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SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934
(Amendment No. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Section 240.14a-11(c) or Section 240.14a-12
SECURITY BANC CORPORATION
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(Name of Registrant as Specified In Its Charter)
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(Name of Person(s) Filing Proxy Statement if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
1) Title of each class of securities to which transaction applies:
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3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which
the filing fee is calculated and state how it was determined):
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[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
1) Amount Previously Paid:
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SECURITY BANC CORPORATION
40 SOUTH LIMESTONE STREET, SPRINGFIELD, OHIO 45502
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO OUR SHAREHOLDERS:
The Annual Meeting of Shareholders of Security Banc Corporation will be
held at Springfield Museum of Art, 107 Cliff Park Road, Springfield, Ohio, 45504
on Tuesday, April 21, 1998 at 1:00 p.m. for the purpose of considering and
voting upon the following matters.
1. To elect four directors of Class I to serve until the Annual
Meeting of Shareholders in 2001 or in the case of each director
until his successor is duly elected and qualified.
2. Adoption of Amendment to Article IV of the Company's Amended
Articles of Incorporation, changing the number of authorized
shares of the Company's Common Stock from eleven million
(11,000,000) to eighteen million (18,000,000) shares, changing
the par value for each share to one dollar and fifty-six
twenty-five cents ($1.5625) which will permit the Board of
Directors to declare the subsequent two (2) for one (1) stock
split for each share owned.
3. Approval of the Corporation's 1998 Stock Option Plan.
4. To transact such other business as may properly come before the
Annual Meeting or any adjournments thereof.
The Board of Directors has fixed the close of business on February 27, 1998
as the record date for the determination of shareholders entitled to notice of
and to vote at the Annual Meeting. All shareholders are cordially invited to
attend the meeting in person. HOWEVER, IF YOU DO NOT EXPECT TO ATTEND THE
MEETING IN PERSON, PLEASE FILL IN, DATE, SIGN, AND RETURN THE ENCLOSED PROXY
CARD.
By Order of the Board of Directors
J. William Stapleton
Executive Vice President/Secretary
Springfield, Ohio
March 20, 1998
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SECURITY BANC CORPORATION
PROXY STATEMENT
40 SOUTH LIMESTONE STREET, SPRINGFIELD, OHIO 45502
MARCH 20, 1998
(MAILING DATE)
SOLICITATION AND REVOCABILITY OF PROXIES
The enclosed form of proxy is being solicited on behalf of the Board of
Directors of Security Banc Corporation for use at the Annual Meeting of
Shareholders and any adjournment thereof. The Annual Meeting will be held on
Tuesday, April 21, 1998, at the time and place for the purposes set forth in the
accompanying Notice of Annual Meeting of Shareholders. Shares represented by
properly executed proxies, if such proxies are received in time and not revoked,
will be voted at such meeting in accordance with any specifications thereon. Any
proxy may be revoked at any time before it is exercised by receipt of later
proxy, by receipt by the secretary of a revocation or by ballot at the meeting.
The persons named as proxies were selected by the Board of Directors of the
Corporation. The cost of the solicitation of proxies will be borne by the
Corporation. In addition to using the mail, proxies may be solicited by personal
interview, telephone and wire. Officers and regular employees of the Corporation
and its subsidiaries will not receive any compensation for the solicitation of
proxies.
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VOTING SECURITIES
The Board of Directors has fixed the close of business on Friday, February
27, 1998 as the record date for the determination of Shareholders entitled to
notice of and to vote at the Annual Meeting. On the record date, the outstanding
capital stock of the Corporation consisted of 6,065,586 shares, par value three
dollars and an eighth ($3.125) per share, each of which is entitled to one (1)
vote at the meeting. Each such share is entitled to one (1) vote on all matters
properly coming before the Annual Meeting.
Abstentions and broker non votes are counted as shares present at the
meeting for purposes of determining the presence of aquorum and, except in the
election of directors, have the effect of a vote against each matter considered
by the shareholders.
PRINCIPAL SHAREHOLDERS
Set forth below is certain information about the only shareholders known by
the Corporation to be a beneficial owner of more than 5% of the outstanding
Common Shares of the Corporation as of December 31, 1997.
NAME AND ADDRESS NUMBER OF SHARES BENEFICIALLY OWNED % OF COMMON SHARES
Fleet National Bank 356,984 6%
159 E. Main Street
Rochester, New York 14604
Martin Brown Hull & Harper
c/o Robert E. Harley
1 South Limestone Street
Springfield, OH 45502
As Co Trustees
On Behalf of Jane P. B. Hollenbeck Trust
Mr. Richard L. and Mrs. Barbara Kuss 305,687 5%
1130 Vester Avenue
Suite A
Springfield, Ohio 45503
Security National Bank Trust Department 1,001,870(1) 16.5%
40 South Limestone Street
Springfield, OH 45502
(1) Includes 1,001,870 shares of stock held by Security National Bank and
Trust held in Trust, which the Corporation has sole voting power for
693,471 shares and shared voting for 78,684 shares.
PROPOSAL I: ELECTION OF DIRECTORS
The Board of Directors of the Corporation is divided into three (3)
classes, with the terms of office of each class ending in successive years. The
terms of Directors of Class I expire with this Annual Meeting. The directors of
Class II and Class III will continue in office. The Shareholders are being asked
to vote on the re-election of the four (4) Directors in Class I. Nominees are to
be elected to serve until the 2001 Annual Meeting of Shareholders and until
their respective successors are fully elected and have qualified. It is intended
that shares represented by the proxies will, unless contrary instructions are
given, be voted for the four (4) nominees as listed below. Although Management
does not expect that any nominee will be unavailable for election, in the event
that vacancies occur unexpectedly, the shares will be voted for substitute
nominees, if any.
The Board of Directors of the Corporation has, by resolution of the Board,
fixed and determined the number of Directors at eleven (11) persons in
accordance with Article III, Section I of the Code of Regulations of the
Corporation. All nominees are presently Directors of the Corporation.
Listed are the names of four (4) nominees for election to the Board of
Directors along with present Directors of Class II and Class III, their
principal occupations and other directorships, their age, the year in which each
first became a Director, the number of shares of the Corporation's Common Stock
beneficially owned by each, directly or indirectly as of the close of business
December 31, 1997, and percent of class.
NOMINEES FOR DIRECTORS OF CLASS I
FOR THREE YEAR TERM EXPIRING ANNUAL MEETING 2001
NAME SHARES OF
POSITION WITH COMMON STOCK PERCENT
CORPORATION DIRECTOR BENEFICIALLY OF
OR OCCUPATION AGE SINCE OWNED CLASS
AT 12-31-97
Harry O. Egger 58 1977 78,049(1) 1.3%
Chairman of the Board, President and CEO
Security Banc Corporation
Chairman of the Board and CEO
Security National Bank and Trust Co.
Scott A. Gabriel 39 1997 3,268 *
Director, President and CEO
Third Savings & Loan Company
Director, Security Banc Corporation
Jane N. Scarff 69 1990 10,240 *
Vice President, Scarff Nursery, Inc.
Thomas J. Veskauf 66 1986 2,685(2) *
Partner: Gorman, Veskauf, Henson & Wineberg
Attorneys at Law
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MEMBERS OF BOARD OF DIRECTORS
CONTINUING IN OFFICE
CLASS II
TERM EXPIRING ANNUAL MEETING 1999
NAME SHARES OF
POSITION WITH COMMON STOCK PERCENT
CORPORATION DIRECTOR BENEFICIALLY OF
OR OCCUPATION AGE SINCE OWNED CLASS
Larry D. Ewald 59 1987 21,468(3) *
President, Process Equipment Co.
Richard E. Kramer 63 1988 13,488(4) *
President, Fulmer Supermarkets, Inc.
James R. Wilson 58 1996 22,531(5) *
Director, President, & CEO
Citizens National Bank
Director, Security Banc Corporation
MEMBERS OF BOARD OF DIRECTORS
CONTINUING IN OFFICE
CLASS III
Term Expiring Annual Meeting 2000
NAME SHARES OF
POSITION WITH COMMON STOCK PERCENT
CORPORATION DIRECTOR BENEFICIALLY OF
OR OCCUPATION AGE SINCE OWNED CLASS
AT 12-31-97
Larry E. Kaffenbarger 56 1995 1,740 *
President, Kaffenbarger Truck Equipment Co.
Chester L. Walthall 56 1994 1,836(6) *
President, Heat-Treating, Inc.
Robert A. Warren 54 1996 1,020 *
President, Hauck Bros., Inc.
*Less than one percent (1%).
The following statement pertains to the Nominees and Directors:
When appropriate, each nominee includes in his or her beneficial holdings
of the Corporation's stock, shares held by or in trust for the respective
nominee's spouse, minor children and/or relatives having the same home as the
nominee, shares held by such nominee as fiduciary where the nominee has the
right to vote or dispose of such shares and such nominee disclaims any
beneficial ownership of such shares.
(1) Includes 30,000 shares owned by the wife of Harry O. Egger and
options for 1,400 shares which are exercisable within 60 days of
December 31, 1997.
(2) Includes 545 shares owned by the wife of Thomas J. Veskauf.
(3) Includes 7,626 shares owned by the wife of Larry D. Ewald and
includes 4,000 shares held in a trust as to which Larry D. Ewald, as
co-trustee, shares investment and voting power.
(4) Includes 1,090 shares owned by the wife of Richard E. Kramer and
includes 10,004 shares held in trust as to which Richard E. Kramer
has shared investment and voting power.
(5) Includes 12,554 shares owned by wife and minor children.
(6) Includes 1,516 shares held by the wife of Chester L. Walthall.
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BENEFICIAL OWNERSHIP OF MANAGEMENT
SHARES OF
COMMON STOCK PERCENT
BENEFICIALLY OF
NAME OWNED CLASS
AT 12-31-97
Harry O. Egger 78,049(1) 1.3%
James R. Wilson 22,531(2) *
Scott A. Gabriel 3,268 *
William C. Fralick 12,744(3) *
J. William Stapleton 16,295(4) *
(1) See footnote number (1) under Board of Directors.
(2) See footnote number (5) under Board of Directors.
(3) Includes 5,400 options which are exercisable within 60 days of December 31,
1997.
(4) Includes 4,912 shares owned by the wife of J. William Stapleton and options
for 1,400 shares which are exercisable within 60 days of December 31, 1997.
As of December 31, 1997, the Directors and Executive Officers of the
Corporation, as a group, beneficially owned an aggregate of 234,632 shares of
the Corporation's Common Stock which constitutes approximately three point eight
percent (3.8%) of the shares outstanding.
PROPOSAL II: TO AMEND ARTICLE IV OF AMENDED ARTICLES OF INCORPORATION
The Board of Directors recommends adoption of the Amendment of Article IV
of the Corporation's Amended Articles of Incorporation in the manner shown in
Appendix A hereto. The proposed amendment to Article IV would change the par
value of the Corporation's Common Stock from three and one eighth ($3.125) to
one dollar and fifty-six twenty-five cents ($1.5625) per share. The proposed
amendment to Article IV would provide the authority for the Corporation to
increase shares authorized from eleven million (11,000,000) to eighteen million
(18,000,000). In addition, if the proposed amendment is adopted, the Board of
Directors intends to declare a two (2) for one (1) stock split of the
Corporation's outstanding common stock. If Proposal III described later in the
Proxy Statement under the caption "Proposal III: Approval of the Corporation's
1998 Stock Option Plan" is approved, the number of shares covered by the 1998
Stock Option Plan will be increased to 120,000 shares. If the amendment is
adopted by the shareholders at the Annual Meeting, it is expected that the
amendment will be duly filed with the Secretary of the State of Ohio.
The Board of Directors recommends the adoption of this amendment by the
shareholders because it considers the proposed change to be in the best interest
of the Corporation and its shareholders. The proposed stock split is expected to
result in a reduced market price of the Corporation's Common Stock in a range
which will be more attractive to small investors and which will benefit both the
shareholders and the Corporation by encouraging a broader market for the stock.
The proposed stock split of the issued shares of the Common Stock will not
result in any change in the relative rights or interests of the present
shareholders since each shareholder would receive additional shares in direct
proportion to current holdings.
Shareholders eligible to receive certificates for the additional shares to
be issued pursuant to the proposed amendment would be those owning shares of
record at the close of business on May 29, 1998. It
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is expected that certificates representing the additional shares would be
distributed by mail on or about June 10, 1998. Existing certificates would
continue to represent the number of shares specified therein.
The Corporation has been advised by its counsel that in their opinion
shareholders will not realize taxable income and there will be no gain or loss
to them under the Internal Revenue Code of 1954, as amended, as a result of the
proposed stock split.
If the proposed amendment is approved and the stock split effected, the
Corporation anticipates a quarterly dividend rate of approximately eleven cents
($0.11) per share.
The resolution attached to this Proxy Statement as Appendix A will be
submitted for adoption at the Annual Meeting. The affirmative vote of the
holders of a majority of the outstanding shares of the Common Stock of the
Corporation is necessary to adopt the proposed amendment. Proxies will be voted
in favor of the resolution unless otherwise instructed by the shareholders.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE "FOR" ADOPTION OF PROPOSED
AMENDMENT.
PROPOSAL III: APPROVAL OF THE CORPORATION'S 1998 STOCK OPTION PLAN
A proposal to approve the Corporation's 1998 Stock Option Plan ("1998
Plan") will be presented at the Annual Meeting of Shareholders. The Board of
Directors of the Corporation adopted the 1998 Plan on February 17, 1998, and
recommends its approval by the Corporation's shareholders.
SUMMARY OF PLAN
The 1998 Plan is intended as an incentive to encourage stock ownership by
employees of the Corporation by providing for the grant of options to purchase
Common Stock of the Corporation so that they may acquire or increase their
proprietary interest in the success of the Corporation. All employees will be
eligible to receive options under the 1998 Stock Option Plan.
Options may be granted under the 1998 Plan for a maximum of sixty thousand
(60,000) shares of Common Stock of the Corporation, subject to adjustment for
stock splits, stock dividends and other changes in capitalization (including an
increase to 120,000 shares if the proposal to amend the Corporation's Amended
Articles of Incorporation is adopted at the Annual Meeting). The shares will be
made available from authorized but unissued shares of Common Stock of the
Corporation. On February 17, 1998, the closing price per share of Common Stock
of the Corporation was $55.00 as reported by the market maker of the
Corporation.
The 1998 Plan will be administered by the Executive Compensation Committee.
The Committee will determine the employees to whom options will be granted, the
number of shares subject to option, and the other terms and conditions of the
options, including any performance related terms, which in any event must not be
inconsistent with the terms of the 1998 Plan.
All options must be granted on or before April 21, 2008, and cannot be
exercised after the expiration of ten (10) years from the date of grant. The
exercise price must not be less than the fair market value of the underlying
shares of Common Stock of the Corporation on the date of grant.
Upon the exercise of an option, the underlying shares of Common Stock must
be paid for in full, either by check payable to the Corporation or by delivery
of Common Stock having a fair market value equal to the exercise price, or in
any combination thereof.
The Board of Directors of the Corporation may amend, modify or terminate
the 1998 Plan at any time without approval unless such approval otherwise is
required by applicable law. No action may be taken by the Corporation that would
impair the validity of any then outstanding option or which would prevent any
then outstanding incentive stock options from qualifying as such.
No options have been granted under the 1998 Plan and it is contemplated
that no such options will be granted under the 1998 Plan until after the
shareholders approve the 1998 Plan. The 1998 Plan will be null and void if it is
not approved by the shareholders of the Corporation at the Annual Meeting on
April 21, 1998. A resolution calling for the approval of the 1998 Plan will be
introduced at the meeting. The persons appointed as proxies will vote FOR this
proposal, unless otherwise directed.
Approval of the 1998 Stock Option Plan will also constitute a release of
all pre-emptive rights with respect to the shares of Common Stock covered by the
1998 Plan.
The Corporation believes that its stock option plans have made a
significant contribution to the success of the Corporation in attracting and
retaining employees and encouraging their ownership of the Corporation. The
proposed plan in its entirety is attached as Appendix B.
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The Board of Directors intends to cause the following resolution to be
presented to shareholders for approval at the Annual Meeting.
"Resolved, that the Security Banc Corporation's 1998 Stock Option Plan be
and it hereby is approved and adopted by the shareholders of the Corporation.
The affirmative vote of the holders of a majority of all outstanding shares of
Common Stock shall be sufficient for the approval and adoption of the 1998 Stock
Option Plan. Said approval will also provide a waiver and release of preemptive
rights for the sixty thousand (60,000) shares." (One hundred twenty thousand
(120,000) shares upon approval of Proposal II by the shareholders.)
THE AFFIRMATIVE VOTE OF HOLDERS OF A MAJORITY OF THE OUTSTANDING COMMON SHARES
IS REQUIRED IN ORDER TO APPROVE THE 1998 PLAN.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE "FOR" APPROVAL OF THE 1998
PLAN.
MEETINGS OF THE CORPORATION BOARD OF DIRECTORS AND
COMMITTEES OF THE BOARD
During 1997, the Corporation's Board of Directors held six (6) scheduled
meetings. All of the directors attended at least seventy-five percent (75%) of
the scheduled meetings.
The Executive Committee rotates on a regularly scheduled basis. Those
members of the Committee at December 31, 1997 were Directors Egger, Ewald,
Kramer, Veskauf, and Walthall. The Executive Committee is empowered to exercise
powers and perform all duties of the Board of Directors when the Board is not in
session. The Executive Committee met four (4) times in 1997.
The Executive Compensation Committee of the Corporation is composed of
Directors Ewald, Scarff, Sweet, and Walthall. The Executive Compensation
Committee met three (3) times in 1997. The purpose of the Executive Compensation
Committee is to establish and execute compensation policy and programs for
executives of the organization.
The Audit Committee of the Corporation is composed of members of the Board
of Directors rotating on a regularly scheduled basis among the Directors, who
are not employed by the Corporation or its subsidiaries, all of whom were
present for at least seventy-five percent (75%) of the meetings of this
Committee. Directors Kramer, Scarff, Sweet, and Warren were members of the
Committee as of December 31, 1997. The Audit Committee met four (4) times in
1997. The function of the Audit Committee consists of reviewing, with the
Company's internal auditor and the independent auditors, the scope and results
of procedures for auditing and the adequacy of the system of internal controls.
The Corporation has no standing Nomination Committee. Nominations for
election to the Board of Directors will receive full consideration by the
Executive Committee. Shareholders desiring to make valid nominations for
election to the Board of Directors need to comply with the statements in the
section entitled "Shareholder Proposals."
REPORT OF THE EXECUTIVE COMPENSATION COMMITTEE
This Committee deals with compensation issues as they pertain to executive
officers. When the compensation and benefit package for the Chief Executive
Officer is on the meeting agenda, the
Committee sets aside time to discuss these matters without Mr. Egger and other
officers of the Corporation being present. During these sessions, the members of
the Committee debate the merits of the matters under consideration and, as part
of these discussions, generally consider the Corporation's financial
performance, Common Stock price performance, and Midwest Peer Group specific
comparative compensation data. In the past, the CEO compensation has been below
the comparative compensation of the Midwest Peer Group, whereas, the financial
performance of the Corporation and common stock price performance has been well
above the norm as it relates to the Peer Group. The Committee also considers
factors such as Mr. Egger's leadership, experience, knowledge, board
communications, Corporation's community involvement and strategic
recommendations, as well as the Corporation's positioning for future
performance. Although the Committee does not place any particular relative
weight on any one of the foregoing factors, the Corporation's financial
performance as it relates to increasing shareholder value is generally a key
factor. All of these decisions regarding the components of Mr. Egger's
compensation and the rationale are reported to the Board without Mr. Egger and
other officers present.
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Based on the performance of the Corporation and its increased value for the
shareholder, the Committee believes Mr. Egger's compensation is a fair
reflection of the services he performs for the Corporation.
In addition, the Committee approved compensation recommendations for all
other named executive officers of the Corporation. Executive Officer salary and
bonus are based on performance, and appraisals, along with favorable corporate
financial performance as it relates to shareholder value.
THE EXECUTIVE COMPENSATION COMMITTEE MEMBERS
LARRY D. EWALD
JANE N. SCARFF
W. DEAN SWEET, (COMMITTEE CHAIRPERSON)
CHET L. WALTHALL
PERFORMANCE GRAPH
The graph summarizes cumulative return (assuming reinvestment of dividends
on a quarterly basis) experienced by the Corporation's shareholders over the
years 1993 through 1997, compared to the S&P 500 Stock Index, and the NASDAQ
Bank Index.
Assumes $100 invested on 1-1-93 in Security Banc Corporation Common Stock,
NASDAQ Bank Index, and S&P 500.
The financial information upon which the S & P 500 and NASDAQ Bank Index,
has been compiled from information issued by the companies themselves or other
secondary sources.
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NASDAQ S & P 500 SBC
BANK
STOCKS
- --------------------------------------------------------------
1993 151 113 114
- --------------------------------------------------------------
1994 167 117 128
- --------------------------------------------------------------
1995 210 152 157
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1996 249 183 214
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1997 411 258 313
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EXECUTIVE COMPENSATION
The following table is a summary of certain information concerning the
compensation paid to, or earned by, the Corporation/Bank's chief executive
officer and each of the Corporation/Bank's most highly compensated executive
officers (the "named executives") during each of the last three (3) fiscal
years.
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SUMMARY COMPENSATION TABLE
LONG
ANNUAL COMPENSATION TERM
COMPEN-
SATION
OTHER AWARD
NAME AND PRINCIPAL ANNUAL STOCK ALL OTHER
POSITION YEAR SALARY BONUS COMPENSATION OPTIONS COMPENSATION (1)
$ $ $ # $
Harry O. Egger
Director, Chairman of the Board,
President and CEO 1997 385,000 100,000 0 0 7,619
Security Banc Corporation 1996 350,000 75,000 0 7,000 8,278
Director, Chairman of the Board and CEO 1995 315,000 50,000 0 0 8,024
Security National Bank
James R. Wilson
Director 1997 165,500 10,500 0 0 25,589
Security Banc Corporation 1996 130,192 37,735 10,382 0 25,952
Director, President, and CEO 1995 115,000 38,400 10,690 0 29,697
Citizens National Bank
Scott A. Gabriel
Director, Security Banc Corporation 1997 122,364 10,000 0 0 5,191
Director, President and CEO 1996 99,400 17,000 0 0 0
Third Savings & Loan Co. 1995 95,200 13,020 0 0 0
William C. Fralick
Vice President, Security Banc Corporation 1997 138,320 16,200 0 0 5,562
Director and President 1996 115,000 15,000 0 7,000 3,974
Security National Bank 1995 90,000 12,000 0 0 3,674
J. William Stapleton
Executive Vice President and CFO 1997 138,320 16,200 0 0 5,095
Security Banc Corporation 1996 115,000 15,000 0 7,000 3,902
Director, Executive Vice President and CFO 1995 90,000 12,000 0 0 3,674
Security National Bank
(1) All amounts shown represent funds contributed or allocated pursuant to the
401 (K) Profit Sharing Savings Plan and Fringe Benefit Plans by the Corporation.
COMPENSATION OF DIRECTORS AND EXECUTIVE OFFICERS
The Board of Directors of the Corporation are not paid a fee for serving on
the Corporate Board. However, Corporation Directors serving on an Affiliate Bank
Board are receiving a single annual retainer of $1,200 and a fee of $800 per
meeting attended ($200 for Committee Meeting). Corporation Directors and
Executive Officers, who are also employees of any of the affiliates of the
Corporation, receive no Board fees.
Pursuant to a Deferred Compensation Plan, corporate directors may annually
defer any amount of their compensation as directors of an affiliate until age
seventy (70) or until they cease to serve on the Board, whichever occurs last.
EMPLOYMENT AGREEMENTS
Harry O. Egger:
The employment agreement with Harry O. Egger will automatically be extended
on January 1, of each year so that it provides for a continuing five (5) year
employment contract. In the event the Corporation ceases to exist as a corporate
entity, Harry O. Egger shall be paid in cash, as a lump sum, equal to
two-point-nine (2.9) times his annual base compensation determined by averaging
the same over the five (5) years immediately prior to the occurrence.
James R. Wilson:
James R. Wilson is employed as President and CEO of the Corporation's
Subsidiary, Citizens National Bank. His compensation is fixed at no less than
$165,000 per annum. In the event the Corporation or its subsidiary, the Citizens
National Bank, ceases to exist as a corporate entity for any reason, then James
R. Wilson shall be paid in cash, in full, in a lump sum at the time of
occurrence of any of said events, a sum
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equal to 2.9 times his annual base compensation determined by averaging the same
over the five (5) years next prior to the occurrence. This employment contract
is for a term of two (2) years commencing on the date of employment and
terminating on September 30, 1998.
Other Agreements:
James R. Wilson and Citizens National Bank entered into an agreement which
by the terms will require the Bank to make payments upon his retirement or
disability. Terms of the agreement require that, upon his normal retirement, he
will receive $50,000 annually for a period of 10 years. In the event of death
prior to retirement, the wife will receive $75,000 annually for a period of 10
years.
PROFIT SHARING PLAN
All employees of the Corporation and its affiliates become eligible
participants in the Corporation's Profit Sharing Plan when they have completed
one (1) year of eligibility service; have worked at least five hundred (500)
hours and are at least age twenty-one (21). Eligible participants may make
contributions to the plan by deferring up to fifteen percent (15%) of their
annual earnings.
The Board of Directors of the Corporation annually determine the matching
contribution to the plan. For the plan year ended December 31, 1997 and December
31, 1996, the matching contribution was fifty percent (50%) of the employee's
contribution up to the first six percent (6%) of annual earnings contributed by
the participant.
Employee contributions are one hundred percent (100%) vested immediately.
The matching contributions are vested at twenty percent (20%) for each year of
eligibility service, based on five (5) year vesting schedule.
RETIREMENT PLANS
The following table shows estimated annual benefits payable for life to
participants upon retirement at age sixty-five (65) in 1997 under the Security
Banc Corporation Pension Plan based upon combinations of compensation levels and
years of service.
PENSION PLAN TABLE
Approximate Annual Retirement Benefit Upon Retirement at Age 65
Before Adjustments (1) (2) (3)
Average Annual
Salary (3) 10 15 20 25 30 or more
150,000 32,292 48,436 64,584 80,729 96,875
200,000 39,283 61,104 82,925 104,746 125,000
300,000 41,902 65,904 89,907 113,910 125,000(4)
400,000 41,902 65,904 89,907 113,910 125,000(4)
500,000 41,902 65,904 89,907 113,910 125,000(4)
600,000 41,902 65,904 89,907 113,910 125,000(4)
(1) For the purpose of computing a benefit under the Plan on December 31,
1997, Harry O. Egger, William C. Fralick, J. William Stapleton, James
R. Wilson, and Scott A. Gabriel have twenty-two (22), twenty-two (22),
twenty (20), one (1) and one (1) years of credit service respectively.
(2) The Bank maintains a Retirement Plan that provides for the payment of
a monthly retirement benefit commencing, in most cases, at the normal
retirement age of sixty-five (65). The benefits are purchased from
contributions made by the employer from year to year. The amount of
the benefit is detemined pursuant to a formula contained in the
Retirement Plan which, among other things, takes into account the
employee's average earnings in the highest sixty (60) consecutive
calendar months. Accrued benefits are fully vested after five (5)
years of vesting service.
(3) ERISA 1997 maximum annual compensation limit of $160,000 used to
determine these benefits.
(4) Maximum IRC Section 415 annual pension payable in 1997 assuming a
minimum of ten (10) years participation.
12
STOCK OPTION PLANS
The Corporation's 1987 and 1995 Stock Option Plans are administered by the
Board of Directors of the Corporation. Under the terms of the Plans, the
Corporation may grant stock options to Officers and certain key Executives. The
options, which must be granted at fair market value, expire ten (10) years from
the date of grant.
All outstanding incentive stock options entitle the holder to purchase
shares at prices equal to the fair market value of the shares on the dates the
options were granted. The fair market value of a share of the Corporation's
Common Stock was $54.50 as of December 31, 1997.
The following table sets forth certain information regarding individual
exercises of stock options during 1997 by each of the named executives:
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
and Fiscal Year End Option Values
Number of
Securities Value of
Underlying Unexercised
Unexercised In-the-Money
Options at Options at
Shares 12/31/97 12/31/97
Acquired on Value Exercisable/ Exercisable/
Name Exercise Realized Unexercisable Unexercisable
(#) ($) (#) ($)
Harry O. Egger 0 $0 1,400 / 5,600 $30,100 / $120,400
William C. Fralick 840 $26,755 5,400 / 5,600 $200,100 / $120,400
J. William Stapleton 4,000 $112,000 1,400 / 5,600 $30,100 / $120,400
TRANSACTIONS WITH MANAGEMENT AND OTHERS
The Corporation's banking subsidiary has, and expects in the future to
have, transactions with corporations in which Directors and Officers of the
Company are active as Directors, Officers, or substantial Shareholders. These
transactions are undertaken in the ordinary course of business and on
substantially the same terms and conditions as comparable transactions with
other corporations. The Bank has made, and expects in the future to make, loans
to such Directors, Officers and their associates. These loans are made in the
ordinary course of business, on substantially the same terms, including interest
rates and collateral as those prevailing at the time for comparable transactions
with other persons and do not involve more than normal risk of collectibility or
present any other unfavorable terms.
The firm of Gorman, Veskauf, Henson & Wineberg, Attorneys-at-Law of which
Thomas J. Veskauf is a partner was paid fees for various legal services
performed for the Corporation during the year ended December 31, 1997.
RELATIONSHIP WITH CERTIFIED PUBLIC ACCOUNTANT
The Security Banc Corporation Board of Directors has retained the
professional services of Ernst & Young LLP, Certified Public Accountants for
1998. The Corporation's financial statements for the previous fiscal year were
examined by Ernst & Young.
SHAREHOLDER PROPOSALS
Shareholders of the Corporation who wish to make a proposal to be included
in the Proxy Statement for the Corporation's 1999 Annual Meeting of Shareholders
which, unless changed, will be held on April 20, 1999, must cause such proposal
to be received by the Corporation at its principal office no later than November
19, 1998. Each proposal submitted should be accompanied by the name and address
of the Shareholder submitting the proposal and number of shares owned. The proxy
rules, as implemented by the Securities Exchange Act of 1934, govern the content
and form of Shareholder proposals. All proposals must be a proper subject for
action at the 1999 Annual Meeting.
OTHER BUSINESS
The Board of Directors does not know of any other matters to be presented
at the Annual Meeting. However, if any other matters do come before such meeting
or an adjournment thereof, it is intended that the holders of the proxies will
vote in accordance with the recommendation of Management.
Harry O. Egger
Chairman of the Board and Chief Executive Officer
March 20, 1998
FORM 10-K ANNUAL REPORT FILED WITH THE SECURITIES AND EXCHANGE COMMISSION IS
AVAILABLE WITHOUT CHARGE AFTER MARCH 31, 1998. TO OBTAIN A COPY, CALL (937)
324-6874 OR WRITE TO SHAREHOLDER RELATIONS, SECURITY BANC CORPORATION, 40 SOUTH
LIMESTONE STREET, SPRINGFIELD, OHIO 45502.
13
APPENDIX A
PROPOSED AMENDMENT TO ARTICLE IV
OF AMENDED ARTICLES OF INCORPORATION
Resolved, that Article IV of the Amended Articles of Incorporation of
Security Banc Corporation be and it hereby is amended in their entirety to read
as follows:
The aggregate number of common shares which the Corporation shall have the
authority to issue is eighteen million (18,000,000) shares each of one dollar
and fifty-six twenty-five cents ($1.5625) par value.
The Corporation, through its Board of Directors, shall have the power to
purchase, hold, sell, and transfer the shares of its own capital stock provided
that it does not use its funds or property for the purchase of its own shares of
capital stock when such use will cause any impairment of its capital, except
when otherwise permitted by law, and provided further that shares of its own
capital stock belonging to it are not voted upon directly or indirectly.
14
APPENDIX B
SECURITY BANC CORPORATION
1998 STOCK OPTION PLAN
1. Name and Purpose. This Plan shall be known as the Security Banc Corporation
1998 Stock Option Plan (the "Plan"). The purpose of the Plan is to advance
the interests of Security Banc Corporation (the "Corporation") by providing
material incentive for the continued services of key employees and by
attracting able personnel to employment with the Corporation and its
Subsidiaries. The term "Subsidiary" as used herein means a subsidiary
corporation [as the term is defined in Section 425(f) of the Internal
Revenue Code of 1986 (the "Code")] of the Corporation.
2. Administration. The Plan shall be administered by a committee of directors
(the "Committee") designated by the Board of Directors of the Corporation.
The Committee may establish, subject to the provisions of the Plan, such
rules and regulations as it deems necessary for the proper administration
of the Plan, and make such determinations and take such action in
connection therewith or in relation to the Plan as it deems necessary or
advisable, consistent with the Plan.
3. Eligibility. Officers and other employees of the Corporation or any
Subsidiary who are designated by the Committee as eligible to participate
in the Plan ("Eligible Employees") shall be eligible to participate in the
Plan and receive options granted under the Plan.
4. Shares Subject to Option. (a) The shares to be issued and delivered by the
Corporation upon exercise of options granted under the Plan are the
Corporation's common shares, which may be either authorized but unissued
shares or treasury shares.
(b) The aggregate number of common shares of the Corporation which may be
issued under the Plan shall not exceed 60,000; subject, however, to
the adjustment provided in Paragraph 8 in the event of stock splits,
stock dividends, exchanges of shares or the like occurring after
adoption of this Plan by the Board of Directors of the Corporation. No
option may be granted under this Plan which could cause such maximum
limit to be exceeded.
(c) Common shares covered by an option which is no longer exercisable with
respect to such shares shall again available for issuance in
connection with other options granted under this Plan.
5. Grant of Options. The Committee from time to time, in its discretion and
subject to the provisions of the Plan, may grant options to any or all
Eligible Employees. An Eligible Employee to whom an option has been granted
is referred to herein as an "Optionee." Each option shall be evidenced by
an "Option Agreement," signed by the Optionee and the Corporation, which
shall provide that the option shall be subject to the provisions of this
Plan and shall contain such other provisions as the Committee may prescribe
not inconsistent with this Plan.
6. Terms and Conditions of Option. All options granted under this Plan shall
contain such terms and conditions as the Committee determines at the time
of grant, subject to the foregoing and following limitations and
requirements.
(a) Form of Option. Incentive Options and Non-Qualified Options may be
granted under this Plan. "Incentive Option" means an option granted
under this Plan which is designated to be an incentive
15
stock option under the provisions of Section 422 of the Code; and any
provisions elsewhere in this Plan or in the Option Agreement for an
Incentive Option which would prevent such option from being an
incentive stock option under the provisions of Section 422 of the Code
may be deleted and/or voided retroactively to the date of the granting
of such option, by action of the Committee. "Non-Qualified Option"
means an option granted under this Plan which is not an incentive
stock option under the provisions of Section 422 of the Code.
Non-Qualified Options shall not be affected by any actions taken
retroactively as provided above with respect to Incentive Options.
(b) Option price. The option price per share shall not be less than 100%
of the fair market value of a common share of the Corporation on the
date the option is granted, as determined by the Committee in a manner
consistent with the requirements of the Code for incentive stock
options.
(c) 10% Shareholder. Notwithstanding any other provisions of this Plan,
with respect to an Incentive Option granted to an Optionee who, at the
time such option is granted, possesses, directly or indirectly, more
than 10% of the voting power of all classes of capital shares of the
Corporation, any Subsidiary or any parent of the Corporation, the
option price per share shall be at least 110% of the fair market value
of a common share of the Corporation, determined as provided in
Paragraph 6(b) above, and such option shall expire five years from the
date the option is granted.
(d) Period within which option may be exercised. Subject to Paragraph 6(c)
above, at the time an option is granted, the Committee shall specify
the maximum term during which the option may be exercised and may
provide for such other terms, restrictions, conditions and limitations
on the exercise of the option (including, without limitation,
provisions that provide the option may be exercised in full or in part
only after the passage of a specified period or periods of time or
only if specified conditions have been satisfied), if any, as it may
deem appropriate. Not withstanding any other provision of this Plan,
however, no option may be exercised after the expiration of ten years
from the date the option is granted.
(e) Termination of option by reason of termination of employment. If an
Optionee's employment with the Corporation and its Subsidiaries
terminates, all options granted under this Plan to such Optionee which
are not exercisable on the date of such termination of employment
shall immediately terminate. Any remaining options held by such
Optionee also shall terminate if not exercised before the expiration
of the following periods, or such earlier time as the option may
expire by its terms:
(i) seven days following the Optionee's termination of employment,
if such termination was not as a result of the death or
disability of the Optionee or the retirement of the Optionee
under the provisions of any retirement plan of the Corporation
and/or any Subsidiary;
(ii) 30 days following the Optionee's termination of employment, if
such termination was as a result of the retirement of the
Optionee under the provisions of any retirement plan of the
Corporation and/or any Subsidiary; or
(iii) one year following the Optionee's termination of employment, if
such termination was as a result of the death or disability of
the Optionee.
(f) Transferability. Each option shall be transferable by the Optionee
only to the extent specified by the Committee at the time the option
is granted and then only to the extent permitted by applicable law
(including, without limitation, the Code).
(g) More than one option granted to an Optionee. More than one option, and
more than one form of option, may be granted to an Optionee under this
Plan; provided, however, that the aggregate fair market value
(determined as of the time the option is granted as provided in
Paragraph 6(b) above) of the common shares with respect to which
incentive stock options are exercisable for the first time by any
Optionee during any calendar year under this Plan and all other plans
of the Corporation, any Subsidiary and any parent corporation shall
not exceed $100,000, or such other maximum amount as may be permitted
from time to time by the Code. To the extent that the foregoing
limitation would be exceeded by all or part of an Incentive Option,
the excess portion shall constitute a Non-Qualified Option and not an
Incentive Option. A single option grant may include both an Incentive
Option and a Non-Qualified Option.
(h) Compliance with securities laws. Options granted and shares issued by
the Corporation upon exercise of options shall be granted and issued
only in full compliance with all applicable securities
16
laws, including laws, rules and regulations of the Securities and
Exchange Commission and applicable state Blue Sky laws. With respect
thereto, the Committee may impose such conditions on transfer,
restrictions and limitations as it may deem necessary and to assure
compliance with such applicable securities laws.
7. Method of Exercise. An option granted under this Plan that is eligible to
be exercised may be exercised by written notice given to the Committee,
signed by the Optionee or by such other person as is entitled to exercise
such option. The notice of exercise shall state the number of common shares
in respect of which the option is being exercised and shall either be
accompanied by payment of the full option price for such common shares or
shall fix a date (not more than ten business days from the date of such
notice) for the payment of the full purchase price of the common shares
being purchased. All or any portion of the option price may be paid by the
transfer of common shares of the Corporation from the Optionee to the
Corporation, to the extent permitted by law. Such shares shall be valued
for this purpose at their fair market value on the date they are
transferred to the Corporation as payment, determined in the same manner as
is provided in Paragraph 6(b). A certificate or certificates for the common
shares purchased through the exercise of an option shall be issued in
regular course after the exercise of the option and payment therefor. No
Optionee shall have any of the rights or privileges of a shareholder with
respect to any common shares issuable upon exercise of an option until the
option is duly exercised and certificates representing such shares have
been issued.
8. Share Adjustments. In the event there is any change in the Corporation's
common shares resulting from stock splits, stock dividends, combinations,
recapitalizations or exchanges of shares or other similar capital
adjustments, the Committee shall make equitable proportionate adjustments
in: (a) the number of common shares remaining available for option under
this Plan, (b) the number of common shares subject to options granted under
this Plan, and (c) the option price of outstanding options granted under
this Plan.
9. Merger, Consolidation, or Sale of Assets. Unless otherwise determined by
the Committee at the time an option is granted, upon the occurrence of a
Change of Control (as hereinafter defined), each outstanding option granted
under the Plan shall become exercisable in full notwithstanding any vesting
schedule or other similar limitation on the right of the Optionee to
exercise such option. For purposes of this Plan, "Change of Control" means
a change of control of a nature that would be required to be reported in
response to Item 6(e) of Schedule 14 of Regulation 14A adopted under the
Exchange Act or any similar successor disclosure provisions. Without
limiting the foregoing, a "Change of Control" shall be deemed to have
occurred if: (i) any "person," as such term is used in Section 13(d) and
14(d)(2) of the Exchange Act (excluding, for this purpose, the Corporation
or any Subsidiary or any employee benefit plan of the Corporation or any
Subsidiary), including any "group" of personsbecomes the beneficial owner
(as determined in accordance with Rule 13d-3 adopted under the Exchange
Act), directly or indirectly, of securities of the Corporation which,
together with any other securities of the Corporation theretofore directly
or indirectly beneficially owned by such person, represent 20% or more of
the combined voting power of the Corporation's then outstanding securities;
(ii) at any election or series of elections, persons not proposed for
nomination or nominated by the Board of Directors of the Corporation are
elected as directors of the Corporation and together constitute 20% or more
of the number of directors of the Corporation; or (iii) any person or group
solicits and receives valid proxies for the election of directors in
opposition to the nominees of the Board of Directors of the Corporation
representing an aggregate of 20% or more of the combined voting power of
the Corporation's then outstanding securities.
10. Authority of the Committee with Respect to Outstanding Options. (a) Subject
to the limitations set forth in Paragraph 6 with respect to the maximum
term of any option, the Committee may waive or modify at any time, either
before or after the granting of an option, any condition, limitation or
restriction with respect to the exercise of such option imposed by or
pursuant to this Plan in such circumstances as the Committee may, in its
discretion, deem appropriate; provided, however, that any such waiver or
modification with respect to an outstanding option shall be subject to the
same limitations applicable to amendments to outstanding options, as set
forth in Paragraph 10 (b) below.
(b) Subject to the other terms and provisions of this Plan, the Committee
may amend any outstanding option; provided, however, that (i) no such
amendment may reduce the option price of the option (except to set forth an
adjustment in the option price made pursuant to Paragraph 8 above) or
extend the maximum term during which the option, if fully vested, may be
exercised, and (ii) if the amendment would adversely affect the rights of
the Optionee, the consent of the Optionee to such amendment must be
obtained.
17
11. Amendment and Termination. (a) The Board of Directors of the Company from
time to time may amend this Plan in such respects as it may deem advisable;
provided, however, that any such amendment must be approved by the holders
of the outstanding common shares of the Corporation by such vote (if any)
as then may be required by, and otherwise in compliance with, applicable
federal and state law (including Rule 16b-3 or any successor provision
adopted under the Exchange Act) and the requirements of any stock exchange
or other trading system upon which the common shares of the Corporation
then may be listed.
(b) The Board of Directors may terminate this Plan at any time.
(c) No amendment to this Plan nor the termination of this Plan shall
adversely affect any option outstanding at the time of such amendment
or termination without the consent of the Optionee holding such
option, and all such outstanding options shall remain in full force
and effect as if the Plan had not been adversely amended or
terminated.
12. Corporation's Responsibility. All expenses of this Plan, including the cost
of maintaining records, shall be borne by the Corporation. The Corporation
shall have no responsibility or liability for any act or thing done or left
undone with respect to the price, time, quantity, or other conditions and
circumstances of the purchase of common shares under the terms of this
Plan, so long as the Corporation acts in good faith.
13. Implied Consent of Optionees. Every Optionee, by his acceptance of an
option under this Plan, shall be deemed to have consented to be bound, on
his own behalf and on behalf of his heirs, assigns, and legal
representatives, by all of the terms and conditions of this Plan.
14. No Effect on Employment Status. The fact that an employee has been granted
an option under this Plan shall not limit or otherwise qualify the right of
his employer to terminate his employment at any time.
15. Saving Provision. With respect to persons subject to Section 16 of the
Exchange Act, transactions under this Plan are intended to comply with all
applicable conditions of Rule 16b-3 or any successor rule adopted under the
Exchange Act. To the extent any provision of this Plan or any action by the
Board of Directors of the Corporation or the Committee fails to so comply,
it shall be deemed null and void, to the extent permitted by law and deemed
advisable by the Board of Directors of the Corporation or the Committee.
16. Shareholder Approval and Term of Plan. (a) The Plan shall become effective
upon approval by the affirmative vote of the holders of a majority of the
outstanding common shares of the Corporation. By adopting the Plan by such
vote, the holders of the Corporation's common shares waive pre-emptive
rights with respect to the Shares issuable upon exercise of options granted
under the Plan, in accordance with Section 1701.15(A)(8) of the Ohio
Revised Code.
b) No options shall be granted under this Plan after April 21, 2008 or
after such earlier date as this Plan may be terminated in accordance
with Paragraph 11.
18
(left side)
[X] PLEASE MARK VOTES REVOCABLE PROXY
AS IN THIS EXAMPLE SECURITY BANC CORPORATION
PROXY FOR ANNUAL MEETING
APRIL 21, 1998
KNOW ALL MEN BY THESE PRESENTS that I, the undersigned Shareholder of Security
Banc Corporation, Springfield, Ohio do hereby nominate and constitute and
appoint Peter G. Geil and Sherman R. Kapp or any one of them with full power to
act alone my true and lawful attorney(s) with full power of substitution for me
and in my name, place and stead to vote all the Common Stock of said
Corporation, standing in my name on its books on February 27, 1998, at the
Annual Meeting of its Shareholders to be held at Clark State Performing Arts
Center, Turner Studio Theater, 300 South Fountain Avenue, Springfield, Ohio, on
Tuesday, April 21, 1998, at 1:00 p.m. or at any adjournment thereof with all the
powers the undersigned would possess if personally present as follows:
-------------------------------
Please be sure to sign and date Date
this Proxy in the box below. -------------------------------
- --------------------------------------------------------------------------------
- ------------Shareholder sign above---------Co-holder (if any) sign above--------
With- For All
(right side) For hold Except
1. To elect four directors of Class I [ ] [ ] [ ]
Harry O. Egger
Scott A. Gabriel
Jane N. Scarff
Thomas J. Veskauf
INSTRUCTION: To withhold authority to vote for any individual nominee, mark "For
All Except" and write that nominee's name in the Space provided below.
For Against Abstain
2. Adoption of Amendment to Article IV of the Company's [ ] [ ] [ ]
Amended Articles of Incorporation, changing the number
of authorized shares of the Company's Common Stock from
eleven million (11,000,000) to eighteen million
(18,000,000) shares, changing the par value for each
share to one dollar and fifty-six twenty-five cents
($1.5625) which will permit the Board of Directors to
declare the subsequent two (2) for one (1) stock split
for each share owned.
For Against Abstain
3. Approval of the Corporation's 1998 Stock Option Plan. [ ] [ ] [ ]
- ---------------------------------------------------------------
This proxy confers discretionary authority to vote "for" the propositions listed
above unless otherwise indicated. If any other business is presented at said
meeting, this proxy shall be voted in accordance with the recommendations of the
Board of Directors.
The Board of Directors recommends a vote "for" the proposition listed above.
This proxy is solicited on behalf of the Corporation's Board of Directors and
may be revoked prior to its exercise. Please sign and date this proxy and return
it in the enclosed envelope.
Please sign exactly as your name appears on this card. When signing as attorney,
executor, administrator, trustee or guardian, please give your full title. If
shares are held jointly, each holder should sign.
................................................................................
Detatch above card, sign, date and mail in postage paid envelope provided
SECURITY BANC CORPORATION