or determination made in
good faith with respect to the Plan or any Award.
5
APPENDIX B
3.3 Compliance with Code Section 162(m). To the extent the Company is
subject to the limitations under Code Section 162(m), the Plan shall be
administered to ensure that any Award under the Plan to the Company's chief
executive officer and the four highest compensated officers (determined pursuant
to the executive compensation disclosure rules under the Securities Exchange Act
of 1934) (each a "covered employee") will be tax deductible, unless the
Committee determines that it would be in the best interests of its shareholders
to do otherwise. In furtherance of this goal, with respect to Awards payable
under the Plan for covered employees, the performance goals established by the
Committee may vary from one covered employee to another, and will be limited to
certain business criteria measured by one or more of the following: revenues,
operating income, cash flow, income before taxes, net income, earnings available
per share, return on equity, return on assets, or total return to stockholders,
whether applicable to the Company or any Subsidiary or business unit, or
combination thereof, as the Committee may deem appropriate, or any of the above
goals as compared to the performance of a published or special index deemed
appropriate by the Committee. The criteria selected by the Committee shall
include a minimum performance standard below which no payments will be made and
a maximum performance level above which no increased payment will be made.
Notwithstanding the foregoing, in no event may any performance goals be
established which would permit a covered employee to receive a single annual
Award of more 15,000 Shares. No payment of any Award may be made to any covered
employee unless the Committee has certified in writing that the performance
goals and any other material terms of the Award were in fact satisfied.
Article 4. Shares Subject to the Plan and Maximum Awards
4.1 Number of Shares Available for Grants. Subject to adjustment as
provided in Section 4.2, the number of Shares hereby reserved for issuance under
the Plan shall be 540,000 (200,000 shares authorized in 1998; 140,000 shares
issued in 1999; 200,000 shares authorized in 2003), and the number of Shares for
which Awards may be granted to any Grantee in any calendar year shall not exceed
15,000. If any Shares subject to an Award granted hereunder are forfeited or
such Award otherwise terminates without the issuance of such Shares or of other
consideration in lieu of such Shares, the Shares subject to such Award, to the
extent of any such forfeiture or termination shall again be available for grant
under the Plan. If any Shares subject to an Award granted hereunder are
withheld, applied as payment, or sold and the proceeds thereof applied as
payment in connection with the exercise of an Award or the withholding or
payment of taxes related thereto, such Shares, to the extent of any such
withholding or payment, shall again be available for grant under the Plan. The
Committee shall from time to time determine the appropriate methodology for
calculating the number of Shares issued pursuant to the Plan. Shares issued
pursuant to the Plan may be treasury Shares or newly issued Shares.
4.2 Adjustments in Authorized Shares. In the event that the Committee
determines that any dividend or other distribution (whether in the form of cash,
Shares, other securities, or other property), recapitalization, stock split,
reverse stock split, subdivision, consolidation or reduction of capital,
reorganization, merger, scheme of arrangement, split-up, spin-off or combination
involving the Company or repurchase or exchange of Shares or other rights to
purchase Shares or other securities of the Company, or other similar corporate
transaction or event affects the Shares such that any adjustment is determined
by the Committee to be
6
APPENDIX B
appropriate in order to prevent dilution or enlargement of the benefits or
potential benefits intended to be made available under the Plan, then the
Committee shall, in such manner as it may deem equitable, adjust any or all of
(i) the number and type of Shares (or other securities or property) with respect
to which Awards may be granted, (ii) the number and type of Shares (or other
securities or property) subject to outstanding Awards, and (iii) the grant or
exercise price with respect to any Award or, if deemed appropriate, make
provision for a cash payment to the holder of an outstanding Award; provided, in
each case that with respect to Awards of Incentive Stock Options no such
adjustment shall be authorized to the extent that such authority would cause the
Plan to violate Section 422(b)(1) of the Code or any successor provision
thereto; and provided further, that the number of Shares subject to any Award
denominated in Shares shall always be a whole number.
Article 5. Eligibility and General Conditions of Awards
5.1 Eligibility. The Committee may in its discretion grant Awards to
any Eligible Person, whether or not he or she has previously received an Award.
5.2 Grant Date. The Grant Date of an Award shall be the date on which
the Committee grants the Award or such later date as specified in advance by the
Committee.
5.3 Maximum Term. Any provision of the Plan to the contrary
notwithstanding, the Option Term or other period during which an Award may be
outstanding shall under no circumstances extend more than 10 years after the
Grant Date, and shall be subject to earlier termination as herein provided.
5.4 Award Agreement. To the extent not set forth in the Plan, the terms
and conditions of each Award (which need not be the same for each grant or for
each Grantee) shall be set forth in an Award Agreement.
5.5 Restrictions on Share Transferability. The Committee may impose
such restrictions on any Shares acquired pursuant to the exercise or vesting of
an Award as it may deem advisable, including restrictions under applicable
federal securities laws. Except as otherwise provided by the Committee in an
Award Agreement, all Shares acquired pursuant to the exercise or vesting of an
Award shall be subject to (i) the right of the Company to purchase, and to
require a Grantee to sell to the Company, such Shares at any time within sixty
(60) days following such Grantee's Termination of Affiliation (or, if later,
following the Grantee's acquisition of such Shares pursuant to exercise or
vesting of an Award) at a purchase price payable in cash equal to the Fair
Market Value of the shares on the date of purchase, and (ii) in the event of a
transaction pursuant to which the holders of more than 50% of the
then-outstanding Shares agree to sell their Shares to any Person, the right of
the Company to require the Grantee to sell to such Person, on the same terms and
conditions applicable to the sale by such other shareholders, any or, all Shares
acquired pursuant to the exercise or vesting of an Award.
5.6 Termination of Affiliation. Except as otherwise provided by the
Committee in an Award Agreement, the extent to which the Grantee shall have the
right to exercise, vest in, or
7
APPENDIX B
receive payment in respect of an Award following Termination of Affiliation
shall be determined in accordance with the following provisions of this Section
5.6.
(a) For Cause. Except as otherwise provided by the Committee
in an Award Agreement, if a Grantee has a Termination of Affiliation for Cause,
(i) the Grantee's Restricted Shares and Deferred Share Units that are
forfeitable shall thereupon be forfeited, subject to the provisions of Section
7.4 regarding repayment of certain amounts to the Grantee; and (ii) any
unexercised Option shall terminate effective immediately upon such Termination
of Affiliation.
(b) On Account of Death. Except as otherwise provided by the
Committee in an Award Agreement, if a Grantee has a Termination of Affiliation
on account of death, then:
(i) the Grantee's Restricted Shares and Deferred Share
Units that were forfeitable shall thereupon become nonforfeitable; and .
(ii) any unexercised Option, whether or not exercisable on
the date of such Termination of Affiliation, may be exercised, in whole or in
part, within the first 12 months after such Termination of Affiliation (but only
during the Option Term) by (A) the Grantee's personal representative or the
person to whom the Option is transferred by will or the applicable laws of
descent and distribution, or (B) the Grantee's beneficiary designated in
accordance with Article 8.
(c) On Account of Disability. Except as otherwise provided by
the Committee in an Award Agreement, if a Grantee has a Termination of
Affiliation on account of Disability, then:
(i) the Grantee's Restricted Shares and Deferred Share
Units that were forfeitable shall thereupon become nonforfeitable; and
(ii) any unexercised Option, whether or not exercisable on
the date of such Termination of Affiliation, may be exercised, in whole or in
part, within the first 12 months after such Termination of Affiliation (but only
during the Option Term) by the Grantee or, after his or her death, by (A) his or
her personal representative or the person to whom the Option is transferred by
will or the applicable laws of descent and distribution, or (B) the Grantee's
beneficiary designated in accordance with Article 8.
(d) Any Other Reason. Except as otherwise provided by the
Committee in an Award Agreement, if a Grantee has a Termination of Affiliation
for any reason other than for Cause, Death, or Disability, then:
(i) the Grantee's Restricted Shares and Deferred Share
Units, to the extent forfeitable on the date of the Grantee's Termination of
Affiliation, shall be forfeited on such date; and
(ii) any unexercised Option, to the extent exercisable
immediately before the Grantee's Termination of Affiliation, may be exercised in
whole or in part, not later than
8
APPENDIX B
three months after such Termination of Affiliation (but only during the Option
Term) by the Grantee, or, after his or her death, by (A) his or her personal
representative or the person to whom the Option is transferred by will or the
applicable laws of descent and distribution, or (B) the Grantee's beneficiary
designated in accordance with Article 8.
5.7 Nontransferability of Awards.
(a) Each Award, and each right under any Award, shall be
exercisable only by the Grantee during the Grantee's lifetime, or, if
permissible under applicable law, by the Grantee's guardian or legal
representative or by a transferee receiving such Award pursuant to a qualified
domestic relations order (a "QDRO") as defined in the Code or Title I of the
Employee Retirement Income Security Act of 1974 as amended ("ERISA"), or the
rules thereunder.
(b) No Award (prior to the time, if applicable, Shares are
issued in respect of such Award), and no right under any Award, may be assigned,
alienated, pledged, attached, sold or otherwise transferred or encumbered by a
Grantee otherwise than by will or by the laws of descent and distribution (or in
the case of Restricted Shares, to the Company) or pursuant to a QDRO, and any
such purported assignment, alienation, pledge, attachment, sale, transfer or
encumbrance shall be void and unenforceable against the Company or any
Subsidiary; provided, that the designation of a beneficiary shall not constitute
an assignment, alienation, pledge, attachment, sale, transfer or encumbrance.
5.8 Cancellation and Rescission of Awards. Unless the Award Agreement
specifies otherwise, the Committee may cancel, rescind, suspend, withhold, or
otherwise limit or restrict any unexercised Award at any Lime if the Grantee is
not in compliance with all applicable provisions of the Award Agreement and the
Plan or if the Grantee has a Termination of Affiliation for Cause.
Article 6. Stock Options
6.1 Grant of Options. Subject to the terms and provisions of the Plan,
Options may be granted to any Eligible Person in such number, and upon such
terms, and at any time and from time to time as shall be determined by the
Committee.
6.2 Award Agreement. Each Option grant shall be evidenced by an Award
Agreement that shall specify the Option Price, the Option Term, the number of
shares to which the Option pertains, the time or times at which such Option
shall be exercisable and such other provisions as the Committee shall determine.
6.3 Option Price. The Option Price of an Option under this Plan shall
be determined in the sole discretion of the Committee; provided, however, that
the Option Price shall be at least equal to 100% of the Fair Market Value of a
Share on the Grant Date.
6.4 Grant of Incentive Stock Options. At the time of the grant of any
Option, the Committee may in its discretion designate that such Option shall be
made subject to additional
9
APPENDIX B
restrictions to permit it to qualify as an "incentive stock option" under the
requirements of Section 422 of the Code. Any Option designated as an Incentive
Stock Option:
(i) shall, if granted to a 10% Owner, have an Option
Price not less than 110% of the Fair Market Value of a Share on its Grant Date;
(ii) shall be for a period of not more than 10 years
(five years in the case of an Incentive Stock Option granted to a 10% Owner)
from its Grant Date, and shall be subject to earlier termination as provided
herein or in the applicable Award Agreement;
(iii) shall not have an aggregate Fair Market Value
(as of the Grant Date of each Incentive Stock Option) of the Shares with respect
to which Incentive Stock Options (whether granted under the Plan or any other
stock option plan of the Grantee's employer or any parent or Subsidiary thereof
("Other Plans")) are exercisable for the first time by such Grantee during any
calendar year, determined in accordance with the provisions of Section 422 of
the Code, which exceeds $100,000 (the 1100,000 Limit");
(iv) shall, if the aggregate Fair Market Value of the
Shares (determined on the Grant Date) with respect to the portion of such grant
which is exercisable for the first time during any calendar year ("Current
Grant") and all Incentive Stock Options previously granted under the Plan and
any Other Plans which are exercisable for the first time during a calendar year
("Prior Grants") would exceed the $100,000 Limit, be exercisable as follows:
(A) the portion of the Current Grant which
would, when added to any Prior Grants, be exercisable with respect to
Shares which would have an aggregate Fair Market Value (determined as
of the respective Grant Date for such options) in excess of tile
$100,000 Limit shall, notwithstanding the terms of the Current Grant,
be exercisable for the first time by the Grantee in the first
subsequent calendar year or years in which it could be exercisable for
the first time by the Grantee when added to all Prior Grants without
exceeding the $100,000 Limit; and
(B) if, viewed as of the date of the Current
Grant, any portion of a Current Grant could not be exercised under the
preceding provisions of this Section during any calendar year
commencing with the calendar yew in which it is first exercisable
through and including the last calendar you in which it may by its
terms be exercised, such portion of the Current Grant shall not be an
Incentive Stock Option, but shall be exercisable as a separate option
at such date or dates as are provided in the Current Grant;
(v) shall be granted within 10 years from the earlier
of the date the Plan is adopted or the date the Plan is approved by the
stockholders of the Company;
(vi) shall require the Grantee to notify the
Committee of any disposition of any Shares issued pursuant to the exercise of
the Incentive Stock Option under the circumstances described in Section 421(b)
of the Code (relating to certain disqualifying dispositions) (any such
10
APPENDIX B
circumstance, a "Disqualifying Disposition"), within 10 days of such
Disqualifying Disposition; and
(vii) shall by its terms not be assignable or
transferable other than by will or the laws of descent and distribution and may
be exercised, during the Grantee's lifetime, only by the Grantee; provided,
however, that the Grantee may, to the extent provided in the Plan in any manner
specified by the Committee, designate in writing a beneficiary to exercise his
or her Incentive Stock, Option after the Grantee's death.
Notwithstanding the foregoing and Section 3.2(v), the Committee may,
without the consent of the Grantee, at any time before the exercise of an Option
(whether or not an Incentive Stock Option), take any action necessary to prevent
such Option from being treated as an Incentive Stock Option.
6.5 Payment. Options granted under this Article 6 shall be exercised by
the delivery of a written notice of exercise to the Company, setting forth the
number of Shares with respect to which the Option is to be exercised,
accompanied by full payment for the Shares made by any one or more of the
following means subject to the approval of the Committee:
(A) cash, personal check or wire transfer;
(B) Mature Shares, valued at their Fair Market Value
on the date of exercise; or
(C) subject to applicable law, pursuant to procedures
previously approved by the Company, through the sale of the Shares
acquired on exercise of the Option through a broker-dealer to whom the
Grantee has submitted an irrevocable notice of exercise and irrevocable
instructions to deliver promptly to the Company the amount of sale or
loan proceeds sufficient to pay for such Shares, together with, if
requested by the Company, the amount of federal, state, local or
foreign withholding taxes payable by Grantee by reason of such
exercise.
The Committee may in its discretion specify that, if any Restricted Shares
("Tendered Restricted Shares") are used to pay the Option Price, (x) all the
Shares acquired on exercise of the Option shall be subject to the same
restrictions as the Tendered Restricted Shares, determined as of the date of
exercise of the Option, or (y) a number of Shares acquired on exercise of the
Option equal to the number of Tendered Restricted Shares shall be subject to the
same restrictions as the Tendered Restricted Shares, determined as of the date
of exercise of the Option.
Article 7. Restricted Shares
7.1 Grant of Restricted Shares. Subject to the terms and provisions of
the Plan, the Committee, at any time and from time to time, may grant Restricted
Shares to any Eligible Person in such amounts as the Committee shall determine.
7.2 Award Agreement. Each grant of Restricted Shares shall be evidenced
by an Award Agreement that shall specify the Period(s) of Restriction, the
number of Restricted Shares
11
APPENDIX B
granted, and such other provisions as the Committee shall determine. The
Committee may impose such conditions and/or restrictions on any Restricted
Shares granted pursuant to the Plan as it may deem advisable, including
restrictions based upon the achievement of specific performance goals
(Company-wide, divisional, and/or individual), time-based restrictions on
vesting following the attainment of the performance goals, and/or restrictions
under applicable securities laws. The Committee may also grant Restricted Shares
without any performance, time-based or other restrictions which shall be
nonforfeitable upon grant.
7.3 Consideration. The Committee shall determine the amount, if any,
that a Grantee shall pay for Restricted Shares, subject to the following
sentence. Except with respect to Restricted Shares that are treasury shares, for
which no payment need be required, the Committee shall require the Grantee to
pay at least the Minimum Consideration for each Restricted Share. Such payment
shall be made in full by the Grantee before the delivery of the shares and in
any event no later than 10 business days after the Grant Date for such shares.
7.4 Effect of Forfeiture. If Restricted Shares are forfeited, and if
the Grantee was required to pay for such shares or acquired such Restricted
Shares upon the exercise of an Option, the Grantee shall be deemed to have
resold such Restricted Shares to the Company at a price equal to the lesser of
(x) the amount paid by the Grantee for such Restricted Shares, or (Y) the Fair
Market Value of such Restricted Shares on the date of such forfeiture. The
Company shall pay to the Grantee the required amount as soon as is
administratively practical. Such Restricted Shares shall cease to be
outstanding, and shall no longer confer on the Grantee thereof any rights as a
stockholder of the Company, from and after the date of the event causing the
forfeiture, whether or not the Grantee accepts the Company's tender of payment
for such Restricted Shares.
7.5 Escrow; Legends. The Committee may provide that the certificates
for any Restricted Shares (x) shall be held (together with a stock power
executed in blank by the Grantee) in escrow by the Secretary of the Company
until such Restricted Shares become nonforfeitable or are forfeited or (y) shall
bear an appropriate legend restricting the transfer of such Restricted Shares.
Article 8. Beneficiary Designation
Each Grantee under the Plan may, from time to time, name any
beneficiary or beneficiaries (who may be named contingently or successively) to
whom any benefit under the Plan is to be paid in case of his or her death before
he or she receives any or ail of such benefit. Each such designation shall
revoke all prior designations by the same Grantee, shall be in a form prescribed
by the Company, and will be effective only when filed by the Grantee in writing
with the Company during the Grantee's lifetime. In the absence of any such
designation, benefits remaining unpaid at the Grantee's death shall be paid to
the Grantee's estate.
Article 9. Deferred Share Units/Deferrals
9.1 Deferred Share Units. Subject to the terms and provisions of the
Plan, Deferred Share Units may be granted to any Eligible Person in such amounts
and upon such terms, and at any time and from time to time, as shall be
determined by the Committee. Except as otherwise provided in an Award Agreement,
each Deferred Share Unit shall have an initial value equal to the Fair Market
Value of a Share on the date of grant. The Committee may impose such
12
APPENDIX B
conditions and/or restrictions on any Deferred Share Units granted pursuant to
the Plan as it may deem advisable, including time-vesting restrictions and
deferred payment features. Except as otherwise provided in an Award Agreement,
payment to the Grantee of the value or increase in value, as applicable, of
Deferred Share Units shall be made upon the Grantee's Termination of
Affiliation.
9.2 Deferrals. The Committee may permit or require a Grantee to defer
receipt of the delivery of Shares that would otherwise be due by virtue of the
exercise of an Option or the lapse or waiver of restrictions with respect to
Restricted Shares. If any such deferral is required or permitted, the Committee
shall, in its sole discretion, establish rules and procedures for such
deferrals. Except as otherwise provided in an Award Agreement, any Shares that
are subject to such deferral shall be delivered to the Grantee upon the earlier
of (i) the first day on which Shares are traded in a public market or (ii) the
Grantee's Termination of Affiliation.
Article 10. Rights of Employees/Directors
10.1 Employment. Nothing in the Plan shall interfere with or limit in
any way the right of the Company to terminate any Grantee's employment or
directorship at any time, nor confer upon any Grantee the right to continue in
the employ or as a director of the Company.
10.2 Participation. No employee or director shall have the right to be
selected to receive an Award under this Plan, or, having been so selected, to be
selected to receive a future Award.
Article 11. Amendment, Modification, and Termination
11.1 Amendment, Modification, and Termination. Subject to the terms of
the Plan, the Board may at any time and from time to time, alter, amend, suspend
or terminate the Plan in whole or in part without the approval of the Company's
stockholders.
11.2 Adjustment of Awards Upon the Occurrence of Certain Unusual or
Nonrecurring Events. The Committee may make adjustments in the terms and
conditions of, and the criteria included in, Awards in recognition of unusual or
nonrecurring events (including the events described in Section 4.2) affecting
the Company or the financial statements of the Company or of changes in
applicable laws, regulations, or accounting principles, whenever the Committee
determines that such adjustments are appropriate in order to prevent dilution or
enlargement of the benefits or potential benefits intended to be made available
under the Plan; provided that no such adjustment shall be authorized to the
extent that such authority would be inconsistent with the Plan's meeting the
requirements of the Performance-Based Exception.
11.3 Awards Previously Granted. Notwithstanding any other provision of
the Plan to the contrary, no termination, amendment, or modification of the Plan
shall adversely affect in any material way any Award previously granted under
the Plan, without the written consent of the Grantee of such Award.
13
APPENDIX B
Article 12. Withholding
12.1 Withholding
(a) Mandatory Tax Withholding.
(1) Whenever under the Plan, Shares are to be
delivered upon exercise or payment of an Award or upon
Restricted Shares becoming nonforfeitable, or any other event
with respect to rights and benefits hereunder, the Company
shall be entitled to require (i) that the Grantee remit an
amount in cash, or in the Committee's discretion, Mature
Shares, sufficient to satisfy all federal, state, and local
tax withholding requirements related thereto ("Required
Withholding"), (ii) the withholding of such Required
Withholding from compensation otherwise due to the Grantee or
from any Shares due to the Grantee under the Plan or (iii) any
combination of the foregoing.
(2) Any Grantee who makes a Disqualifying Disposition
or an election under Section 83(b) of the Code shall remit to
the Company an amount sufficient to satisfy all resulting
Required Withholding; provided that, in lieu of or in addition
to the foregoing, the Company shall have the right to withhold
such Required Withholding from compensation otherwise due to
the Grantee or from any Shares or other payment due to the
Grantee under the Plan.
(b) Elective Share Withholding.
(1) Subject to the following subsection, a Grantee
may elect the withholding ("Share Withholding") by the Company
of a portion of the Shares otherwise deliverable to such
Grantee upon the exercise of an Award or upon Restricted
Shares becoming non-forfeitable (each, a "Taxable Event")
having a Fair Market Value equal to (i) the minimum amount
necessary to satisfy Required Withholding liability
attributable to the Taxable Event; or (ii) with the
Committee's prior approval, a greater amount, not to exceed
the estimated total amount of such Grantee's tax liability
with respect to the Taxable Event.
(2) Each Share Withholding election shall be subject
to the following conditions:
(i) any Grantee's election shall be subject to the
Committee's discretion to revoke the Grantee's right to elect Share Withholding
at any time before the Grantee's election if the Committee has reserved the
right to do so in the Award Agreement;
(ii) the Grantee's election must be made before the date
(the "Tax Date") on which the amount of tax to be withheld is determined; and
(iii) the Grantee's election shall be irrevocable.
14
APPENDIX B
12.2 Notification under Code Section 83(b). If the Grantee, in
connection with the exercise of any Option, or the grant of Restricted Shares,
makes the election permitted under Section 83(b) of the Code to include in such
Grantee's gross income in the year of transfer the amounts specified in Section
83(b) of the Code, then such Grantee shall notify the Company of such election
within 10 days of filing the notice of the election with the Internal Revenue
Service, in addition to any filing and notification required pursuant to
regulations issued under Section 83(b) of the Code. The Committee may, in
connection with the grant of an Award or at any time thereafter, prohibit a
Grantee from making the election described above.
Article 13. Successors
All obligations of the Company under the Plan with respect to Awards
granted hereunder .shall be binding on any successor to the Company, whether the
existence of such successor is the result of a direct or indirect purchase,
merger, consolidation, or otherwise of all or substantially all of the business
and/or assets of the Company.
Article 14. Additional Provisions
14.1 Gender and Number. Except where otherwise indicated by the
context, any masculine term used herein also shall include the feminine; the
plural shall include the singular and the singular shall include the plural.
14.2 Severability. If any part of the Plan is declared by any court or
governmental authority to be unlawful or invalid, such unlawfulness or
invalidity shall not invalidate any other part of the Plan. Any Section or part
of a Section so declared to be unlawful or invalid shall, if possible, be
construed in a manner which will give effect to the terms of such Section or
part of a Section to the fullest extent possible while remaining lawful and
valid.
14.3 Requirements of Law. The granting of Awards and the issuance of
Shares under the Plan shall be subject to all applicable laws, rules, and
regulations, and to such approvals by any governmental agencies or national
securities exchanges as may be required. Notwithstanding any provision of the
Plan or any Award, Grantees shall not be entitled to exercise, or receive
benefits under, any Award, and the Company shall not be obligated to deliver any
Shares or deliver benefits to a Grantee, if such exercise or delivery would
constitute a violation by the Grantee or the Company of any applicable law or
regulation.
14.4 Securities Law Compliance.
(a) If the Committee deems it necessary to comply with any
applicable securities law, or the requirements of any stock exchange upon which
Shares may be listed, the Committee may impose any restriction on Shares
acquired pursuant to Awards under the Plan as it may deem advisable. All
certificates for Shares delivered under the Plan pursuant to any Award or the
exercise thereof shall be subject to such stop transfer orders and other
restrictions as the Committee may deem advisable under the rules, regulations
and other requirements of the SEC, any stock exchange upon which Shares are then
listed, any applicable securities law, and the Committee may cause a legend or
legends to be put on any such certificates to make appropriate reference to such
restrictions. If so requested by the Company, the Grantee shall make a written
15
APPENDIX B
representation to the Company that he or she will not sell or offer to sell any
Shares unless a registration statement shall be in effect with respect to such
Shares under the Securities Act of 1993, as amended, and any applicable state
securities law or unless he or she shall have furnished to the Company, in form
and substance satisfactory to the Company, that such registration is not
required.
(b) If the Committee determines that the exercise or
nonforfeitability of, or delivery of benefits pursuant to, any Award would
violate any applicable provision of securities laws or the listing requirements
of any national securities exchange or national market system .on which are
listed any of the Company's equity securities, then the Committee may postpone
any such exercise, nonforfeitability or delivery, as applicable, but the Company
shall use all reasonable efforts to cause such exercise, nonforfeitability or
delivery to comply with all such provisions at the earliest practicable date.
14.5 No Rights as a Stockholder. A Grantee shall not have any rights as
a stockholder of the Company with respect to the Shares (other than Restricted
Shares) which may be deliverable upon exercise or payment of such Award until
such shares have been delivered to him or her. Restricted Shares, whether held
by a Grantee or in escrow by the Secretary of the Company, shall confer on the
Grantee all rights of a stockholder of the Company, except as otherwise provided
in the Plan or Award Agreement. At the time of a grant of Restricted Shares, the
Committee may require the payment of cash dividends thereon to be deferred and,
if the Committee so determines, reinvested in additional Restricted Shares.
Stock dividends and deferred cash dividends issued with respect to Restricted
Shares shall be subject to the same restrictions and other terms as apply to the
Restricted Shares with respect to which such dividends are issued. The Committee
may in its discretion provide for payment of interest on deferred cash
dividends.
14.6 Nature of Payment. Awards shall be special incentive payments to
the Grantee and shall not be taken into account in computing the amount of
salary or compensation of the Grantee for purposes of determining any pension,
retirement, death or other benefit under (a) any pension, retirement,
profit-sharing, bonus, insurance or other employee benefit plan of the Company
or any Subsidiary or (b) any agreement between (i) the Company or any Subsidiary
and (ii) the Grantee, except as such plan or agreement shall otherwise expressly
provide.
14.7 Governing Law. The Plan, and all agreements hereunder, shall be
construed in accordance with and governed by the laws of the State of Kansas,
other than its laws respecting choice of law.
16
APPENDIX B
BLUE VALLEY BAN CORP.
1998 EQUITY INCENTIVE PLAN
EXHIBIT A
TO
STOCK OPTION AGREEMENT
1. Manner of Exercise. This Option shall be exercised by delivering to
the Company (or its authorized agent), during the period in which such Option is
exercisable, (i) a written notice of your intent to purchase a specific number
of shares pursuant to this Option, and (ii) full payment of the Option Price for
such specific number of shares. Payment may be made by any one or more of the
following means:
a. Cash, personal check or electronic funds transfer, or
b. Shares of Common Stock with a Fair Market Value on
the effective date of such exercise equal to such
Option Price and owned by you for at least six months
(or such longer period as is determined by the
Company to be required by applicable accounting
standards to avoid a charge to the Company's
earnings) or shares of Common Stock that were
purchased on the open market.
Such exercise shall become effective on the earliest date on which both such
notice and full payment have been actually received by the Company (which date
must be before the tenth anniversary of the date of grant (the "Expiration
Date")). You shall not have any rights as a stockholder of the Company with
respect to the shares of Common Stock deliverable upon exercise of this Option
until a certificate for such shares is delivered to you.
2. Exercise. This Option shall become fully exercisable upon your
Termination of Affiliation on account of death or disability.
3. Exercise After Termination of Affiliation. This Option may be
exercised only while you are employed by or a director of the Company or a
Subsidiary, except that this Option may also be exercised after the date on
which you cease to be so employed or a director ("Termination Date") as follows:
a. If your Termination of Affiliation is on account of
Disability, you may also exercise this Option at any
time during the first 12 months after your
Termination Date;
b. If your Termination of Affiliation is on account of
death, the executor or administrator of your estate,
your heirs or legatees, or beneficiary designated in
accordance with the Plan, as applicable, may also
exercise this Option at any time during the first 12
months after your Termination Date; and
17
APPENDIX B
c. If your Termination of Affiliation is on account of
any other reason) other than a dismissal for Cause),
you may also exercise this Option at any time during
the first three months after your Termination Date;
provided, however, that (x) except as otherwise provided in Section 2, this
Option can be exercised after your Termination Date only to the extent it is
exercisable on the Termination Date and (y) under no circumstances can this
Option be exercised after the Expiration Date.
4. Option Non-Transferable. This Option is not transferable except by
will or the laws of descent and distribution. It is exercisable during your
lifetime only by you or your guardian legal representative.
5. Nonstatutory Option. This Option has been designated by the
Committee as a nonstatutory stock option and is not intended to meet the
requirements of an "incentive stock option" within the meaning of section 422 of
the Internal Revenue Code of 1986, as amended..
6. Taxes. The Company is not required to issue shares of Common Stock
upon the exercise of this Option unless you first pay to the Company such
amount, if any, as may be requested by the Company to satisfy any liability it
may have to withhold federal, state or local income or other taxes relating to
such exercise.
7. Amendments. This Agreement may be amended only by a writing executed
by the Company and you which specifically states that it is amending this
Agreement; provided that this Agreement is subject to the power of the Board (as
defined in the Plan) to amend the Plan as provided therein, except that no such
amendment shall adversely affect your rights under this Agreement without your
consent.
8. Notices. Any notice to be given under the terms of this Agreement to
the Company shall be addressed to the Company in care of its Secretary. Any
notice to be given to you shall be addressed to you at the address listed in the
Company's records. By a notice given pursuant to this Section, either party may
designate a different address for notices. Any notice shall have been deemed
given when actually delivered.
9. Severability. If any part of this Agreement is declared by any court
or governmental authority to be unlawful or invalid, such unlawfulness or
invalidity shall not serve to invalidate any part of this Agreement not declared
to be unlawful or invalid. Any part so declared unlawful or invalid shall, if
possible, be construed in a manner which gives effect to the terms of such part
to the fullest extent possible while remaining lawful and valid.
10. Applicable Law. This Agreement shall be governed by the substantive
laws (excluding the conflict of laws rules) of the State of Kansas.
11. Headings. Headings are provided herein for convenience only and are
not to serve as a basis for interpretation or construction of this Agreement.
18
APPENDIX B
BLUE VALLEY BAN CORP.
1998 EQUITY INCENTIVE PLAN
SAMPLE STOCK OPTION AGREEMENT
(NONSTATUTORY STOCK OPTION)
This Agreement has been entered into to record the terms and conditions
pursuant to which Blue Valley Ban Corp., a Kansas corporation (the "Company")
granted to [Name of Employee], an employee of the Company (the "Grantee") on the
Grant Date specified below, an option (the "Option") to purchase shares of the
Company's Common Stock, $1.00 par value ("Stock"). The Option is subject to the
terms and conditions set forth below, in the attached Exhibit A hereto and in
the Blue Valley Ban Corp. 1998 Equity Incentive Plan, adopted on April 9, 1998
and as may from time to time be amended (the "1998 Plan"), all of which are an
integral part of this Agreement. A copy of the 1998 Plan may be obtained from
the Company upon request. Capitalized terms used but not defined in this
Agreement have the meaning specified in the 1998 Plan.
<Table>
Grant Date 12/17/98
Expiration Date 12/17/08
Number of Optioned Shares 200
Option Price $45.00
When First Exercisable 12/17/00
</Table>
Please indicate your acceptance of this Agreement by signing the
enclosed copy in the space provided below and returning it to Patricia L. Day,
Secretary, within 60 days after the Company's mailing of this Agreement to you.
BLUE VALLEY BAN CORP.
By:
-------------------------------------
Robert D. Regnier, Chairman
ACCEPTED AND AGREED:
- -------------------------------------
[Name of Employee]
Dated:
-----------------------------
19
PROXY PROXY
BLUE VALLEY BAN CORP
PROXY FOR ANNUAL MEETING OF STOCKHOLDERS
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
PLEASE FILL IN, DATE AND SIGN PROXY AND RETURN
IN THE ENCLOSED PREPAID ENVELOPE PROMPTLY
The undersigned hereby constitutes and appoints Patricia L. Day and Mark A.
Fortino, and each or any of them, the attorneys and proxies of the undersigned,
each with the power of substitution, to attend and act for the undersigned at
the Annual Meeting of Stockholders of Blue Valley Ban Corp to be held at the
Bank of Blue Valley office located at 7900 College, Overland Park, Kansas
66212, on Wednesday, May 14, 2003, at 5:45 p.m. and at any adjournments or
postponements thereof, and in connection therewith to vote all of the shares of
Blue Valley Ban Corp's common stock which the undersigned would be entitled to
vote, as set forth below. This proxy revokes all prior proxies given by the
undersigned.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE PROPOSALS SET FORTH BELOW.
PROPOSAL 1: ELECTION OF DIRECTORS - NOMINEES ARE: ROBERT D. REGNIER, AND THOMAS
A. MCDONNELL
[ ] FOR ALL NOMINEES [ ] WITHHOLD AUTHORITY FOR ALL NOMINEES
[ ] FOR ALL EXCEPT:
-----------------------------------
INSTRUCTION: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE, WRITE
THAT PERSON'S NAME ON THE LINE ABOVE.
PROPOSAL 2: AMENDMENT TO THE COMPANY'S 1998 EQUITY INCENTIVE PLAN.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
THIS PROXY WILL BE VOTED IN ACCORDANCE WITH THE CHOICES SPECIFIED BY THE
UNDERSIGNED ON THIS PROXY. IF NO INSTRUCTIONS TO THE CONTRARY ARE INDICATED
HEREON, THIS PROXY WILL BE TREATED AS A GRANT OF AUTHORITY TO VOTE FOR ALL THE
NOMINEES FOR DIRECTOR, FOR PROPOSAL 2, AND ACCORDING TO THE DISCRETION OF THE
PROXY HOLDERS ON ANY OTHER MATTERS THAT MAY PROPERLY COME BEFORE THE MEETING.
NO PROPOSAL IS CONDITIONED UPON THE APPROVAL OF ANY OTHER PROPOSAL.
Receipt of Notice of Meeting and Proxy Statement is hereby acknowledged.
Dated: , 2003
--------------------------
Signature:
----------------------------------
Signature:
----------------------------------
Important: Please date this Proxy; sign exactly as your name(s) appear hereon.
When signing as joint tenants, all parties to the joint tenancy should sign.
When signing the Proxy as attorney, executor, administrator, trustee or
guardian, please give full title as such.