June 30, 2000
Dear Fellow Stockholder:
On behalf of the Board of Directors and management of Classic
Bancshares, Inc., I cordially invite you to attend the 2000 Annual Meeting of
Stockholders. The meeting will be held at 4:00 p.m., local time, on July 25,
2000, at the AEP Kentucky headquarters building, located at the corner of 17th
Street and Central Avenue, Ashland, Kentucky 41101.
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 three directors and the ratification of the
appointment of the Company's independent auditors for the fiscal year ending
March 31, 2001. Your Board of Directors unanimously recommends that you vote for
each of the nominees named in the enclosed proxy statement and for the
ratification of 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 2000 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 25, 2000
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 AEP Kentucky headquarters building, located at the corner of 17th Street
and Central Avenue, Ashland, Kentucky 41101, at 4:00 p.m., local time, on July
25, 2000.
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 three 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, 2001;
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
13, 2000 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 30, 2000
--------------------------------------------------------------------------------
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 25, 2000
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 AEP
Kentucky headquarters building, located at the corner of 17th Street and Central
Avenue, Ashland, Kentucky 41101, on July 25, 2000, at 4:00 p.m, local 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 30, 2000.
At the Meeting, stockholders of the Company are being asked to consider
and vote upon (i) the election of three 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, 2001.
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. The holders of at least one-third
of the outstanding 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 13, 2000
will be entitled to one vote for each share of Common Stock then held. As of
that date, the Company had 1,176,356 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>
<TABLE>
Shares
Beneficially Percent
Beneficial Owner Owned of Class
------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Classic Bancshares, Inc. Employee Stock Ownership Plan 105,800(1) 8.99%
344 Seventeenth Street
Ashland, Kentucky 41101
Charles B. Yates 80,000(2) 6.80
Craig W. Yates
Farmers and Mechanics Bank
3 Sunset Road
Burlington, New Jersey 08016
National City Corp. 68,000(3) 5.78
1900 East Ninth Street
Cleveland, Ohio 44114
Directors and executive officers of the Company as a group 302,113(4) 23.42
(12 persons)
----------------
</TABLE>
(1) The amount reported represents shares held by the Company's Employee
Stock Ownership Plan ("ESOP"), 32,140 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 and Craig W. Yates in a statement as of
October 14, 1999 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 40,000 shares and Craig Yates
reported sole voting and dispositive power over 40,000 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.
(3) As reported by National City Corp. in a statement as of February 7,
2000 on Amendment No. 1 to a Schedule 13G under the Exchange Act.
National City Corp. reported sole voting power over 68,000 shares,
shared dispositive power over 63,750 shares and shared voting and sole
dispositive powers over no shares.
(4) Amount includes shares held directly, as well as shares held jointly
with family members, shares held in retirement accounts, 17,516 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
34,083 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 13, 2000 and 113,733 shares subject to
options currently exercisable or which will become exercisable within
60 days of June13, 2000, 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
2
<PAGE>
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 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>
Shares of Common
Stock Beneficially Percent
Director Term to Owned at of
Name Age(1) Position(s) Held Since (2) Expire June 13, 2000(3) Class
----------------------------------------------------------- ------------------------------------------------------
NOMINEES
<S> <C> <C> <C> <C> <C> <C>
E.B. Gevedon, Jr. 66 Director 1980 2003 31,087(4) 2.63%
Robert A. Moyer, Jr. 54 Director 1993 2003 19,687 1.67
John W. Clark 58 Director 1995 2003 28,298 2.39
DIRECTORS REMAINING IN OFFICE
C. Cyrus Reynolds 73 Chairman of the Board 1960 2001 23,303(5) 1.97
David B. Barbour 52 President, Chief Executive 1995 2001 73,628(6) 6.08
Officer and Director
Jeffrey P. Lopez, M.D. 41 Director 1996 2001 2,750 0.23
Robert B. Keifer, Jr. 63 Director 1991 2002 17,087 1.45
David A. Lang 56 Director 1991 2002 17,087 1.45
Robert L. Bayes 56 Executive Vice President 1996 2002 8,564(7) 1.56
and Director
A. Bruce Addington 46 Director 1998 2002 3,850 0.33
-------------------------
</TABLE>
(1) At March 31, 2000.
(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 10,580, 1,290, and 1,798
shares awarded as restricted stock under the RRP, which have vested or
will vest within 60 days of June 13, 2000, to Mr. Barbour, Mr. Bayes
and each of Messrs. Gevedon, Moyer, Clark, Reynolds, Keifer and Lang,
respectively, and 33,700, 11,350, 2,250, 750 and 5,289 shares subject
to options which are currently exercisable or will become exercisable
within 60 days of June 13, 2000, 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 10,000 shares held by Mr. Gevedon's spouse.
(5) Includes 6,216 shares held by Mr. Reynolds' spouse.
(6) Includes 9,009 shares allocated to Mr. Barbour's account under the
ESOP.
(7) Includes 1,360 shares held by Mr. Bayes' spouse and 872 shares
allocated to Mr. Bayes' account under the ESOP.
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.
Everett B. Gevedon, Jr. Mr. Gevedon has served as real estate
consultant to corporations and individuals throughout the eastern United States
for the past 28 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 Alltech Technologies, LLC, an Ashland, Kentucky-based multi-faceted
communications and technology company. Mr. Moyer has held this position since
January 2000. Prior to joining Alltech, Mr. Moyer served as Chairman and Chief
Executive Officer of RAM Technologies, Inc., an Ashland, Kentucky-based
multi-faceted communications and technology company which he founded 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
Airway, an airplane leasing company, since 1990; and John W. Clark Enterprises,
a real estate development and holding company, since 1987.
3
<PAGE>
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 also is a two-term past-President, and is a member
of the Board of Directors of King's Daughters' Medical Center in Ashland,
Kentucky.
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 previously served as President of the Board of Directors of Community
Hospice, Inc. and as a director of several area education projects.
David A. Lang. Mr. Lang is a retired executive of American Electric
Power, where he was employed from 1965 to 2000. During his tenure with American
Electric Power, Mr. Lang held a variety of positions including Executive
Assistant - Operations, Kentucky Region Director, and Manager of National
Accounts. 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.
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 and President 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. In addition, Mr.
Addington is Chairman of Enviro Power, a start-up power generating entity
company specializing in the use of state of the art environmentally friendly
power generation technology.
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 12 meetings during the
fiscal year ended March 31, 2000. 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 did not meet during fiscal 2000.
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 three times during fiscal
2000.
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 four meetings during fiscal
2000.
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 2000 as its
function was performed by the entire Board of Directors.
While the Board of Directors will consider nominees recommended by
stockholders, it has not actively solicited such nominations.
Pursuant to the Company's bylaws, nominations for election as directors
by stockholders must be made in writing and delivered to the Secretary of the
Company at least 70 days prior to the annual meeting date. If, however, the date
of the meeting is first publicly disclosed less than 80 days prior to the date
of the meeting, nominations must be received by the Company not later than the
close of business on the tenth day following the earlier of the day on which
notice of the date of the meeting is mailed to stockholders or the day on which
public disclosure of the date of the meeting is first made. 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 April 19, 1999, each non-employee director of the
Company was granted a ten-year option to purchase 750 shares of Common Stock at
an exercise price of $14.988 per share. The options vested immediately upon
grant.
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,
and by Paintsville Bank for services rendered by Robert L. Bayes, the Company's
Executive Vice President and Paintsville Bank's President and Chief Executive
Officer. No other executive officer of the Company earned a salary and bonus in
excess of $100,000 during fiscal 2000.
<TABLE>
SUMMARY COMPENSATION TABLE
================================================================================================================================
Long-Term Compensation
------------------------------
Annual Compensation Awards Payouts
--------------------------------- ----------- ---------
Other Annual Restricted Options/ LTIP
Fiscal Salary Bonus Compensation Stock SARs Payouts All Other
Name and Principal Position Year ($) ($) ($)(1) Award($)(2) (#) ($) Compensation($)
--------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
David B. Barbour, President and 2000 $106,000 $17,500 --- --- --- --- $35,940(4)
Chief Executive Officer 1999 106,000 --- --- --- 1,250 --- 36,575(4)
1998 98,000 17,981 --- --- --- --- 78,692(4)
2000 $98,700 12,000 --- --- --- --- $7,011(5)
1999 98,700 --- --- --- 3,250 --- 9,674(5)
1998 98,700 --- --- $6,075(3) --- --- 740(5)
=================================================================================================================================
</TABLE>
(1) Neither Mr. Barbour nor Mr. Bayes received any additional benefits or
perquisites which, in the aggregate, exceeded 10% of both his salary
and bonus or $50,000.
(2) Based on the $10.00 closing price per share of the Common Stock on the
Nasdaq Stock Market on March 31, 2000, the aggregate values of the
5,290 and1,160 shares of restricted stock held by Mr. Barbour and Mr.
Bayes, respectively, as of that date were $52,900 and $11,600,
respectively.
(3) Represents the dollar value of 450 shares of restricted stock awarded
under the RRP, based on the $13.50 closing price per share of the
Common Stock on the Nasdaq Stock Market on October 12, 1998, the date
of grant.
(4) Includes, for 2000, 1999, and 1998, respectively, the following
amounts: country club membership fees of $2,400, $2,280, and $0 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 $10,879, $10,526, and $10,166; Classic Bank's
contribution to Mr. Barbour's account under the ESOP of 534, 703, and
2,885 shares of Common Stock based upon closing prices per share of the
Common Stock of $10.000, $14.375 and $20.000 on March 31, 2000, 1999,
and 1998; Classic Bank's contribution to Mr. Barbour's 401(k) Plan
account of $3,654, $0 and $0; life insurance premiums paid by Classic
Bank on behalf of Mr. Barbour of $5,647, $5,647 and $6,026; and fees
received by Mr. Barbour for his service as a director of Paintsville
Bank of $8,020, $8,016 and $4,800.
(5) Includes, for 2000, 1999 and 1998, respectively, the following amounts:
Classic Bank's contributions to Mr. Bayes' 401(k) Plan account of
$2,961, $2,961 and $740; and Classic Bank's contributions to Mr. Bayes'
account under the ESOP of 405, 467 and 0 shares of Common Stock based
upon closing prices per share of the Common Stock of $10.000, $14.375
and $20.000 on March 31, 2000, 1999 and 1998.
6
<PAGE>
The following table provides information as to the number and value of
the stock options held by Mr. Barbour and Mr. Bayes as of March 31, 2000.
Neither Mr. Barbour nor Mr. Bayes exercised any stock options during fiscal
2000.
<TABLE>
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND FY-END
OPTION VALUES
======================================================================================================================
Number of
Securities Value of
Underlying Unexercised
Unexercised In-the-Money
Options at Options at
FY-End (#) FY-End ($) (1)
Shares _____________________________ ________________________________
Name Acquired Value
on Exercise Realized Exercisable Unexercisable Exercisable Unexercisable
(#) ($) (#) (#) ($) ($)
---------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
David B. Barbour --- $--- 21,087 13,226 $--- $---
Robert L. Bayes --- $--- 7,600 6,400 $--- $---
======================= ========================================== ===================================================
</TABLE>
(1) None of the options were in-the-money at March 31, 2000.
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. If the employment of Mr. Barbour had been terminated as of March
31, 2000 under circumstances entitling him to severance pay as described above,
he would have been entitled to receive a lump sum cash payment of approximately
$432,028. 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
7
<PAGE>
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."
Change in Control Severance Agreement
Paintsville Bank has entered into a change in control severance
agreement with Mr. Bayes. The agreement has a one-year term, with automatic
extension for an additional one-year term on each anniversary of its effective
date upon approval by the Board of Directors of Paintsville Bank. The agreement
provides that if Mr. Bayes' employment is involuntarily terminated, other than
for cause, following a change in control of the Company or Paintsville Bank, he
will be entitled to receive (i) a lump sum cash payment equal to 200% of his
five-year average "base amount" of compensation and (ii) for a period of 12
months thereafter substantially the same life and health insurance benefits as
he is receiving as of the date of termination.
If the employment of Mr. Bayes had been terminated as of March 31,
2000 following a change in control and under circumstances entitling him to
severance pay as described above, he would have been entitled to receive a lump
sum cash payment of approximately $221,132.
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 approximately $5.9 million at March 31, 2000, which was
approximately 31.1% of the Company's stockholders' equity at that date. At March
31, 2000, 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, 2000.
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, 2000, all Section
16(a) filing requirements applicable to its officers, directors and greater than
10% beneficial owners were met.
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, 2001. 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, 2001.
STOCKHOLDER PROPOSALS
Stockholder proposals intended to be presented at the Company's next
annual meeting must be received by its Secretary at the executive office of the
Company, located at 344 Seventeenth Street, Ashland, Kentucky 41101, no later
than March 2, 2001to be eligible for inclusion in the Company's proxy statement
and form of proxy relating to the next annual meeting. Any such proposal will be
subject to the requirements of the proxy rules adopted under the Securities
Exchange Act of 1934, as amended, 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.
To be considered for presentation at the next annual meeting, but not
for inclusion in the Company's proxy statement and form of proxy for that
meeting, proposals must be received by the Company no later than May 16, 2001.
If, however, the date of the next annual meeting is before July 5, 2001 or after
September 23, 2001, proposals must instead be received by the Company by the
later of the 70th day before the date of the next annual meeting or the tenth
day following the day on which public disclosure (by press release, in a
publicly available filing with the SEC, through a notice mailed to stockholders,
or otherwise) of the date of the next annual meeting is first made. If a
stockholder proposal that is received by the Company after the applicable
deadline for presentation at the next annual meeting is raised at the next
annual meeting, the holders of the proxies for that meeting will have the
discretion to vote on the proposal in accordance with their best judgment and
discretion, without any discussion of the proposal in the Company's proxy
statement for the next annual meeting.
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. If,
however, 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 30, 2000
9
<PAGE>
REVOCABLE PROXY REVOCABLE PROXY
CLASSIC BANCSHARES, INC.
ANNUAL MEETING OF STOCKHOLDERS
July 25, 2000
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 AEP Kentucky headquarters
building, located at the corner of 17th Street and Central Avenue, Ashland,
Kentucky 41101, on July 25, 2000 at 4:00 p.m., local time, and at any and all
adjournments and postponements thereof.
I. The election as directors of all nominees listed at right (except as marked
to the contrary)
o FOR o VOTE WITHHELD
INSTRUCTION: To withhold your vote from any individual nominee, strike a
line through the name(s) of the nominee(s) in the list at right.
E.B. GEVEDON, JR. ROBERT A. MOYER, JR. JOHN W. CLARK
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,
2001.
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 ON THE REVERSE SIDE 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.
(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 and
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, 2000.
Dated: , 2000
---------------- ---------------------------------------------
Signature of Stockholder
---------------------------------------------
Signature of Stockholder
Please sign exactly as your name(s) appear(s) above.
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
