<PAGE>
SCHEDULE 14A
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934
(Amendment No. )
Filed by the Registrant X
Filed by a Party other than the Registrant
Check the appropriate box:
Preliminary Proxy Statement
Confidential, for Use of the Commission Only
(as permitted by Rule 14a-6(e)(2))
X Definitive Proxy Statement
Definitive Additional Materials
Soliciting Material Pursuant to Section 240.14a-11(c)
or Section 240.14a-12
CLASSIC BANCSHARES, INC.
(Name of Registrant as Specified In Its Charter)
(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)(1)
and 0-11.
(1) Title of each class of securities to which transaction
applies:
(2) Aggregate number of securities to which transaction applies:
(3) Per unit price or other underlying value of transaction
computed pursuant to Exchange Act Rule 0-11
(set forth the amount on which the filing fee is
calculated and state how it was determined)
(4) Proposed maximum aggregate value of transaction:
(5) Total fee paid:
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:
(2) Form, Schedule or Registration Statement No.:
(3) Filing Party:
(4) Date Filed:
<PAGE>
June 25, 1999
Dear Fellow Stockholder:
On behalf of the Board of Directors and management of Classic Bancshares,
Inc., I cordially invite you to attend the 1999 Annual Meeting of Stockholders.
The meeting will be held at 3:00 p.m., local time, on July 26, 1999, at the
corporate headquarters of RAM Technologies, Inc., located at 1516 Bath Avenue,
Ashland, Kentucky.
An important aspect of the meeting process is the stockholder vote on
corporate business items. I urge you to exercise your rights as a stockholder to
vote and participate in this process. Stockholders are being asked to consider
and vote upon the election of four directors and the ratification of the
appointment of the Company's independent auditors for the fiscal year ending
March 31, 2000. Your Board of Directors unanimously recommends that you vote for
each of the nominees named in the enclosed proxy statement and for the
appointment of the Company's independent auditors.
In addition to the annual stockholder vote on corporate business items, the
meeting will include management's report to you on Classic Bancshares, Inc.'s
fiscal 1999 financial and operating performance.
I encourage you to attend the meeting in person. Whether or not you attend
the meeting, please read the enclosed Proxy Statement and then complete, sign
and date the enclosed proxy card and return it in the postage prepaid envelope
provided. This will save Classic Bancshares, Inc. additional expense in
soliciting proxies and will ensure that your shares are represented. Please note
that you may vote in person at the meeting even if you have previously returned
the proxy.
Thank you for your attention to this important matter.
Sincerely,
David B. Barbour
President and Chief Executive Officer
<PAGE>
CLASSIC BANCSHARES, INC.
344 Seventeenth Street
Ashland, Kentucky 41101
(606) 325-4789
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
To be Held on July 26, 1999
Notice is hereby given that the Annual Meeting of Stockholders (the
"Meeting") of Classic Bancshares, Inc. ("Classic" or the "Company") will be held
at the corporate headquarters of RAM Technologies, Inc., located at 1516 Bath
Avenue, Ashland, Kentucky at 3:00 p.m., Ashland, Kentucky time, on July 26,
1999.
A Proxy Card and a Proxy Statement for the Meeting are enclosed.
The Meeting is for the purpose of considering and acting upon:
1. The election of four directors of the Company;
2. The ratification of the appointment of Smith, Goolsby, Artis &
Reams, P.S.C. as the Company's independent auditors for the fiscal
year ending March 31, 2000;
and such other matters as may properly come before the Meeting, or any
adjournments or postponements thereof. The Board of Directors is not aware of
any other business to come before the Meeting.
Any action may be taken on the foregoing items at the Meeting on the date
specified above, or on any date or dates to which the Meeting may be adjourned
or postponed. Stockholders of record at the close of business on June 14, 1999
are the stockholders entitled to vote at the Meeting and any adjournments or
postponements thereof. A complete list of stockholders entitled to vote at the
Meeting will be available for inspection by stockholders at the offices of the
Company during its normal business hours of 9:00 a.m. to 4:00 p.m. during the
ten days prior to the Meeting, as well as at the Meeting.
You are requested to complete, sign and date the enclosed form of proxy,
which is solicited on behalf of the Board of Directors, and to mail it promptly
in the enclosed envelope. The proxy will not be used if you attend and vote at
the Meeting in person.
BY ORDER OF THE BOARD OF DIRECTORS
C. Cyrus Reynolds
Chairman of the Board
Ashland, Kentucky
June 25, 1999
- --------------------------------------------------------------------------------
IMPORTANT: THE PROMPT RETURN OF PROXIES WILL SAVE THE COMPANY THE EXPENSE OF
FURTHER REQUESTS FOR PROXIES TO ENSURE A QUORUM AT THE MEETING. A SELF-
ADDRESSED ENVELOPE IS ENCLOSED FOR YOUR CONVENIENCE. NO POSTAGE IS REQUIRED IF
MAILED WITHIN THE UNITED STATES.
- --------------------------------------------------------------------------------
<PAGE>
PROXY STATEMENT
CLASSIC BANCSHARES, INC.
344 Seventeenth Street
Ashland, Kentucky 41101
(606) 325-4789
ANNUAL MEETING OF STOCKHOLDERS
July 26, 1999
This Proxy Statement is furnished in connection with the solicitation on
behalf of the Board of Directors of Classic Bancshares, Inc. ("Classic" or the
"Company"), the parent company of Classic Bank and The First National Bank of
Paintsville ("Paintsville Bank"), of proxies to be used at the Annual Meeting of
Stockholders of the Company (the "Meeting") which will be held at the corporate
headquarters of RAM Technologies, Inc., located at 1516 Bath Avenue, Ashland,
Kentucky, on July 26, 1999, at 3:00 p.m., Ashland, Kentucky time, and all
adjournments and postponements of the Meeting. The accompanying Notice of Annual
Meeting and form of proxy and this Proxy Statement are first being mailed to
stockholders on or about June 25, 1999.
At the Meeting, stockholders of the Company are being asked to consider and
vote upon (i) the election of four directors and (ii) the ratification of the
appointment of Smith, Goolsby, Artis & Reams, P.S.C. as the Company's
independent auditors for the fiscal year ending March 31, 2000.
Vote Required and Proxy Information
All shares of the Company's common stock, par value $.01 per share (the
"Common Stock"), represented at the Meeting by properly executed proxies
received prior to or at the Meeting, and not revoked, will be voted at the
Meeting in accordance with the instructions thereon. If no instructions are
indicated, properly executed proxies will be voted for the election of the
nominees named herein and for the ratification of the appointment of Smith,
Goolsby, Artis & Reams, P.S.C. The Company does not know of any matters, other
than as described in the Notice of Annual Meeting, that are to come before the
Meeting. If any other matters are properly presented at the Meeting for action,
the Board of Directors, as proxy for the stockholder, will have the discretion
to vote on such matters in accordance with their best judgment.
Directors will be elected by a plurality of the votes cast. The
ratification of the appointment of Smith, Goolsby, Artis & Reams, P.S.C. as the
Company's independent auditors requires the affirmative vote of a majority of
the votes cast on the matter. In the election of directors, stockholders may
either vote "FOR" all nominees for election or withhold their votes from one or
more nominees for election. Votes that are withheld and shares held by a broker,
as nominee, that are not voted (so-called "broker non-votes") in the election of
directors will not be included in determining the number of votes cast. For the
proposal to ratify the appointment of the independent auditors, stockholders may
vote "FOR," "AGAINST" or "ABSTAIN" with respect to this proposal. Proxies marked
to abstain will have the same effect as votes against the proposal, and broker
non-votes will have no effect on the proposal. A majority of the shares of the
Common Stock, present in person or represented by proxy, will constitute a
quorum for purposes of the Meeting. Proxies marked to abstain and broker
non-votes will be counted for purposes of determining a quorum.
A proxy given pursuant to the solicitation may be revoked at any time
before it is voted. Proxies may be revoked by: (i) filing with the Secretary of
the Company at or before the Meeting a written notice of revocation bearing a
later date than the proxy, (ii) duly executing a subsequent proxy relating to
the same shares and delivering it to the Secretary of the Company at or before
the Meeting or (iii) attending the Meeting and voting in person (although
attendance at the Meeting will not in and of itself constitute revocation of a
proxy). Any written notice revoking a proxy should be delivered to: Secretary,
Classic Bancshares, Inc., 344 Seventeenth Street, Ashland, Kentucky 41101.
Voting Securities and Certain Holders Thereof
Stockholders of record as of the close of business on June 14, 1999 will be
entitled to one vote for each share of Common Stock then held. As of that date,
the Company had 1,227,500 shares of Common Stock issued and outstanding. The
following table sets forth information regarding share ownership of those
persons or entities known by management to beneficially own more than five
percent of the Common Stock and all directors and executive officers of the
Company as a group.
1
<PAGE>
Shares
Beneficially Percent
Beneficial Owner Owned of Class
- ---------------------------------------- ------------ --------
Classic Bancshares, Inc.
Employee Stock Ownership Plan 105,800(1) 8.62%
344 Seventeenth Street
Ashland, Kentucky 41101
Charles B. Yates 80,000(2) 6.52
Craig W. Yates
Farmers and Mechanics Bank
3 Sunset Road
Burlington, New Jersey 08016
and
AFEC, Incorporated
3511 Silverside Road, Suite 105
Wilimington, Delaware 19810
Directors and executive officers
of the Company as a group 233,790(3) 17.94
(12 persons)
- ----------------
(1) The amount reported represents shares held by the Company's Employee
Stock Ownership Plan ("ESOP"), 27,285 of which have been allocated to
accounts of participants. First Bankers Trust Company, N.A., Quincy,
Illinois, the trustee of the ESOP, may be deemed to beneficially own
the shares held by the ESOP which have not been allocated to accounts
of participants. Participants in the ESOP are entitled to instruct the
trustee as to the voting of shares allocated to their accounts under
the ESOP. Unallocated shares held by the ESOP are voted by the trustee
in the same manner that the trustee is instructed to vote by a majority
of the plan participants who instruct the trustee as to the manner of
voting the shares allocated to their plan accounts.
(2) As reported by Charles B. Yates, Craig W. Yates and AFEC Incorporated
("AFEC") in a statement as of January 30, 1998 on a Schedule 13D under
the Securities Exchange Act of 1934, as amended (the "Exchange Act").
Charles Yates reported sole voting and dispositive power over 26,000
shares, Craig Yates reported sole voting and dispositive power over
20,000 shares and AFEC reported sole voting and dispositive power over
34,000 shares. According to the Schedule 13D, there is no shared voting
or dispositive power with respect to any of the shares listed. Craig
Yates and Charles Yates are brothers. Craig Yates and Charles Yates
together own AFEC, and serve as its Chairman and President,
respectively.
(3) Amount includes shares held directly, as well as shares held jointly
with family members, shares held in retirement accounts, 15,996 shares
allocated to the ESOP accounts of the group members, shares held in a
fiduciary capacity or by certain family members, with respect to which
shares the group members may be deemed to have sole or shared voting
and/or dispositive power. The amount reported above also includes
25,392 shares awarded as restricted stock under the Company's 1996
Recognition and Retention Plan (the "RRP") that have vested or will
vest within 60 days of June 14, 1999 and 75,898 shares subject to
options currently exercisable or which will become exercisable within
60 days of June 14, 1999, awarded under the Company's 1996 Stock Option
and Incentive Plan (the "1996 Stock Option Plan") and the Company's
1998 Premium Price Stock Option Growth Plan (the "1998 Stock Option
Plan").
PROPOSAL I - ELECTION OF DIRECTORS
The Company's Board of Directors is presently comprised of ten members.
Directors of the Company are generally elected to serve for a three-year term or
until their respective successors have been elected and qualified. Approximately
one-third of the directors are elected annually. Each member of the Company's
Board of Directors has served on the Board since the incorporation of the
Company in September 1995, except for Directors Robert L. Bayes and Jeffrey P.
Lopez, M.D., each of whom joined the Board in November 1996, and A. Bruce
Addington, who joined the Board in April 1998.
The following table sets forth certain information regarding the Company's
Board of Directors, including their terms of office, and the nominees for
election as directors. It is intended that the proxies solicited on behalf of
the Board of Directors (other than proxies in which the vote is withheld as to
the nominee) will be voted at the Meeting for the election of the nominees
identified in the following table. If any nominee is unable to serve, the shares
represented by all such proxies will be voted for the election of such
substitute or substitutes as the Board of Directors may recommend. At this time,
the Board of Directors knows of no reason why any nominee might be unable to
2
<PAGE>
serve, if elected. Except as described herein, there are no arrangements or
understandings between any director or nominee and any other person pursuant to
which such director or nominee was selected.
<TABLE>
<CAPTION>
Shares of Common
Stock Beneficially Percent
Director Term to Owned at of
Name Age(1) Position(s) Held Since (2) Expire June 14, 1999(3) Class
- ------------------------ ------ --------------------------- ----------- ----------- -------------------- -------
<S> <C> <C> <C> <C> <C> <C>
NOMINEES
Robert B. Keifer, Jr. 62 Director 1991 2002 15,502 1.26%
David A. Lang 55 Director 1991 2002 15,502 1.26
Robert L. Bayes 55 Executive Vice President 1996 2002 12,072(4) .98
and Director
A. Bruce Addington 45 Director 1998 2002 1,850 .15
DIRECTORS REMAINING IN OFFICE
E.B. Gevedon, Jr. 65 Director 1980 2000 25,502(5) 2.07
Robert A. Moyer, Jr. 53 Director 1993 2000 15,502 1.26
John W. Clark 57 Director 1995 2000 26,713 2.17
C. Cyrus Reynolds 72 Chairman of the Board 1960 2001 20,318(6) 1.65
David B. Barbour 51 President, Chief Executive 1995 2001 56,582(7) 4.53
Officer and Director
Jeffrey P. Lopez, M.D. 40 Director 1996 2001 2,250 .18
- -------------------------
<FN>
(1) At March 31, 1999.
(2) Includes service as a director of Classic Bank.
(3) Includes shares held directly, as well as shares held in retirement
accounts, shares allocated to the ESOP accounts of certain of the named
persons, held by certain members of the named individuals' families, or
held by trusts of which the named individual is a trustee or
substantial beneficiary, with respect to which shares the named
individuals may be deemed to have sole or shared voting and/or
dispositive power. The amount also includes 7,935, 800 and 1,348 shares
awarded as restricted stock under the RRP, which have vested or will
vest within 60 days of June 14, 1999, to Mr. Barbour, Mr. Bayes and
each of Messrs. Gevedon, Moyer, Clark, Reynolds, Keifer and Lang,
respectively, and 21,087, 6,050, 1,750, 750 and 4,154 shares subject to
options which are currently exercisable or will become exercisable
within 60 days of June 14, 1999, awarded under the 1996 Stock Option
Plan and the 1998 Stock Option Plan to Mr. Barbour, Mr. Bayes, Mr.
Lopez, Mr. Addington and each of Messrs.
Gevedon, Moyer, Clark, Reynolds, Keifer and Lang, respectively.
(4) Includes 1,360 shares held by Mr. Bayes' spouse and 467 shares
allocated to Mr. Bayes' account under the ESOP.
(5) Includes 10,000 shares held by Mr. Gevedon's spouse.
(6) Includes 4,816 shares held by Mr. Reynolds' spouse.
(7) Includes 8,475 shares allocated to Mr. Barbour's account under the ESOP.
</FN>
</TABLE>
The business experience of each director of the Company for at least the
past five years is set forth below. All directors have held their positions at
least five years, except as otherwise indicated. Directors Reynolds, Barbour,
Keifer and Gevedon also serve as directors of Classic Bank. Directors Barbour,
Bayes and Gevedon also serve as directors of Paintsville Bank.
Robert B. Keifer, Jr. Mr. Keifer is a retired group vice-president of
Ashland Petroleum Company, an operating division of Ashland, Inc., where he was
employed from 1966 to 1992. From 1992 to 1994, Mr. Keifer served as a consultant
to Equal Opportunity Finance, a minority small business investment company. Mr.
Keifer also serves as President of the Board of Directors of Community Hospice,
Inc.
David A. Lang. Mr. Lang is manager of national accounts for American
Electric Power, a position he has held since November 1998. Prior to such time,
he was Kentucky Region Director for American Electric Power Company, a position
he held from January 1996 to November 1998. Mr. Lang has been employed by
American Electric Power since 1965 and has held a variety of positions,
including Executive Assistant from May 1990 to June 1995. Mr. Lang is a
Registered Professional Engineer in the Commonwealth of Kentucky. Mr. Lang is
also a former director of the Chamber of Commerce of Boyd and Greenup Counties
and co-chair of the Conference Board's USA Quality Council V.
3
<PAGE>
Robert L. Bayes. Mr. Bayes is currently President and Chief Executive
Officer of Paintsville Bank and Executive Vice President of the Company. Mr.
Bayes has served as President of Paintsville Bank since 1983. A Certified Public
Accountant, Mr. Bayes holds a B.S. in Business Administration from Berea
College, attended graduate school at the University of Kentucky and holds a
graduate banking degree from Stonier Graduate School of Banking at Rutgers
University. Mr. Bayes is a member of the American Institute of CPA's and
Kentucky Society of CPA's, a director of the Paintsville/Johnson County Chamber
of Commerce and Chairman of the Mayo State Vocational- Technical School
Foundation. Mr. Bayes is also a member of the Johnson County Economic
Development Council.
A. Bruce Addington. Mr. Addington is Vice President of Addington
Enterprises, Inc., co-founder and Secretary of Addington Exploration, Inc. and
co-founder and Secretary of Seven Peaks Mining. Addington Enterprises, Inc.,
headquartered in Ashland, Kentucky, is the fourth largest coal mining company in
the United States, with operations throughout the eastern and midwestern United
States. Addington Exploration, Inc. is an oil and gas company involved in
exploration, production and sales of natural gas. Seven Peaks Mining is a
perlite mining company with operations in the State of Oregon.
Everett B. Gevedon, Jr. Mr. Gevedon has served as real estate consultant to
corporations and individuals throughout the eastern United States for the past
18 years. Prior serving as a real estate consultant, he was a general real
estate appraiser and involved in real estate sales.
Robert A. Moyer, Jr. Mr. Moyer is Chairman and Chief Executive Officer of
RAM Technologies, Inc., an Ashland, Kentucky-based multi-faceted communications
and technology company. Mr. Moyer has held this position since he founded RAM
Technologies in 1976.
John W. Clark. Mr. Clark has been the President and Chief Executive Officer
of John W. Clark Oil Co., a company engaged in the distribution and sale of
petroleum products, since its founding in 1970. In addition, he has been the
President of JRB, Inc., a common carrier trucking company, since 1977; Clark's
Pump N Stop, a convenience store, since 1978; B.J. Aviation, an airplane leasing
company, since 1990; and John W. Clark Enterprises, a real estate development
and holding company, since 1987.
C. Cyrus Reynolds. Mr. Reynolds is Chairman of the Board of the Company and
Classic Bank, positions he has held since September 1995 and July 1990,
respectively. Mr. Reynolds retired as Property Valuation Administrator for Boyd
County, Kentucky, an elected office he held since 1977. From 1960 to 1981, Mr.
Reynolds was the owner of Reynolds Insurance Agency, a general lines insurance
agency located in Ashland, Kentucky. Mr. Reynolds is a member and former officer
of the Ashland Lions Club, and has served on various state commissions,
including 18 years of service as Chairman of the Boyd County Democratic Party.
Mr. Reynolds has also served as Treasurer of the Westwood Christian Church for
40 years.
David B. Barbour. Mr. Barbour is the President and Chief Executive Officer
of the Company and Classic Bank, positions he has held since September 1995 and
April 1995, respectively. Prior to joining Classic Bank in March of 1995, Mr.
Barbour served as Senior Vice President and Senior Lending Officer of First
American Bank, a commercial bank located in Ashland, Kentucky with assets of
$225 million. As Senior Vice President and Senior Lending Officer, Mr. Barbour
was responsible for the First American Bank's loan portfolio, including the
commercial, consumer and real estate lending divisions. Mr. Barbour had been
employed by First American Bank since 1977 and held a variety of management
positions, including Senior Vice President and Senior Lending Officer since
1989. Mr. Barbour holds the designation of Certified Lender, Business Banking.
Jeffrey P. Lopez, M.D. Dr. Lopez is President of Ashland Radiation
Oncology, Inc. and owner of Tri-State Regional Cancer Center located in Ashland,
Kentucky. A native of Madison, Indiana, Dr. Lopez is a graduate of Indiana
University, obtained his medical degree from Indiana School of Medicine and
served his residency in Radiation Oncology at the University of Illinois. He
serves on the Board of Directors of the Boyd County chapter of the American
Cancer Society, a position he has held since 1989. He is past President of the
Boyd County Medical Society, having served two terms as President. He is a
member of the Board of Directors for the Association of Free Standing Radiation
Oncology Centers, of which he is currently President, and is a member of the
Board of Directors of King's Daughters' Medical Center in Ashland, Kentucky. Dr.
Lopez is also Vice President of Liberty Holding Co., a real estate company in
Ashland, Kentucky.
4
<PAGE>
Board of Directors' Meetings and Committees
Meetings of the Company's Board of Directors are generally held on a
monthly basis. The Board of Directors of the Company held 16 meetings during the
fiscal year ended March 31, 1999. No incumbent director attended fewer than 75%
of the total number of meetings held by the Board of Directors and by all
committees of the Board of Directors on which he served during the fiscal year.
The Board of Directors of the Company has standing Executive, Audit,
Compensation and Nominating Committees.
The Executive Committee is comprised of Directors Reynolds, Barbour, Keifer
and Gevedon. This committee meets on an as needed basis to act on matters
arising between Board meetings. This committee met once during fiscal 1999.
The Audit Committee reviews audit reports and related matters to ensure
effective compliance with regulations and internal policies and procedures. This
committee also acts on the recommendation by management of an accounting firm to
perform the Company's annual audit and acts as a liaison between the auditors
and the Board of Directors. Directors Keifer, Reynolds, Lang and Lopez are the
current members of this committee. The committee met four times during fiscal
1999.
The Compensation Committee establishes the Company's compensation policies
and reviews compensation matters and administers the Company's stock-based
benefit plans. The current members of this Committee are Directors Moyer, Lang,
Reynolds and Clark. The committee held six meetings during fiscal 1999.
The Nominating Committee meets annually in order to nominate candidates for
membership on the Board of Directors. This committee is comprised of members
selected by the Chairman. This committee did not meet during fiscal 1999 as its
function was performed by the entire Board of Directors.
While the Board of Directors will consider nominees recommended by
stockholders, the Committee has not actively solicited such nominations.
Pursuant to the Company's bylaws, nominations for directors by stockholders
must be made in writing and delivered to the Secretary of the Company at least
30 days prior to the meeting date. If less than 40 days' notice of the date of
the meeting is given or made to stockholders, nominations must be received by
the Company not later than the close of business on the tenth day following the
day on which notice of the date of the meeting was mailed. In addition to
meeting the applicable deadline, nominations must be accompanied by certain
information specified in the Company's bylaws.
Director Compensation
Fees. The monthly fees for service on the Boards of Directors of the
Company, Classic Bank and Paintsville Bank are $600, $250 and $400,
respectively. Directors of Classic Bank also receive $50 for each committee
meeting attended. Directors of the Company who also serve as directors of
Classic Bank do not receive compensation for their service on the Classic Bank
Board. In addition to his fees for serving as a director of the Company, Mr.
Barbour receives a salary of $668 per month for his service as Chairman of the
Board of Directors of Paintsville Bank.
Stock Options. On February 15, 1999, Director Bayes, Executive Vice
President of the Company and President and Chief Executive Officer of
Paintsville Bank, was granted a ten-year, immediately exercisable option to
purchase 1,250 shares of Common Stock at an exercise price of $16.295 per share
(approximately 10% higher than the market value of the Common Stock on the date
of grant). For information regarding stock options granted to Director Barbour,
the Company's and Classic Bank's President and Chief Executive Officer, see the
table below captioned "Option Grants in Last Fiscal Year." No other directors
were granted stock options during the fiscal year ended March 31, 1999.
5
<PAGE>
Executive Compensation
The Company has not paid any compensation to its executive officers since
its formation. The following table sets forth information concerning the
compensation paid or accrued by Classic Bank for services rendered by David B.
Barbour, the Company's and Classic Bank's President and Chief Executive Officer.
No other executive officer of the Company earned a salary and bonus in excess of
$100,000 during fiscal 1999.
<TABLE>
<CAPTION>
SUMMARY COMPENSATION TABLE
Long-Term Compensation
Annual Compensation
Awards Payouts
Other Annual Restricted Options/ LTIP
Fiscal Salary Bonus Compensation Stock SARs Payouts All Other
Name and Principal Position Year ($) ($) ($)(1) Award($) (#) ($) Compensation($)
- --------------------------------- ------ ------ ----- ------------ --------- ------- ------- ---------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
David B. Barbour, President and 1999 $106,000 --- --- --- 1,250(3) --- $36,575(4)
Chief Executive Officer
1998 98,000 $17,981 --- --- --- --- 78,692(4)
1997 96,632 --- --- $142,995(2) 33,062 --- 63,340(4)
- ------------------
<FN>
(1) Mr. Barbour did not receive any additional benefits or perquisites
which, in the aggregate, exceeded 10% of both his salary and bonus
or $50,000.
(2) Represents the dollar value of 13,225 shares of restricted stock
awarded under the RRP, based on the $10.8125 closing price per share
of the Common Stock on the Nasdaq Stock Market on July 29, 1996, the
date of grant. Based on the $14.375 closing price per share of the
Common Stock on the Nasdaq Stock Market on March 31, 1999, the
aggregate value of the 7,935 shares of restricted stock held by Mr.
Barbour as of that date was $114,066.
(3) For information regarding this award, see the table below captioned
"Option Grants in Last Fiscal Year."
(4) Includes, for 1999, 1998, and 1997, respectively, the following
amounts: country club membership fees of $2,280, $0, and $2,040 paid by
Classic Bank on behalf of Mr. Barbour; contributions made pursuant to
the Supplemental Executive Retirement Agreement between Classic Bank
and Mr. Barbour of $10,526, $10,166, and $11,057; Classic Bank's
contribution to Mr. Barbour's account under the ESOP of 703, 2,885, and
3,161 shares of Common Stock based upon closing prices per share of the
Common Stock of $14.375, $20.00 and $13.375 on March 31, 1999, 1998,
and 1997; life insurance premiums paid by Classic Bank on behalf of Mr.
Barbour of $5,647, $6,026 and $5,565; and fees received by Mr. Barbour
for his service as a director of Paintsville Bank of $8,016, $4,800 and
$2,400.
</FN>
</TABLE>
6
<PAGE>
The following table sets forth certain information concerning grants of
stock options to Mr. Barbour during fiscal 1999. No stock appreciation rights
were granted in fiscal 1999.
OPTION GRANTS IN LAST FISCAL YEAR
Individual Grants
------------------------------------------------------
Number of % of Total
Shares Options
Underlying Granted to Per Share
Options Employees in Exercise Expiration
Granted Fiscal Year Price Date
---------- ------------ --------- ----------
David B. Barbour 1,250 15.80% $16.295 02/15/09
The following table provides information as to the value of the stock
options held by Mr. Barbour as of March 31, 1999. Mr. Barbour did not exercise
any stock options during fiscal 1999.
<TABLE>
<CAPTION>
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND FY-END
OPTION VALUES
Number of
Securities Value of
Underlying Unexercised
Unexercised In-the-Money
Options at Options at
Shares FY-End (#) FY-End ($)
Acquired Value ---------------------------- ------------------------------
on Exercise Realized Exercisable Unexercisable Exercisable Unexercisable
Name (#) ($) (#) (#) ($) ($)
- --------------------- ----------- -------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
David B. Barbour --- $ --- 14,474 19,838 $47,111(1) $70,673(2)
- ----------------
<FN>
(1) Represents the aggregate market value of in-the-money options held, based
upon the exercise price of the options ($10.8125) and the closing price per
share of the Common Stock on March 31, 1999 of $14.375, as reported by the
Nasdaq Stock Market. The exercisable options include options to purchase
1,250 shares at an exercise price of $16.295 per share that were not
in-the-money as of March 31, 1999.
(2) Represents the aggregate market value of the options held, based upon the
exercise price of the options ($10.8125) and the closing price per share of
the Common Stock on March 31, 1999 of $14.375, as reported by the Nasdaq
Stock Market.
</FN>
</TABLE>
Employment Agreement
Classic Bank has entered into an employment agreement with Mr. Barbour
providing for an initial term of three years. The employment agreement became
effective upon completion of Classic Bank's conversion from mutual to stock
form, provides for an annual base salary in an amount not less than Mr.
Barbour's then-current salary and provides for an annual extension of its
remaining term by one year, subject to approval of the extension by the Board of
Directors of Classic Bank. The agreement also provides for termination upon Mr.
Barbour's death, for cause or in certain events specified by the regulations of
the Office of Thrift Supervision. The employment agreement is also terminable by
Mr. Barbour upon 90 days' notice to Classic Bank.
The employment agreement provides that a lump sum cash payment will be made
to Mr. Barbour in an amount equal to 299% of his five-year average "base amount"
of compensation if his employment is involuntarily terminated in connection with
or within 12 months after a "change in control" of Classic Bank or the Company.
7
<PAGE>
If the employment of Mr. Barbour had been terminated as of March 31, 1999 under
circumstances entitling him to severance pay as described above, he would have
been entitled to receive a lump sum cash payment of approximately $367,000. The
agreement also provides for the continuation of Mr. Barbour's health benefits
for the remaining term of the agreement if his employment is terminated in
connection with or within 12 months after a change in control. If Mr. Barbour's
employment is terminated by Classic Bank other than for cause and not in
connection with or within 12 months after a change in control, Mr. Barbour will
be entitled to his then-current base salary and the continuation of health
benefits for the remaining term of the agreement.
Supplemental Executive Retirement Agreement
Classic Bank entered into a non-qualified Supplemental Executive Retirement
Agreement (the "SERP") with Mr. Barbour which provides for the payment of a
monthly supplemental retirement benefit of up to 24% of his average monthly
compensation during the three highest 12-month periods prior to retirement. This
benefit will be payable upon normal retirement at age 65 or, under certain
circumstances, after age 55 if his employment is terminated without cause. In
the event of Mr. Barbour's death, 50% of the amount payable under the SERP will
be payable to his spouse until her death. The amounts contributed by Classic
Bank pursuant to the SERP for the last three fiscal years are included in the
Summary Compensation Table under "All Other Compensation."
Certain Transactions
Classic Bank and Paintsville Bank follow policies of granting loans to
their respective (and the Company's) directors, officers and employees. The
loans by Classic Bank and Paintsville Bank to executive officers and directors
are made in the ordinary course of business and on the same terms and conditions
as those of comparable transactions prevailing at the time, in accordance with
each institution's respective underwriting guidelines and do not involve more
than the normal risk of collectibility or present other unfavorable features.
Federal law requires that all loans to directors and executive officers be made
on terms and conditions comparable to those for similar transactions with
non-affiliates. Loans by Classic Bank and Paintsville Bank to all of their (and
the Company's) respective directors and executive officers and the associates of
such directors and executive officers, including outstanding balances and
commitments, totaled $4.0 million at March 31, 1999, which was 19.7% of the
Company's stockholders' equity at that date. At March 31, 1999, there were no
loans by Classic Bank or Paintsville Bank to any director or executive officer
(or any affiliate of such director or executive officer) of the Company or of
Classic Bank or Paintsville Bank, made at preferential rates or terms which in
the aggregate exceeded $60,000 during the two years ended March 31, 1999.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Exchange Act requires the Company's directors and
executive officers, and persons who beneficially own more than 10% of the Common
Stock, to file with the Securities and Exchange Commission (the "SEC") initial
reports of ownership and reports of changes in ownership of the Common Stock.
Officers, directors and greater than 10% beneficial owners are required by SEC
regulations to furnish the Company with copies of all Section 16(a) forms they
file.
To the Company's knowledge, based solely on a review of the copies of such
reports furnished to the Company and written representations that no other
reports were required, during the fiscal year ended March 31, 1999, all Section
16(a) filing requirements applicable to its officers, directors and greater than
10% beneficial owners were met, except for the inadvertent late reporting on
Form 5 by Director Addington of the purchase of 2,000 shares of Common Stock.
8
<PAGE>
PROPOSAL II - RATIFICATION OF APPOINTMENT OF AUDITORS
The Board of Directors of the Company has appointed Smith, Goolsby, Artis &
Reams, P.S.C., independent accountants, to be the Company's independent auditors
for the fiscal year ending March 31, 2000. Representatives of Smith, Goolsby,
Artis & Reams, P.S.C. are expected to attend the Meeting to respond to
appropriate questions and to make a statement if they so desire.
THE BOARD OF DIRECTORS RECOMMENDS THAT STOCKHOLDERS VOTE "FOR" THE
RATIFICATION OF THE APPOINTMENT OF SMITH, GOOLSBY, ARTIS & REAMS, P.S.C. AS THE
COMPANY'S INDEPENDENT AUDITORS FOR THE FISCAL YEAR ENDING MARCH 31, 2000.
STOCKHOLDER PROPOSALS
In order to be eligible for inclusion in the Company's proxy materials for
its 2000 Annual Meeting of Stockholders, any stockholder proposal to take action
at the 2000 Annual Meeting must be received at the Company's executive office at
344 Seventeenth Street, Ashland, Kentucky 41101 no later than February 26, 2000.
Any proposal submitted will be subject to the requirements of the proxy rules
adopted under the Exchange Act and, as with any stockholder proposal (regardless
of whether included in the Company's proxy materials), the Company's Certificate
of Incorporation and Bylaws and Delaware law. Under the proxy rules, in the
event that the Company receives notice of a stockholder proposal to take action
at the 2000 Annual Meeting that is not submitted for inclusion in the Company's
proxy materials, or is submitted for inclusion but is properly excluded from the
Company's proxy materials, the persons named in the form of proxy sent by the
Company to its stockholders intend to exercise their discretion to vote on the
proposal in accordance with their best judgment if notice of the proposal is not
received at the main office of the Company by the Deadline (as defined below).
In addition to the provision of the proxy rules regarding discretionary voting
authority described in the preceding sentence, the Company's Bylaws provide that
if notice of a stockholder proposal to take action at the 2000 Annual Meeting is
not received at the main office of the Company by the Deadline, the proposal
will not be recognized as a matter proper for submission to the Company's
stockholders and will not be eligible for presentation at the 2000 Annual
Meeting. The "Deadline" means May 27, 2000; however, in the event the 2000
Annual Meeting is held before July 6, 2000 or after September 24, 2000, the
"Deadline" means the close of business on the later of the 60th day prior to the
date of the 2000 Annual Meeting or the tenth day following the day on which
notice of the 2000 Annual Meeting is first mailed or public announcement of the
date of the 2000 Annual Meeting is first made.
OTHER MATTERS
The Board of Directors is not aware of any business to come before the
Meeting other than those matters described above in this Proxy Statement.
However, if any other matter should properly come before the Meeting, it is
intended that the Board of Directors, as proxy for the stockholder, will act in
accordance with their best judgment.
The cost of solicitation of proxies will be borne by the Company. The
Company will reimburse brokerage firms and other custodians, nominees and
fiduciaries for reasonable expenses incurred by them in sending proxy materials
to the beneficial owners of Common Stock. In addition to solicitation by mail,
directors, officers and regular employees of the Company, Classic Bank or
Paintsville Bank may solicit proxies personally or by telegraph or telephone
without additional compensation.
Ashland, Kentucky
June 25, 1999
9
<PAGE>
REVOCABLE PROXY REVOCABLE PROXY
CLASSIC BANCSHARES, INC.
ANNUAL MEETING OF STOCKHOLDERS
July 26, 1999
The undersigned hereby appoints the Board of Directors of Classic
Bancshares, Inc. (the "Company"), with full powers of substitution, to act as
attorney and proxy for the undersigned to vote all shares of capital stock of
the Company which the undersigned is entitled to vote at the Annual Meeting of
Stockholders (the "Meeting") to be held at the corporate headquarters of RAM
Technologies, Inc. located at 1516 Bath Avenue, Ashland, Kentucky, on July 26,
1999 at 3:00 p.m., Ashland, Kentucky time, and at any and all adjournments and
postponements thereof.
I. The election as directors of all nominees listed below (except as marked to
the contrary)
o FOR o VOTE WITHHELD o FOR ALL EXCEPT
INSTRUCTION: To vote for all nominees, mark the box "FOR" with an "X." To
withhold your vote for all nominees, mark the box "VOTE WITHHELD" with an "X."
To withhold your vote for one or more nominees but not all nominees, mark the
box "FOR ALL EXCEPT" with an "X" and strike a line through the name(s) of the
nominee(s) below for whom you wish to withhold your vote.
ROBERT B. KEIFER, JR. DAVID A. LANG ROBERT L. BAYES A. BRUCE ADDINGTON
II. The ratification of the appointment of Smith, Goolsby, Artis & Reams,
P.S.C. as auditors for the Company for the fiscal year ending March 31,
2000.
o FOR o AGAINST o ABSTAIN
In its discretion, the Board of Directors, as proxy for the undersigned, is
authorized to vote on any other business that may properly come before the
Meeting or any adjournment or postponement thereof.
THIS PROXY WILL BE VOTED AS DIRECTED, BUT IF NO INSTRUCTIONS ARE SPECIFIED,
THIS PROXY WILL BE VOTED FOR THE ELECTION OF ALL OF THE NOMINEES LISTED ABOVE
AND FOR THE RATIFICATION OF THE APPOINTMENT OF SMITH, GOOLSBY, ARTIS & REAMS,
P.S.C. IF ANY OTHER BUSINESS IS PRESENTED AT THE MEETING, THIS PROXY WILL BE
VOTED AS DIRECTED BY A MAJORITY OF THE BOARD OF DIRECTORS IN THEIR BEST
JUDGMENT. AT THE PRESENT TIME, THE BOARD OF DIRECTORS KNOWS OF NO OTHER BUSINESS
TO BE PRESENTED AT THE MEETING.
The Board of Directors recommends a vote "FOR" the election of all nominees
listed above and "FOR" the ratification of the appointment of Smith, Goolsby,
Artis & Reams, P.S.C.
(Continued and to be SIGNED on Reverse Side)
<PAGE>
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
This Proxy may be revoked at any time before it is voted by: (i) filing
with the Secretary of the Company at or before the Meeting a written notice of
revocation bearing a later date than this Proxy; (ii) duly executing a
subsequent proxy relating to the same shares and delivering it to the Secretary
of the Company at or before the Meeting; or (iii) attending the Meeting and
voting in person (although attendance at the Meeting will not in and of itself
constitute revocation of this Proxy). If this Proxy is properly revoked as
described above, then the power of the Board of Directors to act as attorney or
proxy for the undersigned shall be deemed terminated and of no further force and
effect.
The undersigned acknowledges receipt from the Company, prior to the
execution of this Proxy, of Notice of the Meeting, a Proxy Statement and an
Annual Report to Stockholders for the fiscal year ended March 31, 1999.
Dated: , 1999
----------------------- ----------------------------------------
Signature of Stockholder
----------------------------------------
Signature of Stockholder
Please sign exactly as your name(s)
appear(s) to the left. When signing
as attorney, executor, administrator,
trustee or guardian, please give your
full title. If shares are held jointly,
each holder should sign.
PLEASE COMPLETE, DATE, SIGN AND MAIL THIS PROXY PROMPTLY IN THE
ENCLOSED POSTAGE-PAID ENVELOPE
