<PAGE>
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934
Filed by the registrant [X]
Filed by a party other than the registrant [_]
Check the appropriate box:
[_] Preliminary proxy statement
[_] Confidential, for use of the Commission Only (as permitted by Rule 14a-
6(e)(2))
[X] Definitive proxy statement
[_] Definitive additional materials
[_] Soliciting material pursuant to Rule 14a-12
Lexington B & L Financial Corp.
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(Name of Registrant as Specified in Its Charter)
Lexington B & L Financial Corp.
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(Name of Person(s) Filing Proxy Statement)
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:
N/A
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(2) Aggregate number of securities to which transactions applies:
N/A
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(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11:
N/A
--------------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
N/A
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(5) Total Fee paid:
N/A
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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:
N/A
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(2) Form, schedule or registration statement no.:
N/A
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(3) Filing party:
N/A
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(4) Date filed:
N/A
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<PAGE>
December 5, 2000
Dear Stockholder:
You are cordially invited to attend the annual meeting of stockholders
of Lexington B & L Financial Corp. The meeting will be held at the office of
B & L Bank, 919 Franklin Avenue, Lexington, Missouri, on Tuesday, January 9,
2001 at 10:00 a.m., local time.
The notice of annual meeting and proxy statement appearing on the
following pages describe the formal business to be transacted at the meeting.
During the meeting, we will also report on the operations of the Company.
Directors and officers of the Company, as well as a representative of Moore,
Horton & Carlson, P.C., the Company's independent auditors, will be present to
respond to appropriate questions of stockholders.
It is important that your shares are represented at this meeting,
whether or not you attend the meeting in person and regardless of the number of
shares you own. To make sure your shares are represented, we urge you to
complete and mail the enclosed proxy card. If you attend the meeting, you may
vote in person even if you have previously mailed a proxy card.
We look forward to seeing you at the meeting.
Sincerely,
/s/ Erwin Oetting, Jr.
Erwin Oetting, Jr.
President and Chief Executive Officer
<PAGE>
LEXINGTON B & L FINANCIAL CORP.
919 Franklin Avenue
P.O. Box 190
Lexington, Missouri 64067
(660) 259-2247
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NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
--------------------------------------------------------------------------------
The annual meeting of stockholders of Lexington B & L Financial Corp.
("Company") will be held at the office of B & L Bank, 919 Franklin Avenue,
Lexington, Missouri, on Tuesday, January 9, 2001, at 10:00 a.m., local time, for
the following purposes:
1. To elect one director of the Company;
2. To ratify the appointment of Moore, Horton & Carlson, P.C. as
independent auditors for the Company for the fiscal year ending
September 30, 2001; and
3. To transact any other business that may properly come before the
meeting.
NOTE: The Board of Directors is not aware of any other business to come
before the meeting.
Stockholders of record at the close of business on November 17, 2000
are entitled to receive notice of the meeting and to vote at the meeting and any
adjournment or postponement of the meeting.
Please complete and sign the enclosed form of proxy, which is solicited
by the Board of Directors, and mail it promptly in the enclosed envelope. The
proxy will not be used if you attend the meeting and vote in person.
BY ORDER OF THE BOARD OF DIRECTORS
/s/ E. Steva Vialle
E. Steva Vialle
Secretary
Lexington, Missouri
December 5, 2000
IMPORTANT: The prompt return of proxies will save the Company the expense of
further requests for proxies in order to ensure a quorum. A self-addressed
envelope is enclosed for your convenience. No postage is required if mailed in
the United States.
<PAGE>
LEXINGTON B & L FINANCIAL CORP.
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PROXY STATEMENT
-----------------------------------------------------------------
This proxy statement is furnished in connection with the solicitation
of proxies by the Board of Directors of Lexington B & L Financial Corp.
("Lexington" or the "Company") to be used at the annual meeting of stockholders
of the Company. The Company is the holding company for B & L Bank and Lafayette
County Bank. The annual meeting will be held at the office of B & L Bank, 919
Franklin Avenue, Lexington, Missouri, on Tuesday, January 9, 2001, at 10:00
a.m., local time. This proxy statement and the enclosed proxy card are being
first mailed to stockholders on or about December 5, 2000.
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VOTING AND PROXY PROCEDURE
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Who Can Vote at the Meeting
You are entitled to vote your Lexington common stock if the records of
the Company showed that you held your shares as of the close of business on
November 17, 2000. As of the close of business on that date, a total of 784,173
shares of Lexington common stock were outstanding and entitled to vote. Each
share of common stock has one vote. As provided in the Company's Articles of
Incorporation, record holders of the Company's common stock who beneficially
own, either directly or indirectly, in excess of 10% of the Company's
outstanding shares are not entitled to any vote in respect of the shares held in
excess of the 10% limit.
Attending the Meeting
If you are a beneficial owner of Lexington common stock held by a
broker, bank or other nominee (i.e., in "street name"), you will need proof of
ownership to be admitted to the meeting. A recent brokerage statement or letter
from a bank or broker are examples of proof of ownership. If you want to vote
your shares of Lexington common stock held in street name in person at the
meeting, you will have to get a written proxy in your name from the broker, bank
or other nominee who holds your shares.
Vote Required
The annual meeting will be held if a majority of the outstanding shares
of common stock entitled to vote is represented at the meeting. If you return
valid proxy instructions or attend the meeting in person, your shares will be
counted for purposes of determining whether there is a quorum, even if you
abstain from voting. Broker non-votes also will be counted for purposes of
determining the existence of a quorum. A broker non-vote occurs when a broker,
bank or other nominee holding shares for a beneficial owner does not vote on a
particular proposal because the nominee does not have discretionary voting power
with respect to that item and has not received voting instructions from the
beneficial owner.
In voting on the election of directors, you may vote in favor of all
nominees, withhold votes as to all nominees, or withhold votes as to specific
nominees. There is no cumulative voting for the election of directors. Directors
must be elected by a plurality of the votes cast at the annual meeting. This
means that
<PAGE>
the nominees receiving the greatest number of votes will be elected. Votes that
are withheld and broker non-votes will have no effect on the outcome of the
election. In voting on the approval of the ratification of the appointment of
Moore, Horton & Carlson, P.C. as independent auditors, you may vote in favor of
the proposal, vote against the proposal or abstain from voting. This matter will
be decided by the affirmative vote of a majority of the shares present in person
or by proxy at the annual meeting. On this matter, abstentions will have the
same effect as a negative vote and broker non-votes will have no effect on the
voting.
Voting by Proxy
This proxy statement is being sent to you by the Board of Directors of
the Company for the purpose of requesting that you allow your shares of
Lexington common stock to be represented at the annual meeting by the persons
named in the enclosed proxy card. All shares of Lexington common stock
represented at the meeting by properly executed proxies will be voted in
accordance with the instructions indicated on the proxy card. If you sign and
return a proxy card without giving voting instructions, your shares will be
voted as recommended by the Company's Board of Directors. The Board of Directors
recommends a vote "FOR" each of the nominees for director and "FOR" ratification
of Moore, Horton & Carlson, P.C. as independent auditors.
If any matters not described in this proxy statement are properly
presented at the annual meeting, the persons named in the proxy card will use
their own judgment to determine how to vote your shares. This includes a motion
to adjourn or postpone the meeting in order to solicit additional proxies. If
the annual meeting is postponed or adjourned, your Lexington common stock may be
voted by the persons named in the proxy card on the new meeting date as well,
unless you have revoked your proxy. The Company does not know of any other
matters to be presented at the meeting.
You may revoke your proxy at any time before the vote is taken at the
meeting. To revoke your proxy you must either advise the Secretary of the
Company in writing before your common stock has been voted at the annual
meeting, deliver a later dated proxy, or attend the meeting and vote your shares
in person. Attendance at the annual meeting will not in itself constitute
revocation of your proxy.
If your Lexington common stock is held in street name, you will receive
instructions from your broker, bank or other nominee that you must follow in
order to have your shares voted. Your broker or bank may allow you to deliver
your voting instructions via the telephone or the Internet. Please see the
voting instruction form from your broker or bank that accompanies this proxy
statement.
Participants in B & L Bank's ESOP
If you participate in the B & L Bank Employee Stock Ownership Plan, the
proxy card represents a voting instruction to the trustees. Each participant in
the B & L Bank ESOP may direct the trustees as to the manner in which shares of
Lexington common stock allocated to the participant's plan account are to be
voted. Unallocated shares of common stock held by the B & L Bank ESOP and
allocated shares for which no voting instructions are received will be voted by
the trustees in the same proportion as shares for which the trustees have
received voting instructions.
2
<PAGE>
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STOCK OWNERSHIP
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The following table provides information as of November 1, 2000 with
respect to persons known to the Company to be the beneficial owners of more than
5% of the Company's outstanding common stock. A person may be considered to
beneficially own any shares of common stock over which he or she has, directly
or indirectly, sole or shared voting or investing power.
<TABLE>
<CAPTION>
Percent of
Number of Common Stock
Name and Address Shares Owned Outstanding
---------------------- ---------------------------- -------------------
<S> <C> <C>
B & L Bank 101,200(1) 12.9%
Employee Stock Ownership Plan
919 Franklin Avenue
Lexington, Missouri 64067
Jeffrey L. Gendell 55,000(2) 7.0
Tontine Financial Partners, L.P.
Tontine Management, L.L.C.
200 Park Avenue, Suite 3900
New York, New York 10166
Terry Maltese 77,500(3) 9.9
Sandler O'Neill Asset Management LLC
SOAM Holdings, LLC
Malta Partners, L.P.
Malta Partners II, L.P.
Malta Hedge Fund, L.P.
Malta Hedge Fund II, L.P.
712 Fifth Avenue. 22nd Floor
New York, New York 10019
Erwin Oetting, Jr. 52,786(4) 6.6
919 Franklin Avenue
Lexington, Missouri 64067
E. Steva Vialle 44,576(5) 5.6
919 Franklin Avenue
Lexington, Missouri 64067
</TABLE>
------------------------------
(1) Includes 44,970 shares that have not been allocated to participants'
accounts and 56,230 shares that have been allocated to participants'
accounts. Under the terms of the B & L Bank ESOP, the trustees will vote
unallocated shares and allocated shares for which no voting instructions
are received in the same proportion as shares for which the trustees have
received voting instructions from participants. The trustees of the B & L
Bank ESOP are Erwin Oetting and E. Steva Vialle, both of whom are directors
and executive officers of the Company.
(2) Information concerning the shares owned by Mr. Gendell and related entities
was provided by Tontine Financial Partners, L.P.
(3) Information concerning the shares owned by Mr. Maltese and related entities
was obtained from an amended Schedule 13D dated February 26, 1998.
According to this filing, Mr. Maltese has shared voting and dispositive
power with respect to 77,500 shares, Sandler O'Neill Asset Management LLC
has shared voting and dispositive power with respect to 77,500 shares, SOAM
Holdings, LLC has shared voting and dispositive power with respect to
77,500 shares, Malta Partners, L.P. has shared voting and dispositive power
with respect to 35,660 shares, Malta Partners II, L.P. has shared voting
and dispositive power with respect to 12,240 shares, Malta Hedge Fund, L.P.
has shared voting and dispositive power with respect to 20,340 shares, and
Malta Hedge Fund II, L.P. has shared voting and dispositive power with
respect to 9,260 shares.
(4) Includes 9,956 shares allocated to Mr. Oetting under the B & L Bank ESOP as
to which Mr. Oetting has voting power but not investment power. Also
includes 5,060 shares of unvested restricted stock awarded under the
Company's 1996 Management Recognition and Development Plan as to which Mr.
Oetting has voting power but not investment power and 15,180 shares that
may be acquired within 60 days of November 1, 2000 through the exercise of
stock options.
(5) Includes 7,342 shares allocated to Mr. Vialle under the B & L Bank ESOP as
to which Mr. Vialle has voting power but not investment power. Also
includes 5,464 shares of unvested restricted stock awarded under the
Company's 1996 Management Recognition and Development Plan
3
<PAGE>
as to which Mr. Vialle has voting power but not investment power and 10,626
shares that may be acquired within 60 days of November 1, 2000 through the
exercise of stock options.
The following table provides information about the shares of Lexington
common stock that may be considered to be owned by each director or nominee for
director of the Company and by all directors and executive officers of the
Company as a group as of November 1, 2000. Unless otherwise indicated, each of
the named individuals has sole voting power and sole investment power with
respect to the shares shown.
<TABLE>
<CAPTION>
Number of Number of Shares
Shares Owned That May Be Acquired Percent of
(Excluding Within 60 Days By Common Stock
Name Options)(1)(2) Exercising Options Outstanding(6)
------------------------------------ ---------------------- ------------------------ ------------------
<S> <C> <C> <C>
Erwin Oetting, Jr., 37,606 15,180 6.6%
Steve Oliaro 13,230(3) 3,795 2.2
Norman Vialle 10,030(4) 3,795 1.8
Charles R. Wilcoxon 9,530 3,795 1.7
E. Steva Vialle 33,950(5) 10,626 5.6
All Executive Officers and 163,966 49,335 25.6
Directors as a Group (9 persons)
</TABLE>
----------------------------
(1) Shares allocated under the B & L Bank ESOP, as to which the holder has
voting power but not investment power, are included as follows: Mr.
Oetting, 9,956 shares; Mr. Steva Vialle, 7,342 shares; all executive
officers and directors as a group, 29,070 shares.
(2) Shares of unvested restricted stock awarded under Lexington's 1996
Management Recognition and Development Plan as to which the holders
have voting power but not investment power are included as follows: Mr.
Oetting, 7,590 shares; Messrs. Oliaro, Norman Vialle and Wilcoxon,
1,518 shares each; Mr. E. Steva Vialle, 5,464 shares; and all executive
officers and directors as a group, 24,288 shares.
(3) Includes 3,000 shares owned by a company controlled by Mr. Oliaro and
800 shares owned by Mr. Oliaro's spouse.
(4) Includes 8,512 shares owned by trusts for which Mr. Vialle serves as
trustee.
(5) Includes 223 shares owned by Mr. Vialle's spouse and 10,000 shares
owned by Mr. Vialle's mother over which Mr. Vialle has voting and
investment power.
(6) Percentages with respect to each person or group of persons have been
calculated on the basis of 784,173 shares of Lexington common stock,
which is the number of shares of the Company's common stock outstanding
and entitled to vote as of November 1, 2000, plus the number of shares
that may be acquired within 60 days of that date through the exercise
of stock options.
4
<PAGE>
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Proposal 1 -- Election Of Directors
--------------------------------------------------------------------------------
The Company's Board of Directors consists of five members. Three of
them are independent directors and two are members of management. The Board is
divided into three classes with three-year staggered terms, with approximately
one-third of the directors elected each year. One director will be elected at
the annual meeting to serve for a three-year term, or until his successor has
been elected and qualified. The nominee is E. Steva Vialle, who is currently a
director of the Company and B & L Bank.
It is intended that the proxies solicited by the Board of Directors
will be voted for the election of the nominee named above. If the nominee is
unable to serve, the persons named in the proxy card would vote your shares to
approve the election of any substitute proposed by the Board of Directors.
Alternatively, the Board of Directors may adopt a resolution to reduce the size
of the Board. At this time, the Board of Directors knows of no reason why the
nominee might be unable to serve.
The Board of Directors recommends a vote "FOR" the election of Mr.
Vialle.
Information regarding the nominee for election at the annual meeting,
as well as information regarding the continuing directors whose terms expire in
2001 and 2002, is provided below. Unless otherwise stated, each individual has
held his current occupation for the last five years. The age indicated in each
individual's biography is as of September 30, 2000. The indicated period for
service as a director includes service as a director of B & L Bank. There are no
family relationships among the directors and executive officers except that
Norman Vialle is the uncle of E. Steva Vialle.
Nominee for Election as Directors
The director standing for election is:
E. Steva Vialle. Mr. Vialle is Executive Vice President, Chief
Operating Officer and Secretary of the Company and B & L Bank. Mr. Vialle is 49
years old and has been a director since 1992.
Directors Continuing in Office
The following directors have terms ending in 2002:
Erwin Oetting, Jr. Mr. Oetting is the President and Chief Executive
Officer of the Company and President, Chairman of the Board and Chief Executive
Officer of B & L Bank. Mr. Oetting is 60 years old and has been a director since
1966.
Steve Oliaro. Mr. Oliaro is the owner of Baker Memorials, Inc. and sole
proprietor of Custom Grafix Design, both in Lexington, Missouri. Mr. Oliaro is
55 years old and has been a director since 1989.
The following directors have terms ending in 2003:
Norman Vialle. Mr. Vialle is the retired owner and operator of Maid-
Rite Drive-In, Lexington, Missouri. Mr. Vialle is 74 years old and has been a
director since 1964.
5
<PAGE>
Charles R. Wilcoxon. Mr. Wilcoxon is a retired businessman. Mr.
Wilcoxon is 88 years old and has been a director since 1962.
Meetings and Committees of the Board of Directors
The Board of Directors of the Company conducts its business through
meetings of the Board and its committees. During the fiscal year ended September
30, 2000, the Board of Directors of the Company held seven meetings. No director
of the Company attended fewer than 75% of the total meetings of the Board and
committees on which such Board member served during this period.
The entire Board of Directors functions as an audit committee to
receive and review reports prepared by the Company's outside auditor and as a
compensation committee to review and establish annual employee salary increases
and bonuses. During the fiscal year ended September 30, 2000, the Board of
Directors met one time in its capacity as an audit committee and one time in its
capacity as a compensation committee.
Directors' Compensation
All of the Directors of the Company currently serve on the Board of
Directors of B & L Bank. Directors of B & L Bank received a fee of $750 per
month during the year ended September 30, 2000. No additional compensation is
paid for service on the Board of Directors of the Company.
B & L Bank has adopted a retirement plan to help ensure the retention
of directors of experience and ability in key positions of responsibility by
providing such directors with a retirement benefit upon their retirement from
the Board of Directors. The plan provides that a director who retires from the
Board with specified years of service will be designated a director emeritus and
continue to receive the compensation payable to members of the Board for a
period of five years following retirement. The same benefit would be payable to
the director (or his designated beneficiary) in the event of his death or
disability while serving on the Board if the director was otherwise eligible to
receive the normal retirement benefit. In the event of a change in control of B
& L Bank (as defined in the plan), the plan provides that all directors would be
deemed retired and the then present value of the normal retirement benefit would
be payable in a lump sum to each director on the effective date of the change in
control.
During the year ended September 30, 1997, each non-employee director
received a grant of 2,530 shares of restricted stock at no cost to the director
under the Company's 1996 Management Recognition and Development Plan. Each
non-employee director also received options to acquire 6,325 shares of common
stock at an exercise price of $15.125 under the Company's 1996 Stock Option
Plan. Both the restricted stock and the stock options vest ratably over a
five-year period.
6
<PAGE>
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EXECUTIVE COMPENSATION
--------------------------------------------------------------------------------
Summary Compensation Table
The following information is furnished for Mr. Oetting. No other
executive officer of the Company or its subsidiaries received salary and bonus
of $100,000 or more during the year ended September 30, 2000.
<TABLE>
<CAPTION>
Long-Term Compensation
--------------------------
Annual Compensation Awards
------------------------------ --------------------------
Other Securities
Annual Restricted Underlying All Other
Compensation Stock Awards Options/SARs Compensation
Name and Principal Positions Year Salary($) Bonus($) ($)(1) ($) (#) ($)
---------------------------- ---- -------- ------- ---------- ------------- ---------- ------------
<S> <C> <C> <C> <C> <C> <C> <C>
Erwin Oetting, Jr., 2000 $80,875 $8,015 $ 9,806(2) -- -- 21,955(3)
President and Chief 1999 79,560 7,793 10,785 -- -- 25,379
Executive Officer 1998 76,916 7,490 9,796 -- -- 33,411
</TABLE>
------------------------
(1) Does not include certain additional benefits, the aggregate amounts of
which do not exceed 10% of total annual salary and bonus.
(2) Consists of director's fees of $9,000 and a $806 salary received from B & L
Bank's service corporation.
(3) Represents employer contribution to the B & L Bank ESOP.
Option Value at Fiscal Year End
The following table provides information regarding unexercised stock
options for Mr. Oetting as of September 30, 2000. Mr. Oetting did not exercise
any stock options during the year ended September 30, 2000.
<TABLE>
<CAPTION>
Number of Securities
Underlying Unexercised Value of Unexercised
Options at Fiscal In-the-Money Options at
Name Year-End (#) Fiscal Year-End ($) (1)
-------------------- ----------------------------- ----------------------------
Exercisable Unexercisable Exercisable Unexercisable
------------ -------------- ----------- --------------
<S> <C> <C> <C> <C>
Erwin Oetting, Jr. 15,180 10,120 -- --
</TABLE>
------------------------
(1) Value of unexercised in-the-money stock options equals the market value of
shares covered by in-the-money options on September 30, 2000 less the
option exercise price. Options are in-the-money if the market value of
shares covered by the options is greater than the exercise price.
Employment Agreement
The Company and B & L Bank have entered into a three-year employment
agreement with Mr. Oetting. Under the agreement, the current salary level for
Mr. Oetting is $81,894, which amount is paid by B & L Bank and may be increased
at the discretion of the Board of Directors or an authorized committee of the
Board. On each anniversary of the commencement date of the agreement, the term
of the agreement may be extended for an additional year. The agreement is
terminable by the Company and B & L Bank at any time or upon the occurrence of
certain events specified by federal regulations.
7
<PAGE>
The employment agreement provides for a severance payment and other
benefits in the event of involuntary termination of employment in connection
with any change in control of the Company or B & L Bank. A severance payment
also will be provided on a similar basis in connection with a voluntary
termination of employment where, subsequent to a change in control, Mr. Oetting
is assigned duties inconsistent with his positions, duties, responsibilities and
status immediately prior to such change in control.
The severance payment under the employment agreement will equal 2.99
times Mr. Oetting's average annual compensation during the five-year period
preceding the change in control. Such amount will be paid in a lump sum within
10 business days following the termination of employment. Section 280G of the
Internal Revenue Code states that severance payments that equal or exceed three
times the base compensation of the individual are deemed to be "excess parachute
payments" if they are contingent upon a change in control. Individuals receiving
excess parachute payments are subject to a 20% excise tax on the amount of such
payments in excess of base compensation, and the Company would not be entitled
to deduct such amount.
The employment agreement restricts Mr. Oetting's right to compete
against the Company and B & L Bank for a period of one year from the date of
termination of the agreement if Mr. Oetting voluntarily terminates employment,
except in the event of a change in control.
Salary Continuation Agreement
B & L Bank has entered into a salary continuation agreement with Mr.
Oetting to ensure his continued service with B & L Bank through retirement and
to provide him with additional financial security at retirement. The agreement
provides that if Mr. Oetting remains employed by B & L Bank through the
retirement age specified in the agreement, B & L Bank will provide him with
monthly benefits of $2,917 for a period of 180 months following retirement. The
agreement provides for retirement at age 60 for Mr. Oetting. Under the
agreement, Mr. Oetting will vest ratably in his salary continuation benefit over
the number of years remaining to the specified retirement age. However, in the
event of a change in control of the Company or B & L Bank (as defined in the
agreements), Mr. Oetting would be fully vested as of the effective date of the
change in control. In the event that Mr. Oetting terminates his employment with
the Company or B & L Bank prior to the specified retirement age, the retirement
benefit will be reduced to the amount of the vested benefit on the date of
termination. In the event of Mr. Oetting's death while employed by the Company
or B & L Bank, his designated beneficiary will receive the same benefit as if
Mr. Oetting had retired at the specified retirement age.
Defined Benefit Plan
B & L Bank is a participant in the Financial Institution Retirement
Fund ("FIRF"), a multiple employer, non-contributory defined benefit retirement
plan. The FIRF plan covers all employees who have completed one year of service
and have attained the age of 21 years and provides for monthly retirement
benefits determined based on the employee's base salary and years of service
after June 1, 1988. The normal retirement age is 65 and the early retirement age
is before age 65, but generally after age 55. Normal retirement benefits are
equal to 2.0% multiplied by the years of service to B & L Bank and the
employee's average salary for the five highest consecutive years preceding
retirement. Benefits under the plan are not subject to offset for social
security benefits. If an employee elects early retirement, but defers the
receipt of benefits until age 65, the formula for computation of early
retirement benefits is the same as if the employee had retired at the normal
retirement age. However, if the employee elects early retirement and receives
benefits prior to age 65, benefits are reduced by applying an early retirement
factor based on the number of years the early retirement date precedes age 65.
If a participant terminates employment prior to
8
<PAGE>
the normal retirement date or early retirement date as a result of disability,
the participant would receive the vested percentage of benefits at the
participant's normal retirement date. Separate actuarial valuations are not made
for individual members of the plan. As of September 30, 2000, Mr. Oetting had
12.5 years of credited service under the plan.
The following table illustrates annual pension benefits payable at
normal retirement age, based on various levels of compensation and years of
service.
<TABLE>
<CAPTION>
Years of Benefit Service
Highest 5 Year Final ---------------------------------------------------------------
Average Earnings 5 10 15 25 35
----------------------------------------- ---------- --------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C>
$ 10,000 1,000 2,000 3,000 5,000 7,000
20,000 2,000 4,000 6,000 10,000 14,000
30,000 3,000 6,000 9,000 15,000 21,000
40,000 4,000 8,000 12,000 20,000 28,000
60,000 6,000 12,000 18,000 30,000 42,000
80,000 8,000 16,000 24,000 40,000 56,000
100,000 10,000 20,000 30,000 50,000 70,000
120,000 12,000 24,000 36,000 60,000 84,000
130,000 13,000 26,000 39,000 65,000 91,000
</TABLE>
--------------------------------------------------------------------------------
AUDIT COMMITTEE REPORT
--------------------------------------------------------------------------------
The Board of Directors, in its function as the Audit Committee, is
responsible for providing independent, objective oversight of the Company's
independent auditors, accounting functions and internal controls. The Board of
Directors is comprised of five persons, a majority of whom are independent under
the National Association of Securities Dealers' listing standards. The Audit
Committee acts under a written charter adopted by the Board of Directors, a copy
of which is attached to this proxy statement as Appendix A.
The Audit Committee reviewed and discussed the annual financial
statements with management and the independent accountants. As part of this
process, management represented to the Audit Committee that the financial
statements were prepared in accordance with generally accepted accounting
principles. The Audit Committee also received and reviewed written disclosures
and a letter from the accountants concerning their independence as required
under applicable standards for auditors of public companies. The Audit Committee
discussed with the accountants the contents of such materials, the accountant's
independence and the additional matters required under Statement on Auditing
Standards No. 61. Based on such review and discussions, the Audit Committee
recommended that the Board of Directors include the audited consolidated
financial statements in the Company's Annual Report on Form 10-KSB for the year
ended September 30, 2000 for filing with the Securities and Exchange Commission.
Erwin Oetting, Jr.
Steve Oliaro
Norman Vialle
Charles R. Wilcoxon
E. Steva Vialle
9
<PAGE>
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COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT
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Section 16(a) of the Securities Exchange Act of 1934 requires
Lexington's executive officers and directors, and persons who own more than 10%
of any registered class of the Company's equity securities, to file reports of
ownership and changes in ownership with the SEC. Executive officers, directors
and greater than 10% stockholders are required by regulation to furnish the
Company with copies of all Section 16(a) reports they file.
Based solely on its review of the copies of the reports it has received
and written representations provided to the Company from the individuals
required to file the reports, the Company believes that each of the Company's
executive officers and directors has complied with applicable reporting
requirements for transactions in Lexington common stock during the fiscal year
ended September 30, 2000.
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TRANSACTIONS WITH MANAGEMENT
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Federal regulations require that all loans or extensions of credit to
executive officers and directors of insured financial institutions must be made
on substantially the same terms, including interest rates and collateral, as
those prevailing at the time for comparable transactions with other persons,
except for loans made pursuant to programs generally available to all employees,
and must not involve more than the normal risk of repayment or present other
unfavorable features. B & L Bank and Lafayette County Bank are therefore
prohibited from making any new loans or extensions of credit to executive
officers and directors at different rates or terms than those offered to the
general public, except for loans made pursuant to programs generally available
to all employees, and has adopted a policy to this effect. In addition, loans
made to a director or executive officer in an amount that, when aggregated with
the amount of all other loans to such person and his or her related interests,
are in excess of the greater of $25,000 or 5% of the institution's capital and
surplus (up to a maximum of $500,000) must be approved in advance by a majority
of the disinterested members of the Board of Directors.
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PROPOSAL 2 - RATIFICATION OF AUDITORS
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The Board of Directors has appointed Moore, Horton & Carlson, P.C. to
be its independent auditors for the 2001 fiscal year, subject to the
ratification by stockholders. A representative of Moore, Horton & Carlson is
expected to be present at the annual meeting to respond to appropriate questions
from stockholders and will have the opportunity to make a statement should he or
she desire to do so.
If the ratification of the appointment of the auditors is not approved
by a majority of the votes cast by stockholders at the annual meeting, other
independent public accountants will be considered by the Board of Directors.
The Board of Directors recommends that stockholders
vote "FOR" the ratification of the appointment of
independent auditors.
10
<PAGE>
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MISCELLANEOUS
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The Company will pay the cost of this proxy solicitation. 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 Lexington common stock. In addition to soliciting proxies
by mail, directors, officers and regular employees of the Company may solicit
proxies personally or by telephone. None of these persons will receive
additional compensation for these activities. The Company has also hired Regan &
Associates, New York, New York, to assist in soliciting proxies at a cost of
$2,500 plus expenses up to $1,250.
The Company's Annual Report to Stockholders has been mailed to all
persons who were stockholders as of the close of business on November 17, 2000.
Any stockholder who has not received a copy of the Annual Report may obtain a
copy by writing to the Secretary of the Company. The Annual Report is not to be
treated as part of the proxy solicitation material or as having been
incorporated herein by reference.
A copy of the Company's Form 10-KSB for the fiscal year ended September
30, 2000 as filed with the Securities and Exchange Commission, will be furnished
without charge to all persons who were stockholders as of the close of business
on November 17, 2000 upon written request to E. Steva Vialle, Corporate
Secretary, Lexington B & L Financial Corp., 919 Franklin Avenue, Lexington,
Missouri 64062. The Company's Form 10-KSB is also available through the SEC's
worldwide website on the Internet (http://www.sec.gov).
--------------------------------------------------------------------------------
STOCKHOLDER PROPOSALS
--------------------------------------------------------------------------------
Proposals that stockholders seek to have included in the proxy
statement for Lexington's next annual meeting must be received by the Company no
later than August 7, 2001. Any such proposals will be subject to the
requirements of the proxy rules adopted by the SEC.
The Company's Bylaws provide that in order for a stockholder to make
nominations for the election of directors or proposals for business to be
brought before the annual meeting, a stockholder must deliver notice of such
nominations and/or proposals to the Secretary not less than 60 nor more than 90
days prior to the date of the annual meeting; provided that if less than 70
days' notice of the annual meeting is given to stockholders, such notice must be
delivered not later than the close of the tenth day following the day on which
notice of the annual meeting was mailed to stockholders or public disclosure of
the meeting date was made. A copy of the Bylaws may be obtained from the
Company.
BY ORDER OF THE BOARD OF DIRECTORS
/s/ E. Steva Vialle
E. Steva Vialle
Secretary
Lexington, Missouri
December 5, 2000
11
<PAGE>
Appendix A
LEXINGTON B&L FINANCIAL CORP.
________________________________________
CHARTER - AUDIT COMMITTEE
Mission Statement
The committee's role is to assist the board of directors in overseeing all
material aspects of Lexington B&L Financial Corp.'s (the "Company") financial
reporting, internal control, and audit functions, including a particular focus
on the qualitative aspects of financial reporting to stockholders, on compliance
with significant applicable legal, ethical, and regulatory requirements and to
ensure the objectivity of the financial statements. The role also includes
maintenance of strong, positive working relationships with management, external
and internal auditors, counsel, and other committee advisors.
Organization
Committee Composition. The committee shall consist of at least two board
members, a majority of whom shall be independent of management and the Company.
Committee appointments, including selection of the committee chairperson, shall
be approved annually by the full board.
Meetings. The committee shall meet at least quarterly. Additional meetings
shall be scheduled as considered necessary by the committee or chairperson. A
quorum of the committee shall be declared when a majority of the appointed
members of the committee are in attendance.
External Resources. The committee shall be authorized to access internal
and external resources, as the committee requires, to carry out its
responsibilities.
Roles and Responsibilities
Communication with the Board of Directors and Management
. The chairperson and others on the committee shall, to the extent
appropriate, have contact throughout the year with senior management,
the board of directors, external auditors and legal counsel, as
applicable, to strengthen the committee's knowledge of relevant current
and prospective business issues, risks and exposures. This will include
requests by the committee that members of management, counsel, the
external auditors, as applicable, participate in committee meetings, as
necessary, to carry out the committee's responsibilities.
. The committee, with input from management and other key committee
advisors, shall develop an annual plan, which shall include an agenda
and procedures for the review of the Company's quarterly financial
data, its year end audit, and the review of the independence of its
accountants.
. The committee, through the committee chairperson, shall report
periodically, as deemed necessary, but at least semi-annually, to the
full board.
. The committee shall make recommendations to the full board regarding
the compensation to be paid to the external auditors and its views
regarding the retention of the auditors for the upcoming fiscal year.
Review of the External Audit
. The committee shall meet with the external auditors, at least annually,
who shall report all relevant issues to the committee.
<PAGE>
. The external auditors, in their capacity as independent public
accountants, shall be responsible to the board of directors and the
audit committee as representatives of the stockholders.
. The committee shall review the annual financial statements, including
the overall scope and focus of the annual audit. This review shall
include a determination of whether the annual financial statements are
consistent with the information known to committee members. This review
shall also include a review of key financial statement issues and
risks, their impact or potential effect on reported financial
information, the processes used by management to address such matters,
related auditor views, and the basis for audit conclusions. Any
important conclusions concerning the year-end audit work shall be
discussed by the committee and reported to the full board well in
advance of the public release of the annual financial statements.
. The committee shall annually review the performance (effectiveness,
objectivity, and independence) of the external auditors. The committee
shall ensure receipt of a formal written statement from the external
auditors consistent with standards set by the Independence Standards
Board. Additionally, the committee shall discuss with the auditor any
relationships or services that may affect auditor objectivity or
independence. If the committee is not satisfied with the auditors'
assurances of independence, it shall take or recommend to the full
board appropriate action to ensure the independence of the external
auditor.
. The committee shall review any important recommendations on financial
reporting, controls, other matters, and management's response.
. If the external auditors identify significant issues relative to the
overall board responsibility that have been communicated to management
but, in their judgment, have not been adequately addressed, they shall
communicate these issues to the committee, and the committee shall
inform the full board, if, after its consideration, the committee
concurs with the judgement of the external auditors.
Reporting to Stockholders
. The committee should be briefed on the processes used by management in
producing its interim financial statements and review and discuss with
management any questions or issues concerning the statements. Any
important issues on interim financial statements shall be discussed by
the committee well in advance of the public release of the interim
financial statements.
. The committee will ensure that management requires that the external
auditors review the financial information included in the Company's
interim financial statements before the Company files its quarterly
reports with the Securities and Exchange Commission.
. The committee shall review all major financial reports in advance of
filings or distribution, including the annual report.
. The committee shall annually provide a written summary report of the
scope of its activities. This may be identical to the report that shall
be included within the proxy statement for the annual meeting. The
report shall appear over the names of the audit committee. Such report
shall be furnished to and approved by the full board of directors prior
to its inclusion in the proxy statement. The report will state whether
the committee: (i) has reviewed and discussed the audited financial
statements with management; (ii) has discussed with the independent
auditors the matters to be discussed by Statement of Auditing Standards
No. 61; (iii) has received the written disclosures and the letter from
the independent auditors regarding the independence required by
Independence Standards Board Standard No. 1; (iv) has discussed with
the auditors their independence; and (v) based on the review and
discussion of the audited financial statements with management and the
independent auditors, has recommended to the board of directors that
the audited financial statements be included in the Company's annual
report on Form 10-KSB.
. The Company shall disclose that the committee is governed by a written
charter, a copy of which has been approved by the full board of
directors. The committee shall review the charter annually, assess its
adequacy
2
<PAGE>
and propose appropriate amendments to the full board of directors. A
copy of the charter shall be filed as an appendix to the proxy
statement at least every three years.
Regulatory Examinations
. The committee shall review the results of examinations by regulatory
authorities and management's response to such examinations.
Committee Self Assessment and Education
. The committee shall review, discuss, and assess its own performance as
well as the committee role and responsibilities, seeking input from
senior management, the full board, and others.
. The Committee shall review significant accounting and reporting issues,
including recent professional and regulatory pronouncements and
understand their impact on the Company's business, results of operation
and financial statements.
While the Committee has the responsibilities and powers set forth in this
Charter, it is not the duty of the Committee to plan or conduct audits or to
determine that the Company's financial statements are complete and accurate and
in accordance with generally accepted accounting principles. This is the
responsibility of management and the external auditor. Nor is it the duty of the
Committee to conduct investigations, to resolve disagreements, if any, between
management and the external auditor or to assure compliance with laws and
regulations.
3
<PAGE>
LEXINGTON B & L FINANCIAL CORP.
ANNUAL MEETING OF STOCKHOLDERS
January 9, 2001
-------------------------------
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints the entire Board of Directors, each with
full power of substitution, to act as proxy for the undersigned, and to vote all
shares of common stock of Lexington B & L Financial Corp. ("Company") owned of
record by the undersigned at the Annual Meeting of Stockholders, to be held on
January 9, 2001, at 10:00 a.m., local time, at the office of B & L Bank, 919
Franklin Avenue, Lexington, Missouri, and at any and all adjournments thereof,
as designated below with respect to the matters set forth below and described in
the accompanying Proxy Statement and, in their discretion, for the election of a
person to the Board of Directors if any nominee named herein becomes unable to
serve or for good cause will not serve and with respect to any other business
that may properly come before the meeting. Any prior proxy or voting
instructions are hereby revoked.
This proxy card will also be used to provide voting instructions to the
trustees for any shares of common stock of the Company allocated to participants
under the B & L Bank Employee Stock Ownership Plan.
1. The election as directors of all nominees listed (except as marked to
the contrary below).
E. Steva Vialle
FOR VOTE WITHHELD
--- -------------
[_] [_]
2. The ratification of the appointment of Moore, Horton & Carlson, P.C.,
as independent auditors for the Company for the fiscal year ending
September 30, 2001.
FOR AGAINST ABSTAIN
--- ------- -------
[_] [_] [_]
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR"
EACH OF THE LISTED PROPOSALS
<PAGE>
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS
This proxy will be voted as directed, but if no instructions are specified,
this proxy will be voted "FOR" each of the proposals listed. If any other
business is presented at the meeting, including whether or not to adjourn the
meeting, this proxy will be voted by the proxies in their best judgment. At the
present time, the Board of Directors knows of no other business to be presented
at the Annual Meeting.
The above-signed acknowledges receipt from the Company prior to the
execution of this proxy of a Notice of Annual Meeting of Stockholders, a Proxy
Statement dated December 5, 2000 and the Annual Report to Stockholders.
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 may sign but only one signature
is required.
Dated:___________________________
________________________________
STOCKHOLDER SIGN ABOVE
________________________________
CO-HOLDER (IF ANY) SIGN ABOVE
_____________________________
PLEASE COMPLETE, DATE, SIGN AND PROMPTLY MAIL
THIS PROXY IN THE ENCLOSED POSTAGE-PAID ENVELOPE.
