<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON MAY 10, 1996
REGISTRATION NO. 333-___________
================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM S-4
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
TIB FINANCIAL CORP.
(Exact name of Registrant as specified in its charter)
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<S> <C> <C>
Florida 6710 65-0655973
(State or other jurisdiction of (Primary Standard Industrial (I.R.S. Employer
of incorporation or organization) Classification Code) Identification No.)
</TABLE>
99451 Overseas Highway
Key Largo, Florida 33037
(305) 451-4660
(Address and telephone number of Registrant's principal executive offices)
<TABLE>
<C> <S>
Edward V. Lett, President With a copy to:
TIB Financial Corp. Stanley H. Pollock, Esq.
99451 Overseas Highway Gilbert H. Davis, Esq.
Key Largo, Florida 33037 Holland & Knight
(305) 451-4660 Fifteenth Floor, Two Midtown Plaza
(Name, address and telephone number 1360 Peachtree Street, N.E.
of agent for service) Atlanta, Georgia 30309-3209
</TABLE>
___________________________________
Approximate date of commencement of proposed sale of the securities to the
public: As soon as practicable after the effective date of this Registration
Statement.
If the securities being registered on this Form are being offered in connection
with the formation of a holding company and there is compliance with General
Instruction G, check the following box: [X]
CALCULATION OF REGISTRATION FEE
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<CAPTION>
========================================================================================================================
Title Of Proposed Maximum Proposed Maximum
Securities To Amount To Be Offering Price Aggregate Amount of
Be Registered Registered Per Security/(1)/ Offering Price/(1)/ Registration Fee
- ------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock, $0.10 par 1,765,616 shares $12.08 $21,322,138 $7,352
value per share
========================================================================================================================
</TABLE>
/(1)/ Estimated solely for the purpose of calculating the registration fee
pursuant to Rule 457(f)(2) on the basis of an exchange ratio of one share
of TIB Financial Corp. common stock for every one share of TIB Bank of the
Keys common stock pursuant to the reorganization described in this
Registration Statement.
PAGE 1 OF ____ PAGES
EXHIBIT INDEX ON PAGE ____
<PAGE>
TIB FINANCIAL CORP.
Cross Reference Sheet
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FORM S-4 ITEM PROXY STATEMENT/PROSPECTUS HEADING
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Item 1. Forepart of Registration Statement and Outside Front Facing Page; Cross Reference Sheet; Outside Front Cover
Cover Page of Prospectus Page
Item 2. Inside Front and Outside Back Cover Pages of Prospectus Table of Contents; Additional Information
Item 3. Risk Factors, Ratio of Earnings to Fixed Charges and Summary of the Proxy Statement/Prospectus; Trading Market;
Other Information Management; Principal Shareholders
Item 4. Terms of the Transaction Outside Front Cover Page; Summary of the Proxy
Statement/Prospectus; The Proposed Reorganization; Effect of
Reorganization on the Bank's Shareholders
Item 5. Pro Forma Financial Information Not Applicable
Item 6. Material Contracts with the Company Being Acquired Not Applicable
Item 7. Additional Information Required for Reoffering by Persons Not Applicable
and Parties Deemed to be Underwriters
Item 8. Interests of Names Experts and Counsel Not Applicable
Item 9. Disclosures of Commission Position on Indemnification for Not Applicable
Securities Act Liabilities
Item 10. Information with Respect to S-3 Registrants Not Applicable
Item 11. Incorporation of Certain Information by Reference Not Applicable
Item 12. Information with Respect to S-2 or S-3 Registrants Not Applicable
Item 13. Incorporation of Certain Information by Reference Not Applicable
Item 14. Information with Respect to Registrants other than S-2 or Business of the Company; Description of Capital Stock; Not
S-3 Registrants Applicable in part
Item 15. Information with Respect to S-3 Companies Not Applicable
Item 16. Information with Respect to S-2 or S-3 Companies Not Applicable
Item 17. Information with Respect to Companies other than S-2 or Summary of the Proxy Statement/Prospectus; Business of the
S-3 Companies Bank; Description of Capital Stock; Trading Market; Not
Applicable in part
Item 18. Information if Proxies, Consents or Authorizations are to Summary of the Proxy Statement/Prospectus; The Proposed
Solicited Reorganization; Recommendation of Board of Directors;
Rights of Dissenting Shareholders; Management;
Certain Transactions; Principal Shareholders
Item 19. Information if Proxies, Consents or Authorizations are Not Applicable
not to be Solicited, or in an Exchange Offer
</TABLE>
<PAGE>
TIB BANK OF THE KEYS
99451 OVERSEAS HIGHWAY
KEY LARGO, FLORIDA 33037
May 29, 1996
Dear Shareholder:
You are cordially invited to attend a Special Meeting of Shareholders
(the "Special Meeting") of TIB Bank of the Keys (the "Bank") to be held on
Thursday, June 27, 1996 at 3:00 p.m. at the Sheraton Hotel, 97000 South
Overseas Highway, Key Largo, Florida 33037.
The purpose of the meeting is to consider and vote upon an Agreement and
Plan of Merger (the "Merger Agreement") whereby the Bank would become a
wholly-owned subsidiary of TIB Financial Corp., a new Florida bank holding
company (the "Company"). If the Bank's reorganization into a holding company
structure is approved, each outstanding share of common stock of the Bank
will be converted into and exchanged for one share of common stock of the
Company, and the shareholders of the Bank will become shareholders of the
Company. The Bank's business will be carried on as a wholly-owned subsidiary
of the Company.
The accompanying Proxy Statement/Prospectus includes a description of the
terms and conditions of the Bank's proposed reorganization into a holding
company structure, a description of the business and condition of the Bank
and the Company, and certain other significant information, including the
appraisal rights of any shareholders wishing to dissent from the
reorganization transaction. A copy of the Merger Agreement is attached as
Exhibit "A" to the Proxy Statement/Prospectus. The Proxy Statement/Prospectus
describes your rights as a shareholder of the Company, which will be
different in certain respects from your rights as a shareholder of the Bank.
You are urged to carefully review the terms of the Merger Agreement and the
discussions contained in the Proxy Statement/Prospectus.
THE BOARD OF DIRECTORS BELIEVES THAT THE BANK'S REORGANIZATION INTO A HOLDING
COMPANY STRUCTURE AS DESCRIBED IN THE PROXY STATEMENT/PROSPECTUS IS IN THE
BEST INTEREST OF THE BANK AND ITS SHAREHOLDERS AND RECOMMENDS A VOTE "FOR"
---
APPROVAL OF THE MERGER AGREEMENT.
The affirmative vote of holders of at least a majority of the outstanding
shares of common stock of the Bank is required in order to approve the Merger
Agreement. It is, therefore, extremely important that your shares be
represented at the Special Meeting, whether or not you are personally able to
attend. You are urged to complete, sign and return the accompanying form of
proxy in the enclosed envelope as soon as possible.
REGARDLESS OF WHETHER YOU EXPECT TO BE PRESENT AT THE SPECIAL MEETING IN
PERSON, PLEASE VOTE, SIGN AND MAIL THE ACCOMPANYING FORM OF ENCLOSED PROXY IN
THE ENCLOSED ENVELOPE, WHICH REQUIRES NO POSTAGE. YOUR PROXY MAY BE REVOKED
AT ANY TIME PRIOR TO THE VOTE BEING TAKEN AT THE SPECIAL MEETING.
Sincerely, Sincerely,
W. Kenneth Meeks Edward V. Lett
Chairman President and Chief Executive Officer
<PAGE>
TIB BANK OF THE KEYS
99451 OVERSEAS HIGHWAY
KEY LARGO, FLORIDA 33037
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
TO BE HELD JUNE 27, 1996
May 29, 1996
A Special Meeting of Shareholders (the "Special Meeting") of TIB
Bank of the Keys (the "Bank") will be held on Thursday, June 27, 1996 at 3:00
p.m. at the Sheraton Hotel, 97000 South Overseas Highway, Key Largo, Florida
33037 for the following purposes:
(1) To consider and vote upon the approval of a proposed Agreement
and Plan of Merger (the "Merger Agreement") whereby the Bank would become a
wholly-owned subsidiary of TIB Financial Corp., a new Florida bank holding
company (the "Company"). If the Merger Agreement is approved, each outstanding
share of common stock of the Bank will be converted into and exchanged for one
share of common stock of the Company, and the shareholders of the Bank will
become shareholders of the Company. The Merger Agreement provides that the
Company will cause TIB Interim Corp. (In Organization), a new state-chartered
interim financial institution that will be a wholly-owned subsidiary of the
Company ("Interim"), to be merged into the Bank with the Bank surviving the
Merger and continuing its business as a wholly-owned subsidiary of Company;
and
(2) To consider such other business as may properly come before the
Special Meeting or any adjournments thereof.
The affirmative vote of holders of at least a majority of the
outstanding shares of common stock of the Bank is required in order to approve
the Merger Agreement. If the Merger Agreement is approved, dissenting
shareholders are entitled, pursuant to Section 658.44 of the Florida Banking
Code to receive payment in cash for the shares of the Bank provided they
comply with the provisions of Section 658.44, including the requirement that
such shareholder must vote against approval of the Merger Agreement or deliver
notice in writing to the Bank, at or prior to the Special Meeting, that the
shareholder elects to dissent from the reorganization and receive cash for the
value of the shares of the Bank held by them if the reorganization is
consummated.
The Board of Directors has set May 15, 1996 as the record date for
the Special Meeting. Only shareholders of record at the close of business on
the record date will be entitled to notice of and to vote at the Special
Meeting.
REGARDLESS OF WHETHER A SHAREHOLDER EXPECTS TO BE PRESENT AT THE SPECIAL
MEETING IN PERSON, PLEASE VOTE, SIGN AND MAIL THE ACCOMPANYING FORM OF PROXY
IN THE ENCLOSED ENVELOPE, WHICH REQUIRES NO POSTAGE. YOUR PROXY MAY BE REVOKED
AT ANY TIME PRIOR TO THE VOTE BEING TAKEN AT THE SPECIAL MEETING.
By Order Of The Board Of Directors Of
TIB BANK OF THE KEYS
W. Kenneth Meeks Edward V. Lett
Chairman President and Chief Executive Officer
<PAGE>
TIB BANK OF THE KEYS
99451 OVERSEAS HIGHWAY
KEY LARGO, FLORIDA 33037
PROXY STATEMENT/PROSPECTUS
FOR SPECIAL MEETING OF SHAREHOLDERS
TO BE HELD THURSDAY, JUNE 27, 1996
This Proxy Statement/Prospectus constitutes the Proxy Statement of TIB
Bank of the Keys (the "Bank") in connection with the solicitation by the Board
of Directors of the Bank of proxies for use at a Special Meeting of
Shareholders (the "Special Meeting") to be held on Thursday, June 27, 1996,
and any adjournments thereof. This Proxy Statement/Prospectus is being mailed
to the Bank's shareholders of record as of the close of business on May 15,
1996 who are entitled to receive notice of and to vote at the Special Meeting.
The Special Meeting has been called by the Board of Directors of the Bank
in order for the Bank's shareholders to consider and vote upon approval of an
Agreement and Plan of Merger (the "Merger Agreement") providing for a
reorganization whereby the Bank would become a wholly-owned subsidiary of TIB
Financial Corp., a new Florida bank holding company (the "Company"). If the
Bank's reorganization into a holding company structure is approved, each
outstanding share of common stock of the Bank will be converted into and
exchanged for one share of common stock of the Company, and the shareholders
of the Bank will become shareholders of the Company. The Merger Agreement
provides that the Company will cause its wholly-owned subsidiary, TIB Interim
Corp. (In Organization), a new state-chartered interim financial institution
that will be a wholly-owned subsidiary of the Company ("Interim"), to be
merged with and into the Bank, with the Bank surviving the merger and
continuing its business as a wholly-owned subsidiary of the Company. A copy of
the Merger Agreement is attached as Exhibit "A" to this Proxy
Statement/Prospectus.
This Proxy Statement/Prospectus also constitutes the Prospectus of the
Company under the Securities Act of 1933, as amended, with respect to the
issuance of up to 1,765,616 shares of common stock of the Company to
shareholders of the Bank in exchange for an equal number of shares of common
stock of the Bank upon consummation of the Bank's reorganization into a
holding company structure pursuant to the Merger Agreement.
The executive offices of the Bank and the Company are located at 99451
Overseas Highway, Key Largo, Florida 33037 and the telephone number is (305)
451-4660.
The date of this Proxy Statement/Prospectus is May 29, 1996.
<PAGE>
______________________
THE COMMON STOCK OF THE COMPANY ISSUABLE IN CONNECTION WITH THE PROPOSED
REORGANIZATION HAS NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION, NOR HAS THE COMMISSION PASSED UPON THE ACCURACY OR
ADEQUACY OF THIS PROXY STATEMENT/PROSPECTUS. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.
----------------------
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR MAKE ANY
REPRESENTATIONS OTHER THAN THOSE CONTAINED IN THIS PROXY STATEMENT/
PROSPECTUS, AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATIONS MUST
NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED. THIS PROXY STATEMENT/PROSPECTUS
DOES NOT CONSTITUTE AN OFFER OR SOLICITATION BY ANY ONE IN ANY JURISDICTION IN
WHICH SUCH OFFER OR SOLICITATION IS NOT AUTHORIZED, OR IN WHICH THE PERSON
MAKING SUCH OFFER OR SOLICITATION IS NOT QUALIFIED TO DO SO, OR TO ANY PERSON
TO WHOM IT IS UNLAWFUL TO MAKE SUCH OFFER OR SOLICITATION.
<PAGE>
TABLE OF CONTENTS
<TABLE>
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Page
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<S> <C>
SUMMARY OF THE PROXY STATEMENT/PROSPECTUS................................. 1
RECOMMENDATION OF BOARD OF DIRECTORS...................................... 4
THE PROPOSED REORGANIZATION............................................... 4
EFFECT OF THE REORGANIZATION ON THE BANK'S SHAREHOLDERS................... 6
RIGHTS OF DISSENTING SHAREHOLDERS......................................... 10
FEDERAL INCOME TAX CONSEQUENCES........................................... 11
TRADING MARKET............................................................ 13
UNAUDITED CONDENSED PRO FORMA CONSOLIDATED BALANCE SHEET.................. 13
BUSINESS OF BANK.......................................................... 15
BUSINESS OF COMPANY....................................................... 16
SUPERVISION AND REGULATION................................................ 16
MANAGEMENT................................................................ 19
CERTAIN TRANSACTIONS...................................................... 25
PRINCIPAL SHAREHOLDERS.................................................... 25
DESCRIPTION OF CAPITAL STOCK.............................................. 26
LEGAL MATTERS............................................................. 27
FINANCIAL STATEMENTS...................................................... 27
OTHER MATTERS............................................................. 28
ADDITIONAL INFORMATION.................................................... 28
EXHIBIT "A" - AGREEMENT AND PLAN OF MERGER................................A-1
Attachment A - Branch Locations...............................B-1
Attachment B - Rights of Dissenting Shareholders..............C-1
</TABLE>
REVOCABLE PROXY FORM
<PAGE>
SUMMARY OF THE PROXY STATEMENT/PROSPECTUS
THE FOLLOWING IS A SUMMARY OF CERTAIN INFORMATION WITH RESPECT TO THE
MATTERS TO BE CONSIDERED AT THE SPECIAL MEETING OF SHAREHOLDERS OF THE BANK.
THIS SUMMARY DOES NOT PURPORT TO BE COMPLETE AND IS QUALIFIED IN ITS ENTIRETY
BY THE MORE DETAILED INFORMATION CONTAINED IN THIS PROXY STATEMENT/PROSPECTUS,
INCLUDING THE EXHIBITS HERETO, TO WHICH REFERENCE IS MADE FOR A COMPLETE
STATEMENT OF THE MATTERS DISCUSSED BELOW.
SPECIAL MEETING OF SHAREHOLDERS
The Special Meeting of Shareholders (the "Special Meeting") of TIB Bank
of the Keys (the "Bank") will be held at the Sheraton Hotel, Overseas Highway,
Key Largo, Florida 33037 on Thursday, June 27, 1996 at 3:00 p.m. Shareholders
of record at the close of business on May 15, 1996 are entitled to receive
notice of and to vote at the Special Meeting. The Bank is a publicly-owned
financial institution with approximately 460 shareholders of record.
PURPOSE OF THE SPECIAL MEETING
The Special Meeting has been called by the Board of Directors of the Bank
to consider and vote upon approval of an Agreement and Plan of Merger (the
"Merger Agreement") providing for a reorganization whereby the Bank would
become a wholly-owned subsidiary of TIB Financial Corp., a new Florida
corporation (the "Company"). If the Merger Agreement is approved, and the
proposed reorganization completed, each outstanding share of common stock of
the Bank will be converted into and exchanged for one share of common stock of
the Company, and the shareholders of the Bank will become shareholders of the
Company. The Bank's business will then be carried on as a wholly-owned
subsidiary of the Company. The first annual meeting of the Company's
shareholders at which directors are elected will be held in 1997. See "The
Proposed Reorganization."
THE BANK
The Bank is a state-chartered commercial bank headquartered in Key Largo,
Florida. The Bank's deposits are insured by the Bank Insurance Fund ("BIF") of
the Federal Deposit Insurance Corporation (the "FDIC"). The Bank is not a
member of the Federal Reserve System. The Bank opened for business in 1974.
The primary business of the Bank is attracting deposits from the public
and using such deposits to make real estate, business and consumer loans. As
of March 31, 1996, the Bank had total assets of approximately $230.1 million,
total deposits of approximately $206.0 million, and shareholders' equity of
approximately $21.3 million. The Bank's business is conducted at its main
banking office at 99451 Overseas Highway, Key Largo, Florida 33037, where its
principal executive offices are located, and at its branch offices at the
following addresses: 10330 Overseas Highway, Key Largo, Florida; 91980
Overseas Highway, Tavernier, Florida; 80900 Overseas Highway, Tavernier,
Florida; 11401 Overseas Highway, Marathon Shores, Florida; 2315 Overseas
Highway, Marathon, Florida; Mile Marker 30.4, Big Pine Key, Florida; 330
Whitehead Street, Key West, Florida; and 3322 N. Roosevelt Boulevard, Key
West, Florida. See "Business of the Bank".
BANK HOLDING COMPANY
TIB Financial Corp. is a new Florida corporation organized in February
1996 to serve as a holding company for the Bank. Upon consummation of the
proposed reorganization, the Company's primary asset will be 100% of the
outstanding common stock of the Bank. The Company was organized at the
direction of the Bank's Board of Directors for the purpose of effecting the
proposed reorganization transaction with the Bank and has not engaged in any
active business operations. The Company is in the process of forming TIB
Interim Corp. (In Organization) ("Interim") as its wholly-owned subsidiary for
the purpose of effecting the reorganization with the Bank. Interim has not yet
been formed or engaged in any active business
<PAGE>
operations. If the reorganization is approved, the Company will cause Interim
to be merged into the Bank and thereafter Interim will cease to exist as a
separate entity. See "Business of the Company."
PROPOSED REORGANIZATION
If the Bank's proposed reorganization into a holding company structure is
approved, the Company will acquire 100% of the outstanding common stock of the
Bank through a corporate transaction in which Interim merges into the Bank
with the Bank as the surviving entity. Upon consummation of the merger, each
outstanding share of common stock of the Bank will be converted into and
exchanged for one share of common stock of the Company, and the shareholders
of the Bank will become shareholders of the Company. The Bank's business will
be carried on as a wholly-owned subsidiary of the Company. See "The Proposed
Reorganization."
REASONS FOR THE PROPOSED REORGANIZATION
The Board of Directors of the Bank believes the proposed reorganization
to be in the best interest of the Bank and its shareholders as it will better
facilitate the Bank's ability to serve its customers' needs for financial
services. The holding company structure will provide the Bank with greater
flexibility than the Bank would otherwise possess. Through the holding
company, the Bank will be able to expand and diversify its business into other
permitted banking and non-banking activities, either through newly formed
subsidiaries or through acquisitions. While management has no present plans to
engage actively in any other business activities, management will study the
feasibility of establishing and acquiring subsidiaries to engage in other
banking and non-banking activities to the extent permitted by law. The holding
company structure will provide the Company with an alternative means for
raising additional capital. The Company may raise capital by borrowing funds,
rather than selling equity capital, which funds can be contributed to the
capital of the Bank or to other subsidiaries. The Company, as a bank holding
company, would be permitted to acquire other bank holding companies or,
subject to certain restrictions, other financial institutions.
EFFECT OF THE REORGANIZATION
If the Merger Agreement is approved and the proposed reorganization is
consummated, the Bank will continue to operate as a state-chartered commercial
bank and will engage in substantially the same business and activities in
which the Bank is presently engaged. The directors of the Bank and the Company
will be the same. Moreover, the directors do not anticipate any changes in the
officers of the Bank following the reorganization. The Company will be
operated as a bank holding company within the meaning of the federal Bank
Holding Company Act of 1956. The Company will be authorized to engage in any
activity permitted by law to a business corporation, subject to applicable
federal and state regulatory restrictions on the activities of bank holding
companies.
With respect to the shareholders of the Bank, there are significant
differences between the rights of a shareholder in the Bank and the rights of
a shareholder in the Company. See "The Proposed Reorganization" and "Effect of
the Reorganization on the Bank's Shareholders".
VOTE REQUIRED TO APPROVE THE MERGER AGREEMENT
The affirmative vote of the holders of at least a majority of the
outstanding shares of common stock of the Bank is required in order to approve
the Agreement. In addition, consummation of the reorganization is subject to
the satisfaction of certain other conditions, including the approval of
various federal and state regulatory authorities. Moreover, if the Board of
Directors of the Bank deems it appropriate to do so, it has the right to
terminate the Merger Agreement, even after shareholder approval. See "The
Proposed
2
<PAGE>
Reorganization."
RIGHTS OF DISSENTING SHAREHOLDERS
A shareholder has the right to dissent from the Merger Agreement. If the
Merger Agreement is approved, under the provisions of Section 658.44 of the
Florida Banking Code any shareholder of record who votes against the Merger at
the meeting at which the Merger Agreement is approved or advises the Bank in
writing at or prior to such meeting that he dissents from the reorganization,
shall be entitled to be paid the fair value of his shares. On or promptly
after the effective date of the merger, the Bank may fix an amount that it
considers to be not more than the fair market value of the shares as of the
time of the merger. If the Bank does not establish such a fair value or such
value is not acceptable to the dissenting shareholder, appraisers will be
selected by the Bank and the dissenting shareholder to establish the fair cash
value. Failure to follow the procedures set forth in Section 658.44 will waive
the shareholder's rights of appraisal under this section of the law. A
complete copy of the statute relating to the perfection of a dissenting
shareholder's rights is attached as Attachment B to Exhibit "A" to this Proxy
Statement/Prospectus and shareholders are encouraged to read the requirements
contained therein, which requirements must be met prior to the shareholder
being entitled to be paid the fair value of his shares. See "Rights of
Dissenting Shareholders."
FEDERAL INCOME TAX CONSEQUENCES
Consummation of the reorganization is subject to, among other matters,
receipt of an opinion from Holland & Knight, special counsel to the Company
and the Bank, to the effect, that (i) under applicable provisions of the
Internal Revenue Code of 1986, as amended (the "Code"), the reorganization
will constitute a tax-free transaction, (ii) no gain or loss will be
recognized by the shareholders of the Bank upon conversion of their common
stock of the Bank into common stock of the Company pursuant to the Merger
Agreement, and (iii) cash received by shareholders of the Bank exercising
their dissenters' rights will be treated as amounts distributed in redemption
of their common stock of the Bank subject to and taxable under the provisions
of Code Section 302 as either ordinary income or capital gain or loss,
depending upon the circumstances of the individual shareholder.
RECOMMENDATION OF BOARD OF DIRECTORS
THE BOARD OF DIRECTORS OF THE BANK BELIEVES THAT THE PROPOSED
REORGANIZATION IS IN THE BEST INTEREST OF THE BANK AND ITS SHAREHOLDERS AND
RECOMMENDS THAT THE SHAREHOLDERS VOTE "FOR" THE PROPOSAL TO APPROVE THE
---
MERGER AGREEMENT.
THE PROPOSED REORGANIZATION
THE FOLLOWING DISCUSSION INCLUDES SUMMARIES OF CERTAIN PROVISIONS OF THE
MERGER AGREEMENT. THIS DISCUSSION DOES NOT PURPORT TO BE COMPLETE AND IS
QUALIFIED IN ITS ENTIRETY BY REFERENCE TO THE FULL TEXT OF THE MERGER
AGREEMENT ATTACHED AS EXHIBIT "A" TO THIS PROXY STATEMENT/PROSPECTUS.
THE MERGER AGREEMENT
The Boards of Directors of the Bank, the Company and Interim, by
unanimous votes of all directors present at their respective meetings, have
approved and authorized the execution of the Merger Agreement. The Merger
Agreement sets forth the terms of the proposed reorganization and contains (i)
conditions to each party's obligations to consummate the reorganization, (ii)
representations and warranties of
3
<PAGE>
the parties, (iii) procedures which must be followed to consummate the
reorganization, and (iv) certain covenants of each of the parties to the Merger
Agreement.
TERMS OF REORGANIZATION
The Bank's proposed reorganization into a holding company structure would
be accomplished by the Holding Company causing Interim to be merged into the
Bank, with the Bank to survive that merger and to continue its business
thereafter as a wholly-owned subsidiary of the Holding Company. At the time the
reorganization is consummated, each outstanding share of common stock of the
Bank will be converted into and exchanged for one share of common stock of the
Holding Company, and the shareholders of the Bank will become shareholders of
the Holding Company. Following consummation of the reorganization, certificates
representing shares of common stock of the Bank will automatically be deemed to
represent shares of common stock of the Holding Company, and each shareholder
may exchange his stock certificates representing shares of common stock of the
Bank for stock certificates representing an equal number of shares of common
stock of the Holding Company. On the basis of the number of shares of common
stock of the Bank which were outstanding on the date of record, and assuming no
dissenting shareholders or exercises of outstanding stock options, the Holding
Company will issue 1,426,288 shares of its common stock to the shareholders of
the Bank pursuant to the Merger Agreement, all of which will be owned by the
former shareholders of the Bank.
REASONS FOR THE REORGANIZATION
The Board of Directors of the Bank believes the proposed reorganization to
be in the best interest of the Bank and its shareholders. The Board of Directors
believes that the holding company structure will better facilitate the Bank's
ability to serve its customers' needs for financial services. The holding
company structure will also provide greater flexibility than the Bank would
otherwise possess. Through the holding company, the Bank will be able to expand
and to diversify its business into other permitted banking and non-banking
activities, either through newly formed subsidiaries or through acquisitions.
The holding company structure will also enable the Holding Company to provide
banking related services that are in addition to the traditional services that a
commercial bank may provide under present law. While management has no present
plans to engage actively in any other business activities, management will study
the feasibility of establishing and acquiring subsidiaries to engage in other
banking and non-banking business activities to the extent permitted by law.
In addition to possible expansion into non-banking activities, Florida law
presently restricts the ability of a state-chartered bank to borrow money or
issue other obligation to evidence such borrowing. This restriction limits the
ability of the Bank to raise additional capital which may be needed. The holding
company structure will provide the Holding Company with an alternative means for
raising such additional capital. The Holding Company may raise capital by
borrowing funds, rather than selling equity capital, which funds can be
contributed to the capital of the Bank or to other subsidiaries. Furthermore,
Florida law places certain restrictions on the Bank's ability to repurchase its
own shares, while the Holding Company, as a bank holding company, would be
permitted, under certain conditions, to repurchase its own shares of common
stock.
The Holding Company, as a bank holding company, would be permitted to
acquire other bank holding companies or, subject to certain restrictions, other
financial institutions.
CONDITIONS TO THE REORGANIZATION
The consummation of the reorganization is subject to: (i) the approval of
the Agreement by holders of at least a majority of the outstanding shares of
common stock of the Bank; (ii) the approval of the reorganization by the Florida
Department of Banking and Finance, the Federal Deposit Insurance Corporation,
the Board of Governors of the Federal Reserve System, and the United States
Department of Justice; and (iii) the
4
<PAGE>
effectiveness of a Registration Statement filed with the Securities and Exchange
Commission relating to the shares of common stock of the Holding Company
issuable to the shareholders of the Bank. The Merger Agreement has already been
approved by the Boards of Directors of the Bank, the Holding Company and
Interim. The Merger Agreement provides that the reorganization will be
consummated as soon as practical after all conditions have been satisfied.
The Merger Agreement provides broad flexibility to the Board of Directors
of the Bank to terminate the Merger Agreement prior to consummation, either
before or after a vote of the Bank's shareholders, should it appear in the best
interest of the Bank to terminate the Merger Agreement.
STOCK CERTIFICATES
Upon and after consummation of the reorganization, Bank share certificates
will automatically instead represent a like number of shares of common stock of
the Holding Company. No exchange of certificates will be required. Upon the
surrender of any Bank share certificate which prior to the reorganization
represented shares of common stock of the Bank, the holder thereof (or the
shareholder's transferee) will be entitled to receive a Holding Company share
certificate for a like number of shares of Holding Company common stock.
SHAREHOLDER APPROVAL
The affirmative vote of the holders of at least a majority of the
outstanding shares of common stock of the Bank entitled to vote at the Special
Meeting is required for approval of the Merger Agreement. As of May 15, 1996 the
record date set by the Board of Directors for determination of shareholders
entitled to notice of and to vote at the Special Meeting, the Bank had 1,426,288
shares of common stock outstanding.
ACCOUNTING TREATMENT
The Bank's reorganization into a holding company structure will be
accounted for on a historical cost basis in accordance with generally accepted
accounting principles and, accordingly, the financial statements of the Holding
Company and the Bank will be combined for all prior years, and any amounts paid
for dissenters' shares will be treated as a reduction of shareholders' equity.
EFFECT OF THE REORGANIZATION ON THE BANK'S SHAREHOLDERS
If the reorganization is consummated, the shareholders of the Bank would
become shareholders of the Holding Company and would maintain their current
proportionate interest, except as may be effected by any dissenting
shareholders. Thereafter, the rights and privileges of the shareholders of the
Holding Company will be governed primarily by the provisions of the Florida
Business Corporation Act rather than by the Florida Banking Code, which governs
the rights of shareholders of a state-chartered bank. The following material
includes summaries of certain of such differences.
BUSINESS COMBINATIONS
The Holding Company's Articles of Incorporation do not "opt out" of the
antitakeover provisions of Sections 607.901 and 607.902 of the Florida Business
Corporation Act, which will apply to certain attempted acquisitions of the
Holding Company by an "interested shareholder."
Under Section 607.901, acquisition activities with "interested
shareholders" (i.e., those with greater than 10% ownership interest) are subject
to a supermajority/fair price provision. This provision increases to 66-2/3%
5
<PAGE>
of the disinterested shareholders (from a mere majority of all shareholders) the
vote required to approve certain transactions with interested shareholders.
These provisions, however, do not apply (i) in the event the transaction has
been approved by a majority of directors who are not affiliated with the
interested shareholder; (ii) if the company has had less than 300 shareholders
during the last 3 years; (iii) if the interested shareholder has been the
beneficial owner of 80% of the company's outstanding shares for at least 5
years; (iv) if the interested shareholder is the beneficial owner of at least
90% of the outstanding shares of the company, exclusive of shares acquired from
the company, unless such acquisition has been approved by disinterested
directors; or (v) the amount to be paid to the shareholders is a "fair price,"
meaning that the highest price paid by the interested shareholder to purchase
shares of the target in the last two years must be maintained for additional
purchases.
Section 607.902 embodies a "control share acquisition statute" which places
certain procedural restrictions upon the acquisition of ranges of voting power
of the Holding Company (20% to 33-1/3%, 33-1/3% to 50% and greater than 50%).
The statute provides that the proposed share buyer may give a notice to the
Holding Company before or after such an acquisition has occurred and can request
that a shareholders meeting be held to consider the proposed acquisition if the
acquiring person agrees to pay the company expenses in regard to the meeting.
Unless the buyer agrees otherwise, the meeting is to be held within 50 days
after receipt of the notice by the company. A notice to the shareholders of the
company is to be sent and shall include: (I) a copy of the acquiring persons
statement delivered by the proposed buyer; (ii) a statement by the board of
directors of its position or recommendation or that it is making no
recommendation with respect to the proposed acquisition; and (iii) a statement
that the shareholders are or may be entitled to assert dissenters rights in
regard to the proposed transaction. If the company's Articles of Incorporation
or Bylaws contain a provision to the effect that the shares so purchased are
subject to redemption by the company (which the Holding Company's currently do
not), the company may redeem such shares where no acquiring person statement was
filed for a period of up to 60 days after the last such acquisition at their
"fair value." The effect of this section is to make such control share
acquisition more difficult to complete without the prior approval and support of
the Board of Directors and shareholders of the Holding Company.
These sections may have the effect of protecting the incumbent Board of
Directors and management by discouraging takeover attempts which are not
supported by the Board and management. As a result, shareholders may not have
the opportunity to sell some or all of their shares in such a takeover attempt.
In addition, these provisions could affect the price of the Holding Company's
common shares by making it less attractive to persons who invest in securities
in anticipation of an increase in price if a takeover attempt oy also deter an
interested shareholder from proceeding with a second step business combination
unless approved by the Board of Directors, especially if the market price of the
Holding Company shares had declined from the highest price paid by the
interested shareholder in acquiring shares of such class. Furthermore, unless
the Board of Directors approves a business combination, these provisions would
give the holder of a minority of the total outstanding shares a veto power over
a business combination with an interested shareholder notwithstanding that the
other stockholders, including the interested shareholder, may believe the
business combination to be desirable or beneficial.
COMPARISON OF VOTING AND OTHER RIGHTS
Voting by the shareholders of both the Bank and the Holding Company is on
the basis of one vote for each share, without any cumulative voting rights. The
Bylaws of the Bank provide for the annual election of the directors by the
shareholders for the ensuing year. The Articles of Incorporation of the Holding
Company provide for the division of directors into three classes, with members
of each class serving three-year terms and the shareholders electing one class
annually. The classification of the directors of the Holding Company has the
effect of making it more difficult for shareholders to effect an immediate
change in the composition of a majority of the Board of Directors.
6
<PAGE>
The Bylaws of the Bank provide for the removal of any director, with or
without cause, upon the vote of a majority of the outstanding shares of capital
stock of the Bank. The Articles of Incorporation of the Holding Company provide
that a director may be removed from office at any time, only for cause, by the
vote of the holders of at least 67% of the outstanding shares of capital stock
of the Holding Company, unless the removal has been approved by a resolution
adopted by at least 67% of the directors then in office, in which event the
removal need only be approved by vote of holders of a majority of the voting
power of the then outstanding shares of capital stock of the Holding Company.
The Bylaws of the Bank provide that special meetings of shareholders may be
called at any time by the Board of Directors or by any three or more
shareholders owning in the aggregate more than twenty-five percent (25%) of the
capital stock of the Bank. The Articles of Incorporation of the Holding Company
provide that special meetings of shareholders may be called at any time by the
Chairman of the Board or the President or by a majority of the directors then in
office or by 67% of the then outstanding shares of stock of the Holding Company.
The Bylaws of the Bank do not provide that the shareholders of the Bank may
take action by written consent in lieu of taking such action at an annual or
special meeting of shareholders called for that purpose. The Articles of
Incorporation of the Holding Company provide that shareholders of the Holding
Company shall not be entitled to take any action by written consent in lieu of
taking such action at an annual or special meeting of shareholders called for
that purpose.
AMENDMENT OF ARTICLES OF INCORPORATION
The Bank's Articles of Incorporation may be amended by the affirmative vote
of a majority of the outstanding voting stock of the Bank. The Articles of
Incorporation of the Holding Company provide that certain articles may be
amended by the vote of holders of at least 67% of the voting power of the
outstanding shares of capital stock; provided, however, that such 67% voting
requirement shall not be applicable if the board of directors of the Holding
Company shall approve such action by resolution adopted by at least 67% of the
directors then in office, in which case the affirmative vote of holders of a
majority of the then outstanding shares of capital stock of the Holding Company
is required to approve such action. Other provisions of the Articles of
Incorporation require approval by a majority of the outstanding voting stock of
the Holding Company for any amendment thereof.
AMENDMENT OF BYLAWS
The Bylaws of the Bank may be amended by a majority vote of the Bank's
Board of Directors or by a majority vote of the holders of the outstanding
shares of the Bank. The Holding Company's Articles of Incorporation provide that
the Board of Directors is authorized to amend or repeal the Bylaws of the
Holding Company by a majority of the directors then in office, subject to the
power of the holders of the capital stock of the Holding Company to amend or
repeal the Bylaws upon the affirmative vote of holders of at least 67% of the
voting power of the outstanding shares of capital stock.
SHARE PURCHASES
Pursuant to the provisions of the Florida Business Corporation Act and the
federal Bank Holding Company Act of 1956 and Federal Reserve Board Regulation Y,
the Holding Company will have the right to purchase its own shares subject to
certain prescribed financial tests. Under the Florida Banking Code, the Bank is
limited in its ability to purchase its outstanding shares from its shareholders.
7
<PAGE>
PAYMENT OF DIVIDENDS
The Holding Company will be permitted to pay dividends on its outstanding
capital stock at such time and in such amounts as the Board of Directors deems
advisable, subject only to restrictions contained in the Florida Business
Corporation Act and subject to the amount of dividends which may be declared by
its subsidiary, the Bank. The Board of Directors of the Bank, however, is
limited in its ability to pay cash dividends on the outstanding capital stock of
the Bank. In general, the Bank may not declare a dividend without the approval
of the Florida Department of Banking and Finance if the total of the dividends
declared by the Bank in a calendar year exceeds the total of its net profits for
that year combined with its retained profits of the preceding two years.
Notwithstanding the proposed reorganization, the Bank will be governed by the
aforementioned restrictions with regard to the payment of dividends to the
Holding Company which, in turn, may serve as a limitation on any future dividend
payments by the Holding Company to its shareholders.
NO PREEMPTIVE RIGHTS
Shareholders of the Bank do not have preemptive rights. Also, shareholders
of the Holding Company do not have preemptive rights. This permits the Board of
Directors of the Holding Company to utilize and issue the authorized and
unissued shares of the Holding Company's stock as it determines to be in the
best interests of the Holding Company and its shareholders. Since the Board of
Directors could issue shares of the Holding Company's stock to raise additional
capital and for other proper corporate purposes, this difference could result in
dilution of a shareholder's interest in the Holding Company. Any issuance of
shares, however, would have to be approved by the Board of Directors of the
Holding Company.
CERTAIN RESTRICTIONS ON TRANSFER OF STOCK
The common stock of the Holding Company to be issued to shareholders of the
Bank pursuant to this Proxy Statement/Prospectus is freely transferable, except
for shares issued to persons who are deemed "control persons" or "affiliates" of
the issuer, as described below.
Each person who controls, or who is a member of the group which controls,
or who is under common control with the Bank at the time the Merger Agreement is
submitted to a vote of the shareholders of the Bank may, in connection with any
subsequent sale or other distribution of the common stock of the Holding Company
received pursuant to the reorganization, be deemed to be an "underwriter" within
the meaning of the Securities Act of 1933 (the "Securities Act"), unless such
securities are sold in accordance with Rule 145 promulgated under the Securities
Act. Directors and executive officers of the Bank are deemed to be control
persons in accordance with Rule 145. However, such persons will not be deemed
underwriters of the common stock of the Holding Company acquired in the
reorganization if the securities are resold in accordance with certain specified
provisions of Rule 144 promulgated under the Securities Act.
Rule 144 provides that in order for securities to be sold in accordance
with the Rule there must be available adequate public information with respect
to the issuer of such securities. This public information will be deemed
available if the issuer has securities registered pursuant to Section 12 of the
Securities Exchange Act of 1934 (the "Exchange Act") and has been subject to the
reporting requirements of Section 12 of the Exchange Act for a period of at
least 90 days immediately preceding the sale of such securities and has filed
all the reports required to be filed thereunder during the 12 months preceding
the sale. Adequate public information with respect to the issuer of the
securities will also be deemed available if the issuer has securities registered
pursuant to the Securities Act, has been subject to the reporting requirements
of Section 15(d) of the Exchange Act for a period of at least 90 days
immediately preceding the sale of securities and has filed all reports required
to be filed thereunder during the 12 months preceding such sale. The Holding
Company will not be subject to the reporting requirements of Section 15(d) of
the Exchange Act upon consummation of the reorganization.
8
<PAGE>
Rule 144 also provides that any person who controls, or who is a member of
a group which controls, or is under common control with the issuer cannot sell,
within any 3 month period, restricted or other securities of the same class in
an aggregate amount greater than (I) 1% of the shares of that class outstanding
or (ii) the average weekly reported trading volume of the securities during the
four calendar weeks immediately preceding the sale. The securities sold in
accordance with Rule 144 must also be sold in broker's transactions executed
upon a customer's order on an exchange or in the over-the-counter market, or in
transactions directly with a market maker. The owner of the securities must not
solicit orders to buy the securities, or make any payment in connection with the
offer or sale of the securities to any person other than the broker who executes
the order to sell the securities. If the amount of any securities sold pursuant
to Rule 144 during any 3 month period exceeds 500 shares or has an aggregate
sales price in excess of $10,000, three copies of the notice of sale on Form 144
must be filed with the Securities and Exchange Commission.
THIS PROXY STATEMENT/PROSPECTUS, WHICH ALSO SERVES AS A PROSPECTUS WITH RESPECT
TO THE SHARES OF COMMON STOCK OF THE HOLDING COMPANY ISSUABLE IN THE
REORGANIZATION, DOES NOT RELATE TO ANY RESALES OF THE COMMON STOCK OF THE
COMPANY RECEIVED BY SHAREHOLDERS PURSUANT TO THE REORGANIZATION, AND NO PERSON
IS AUTHORIZED TO MAKE USE OF THIS PROXY STATEMENT/PROSPECTUS IN CONNECTION WITH
ANY SUCH RESALES.
RIGHTS OF DISSENTING SHAREHOLDERS
THE FOLLOWING DISCUSSION IS A SUMMARY OF CERTAIN STATUTORY PROVISIONS. THIS
SUMMARY DOES NOT PURPORT TO BE COMPLETE AND IS QUALIFIED IN ITS ENTIRETY BY
REFERENCE TO THE COPY OF THE COMPLETE TEXT OF SECTION 658.44 OF THE FLORIDA
BANKING CODE ATTACHED AS ATTACHMENT B TO EXHIBIT A TO THIS PROXY
STATEMENT/PROSPECTUS.
Pursuant to the provisions of Section 658.44 of the Florida Banking Code,
any shareholder of record of the Bank is entitled to dissent from the Merger
Agreement and obtain payment of the fair market value of his shares of common
stock of the Bank in cash if the reorganization is effected. With respect to the
dissenter's shares, "fair market value" means the value of the Bank's shares on
the effective date of the reorganization.
A shareholder of record entitled to dissent from the reorganization and
obtain payment of fair market value of his shares of common stock in the Bank,
must perfect his rights as a dissenter in accordance with the Florida Banking
Code. A dissenting shareholder will be entitled to payment in cash of the value
of only those shares held by the stockholder:
(I) which at the special meeting of shareholders are voted against the
approval of the Merger Agreement; or
(ii) with respect to which the stockholder has given written notice to the
Bank at or prior to the special meeting that the shareholder dissents from
the Merger Agreement.
A shareholder desiring to file a written notice of his intent to dissent
send such notice to: TIB Bank of the Keys, Attn: Edward V. Lett, President,
99451 Overseas Highway, Key Largo, Florida 33037.
9
<PAGE>
FEDERAL INCOME TAX CONSEQUENCES
IN VIEW OF THE COMPLEXITY OF THE LAWS AND INTERPRETATIONS THEREOF,
SHAREHOLDERS OF THE BANK SHOULD CONSULT WITH AND RELY ONLY ON THE ADVICE OF
THEIR TAX ADVISORS ON MATTERS RELATING TO THE CONVERSION OF COMMON STOCK IN THE
BANK FOR COMMON STOCK OF THE HOLDING COMPANY AND SHOULD NOT CONSIDER THIS
SUMMARY AS A SUBSTITUTE FOR CAREFUL AND INDIVIDUAL TAX PLANNING.
The income tax treatment of the conversion of common stock pursuant to a
reorganization involves technical and not completely settled principles of
taxation. Consequently, it is impractical to present herein a detailed
explanation of the income tax treatment of shareholders as a result of the
reorganization. In addition, the following discussion is intended to be a
summary of certain relevant principles of federal income taxation and a
statement of the material tax issues associated with the reorganization which
should be carefully considered by shareholders prior to voting on the
reorganization. The following discussion is based upon counsel's analysis and
interpretation of the Internal Revenue Code of 1986, as amended), and Treasury
Regulations promulgated thereunder, Internal Revenue Service ("Service")
procedures and rulings and Court decisions published as of the date of this
Proxy Statement/Prospectus. No assurance can be given that such authorities will
not be modified by legislative action, administrative action or judicial review.
Any such changes may be retroactive so as to apply to transactions prior to the
date of such changes and could modify such discussion and adversely affect the
tax aspects described herein.
The reorganization has been structured to qualify as a tax-free
reorganization under Sections 368(a)(l)(A) and 368(a)(2)(E) of the Code. The
consummation of the reorganization is subject to, among other matters, receipt
of an opinion from Holland & Knight, special counsel to the Holding Company and
the Bank, to the effect that the reorganization will be treated as a tax-free
transaction, with the following federal income tax consequences:
(1) Neither the Bank, Interim nor the Holding Company will recognize any
gain or loss as a result of the reorganization;
(2) No gain or loss will be recognized to the shareholders of the Bank
upon conversion of their shares; the tax basis of shares of the Holding
Company's common stock received in the reorganization will be the same as
the tax basis of the shares of the Bank's common stock previously owned;
and if the shares of the Bank's common stock were held as capital assets,
the holding period of the shares of Holding Company's common stock received
will include the holding period of the shares of the Bank's common stock
exchanged therefor; and
(3) A shareholder of the Bank who exercises his rights as a dissenter and
thereby receives cash for his shares will recognize income, gain or loss
measured by the difference between the amount of cash received and the tax
basis of his shares of the Bank's common stock, subject to the provisions
of Code Section 302. Such distributions will generally be treated as
capital gain or loss if the shares were held as capital assets. However, a
dissenting shareholder must take into account the effect that Sections 302
and 318 of the Code may have in determining consequences of the transaction
if he receives only cash, which could cause the distributions to be treated
as ordinary income or, possibly, as a dividend to the dissenter.
The shareholders of the Bank should also be aware that state and local
income taxes may affect their tax situation. While many state and local income
tax statutes correspond with the federal income tax laws, no attempt is made
herein to describe any state or local income tax consequences resulting from the
reorganization. SHAREHOLDERS ARE URGED TO CONSULT THEIR PERSONAL TAX ADVISORS
WITH RESPECT TO ANY EFFECTS OF STATE AND LOCAL TAX LAWS.
10
<PAGE>
In the case of a corporate shareholder of the Bank, the tax consequences
described herein are generally applicable, although no attempt is made herein to
discuss the tax ramifications with respect to a corporate shareholder. This
discussion herein assumes that each shareholder of the Bank is a natural person,
except as otherwise noted. All corporations, trusts, or other entities, are
urged to consult their own tax advisors.
11
<PAGE>
TRADING MARKET
COMPANY
Prior to the reorganization, there has been no public market for the common
stock of the Holding Company and there can be no assurance that an active
trading market will develop as a result of the reorganization. The Holding
Company has no arrangement with any securities dealer concerning the maintenance
of a trading market in its securities.
BANK
There has been no established trading market for the common stock of the
Bank to date. The Bank has no arrangement with any securities dealer concerning
the maintenance of a trading market in its securities. The Bank has
approximately 460 shareholders.
12
<PAGE>
TIB FINANCIAL CORP.
UNAUDITED CONDENSED PRO FORMA CONSOLIDATED BALANCE SHEET
DECEMBER 31, 1995
<TABLE>
<CAPTION>
CONSOLIDATION
TIB BANK OF TIB FINANCIAL REORGANIZATION ELIMINATION PRO FORMA
THE KEYS CORP. ADJUSTMENTS ADJUSTMENTS CONSOLIDATED
<S> <C> <C> <C> <C> <C>
ASSETS
Cash due from financial institutions $8,542,945 $150,000 /(2)/ $ (10) /(4)/ $ (150,000) $8,542,945
/(3)/ 10
Investment securities held to maturity
(market value of $10,619,000) 10,116,000 -- -- -- 10,116,000
Investment securities available for sale 50,844,888 -- -- -- 50,844,888
Investment in subsidiary /(1)/ 21,063,146 /(5)/ (21,063,146)
-- 10 /(3)/ (10) -- --
Federal funds sold and securities
purchased under agreement to resell 587,000 -- -- -- 587,000
Loans 138,369,991 -- -- -- 138,369,991
Reserve for loan losses ( 1,700,823) -- -- -- ( 1,700,823)
----------- ------ ------ ------ ----------
Loans, net of valuation reserve and
unearned income 136,669,168 -- -- -- 136,669,168
Bank premises and equipment 8,570,271 -- -- -- 8,570,271
Accrued interest receivable 1,709,057 -- -- -- 1,709,057
Other assets 2,527,326 -- -- -- 2,527,326
----------- ------ ------ ------ -----------
Total Assets $219,566,655 $150,010 $21,063,136 $(21,213,146) $219,566,655
=========== ======= ========== ========== ===========
LIABILITIES
Deposits:
Noninterest-bearing demand $34,247,739 -- -- /(4)/ $ (150,000) $34,097,739
Interest-bearing demand and money market 67,834,751 -- -- -- 67,834,751
Savings 17,545,775 -- -- -- 17,545,775
Time deposits of $100,000 or more 22,329,989 -- -- -- 22,329,989
Other time deposits 51,161,580 -- -- -- 51,161,580
------ ------ ------
Total deposits $193,119,834 -- -- (150,000) $192,969,834
=========== ====== ====== ======= ===========
Federal funds purchased and securities sold
under agreement to repurchase $3,521,806 -- -- -- $3,521,806
Other borrowings -- 150,000 -- -- 150,000
Other liabilities 1,861,869 -- -- -- 1,861,869
---------- -------- ------ ------- ----------
Total Liabilities 198,503,509 150,000 -- (150,000) 198,503,509
----------- -------- ------ ------- -----------
Subordinated notes and debentures -- -- -- -- --
STOCKHOLDERS' EQUITY
Common stock 1,774,360 .10 /(1)/ 141,949 /(5)/ (1,774,360) 141,949
/(2)/ (.10)
Surplus 4,447,133 9.80 /(1)/ 6,079,544 /(5)/ (4,447,133) 6,079,544
/(2)/ (9.80)
Retained earnings 14,663,648 -- /(1)/ 14,663,648 /(5)/ (14,663,648) 14,663,648
.10 /(2)/ (.10)
Unrealized gain on securities available for sale 178,005 -- 178,005 (178,005) 178,005
---------- -------- --------- ------- ----------
Total Stockholders' Equity 21,063,146 10 21,063,136 (21,063,146) 21,063,146
----------- -------- ---------- ---------- -----------
Total Liabilities and Stockholders' Equity $219,566,655 $150,010 $21,063,136 $(21,213,146) $219,566,655
=========== ======== ========== ========== ===========
</TABLE>
13
<PAGE>
TIB FINANCIAL CORP.
ADJUSTMENT LEGEND FOR UNAUDITED CONDENSED PRO FORMA
CONSOLIDATED BALANCE SHEET
DECEMBER 31, 1995
REORGANIZATION ADJUSTMENTS
- --------------------------
/(1)/ Exchange of 1,419,488 shares of $.10 par value TIB Financial Corp.
common stock for 1,419,488 shares of TIB Bank of the Keys common
stock.
/(2)/ Repurchase and retirement of original incorporating shares of TIB
Financial Corp. common stock.
/(3)/ Retirement of original incorporating shares of TIB Interim Corp. common
stock.
CONSOLIDATION ELIMINATION ADJUSTMENTS
- -------------------------------------
/(4)/ Elimination of TIB Financial Corp. demand deposit account and cash in
TIB Bank of the Keys.
/(5)/ Elimination of TIB Financial Corp.'s investment in TIB Bank of the Keys.
NOTE TO CONDENSED PRO FORMA CONSOLIDATED BALANCE SHEET
- ------------------------------------------------------
1) Subsequent to December 31, 1995, the Bank effected a two-for-one stock
split in the form of a share dividend. The pro forma combined balance sheet
reflects this stock split. Prior to the split, the Bank had 709,744 shares
outstanding with a par value of $1.25 per share. As a result of the split,
the outstanding shares increased from 709,744 to 1,419,488 with a par value
of $1.25 per share. Additional paid in capital was reduced $887,180 as a
result of the split.
2) In connection with the formation of TIB Financial Corp., a line of credit
totalling $150,000 was established. This note carries an interest rate of
prime plus 50 basis points and a term of one year. The effect this line of
credit would have reduced net income (net of income taxes, using a 35% tax
rate) for 1995, assuming that the transaction had occurred at the beginning
of the period, are shown below:
<TABLE>
<CAPTION>
Without Note Payable With Note Payable
----------------------------- --------------------------
<S> <C> <C>
Net income $3,000,943 $2,992,336
Earnings per share - without $4.24/(1)/ $4.23/(1)/
stock split
Earnings per share - with $2.12/(1)/ $2.11/(1)/
stock split
</TABLE>
/(1)/ The weighted average common shares outstanding was 707,697 at December
31, 1995, assuming no stock split, and 1,415,394 with the stock split.
14
<PAGE>
BUSINESS OF THE BANK
TIB BANK OF THE KEYS
TIB Bank of the Keys is a state-chartered commercial bank headquartered
in Key Largo, Florida. The Bank's deposits are insured by the FDIC.
The primary business of the Bank is attracting deposits from the public
and using such deposits to make real estate, business and consumer loans. As of
March 31, 1996, the Bank had total assets of approximately $230.1 million, total
deposits of approximately $206.0 million, and shareholders' equity of
approximately $21.3 million. The Bank's primary service area includes Monroe
County, Florida.
BANKING OFFICES
The Bank's business is conducted at its main banking office at 99451
Overseas Highway, Key Largo, Florida, where its principal executive offices are
located. The Bank maintains branches located at: 10330 Overseas Highway, Key
Largo, Florida; 91980 Overseas Highway, Tavernier, Florida; 80900 Overseas
Highway, Tavernier, Florida; 11401 Overseas Highway, Marathon Shores, Florida;
2315 Overseas Highway, Marathon, Florida; Mile Marker 30.4, Big Pine Key,
Florida; 330 Whitehead Street, Key West, Florida; and 3322 N. Roosevelt
Boulevard, Key West, Florida.
BANKING SERVICES
The Bank offers a full range of commercial banking services to
individual, professional and business customers in its primary service area.
These services include savings accounts, money market checking accounts and NOW
accounts, certificates of deposit and other time deposits, commercial, real
estate and installment loans, and safe deposit facilities. Customer deposits are
insured to the maximum extent provided by law through the BIF. The Bank pays
interest on its accounts and certificates competitive with other financial
institutions in its primary service area. The Bank seeks to attract deposits
from the public and uses such deposits, together with borrowings and other
sources of funds, to make real estate, business and consumer loans. The Bank
seeks to concentrate its deposits and loan efforts primarily within its primary
service area.
COMPETITION
The Bank experiences competition in attracting deposits and in making
real estate, business and consumer loans in its primary service area. The
primary factors in competing for deposits are interest rates, the range of
financial services offered, convenience of office locations and flexible office
hours. Direct competition for such deposits comes from other commercial banks,
savings institutions, credit unions, brokerage firms and money market funds. The
primary factors in competing for loans are interest rates, loan origination fees
and the range of lending services offered. Competition for origination of loans
normally comes from other commercial banks, savings institutions, credit unions
and mortgage banking firms. Such entities may have competitive advantages as a
result of greater resources and higher lending limits (by virtue of their
greater capitalization). However, the Bank seeks to attract customers in its
primary service area with its products and services which are tailored to the
needs of the customers. Management seeks to emphasize a high degree of
personalized client service in order to be able to better meet the banking needs
of its customers.
EMPLOYEES
At March 31, 1996, the Bank had 145 full-time and six part-time
employees. The Bank considers its relationship with its employees to be good.
15
<PAGE>
LEGAL PROCEEDINGS
There are no pending material legal proceedings in which the Bank is
involved.
BUSINESS OF THE COMPANY
The Holding Company is a new Florida bank holding company organized in
February 1996. Upon consummation of the proposed reorganization, the Holding
Company's primary asset will be 100% of the outstanding common stock of the
Bank. The Holding Company was organized at the direction of the Bank's Board of
Directors for the purpose of effecting the proposed reorganization transaction
with the Bank and has not engaged in any active business operations. The Holding
Company is in the process of forming a wholly-owned subsidiary, Interim, for the
purpose of effecting the reorganization with the Bank. Interim has not engaged
in any active business or banking operations. If the reorganization is approved,
the Holding Company will cause Interim to be merged into the Bank with the Bank
as the surviving entity and with Interim ceasing to exist as a separate entity.
The Holding Company's executive offices are located at the Bank's main
banking office at 99451 Overseas Highway, Key Largo, Florida 33037. The
Holding Company does not have any full-time employees.
SUPERVISION AND REGULATION
The Holding Company will be subject to substantial regulation as a bank
holding company, and the Bank is currently subject to substantial regulation.
The following summaries of statutes and regulations affecting bank holding
companies and banks do not purport to be complete. Such summaries are qualified
in their entirety by reference to such statutes and regulations.
SUPERVISION AND REGULATION OF THE COMPANY
The Holding Company will be a bank holding company within the meaning of
the federal Bank Holding Company Act (the "Act"). As a bank holding company, the
Holding Company will be subject to supervision and regulation by the Board of
Governors of the Federal Reserve System (the "Board") under the Act. The Board
may make examinations of the Holding Company and each of its subsidiaries. Bank
holding companies are required by the Act to obtain approval from the Board
prior to acquiring, directly or indirectly, ownership or control of more than 5%
of the voting shares of a bank.
The Act also prohibits bank holding companies, with certain exceptions,
from acquiring more than 5% of the voting shares of any company that is not a
bank, from engaging in any business other than a business closely related to
banking (as determined by the Board) or managing or controlling banks and other
subsidiaries authorized by the Act without the prior approval of the Board. The
Board may differentiate between activities that are initiated de novo by a bank
holding company or a subsidiary and activities commenced by acquisition of a
going concern. The Holding Company has no present intention to engage in
nonbanking activities.
As a bank holding company, the Holding Company is subject to capital
adequacy guidelines as established by the Board. The Board established risk
based capital guidelines for bank holding companies effective March 15, 1989.
Beginning on December 31, 1992, the minimum required ratio for total capital to
risk weighted assets became 8 percent (of which at least 4 percent must consist
of Tier 1 capital). Tier 1 capital (as defined in regulations of the Board)
consists of common shareholders equity and qualifying preferred stock and
minority interests in equity accounts of consolidated subsidiaries, less
goodwill and other intangible assets required to be deducted under the Board's
guidelines. The Board's guidelines apply on a consolidated basis to bank holding
companies with total consolidated assets of $150 million or more. These
guidelines will apply to the Holding
16
<PAGE>
Company if the reorganization is consummated. The Board has stated that risk
based capital guidelines establish minimum standards and that bank holding
companies generally are expected to operate well above the minimum standards.
Bank holding companies may be compelled by bank regulatory authorities to
invest additional capital into a subsidiary bank in the event the subsidiary
bank experiences either significant loan losses or rapid growth of loans or
deposits. In addition, the Holding Company may be required to provide additional
capital to any additional banks it acquires as a condition to obtaining the
approvals and consents of regulatory authorities in connection with such
acquisitions.
The Holding Company is an "affiliate" of the Bank within the meaning of
the Federal Reserve Act, which imposes restrictions on loans to the Holding
Company by the Bank, investments by the Bank in securities of the Holding
Company and on the use of such securities as collateral security for loans by
the Bank to any borrower. The Federal Reserve Act will limit the transfer of
funds by the Bank to the Holding Company and its nonbanking subsidiaries,
whether in the form of loans, extensions of credit, investments or asset
purchases. Such transfers by the Bank to the Holding Company or any nonbanking
Holding Company subsidiary are limited in amount to 10% of the Bank's capital
and surplus and, with respect to the Holding Company and all such nonbanking
subsidiaries, to an aggregate of 20% of the Bank's capital and surplus.
Furthermore, such loans and extensions of credit are required to be secured in
the specified amounts.
The Riegle-Neal Interstate Banking and Branching Efficiency Act of 1994
(the "Interstate Banking Act"), subject to certain restrictions, allows
adequately capitalized and managed bank holding companies to acquire existing
banks across state lines, regardless of state statutes that would prohibit
acquisitions by out-of-state institutions. Further, effective June 1, 1997, a
bank holding company may consolidate interstate bank subsidiaries into branches
and a bank may merge with an unaffiliated bank across state lines to the extent
that the applicable states have not "opted out" of interstate branching prior to
such effective date. Some states may elect to permit interstate mergers prior to
June 1, 1997. The Interstate Banking Act also permits de novo branching to the
-- ----
extent that a particular state "opts into" the de novo branching provisions. The
-- ----
Interstate Banking Act generally prohibits an interstate acquisition (other than
an initial entry into a state by a bank holding company) that would result in
either the control of more than (I) 10% of the total amount of insured deposits
in the United States or (ii) 30% of the total insured deposits in the home state
of the target bank, unless such 30% limitation is waived by the home state on a
basis which does not discriminate against out-of-state institutions. As a result
of this and prior legislation, the Holding Company may become a candidate for
acquisition by, or may itself seek to acquire, banking organizations located in
other states.
The Holding Company is a legal entity separate and distinct from the
Bank. In contrast to the Bank's common stock, the stock of the pending Company
is subject to the registration requirements of the Securities Act of 1933.
SUPERVISION AND REGULATION OF THE BANK
The Bank is a state banking corporation organized under the laws of the
State of Florida. The operations of the Bank are subject to state and federal
statutes applicable to state chartered banks whose deposits are insured by the
FDIC and the regulations of the Florida Department of Banking and Finance (the
"DBF") and the FDIC. Such statutes and regulations relate to, among other
things, required reserves, permissible investments, lending limitations and
procedures, mergers and consolidations, issuances of securities, payment of
dividends, establishment of branches and other aspects of the Bank's operations.
The Bank is subject to regularly scheduled examinations by the DBF and the FDIC.
In addition, and as discussed above under "Supervision and Regulation of the
Company," the Federal Reserve Act restricts extensions of credit by the Bank to
affiliates, such as the Holding Company or, with certain exceptions, other
affiliates, and on the taking of such stock or securities as collateral on
17
<PAGE>
loans to any borrower. The Bank is prohibited from engaging in certain tie-in
arrangements in connection with any extension of credit or the providing of any
property or service.
Effective December 31, 1990, the FDIC adopted final risk-based capital
guidelines for all FDIC insured state chartered banks that are not members of
the Federal Reserve System. Beginning on December 31, 1992, all banks were
required to maintain a minimum ratio of total capital to risk weighted assets of
8 percent (of which at least 4 percent must consist of Tier 1 capital). Tier 1
capital of state chartered banks (as defined in regulations) generally consists
of (I) common stockholders equity; (ii) noncumulative perpetual preferred stock
and related surplus; and (iii) minority interests in the equity accounts of
consolidated subsidiaries.
In addition, the FDIC adopted a minimum ratio of Tier 1 capital to total
assets of banks. This capital measure is generally referred to as the leverage
capital ratio. The FDIC has established a minimum leverage capital ratio of 3
percent if the FDIC determines that the institution is not anticipating or
experiencing significant growth and has well-diversified risk, including no
undue interest rate exposure, excellent asset quality, high liquidity, good
earnings and, in general, is considered a strong banking organization, rated
Composite 1 under the Uniform Financial Institutions Rating System. Other
financial institutions are expected to maintain leverage capital at least 100 to
200 basis points above the minimum level. At December 31, 1995, the Bank
exceeded the minimum Tier 1, risk-based and leverage capital ratios.
The Federal Deposit Insurance Corporation Improvement Act of 1991,
enacted in December 1991 ("FDICIA"), specifies, among other things, the
following capital standard categories for depository institutions: well
capitalized, adequately capitalized, undercapitalized, significantly
undercapitalized and critically undercapitalized. FDICIA imposes progressively
more restrictive constraints on operations, management and capital distributions
depending on the category in which an institution is classified. Each of the
federal banking agencies has issued final uniform regulations that became
effective December 19, 1992, which, among other things, define the capital
levels described above. Under the final regulations, a bank is considered "well
capitalized" if it (I) has a total risk-based capital ratio of 10% or greater,
(ii) has a Tier 1 risk-based capital ratio of 6% or greater, (iii) has a
leverage ratio of 5% or greater, and (iv) is not subject to any order or written
directive to meet and maintain a specific capital level for any capital measure.
An "adequately capitalized" bank is defined as one that has (I) a total risk-
based capital ratio of 8% or greater, (ii) a Tier 1 risk-based capital ratio of
4% or greater and (iii) a leverage ratio of 4% or greater (or 3% or greater in
the case of a bank with a composite CAMEL rating of 1). A bank is considered
"undercapitalized" if it has (I) a total risk-based capital ratio of less than
8%, (ii) a Tier 1 risk-based capital ratio of less than 4%, or (iii) a leverage
ratio of less than 3%, and "critically undercapitalized" if the bank has a ratio
of tangible equity to total assets equal to or less than 2%. The applicable
federal regulatory agency for a bank that is "well capitalized" may reclassify
it as "adequately capitalized" or "undercapitalized" institution to the
supervisory actions applicable to the next lower capital category, if it
determines that the bank is in an unsafe or unsound condition or deems the bank
to be engaged in an unsafe or unsound practice and not to have corrected the
deficiency. As of December 31, 1995, the Bank met the definition of a "well
capitalized" institution.
"Undercapitalized" depository institutions, among other things, are
subject to growth limitations, are prohibited, with certain exceptions, from
making capital distributions, are limited in their ability to obtain funding
from a Federal Reserve Bank and are required to submit a capital restoration
plan. The federal banking agencies may not accept a capital plan without
determining, among other things, that the plan is based on realistic assumptions
and is likely to succeed in restoring the depository institution's capital. In
addition, for a capital restoration plan to be acceptable, the depository
institution's parent holding company must guarantee that the institution will
comply with such capital restoration plan and provide appropriate assurances of
performance. If a depository institution fails to submit an acceptable plan,
including if the holding company refuses or is unable to make the guarantee
described in the previous sentence, it is treated as if it is "significantly
undercapitalized." Failure to submit or implement an acceptable capital plan
also is grounds for the appointment of a conservator or a receiver.
"Significantly undercapitalized" depository institutions may be subject to a
number of additional
18
<PAGE>
requirements and restrictions, including orders to sell sufficient voting stock
to become adequately capitalized, requirements to reduce total assets and
cessation of receipt of deposits from correspondent banks. "Critically
undercapitalized" institutions, among other things, are prohibited from making
any payments of principal and interest on subordinated debt, and are subject to
the appointment of a receiver or conservator.
Under FDICIA, the FDIC is permitted to provide financial assistance to an
insured bank before appointment of a conservator or receiver only if (I) such
assistance would be the least costly method of meeting the FDIC's insurance
obligations, (ii) grounds for appointment of a conservator or a receiver exist
or are likely to exist, (iii) it is unlikely that the bank can meet all capital
standards without assistance and (iv) the bank's management has been competent,
has complied with applicable laws, regulations, rules and supervisory directives
and has not engaged in any insider dealing, speculative practice or other
abusive activity.
FURTHER CHANGES IN REGULATORY REQUIREMENTS
The United States Congress and the Florida legislature have periodically
considered and adopted legislation that has resulted in deregulation of, among
other matters, banks and other financial institutions, or adversely affected the
profitability of the banking industry. Future legislation could further modify
or eliminate geographic restrictions on banks and bank holding companies and
current prohibitions with other financial institutions, including mutual funds,
securities brokerage firms, insurance companies, banks from other states and
investment banking firms. The effect of any such legislation on the business of
the Holding Company or the Bank cannot be accurately predicted. The Holding
Company also cannot predict what legislation might be enacted or what other
implementing regulations might be adopted, and if enacted or adopted, the effect
thereof.
MANAGEMENT
DIRECTORS AND EXECUTIVE OFFICERS
The following table sets forth certain information with respect to the
directors and executive officers of the Holding Company and the Bank as of April
15, 1996:
<TABLE>
<CAPTION>
Position with Position with
Name Age the Company the Bank
- ---- --- ------------- --------------
<S> <C> <C> <C>
B.G. Carter 53 Director Director
William Eldon Chasteen 71 Director Director
Armando J. Henriquez 61 Director Director
James R. Lawson, III 62 Director Director
Edward V. Lett 50 Director, President Director, President
and CEO and CEO
Scott A. Marr 41 Director Director
W. Kenneth Meeks 68 Director and Chairman Director and Chairman
Derek D. Martin-Vegue 49 Director Director
Joseph H. Roth, Jr. 49 Director Director
</TABLE>
19
<PAGE>
<TABLE>
<S> <C> <C> <C>
Richard J. Williams 75 Director Director
</TABLE>
The members of the Board of Directors of the Holding Company are elected
by the shareholders. The directorships of the Holding Company are divided into
three classes, with the members of each class serving three-year terms and the
shareholders electing one class annually. The directors of the Holding Company
were first elected to the Board in 1996 and serve initial staggered terms of
one, two and three years. The terms of the current directors expire as follows:
the terms of directors Chasteen, Meeks and Williams expire in 1997; the terms of
directors Carter, Henriquez and Lawson expire in 1998; and the terms of
directors Lett, Marr, Martin-Vegue and Roth expire in 1999. The first annual
meeting of shareholders of the Holding Company at which directors will be
elected will be held in 1997.
The members of the Board of Directors of the Bank will be elected
annually by the Holding Company as the sole shareholder of the Bank if the
proposed reorganization is completed.
The business experience of each of the directors and executive officers
of the Holding Company and the Bank is set forth below.
B. G. CARTER is the Managing Director of the Independent Companies which
engage in the title insurance, residential and commercial property insurance and
mortgage brokerage businesses. Mr. Carter is also the owner of Westwinds, a
twenty-two unit guest house in Key West. Mr. Carter has served as a director of
the Bank since 1988.
WILLIAM ELDON CHASTEEN is now retired. He was the owner of Ace Hardware
Stores in Key Largo and Tavernier until selling them in 1995. He has served as a
director of the Bank since 1983.
ARMANDO J. HENRIQUEZ has served as Vice President of Client Relations of
Fringe Benefits Management Company since September of 1993. Mr. Henriquez served
as a consultant to the Florida Association of School Superintendents from
January of 1993 until joining Fringe Benefits Management Company. Mr. Henriquez
served as Superintendent of Schools of Monroe County, Florida from January 1969
to December 1992.
JAMES R. LAWSON is now retired. He was the owner of the Key Largo
Shopper, a grocery store in Key Largo, prior to its sale in 1994. Mr. Lawson has
served as a director of the Bank since 1988.
EDWARD V. LETT has been the President and Chief Executive Officer of the
Bank since January 6, 1996 and has served as a director since 1992. Prior to
becoming President, Mr. Lett served as Executive Vice President and Chief
Operating Officer of the Bank since joining the Bank in November 1991. Prior to
joining the Bank, Mr. Lett had served as Executive Vice President and Chief
Operating Officer of American National Bank of Florida.
SCOTT A. MARR has been the General Manager and a Partner of Marina-Del
Mar Resorts, which consists of two hotels in Key Largo, Florida, for more than
five years. Mr. Marr has served as a director of the Bank since 1994.
W. KENNETH MEEKS has been the Chairman of the Bank since 1976. Mr. Meeks
retired as Chief Executive Officer of the Bank in 1988, and served as the Bank's
acting Chief Executive Officer from September 1995 through January 5, 1996. Mr.
Meeks has served as a director of the Bank since 1974.
DEREK D. MARTIN-VEGUE has been the President of Keys Insurance Agency of
Monroe County, Inc. for more than five years. He has served as a director since
1995.
20
<PAGE>
JOSEPH H. ROTH, JR. has been Managing Owner of Holiday Isle Resorts and
Marina, and the General Partner of Little Palm Island Resorts, for more than
five years. Mr. Roth became a director in 1980.
RICHARD J. WILLIAMS has been a professional fishing guide for over 50
years, and has also owned and operated the Coral Cove Resort on Islamorada. He
became a director upon organization of the Bank in 1974.
COMPENSATION
The following sets forth certain information concerning the compensation
of the Bank's chief executive officer during fiscal years 1995, 1994 and 1993.
No other executive officer received annual compensation in excess of $100,000.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
Long Term Compensation
Annual Compensation Awards Payouts
------------------- ------ -------
Other Annual Securities All Other
Name and Principal Fiscal Compensation Underlying Compensation
Position Year Salary ($) Bonus ($) ($)/(1)/ Options (#) ($)/(2)/
-------- ---- ---------- --------- -------- ----------- --------
<S> <C> <C> <C> <C> <C> <C>
Edward V. Lett 1995 $123,627 $14,216 $16,600 -- $1,545
President and Chief
Executive Officer/(3)/
W. Kenneth Meeks 1995 $ 12,500 -- $16,600 -- --
Chairman of the Board;
Former Interim CEO/(4)/
Richard A. Drake 1995 $100,899 $12,178 $35,204 -- $1,000
Former President and
CEO/(5)/
Gregory S. Bills 1995 $100,000 $12,067 $ 5,600 -- --
Senior Vice President
</TABLE>
/(1)/ Includes (I) quarterly retainer and fees for attending Board of
Directors meetings paid to all directors including Messrs. Lett, Meeks
and Drake, (ii) as regards Mr. Drake, payments of $23,504 under a
settlement and noncompetition agreement entered into in connection with
his severance, and (iii) amounts paid to Mr. Bills as a car allowance.
Compensation does not include any other perquisites and other personal
benefits which may be derived from business-related expenditures that in
the aggregate exceed the lesser of $50,000 or 10% of the total annual
salary and bonus reported for such person.
/(2)/ The reported amount consists of matching contributions to the Bank's
401(k) and Employee Stock Ownership Plan.
/(3)/ Mr. Lett became the Bank's President and CEO on January 6,1996, and
served as the Bank's Executive Vice President and Chief Operating
Officer during 1995.
/(4)/ Mr. Meeks served as the Bank's interim CEO from September 26, 1995
through January 5, 1996 and received a salary at a rate equal to $50,000
during that period.
/(5)/ Mr. Drake served as the Bank's President and CEO through September 25,
1995.
The following table sets forth information with respect to the named
executives concerning unexercised options held as of December 31, 1995. No
options were granted to or exercised by such executives during 1995.
21
<PAGE>
AGGREGATE OPTION EXERCISES IN 1995 AND DECEMBER 31, 1995 OPTION VALUES
<TABLE>
<CAPTION>
Shares Number of Securities Value of
Acquired Underlying Unexercised Unexercised In-the-Money
on Options at 12/31/95 Options at 12/31/95/(1)/
------------------- --------------------------
Name Exercise Value Realized Exercisable Unexercisable Exercisable Unexercisable
---- -------- --------------- ----------- -------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Edward V. Lett 0 0 2,700 24,300 $17,280 $155,520
W. Kenneth Meeks 0 0 10,000 0 $64,000 0
Richard A. Drake 0 0 0 0 0 0
Gregory S. Bills 0 0 800 7,200 $ 5,120 $ 46,080
</TABLE>
/(1)/ Based on a fair market value of $22.875 per share as of that date and
exercise prices per share of $16.475.
EMPLOYMENT AGREEMENT
The Bank and Edward V. Lett, the President and Chief Executive Officer of
the Holding Company and the Bank, are parties to an "Executive Employment
Agreement." Under the agreement, Mr. Lett receives a base salary of $116,630 per
year. The Bank may increase Mr. Lett's salary annually based on Mr. Lett's
performance. The agreement provides that Mr. Lett will be employed by the Bank
on an "at-will" basis, unless and until there is a change of ownership control
of the Bank. In the event there is a change of ownership control of the Bank,
Mr. Lett will no longer be an at-will employee and the agreement will become an
employment agreement for a term of 24 months on the effective date of the change
in ownership control. Mr. Lett's salary cannot be reduced for any reason during
this 24 month term, unless the agreement is terminated due to the death or
incapacity of Mr. Lett or for "cause." The agreement further provides that Mr.
Lett will be entitled to a credit for all years of service with the Bank (i.e.,
----
all years prior to the change in ownership control, plus the greater of 24
months or the actual period of employment after the change in ownership control)
in determining eligibility for and benefits from any and all retirement,
disability, profit-sharing and other employee benefit programs offered by the
Bank.
COMPENSATION TO DIRECTORS
All of the members of the Board of Directors of the Bank receive a
quarterly retainer of $2,500 and $600 for attending each of 11 regular board
meetings, for a total of up to $16,600 annually. Each member of the Board of
Directors has also received a grant of an option to purchase 10,000 shares of
the Bank's common stock at an exercise price of $16.475 per share, except for a
more recent grant to Mr. Martin-Vegue with an exercise price of $18.70 per
share. Management anticipates that Board meetings of the Holding Company, when
called, would be held in conjunction with Board meetings of the Bank. No
additional compensation will be paid to the directors of the Holding Company.
The Board of Directors of the Holding Company does not have any standing
committees. The Board of Directors of the Bank has an Audit Committee, an
Executive Committee, a Salary Review Committee, a Loan Committee and an
Investment/Strategic Planning Committee.
LIMITATION ON DIRECTORS' LIABILITY
The Holding Company's Articles of Incorporation contain a provision which
eliminates or limits the personal liability of directors to the Holding Company
or its shareholders for monetary damages for certain breaches of their duty of
care or other duty. This provision provides that a director of the Holding
Company shall not be personally liable for monetary damages for a breach of his
duty of care or other duty as a director, except for liabilities for (I) any
appropriation, in violation of the director's duties, of any business
opportunity of the Holding Company, (ii) acts or omissions not in good faith or
which involve intentional misconduct or a knowing
22
<PAGE>
violation of law, (iii) authorization of improper dividends or redemptions, or
(iv) any transaction from which the director derived an improper personal
benefit. Liability for monetary damages remains unaffected by such provision if
liability is based on any of these grounds. Liability for monetary damages for
violations of federal securities laws would also remain unaffected. The
provision does not eliminate a director's fiduciary duty, nor does it preclude a
shareholder from pursuing injunctive or other equitable remedies.
The Board of Directors believes this provision in the Holding Company's
Articles of Incorporation is essential to maintain and improve the ability of
the Holding Company to attract and retain competent directors.
INDEMNIFICATION
The Holding Company's Articles of Incorporation provide for the
indemnification of the directors, officers, employees and agents of the Holding
Company against certain liabilities and expenses that may be incurred by them to
the fullest extent permitted by Florida corporate law.
The Holding Company's Articles of Incorporation provide for
indemnification of directors and officers of the Holding Company for liability
and expenses reasonably incurred by them in connection with any civil, criminal,
administrative or investigative action, suit or proceeding in which they may
become involved by reason of being a director or officer of the Holding Company.
Indemnification is permitted if the director or officer acted in a manner he
believed in good faith to be in or not opposed to the best interests of the
Holding Company and, with respect to, in criminal actions, if he had no
reasonable cause to believe his conduct to be unlawful; provided that the
Holding Company may not indemnify any director (I) in connection with a
proceeding by or in the right of the corporation in which the director was
adjudged liable to the corporation or (ii) in connection with any other
proceeding in which he was adjudged liable on the basis that personal profit was
improperly received by him. Article 8 of the Holding Company's Articles of
Incorporation contains a provision providing for the indemnification of officers
and directors and advancement of expenses to the fullest extent authorized by
the Florida Business Corporation Act.
The Holding Company may seek to purchase and maintain directors and
officers liability insurance which insures against liabilities that directors
and officers of the Holding Company may incur in such capacities.
Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers or persons controlling the
Holding Company pursuant to the foregoing provisions, the Holding Company has
been informed that in the opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in that Act and is
therefore unenforceable.
CERTAIN TRANSACTIONS
Certain of the executive officers, directors and principal shareholders
of the Bank and affiliates of such persons have, from time to time, engaged in
banking transactions with the Bank and are expected to continue such
relationships in the future. All loans or other extensions of credit made by the
Bank to such individuals were made in the ordinary course of business on
substantially the same terms, including interest rates and collateral, as those
prevailing at the time for comparable transactions with unaffiliated third
parties and did not involve more than the normal risk of collectibility or
present other unfavorable features. As of December 31, 1995, loans to executive
officers and directors of the Bank, including affiliates of such persons,
amounted to $7,519,273 in the aggregate.
23
<PAGE>
PRINCIPAL SHAREHOLDERS
The following table sets forth certain information regarding the shares of
the common stock of the Bank owned as of the record date (I) by each person who
beneficially owns more than 5% of the shares of the common stock of the Bank,
(ii) by each of the Bank's directors, and (iii) by all directors and executive
officers as a group.
<TABLE>
<CAPTION>
Beneficial Ownership /(2)/
Number Percentage
Name /(1)/ of Shares Ownership
- ---- --------- ---------
<S> <C> <C>
5% shareholders:
- ---------------
W. Kenneth Meeks /(3)(4)/ 327,174 22.8%
Joseph H. Roth, Jr. 91,074 6.3%
Directors and Officers:
- ----------------------
B. G. Carter 6,010 *
William Eldon Chasteen /(3)(5)/ 45,722 3.2%
Armando J. Henriquez /(6)/ 12,502 *
James R. Lawson /(3)(7)/ 56,106 3.9%
Edward V. Lett /(3)/ 51,470 3.6%
Scott A. Marr 10,614 *
W. Kenneth Meeks /(3)(4)/ 327,174 22.8%
Derek D. Martin-Vegue 10,000 *
Joseph H. Roth, Jr. 91,074 6.3%
Richard J. Williams 13,760 *
All directors and
executive officers as
a group (11 persons)/(8)/ 545,370 36.4%
</TABLE>
______________
* Percent share ownership is less than 1% of total shares outstanding.
/(1)/ Except as otherwise indicated, the persons named in the above table
have sole voting and investment power with respect to all shares shown
as beneficially owned by them. Information relating to beneficial
ownership of the shares is based upon "beneficial ownership" concepts
set forth in the rules promulgated under the Securities and Exchange
Act of 1934, as amended. Under such rules, a person is deemed to be a
"beneficial owner" of a security if that person has or shares "voting
power" with respect to such security. The information as to beneficial
ownership has been furnished by the respective persons listed in the
above table.
/(2)/ Based on 1,426,288 shares outstanding as of the record date.
24
<PAGE>
/(3)/ Includes 26,354 shares of common stock of the Bank over which Messrs.
Chasteen, Lawson, Lett and Meeks exercise voting rights as co-trustees
under the Bank's 401(k) Savings and Employee Stock Ownership Plan.
/(4)/ Includes 122,292 shares as to which Mr. Meeks shares beneficial
ownership with his spouse.
/(5)/ Includes 13,052 shares as to which Mr. Chasteen shares beneficial
ownership with his spouse.
/(6)/ Includes 2,470 shares as to which Mr. Henriquez shares beneficial
ownership with his spouse.
/(7)/ Includes 1,948 shares as to which Mr. Lawson shares beneficial
ownership with his spouse.
/(8)/ Includes 70,000 exercisable options.
DESCRIPTION OF CAPITAL STOCK
STOCK OF THE BANK
The Bank's Articles of Incorporation authorize the issuance of up to
1,765,616 shares of common stock, $1.25 par value per share. As of the date of
this Proxy Statement/Prospectus, there are 1,426,288 shares of common stock of
the Bank issued and outstanding, all of which shares are fully paid and non-
assessable.
Dividends on the Bank's shares may be paid to shareholders at such time and
in such amounts as may be declared by the Board of Directors out of funds
legally available for the payment of dividends, subject to certain restrictions
by regulatory authorities.
Each of these shares is entitled to one vote in all matters presented to
shareholders and to share ratably in the assets of the Bank in the event of
liquidation. These shares are not convertible into any other security, nor are
they subject to any call, assessment or redemption. The holders of these shares
do not have preemptive rights to subscribe for additional shares of common
stock.
STOCK OF THE COMPANY
The Holding Company's Articles of Incorporation authorize the issuance of
5,000,000 shares of common stock, $0.10 par value per share. The Holding Company
is a newly-formed Florida corporation and has no history of earnings and has
never paid any dividends.
Assuming that no shareholder of the Bank exercises his dissenter's rights,
there will be 1,426,288 shares of common stock of the Holding Company issued and
outstanding upon consummation of the reorganization.
The Board of Directors of the Holding Company will be empowered to pay such
dividends at such time as they may deem appropriate out of funds legally
available for the payment of dividends. Shareholders should, however, be aware
that the only current source of funds with which the Holding Company could pay
dividends would be from amounts received as dividends from the Bank.
Each share of common stock of the Holding Company is entitled to one vote
in all matters that may be presented to the shareholders and to share ratably in
the assets of the Holding Company in the event of liquidation. These shares are
not convertible into any other security, nor are they subject to any call,
assessment or redemption. The holders of these shares do not have preemptive
rights to subscribe to additional shares of common stock of
25
<PAGE>
the Holding Company. All shares of common stock of the Holding Company will,
when issued upon consummation of the reorganization, be fully paid and non-
assessable.
LEGAL MATTERS
The legality of the shares of common stock of the Holding Company to be
issued in the reorganization and certain other legal matters in connection with
the reorganization will be passed upon by Holland & Knight, Fifteenth Floor, Two
Midtown Plaza, 1360 Peachtree Street, N.E., Atlanta, Georgia 30309-3209.
FINANCIAL STATEMENTS
The Bank's financial statements prepared in conformity with generally
accepted accounting principles for the fiscal year ended December 31, 1995, have
previously been delivered to the shareholders of the Bank with the Bank's Annual
Report for the year ended December 31, 1995. Such financial statements are not a
part of this Proxy Statement/Prospectus due to the applicability of Securities
and Exchange Commission Staff Accounting Bulletin No. 50. Additional copies of
such statements as included in the Annual Report will be furnished to
shareholders without charge upon request. All such requests should be directed
to: Edward V. Lett, President, TIB Financial Corp., 99451 Overseas Highway, Key
Largo, Florida 33037.
OTHER MATTERS
Management knows of no other matters which may be brought before the
meeting. However, if any matter other than the proposed reorganization or
matters incident thereto should come before the meeting, the persons named in
the enclosed proxy will vote such proxy in accordance with their judgment on
such matters.
ADDITIONAL INFORMATION
This Proxy Statement/Prospectus does not contain all the information set
forth in the Registration Statement and the exhibits relating thereto which the
Holding Company has filed with the Securities and Exchange Commission, 450 5th
Street, N.W., Washington, D.C. 20549 pursuant to the Securities Act of 1933. For
further information pertaining to the Holding Company or the securities offered
hereby, reference is made to the Registration Statement, including exhibits.
26
<PAGE>
EXHIBIT A
AGREEMENT AND PLAN OF MERGER
THIS AGREEMENT AND PLAN OF MERGER (the "Merger Agreement"), dated as of
February 27, 1996, as amended, is made by and between TIB BANK OF THE KEYS (the
"Bank"), and TIB INTERIM CORP. (the "Interim"), and is joined by TIB FINANCIAL
CORP. (the "Corporation").
The Bank and the Interim are each state banking corporations duly organized
under the laws of the State of Florida. The Bank shall merge with the Interim
under the charter and title of the Bank, which shall be the "Resulting Bank."
The three parties to this Merger Agreement maintain their main offices at 99451
Overseas Highway, in Key Largo, County of Monroe, State of Florida. The Bank
operates eight branch offices located in Monroe County, Florida at the addresses
as set forth in Attachment "A." The Interim has no branches. As of March 31,
1996 the Bank had 1,765,616 shares (as adjusted) of authorized common stock, par
value of $1.25 per share, of which 1,423,288 shares (as adjusted) were issued
and outstanding (total of $1,779,110) with surplus of $4,505,902 and undivided
profits, including capital reserves and after net unrealized losses on available
for sale securities, of $14,694,988, resulting in total capital funds of
$20,980,000. The Interim has authorized capital stock of one share of common
stock of a par value of $1.25 per share, which is subscribed for by the
Corporation at a price of $10.00 per share and will be paid for in full prior to
the effective date of the Merger (as defined herein) contemplated hereby, and a
surplus of $7.50 and undivided profits or capital reserves of $1.25.
The Corporation is a corporation duly organized under the laws of the State
of Florida, is authorized to do business in Florida, and has its principal
office in Key Largo, County of Monroe, State of Florida. As of the date hereof,
the Corporation has authorized common stock of 5,000,000 shares $0.10 par value.
There is one shares of common stock issued and outstanding at a price of $10.00
as of the date of this Merger Agreement.
A majority of the Board of Directors of the Bank and the Interim have,
respectively, entered into and signed this Merger Agreement, and the Board of
Directors of the Corporation has approved this Merger Agreement, undertaken that
the Corporation shall join in and be bound by it, and has authorized the
undertakings hereinafter made by the Corporation.
From and after the date the Merger becomes effective, and as and when
required by the provisions of this Merger Agreement, the Corporation will issue
its shares of common stock which the shareholders of the Bank shall be entitled
to receive as hereinafter provided.
In consideration of the premises and covenants contained herein, the Bank
and the Interim hereby make this Merger Agreement and prescribe the terms and
conditiomode of carrying such Merger into effect, as follows:
1. MERGER. The Bank shall merge with the Interim under the charter and
------
the title of the Bank (which shall be the "Resulting Bank"), pursuant to Section
658.41 of the Florida Banking Code (the "Merger"), in the manner and with the
effect provided therein. As a result of the Merger:
a. The total capital funds of the Resulting Bank shall be not less
than $20,980,000, divided by 1,423,288 shares of common stock, each of $1.25 par
value, and at the time the Merger shall become effective, the Resulting Bank
shall have a surplus of not less than $4,505,902, and undivided profits,
including capital reserves and after net losses for available for sale
securities of not less than $14,694,988, which, when combined with capital and
surplus, will be equal to not less than the March 31, 1996 capital structure of
the Bank (as adjusted), and the capital structure of the Interim at the
effective date of the Merger as noted above; adjusted, however, for normal
earnings and expenses of the Bank between March 31, 1996 and the time of the
consummation of the Merger, and the redemption and cancellation of the one share
of $1.25 par value stock used to capitalize the Interim, at an aggregate
redemption price of $10.00.
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b. The Resulting Bank shall have the rights, privileges, immunities
and franchises, public or private, of each of the merged banks, and all
property, real, personal, and mixed, and all debts due on whatever account,
including subscriptions to shares, and all other chooses in action. All
interests of or belonging to or due to each of the merged banks shall be deemed
to be transferred to and vested in the Resulting Bank without further act or
deed. The title to real estate, or interest therein, vested in the merged banks
shall not revert or be in any way impaired because of the Merger. The Resulting
Bank shall not have trust powers.
c. The Resulting Bank shall thereafter be responsible and liable for
all liabilities and obligations of each of the merged banks. A claim existing or
action or proceeding pending by or against either merged bank may be prosecuted
as if the Merger had not taken place, or the Resulting Bank may be substituted
in its place. The rights of creditors and any lien upon the property of such
merged banks shall not be impaired by the Merger.
d. The Articles of Incorporation of the Bank shall be the Articles
of Incorporation of the Resulting Bank, and the Bylaws of the Bank in existence
on the effective date of the Merger, shall be the Bylaws of the Resulting Bank
until repealed or amended, as provided by law. (See Addendum I for complete
Articles of Incorporation of the Bank).
e. The name of the Resulting Bank shall be "TIB BANK OF THE KEYS"
until changed, as provided by law.
f. The business of the Resulting Bank shall be that of a state
banking corporation. This business shall be conducted by the Resulting Bank at
its main office which shall be located at 99451 Overseas Highway, Key Largo,
Florida, and at its legally established branches located in Monroe County,
Florida as set forth in Attachment "A." The Directors of the Resulting Bank
shall be the Directors of the Bank immediately prior to the Merger. The
Directors of the Resulting Bank shall hold office until their successors are
elected and have qualified.
g. No benefit, stock option or employee stock ownership plans of the
Bank shall terminate by reason of the Merger, but shall continue as the plans of
the Resulting Bank; provided, however, that such plans may subsequently be
amended or terminated as provided by law and further provided that any shares of
stock issued pursuant to said plans subsequent to consummation of the Merger
shall be shares of the Corporation.
2. CONVERSION, EXCHANGE AND CONSOLIDATION OF SHARES.
------------------------------------------------
a. To the Corporation, in exchange for the issuance of its shares
under Section 2(c) hereof, there shall be issued 1,423,288 shares of the
Resulting Bank's common shares of $1.25 par value which shall represent all of
the issued and outstanding common stock of the Resulting Bank.
b. The amount and number of shares of capital stock, surplus and
undivided profits of the Bank outstanding immediately before the Merger becomes
effective (specifically, $20,980,000, divided by 1,423,288 shares of par value
of $1.25 each, surplus of $4,505,902 and undivided profits, including capital
reserves and net of unrealized losses on available for sale securities, of
$14,694,988), shall be increased by the amount, and the number of shares of
capital stock, surplus and undivided profits of the Interim outstanding
immediately before the Merger becomes effective (specifically, $10.00 divided
into one share of the par value of $1.25 each, surplus of $7.50, and undivided
profits or capital reserves of $1.25), with the effect that the amount and
number of shares of the capital stock, surplus and undivided profits of the
Resulting Bank outstanding upon completion of the Merger shall be equal to the
aggregate amount and the aggregate number of shares of capital stock, surplus
and undivided profits of the Bank and the Interim combined immediately before
the Merger; adjusted, however, for normal earnings, expenses, and stock
dividends of the Bank after March 31, 1996 and prior
A-2
<PAGE>
to the time the Merger becomes effective, and the immediate redemption and
cancellation of the stock used to capitalize the Interim, specifically one share
of $1.25 par value common stock, at an aggregate price of $10.00.
c. Each holder of common stock of the Bank will be entitled to
receive one (1) share of the Corporation stock for each share of the Bank stock
held by them on the effective date of the Merger. As soon as is practicable
after the effective date of the Merger, stock certificates representing common
stock of the Bank issued and outstanding prior to the effective date may be
surrendered to the Corporation in exchange for a certificate representing the
requisite number of shares of the Corporation to which each holder is entitled.
Until so exchanged after the effective date, each certificate nominally
representing common stock of the Bank prior to the effective date shall, for all
corporate purposes, be deemed to evidence ownership of the number of shares of
the Corporation which the holder would be entitled to receive upon its surrender
to the Corporation.
d. At the discretion of the Board of Directors of the Bank,
dividends may or may not be paid during the period beginning at the date of this
Merger Agreement and ending with the consummation of the Merger.
3. NECESSARY APPROVALS. This Merger Agreement shall be submitted to the
-------------------
shareholders of the Bank and the Interim for adoption at separate meetings to be
called and held in accordance with the applicable provisions of law and the
respective Articles of Incorporation and Bylaws of the Bank and the Interim. The
Bank and the Interim shall proceed expeditiously and cooperate fully in the
procurement of any other consents and approvals, in the taking of any other
action, and in the satisfaction of all other requirements prescribed by law or
otherwise necessary for consummation of the Merger on the terms provided;
including, without being limited to, the preparation and submission of an
application to the Florida Department of Banking and Finance for approval of the
Merger under the provisions of the laws of the State of Florida. The
consummation of the Merger shall be subject to the approval of the transaction
by the shareholders of the Bank and the Interim and the Florida Department of
Banking and Finance and the Federal Deposit Insurance Corporation.
4. RIGHTS OF DISSENTING SHAREHOLDERS. Any shareholder of the Bank who
---------------------------------
votes against the Merger at the meeting of shareholderS of the Bank held for the
purpose of considering this Merger Agreement or who gives notice in writing at
or prior to such meeting of shareholders of the Bank that he dissents from the
Merger, and who otherwise complies with the requirements of Section 658.44 of
the Florida statutes, shall be entitled to receive cash as provided in Section
658.44 of the Florida Statutes from the Resulting Bank, if and when the Merger
is consummated. (A copy of the relevant portions of Section 658.44 of the
Florida Statutes is attached hereto as "Addendum II.")
5. CONDITIONS PRECEDENT. Consummation of the Merger contemplated by this
--------------------
Merger Agreement is conditioned upon the satisfaction of the following
conditions:
a. adoption of this Merger Agreement by the affirmative vote of the
shareholders, both of the Bank and the Interim, owning at least a majority of
the outstanding capital stock of each, and who are entitled to vote thereon at
the meetings of such shareholders to be held for such purpose;
b. the Florida Department of Banking and Finance and the Federal
Deposit Insurance Corporation shall have approved the merger of the Interim into
the Bank;
c. the Board of Governors of the Federal Reserve System shall have
approved the application of the Corporation to become a bank holding company by
reason of its acquisition of all of the outstanding Bank stock;
d. the expiration of the review period of the United States
Department of Justice; and
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<PAGE>
e. at the time of the mailing of the Bank's proxy statement to its
shareholders and thereafter through the Closing, the Corporation stock to be
received by the Bank shareholders shall be the subject of an effective
registration statement under the Securities Act of 1933 and shall be duly
registered or qualified under the securities laws of all states in which such
registration or qualification is required, or the Corporation stock shall be
exempt from the registration requirements of such federal or state laws; (f)
Corporation and the Bank shall have received at the Closing an opinion from
Holland & Knight in form and substance satisfactory to the Corporation and the
Bank to the effect, in general, that:
(i) The Reorganization will qualify as a reorganization under
Section 368(a)(1)(A) of the Internal Revenue Code by
reason of Section 368(a)(2)(E) thereof;
(ii) No gain or loss will be recognized by the holders of the
Bank stock on the conversion of such shares into the
Corporation stock;
(iii) The cost basis of the Corporation stock received in the
Reorganization by holders of the Bank stock will generally
be the same as their cost basis in the Bank stock
exchanged therefor;
(iv) The holding period of the Corporation stock received will
include the period during which the Bank stock exchanged
therefor was held, provided the Bank stock was held as a
capital asset;
(v) No gain or loss will be recognized by the Bank, the
Corporation or the Interim as a result of the
Reorganization; and
(vi) Cash received by the Bank shareholders exercising their
dissenters' rights and receiving cash in exchange for
their Bank stock pursuant to a dissenter's proceeding,
will be treated as having been received as a taxable
redemption of their Bank stock, subject to the provisions
of Section 302 of the Internal Revenue Code.
6. TERMINATION OF MERGER. This Merger Agreement may be terminated and
---------------------
abandoned by the Bank at any time prior to the date the Merger becomes
effective, whether before or after any shareholder action in the event of the
occurrence of any one or more of the following circumstances which in the sole
judgment of the Bank's Board of Directors, makes the Merger undesirable for the
Bank and its shareholders:
a. The holders of more than 10% of the outstanding shares of Bank
stock dissent from the Merger;
b. Any act, suit, proceeding or claim relating to the Merger is
instituted before any court or administrative body or threatened to be
instituted before such court or body; or
c. For any other reason the consummation of the Merger is deemed
inadvisable in the opinion of the Bank's Board of Directors.
Upon termination, as provided in this section, this Merger Agreement shall be
void and of no further effect, and there shall be no liability by reason of this
Merger Agreement or the termination thereof on the part of the Bank, the Interim
or the Corporation, or on the directors, officers, employees, agents or
shareholders of any them.
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<PAGE>
7. DIRECTORS. The name and address of each director who is to serve as a
---------
director of the Resulting Bank, until the next meeting of shareholders at which
directors are elected, is as follows:
<TABLE>
<S> <C>
B.G. Carter William Eldon Chasteen
Long Ben Lane 127 Harbor View Drive
Cudjoe Key, Florida 33042 Tavernier, Florida 33070
Armando J. Henriquez James R. Lawson, III
3615 Sunrise Drive 122 East Shore Drive
Key West, Florida 33040 Key Largo, Florida 33037
Edward V. Lett Scott A. Marr
87465 Old Highway, #225 496 Caribbean Drive
Islamorada, Florida 33036 Key Largo, Florida 33037
Derek D. Martin-Vegue W. Kenneth Meeks
2020 Manor Lane Pen Key Club
Marathon, Florida 33050 Islamorada, Florida 33036
Joseph H. Roth, Jr. Richard J. Williams
88181 State Road, #E-33 Williams Drive
Islamorada, Florida 33036 Islamorada, Florida 33036
</TABLE>
8. EXECUTIVE OFFICERS. Upon the Merger becoming effective, the executive
------------------
officers of the Resulting Bank shall be as follows:
W. KENNETH MEEKS - Chairman of the Board
EDWARD V. LETT - President and Chief Executive Officer
DANIEL W. TAYLOR - Executive Vice President
9. EFFECTIVE DATE. Subject to the terms and upon satisfaction of all
--------------
requirements of law and the conditions specified in this Merger Agreement, the
Merger shall become effective at the time specified in the certificate of the
Florida Department of Banking and Finance approving the Merger.
[SIGNATURES OMITTED]
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<PAGE>
ATTACHMENT A
TIB BANK OF THE KEYS
BRANCH LOCATIONS
1. Key Largo Bayside, 10330 Overseas Highway, Key Largo, Florida 33037
2. Tavernier, 91980 Overseas Highway, Tavernier, Florida 33037
3. Islamorada, 80900 Overseas Highway, Tavernier, Florida 33037
4. Marathon Shores, 11401 Overseas Highway, Marathon Shores, Florida 33052
5. Marathon, 2315 Overseas Highway, Marathon, Florida 33050
6. Big Pine Key, Mile Marker 30.4, Big Pine Key, Florida 33043
7. Key West, 330 Whitehead Street, Key West, Florida 33041
8. Searstown Key West, 3322 N. Roosevelt Blvd., Key West, Florida 33040
B-1
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ATTACHMENT B
RIGHTS OF DISSENTING SHAREHOLDERS
658.44 APPROVAL BY STOCKHOLDERS; RIGHTS OF DISSENTERS; PREEMPTIVE RIGHTS.--
(1) The department shall not issue a certificate of merger to a resulting
state bank or trust company unless the plan of merger and merger agreement, as
adopted by a majority of the entire board of directors of each constituent bank
or trust company, and as approved by each appropriate federal regulatory agency
and by the department, has been approved:
(a) By the stockholders of each constituent national bank as provided
by, and in accordance with the procedures required by, the laws of
the United States applicable thereto, and
(b) After notice as hereinafter provided, by the affirmative vote or
written consent of the holders of at least a majority of the shares
entitled to vote thereon of each constituent state bank or state
trust company, unless any class of shares of any constituent state
bank or state trust company is entitled to vote thereon as a class,
in which event as to such constituent state bank or state trust
company the plan of merger and merger agreement shall be approved by
the stockholders upon receiving the affirmative vote or written
consent of the holders of a majority of the shares of each class of
shares entitled to vote thereon as a class and of the total shares
entitled to vote thereon. Such vote of stockholders of a constituent
state bank or state trust company shall be at an annual or special
meeting of stockholders or by written consent of the stockholders
without a meeting as provided in s. 607.0704.
Approval by the stockholders of a constituent bank or trust company of a plan of
merger and merger agreement shall constitute the adoption by the stockholders of
the articles of incorporation of the resulting state bank or state trust company
as set forth in the plan of merger and merger agreement.
(2) Written notice of the meeting of, or proposed written consent action
by, the stockholders of each constituent state bank or state trust company shall
be given to each stockholder of record, whether or not entitled to vote, and
whether the meeting is an annual or a special meeting or whether the vote is to
be by written consent pursuant to s. 607.0704, and the notice shall state that
the purpose or one of the purposes of the meeting, or of the proposed action by
the stockholders without a meeting, is to consider the proposed plan of merger
and merger agreement. Except to the extent provided otherwise with respect to
stockholders of a resulting bank or trust company pursuant to subsection (7),
the notice shall also state that dissenting stockholders will be entitled to
payment in cash of the value of only those shares held by the stockholders:
(a) Which at a meeting of the stockholders are voted against the
approval of the plan of merger and merger agreement;
(b) As to which, if the proposed action is to be by written consent of
stockholders pursuant to s. 607.0704, such written consent is not
given by the holder thereof; or
(c) With respect to which the holder thereof has given written notice to
the constituent state bank or trust company, at or prior to the
meeting of the stockholders or on or prior to the date specified for
action by the stockholders without a meeting pursuant to s. 607.0704
in the notice of such proposed action, that the stockholder dissents
from the plan of merger and merger agreement.
Hereinafter in this section, the term "dissenting shares" means and includes
only those shares, which may be all or less than all the shares of any class
owned by a stockholder, described in paragraphs (a), (b), and (c).
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<PAGE>
(3) On or promptly after the effective date of the merger, the resulting
state bank or trust company, or a bank holding company which, as set out in the
plan of merger or merger agreement, is offering shares rights, obligations, or
other securities or property in exchange for shares of the constituent banks or
trust companies, may fix an amount which it considers to be not more than the
fair market value of the shares of a constituent bank or trust company and which
it will pay to the holders of dissenting shares of that constituent bank or
trust company and, if it fixes such amount, shall offer to pay such amount to
the holders of all dissenting shares of that constituent bank or trust company.
The amount payable pursuant to any such offer which is accepted by the holders
of dissenting shares, and the amount payable to the holders of dissenting shares
pursuant to an appraisal, shall constitute a debt of the resulting state bank or
state trust company.
(4) The owners of dissenting shares who have accepted an offer made
pursuant to subsection (3) shall be entitled to receive the amount so offered
for such shares in cash upon surrendering the stock certificates representing
such shares at any time within 30 days after the effective date of the merger,
and the owners of dissenting shares, the value of which is to be determined by
appraisal, shall be entitled to receive the value of such shares in cash upon
surrender of the stock certificates representing such shares at any time within
30 days after the value of such shares has been determined by appraisal made on
or after the effective date of the merger.
(5) The value of dissenting shares of each constituent state bank or state
trust company, the owners of which have not accepted an offer for such shares
made pursuant to subsection (3), shall be determined as of the effective date of
the merger by three appraisers, one to be selected by the owners of at least
two-thirds of such dissenting shares, one to be selected by the board of
directors of the resulting state bank, and the third to be selected by the two
so chosen. The value agreed upon by any two of the appraisers shall control and
be final and binding on all parties. If, within 90 days from the effective date
of the merger, for any reason one or more of the appraisers is not selected as
herein provided, or the appraisers fail to determine the value of such
dissenting shares, the department shall cause an appraisal of such dissenting
shares to be made which will be final and binding on all parties. The expenses
of appraisal shall be paid by the resulting state bank or trust company.
(6) Upon the effective date of the merger, all the shares of stock of every
class of each constituent bank or trust company, whether or not surrendered by
the holders thereof, shall be void and deemed to be canceled, and no voting or
other rights of any kind shall pertain thereto or to the holders thereof except
only such rights as may be expressly provided in the plan of merger and merger
agreement or expressly provided by law.
(7) The provisions of subsection (6) and, unless agreed by all the
constituent banks and trust companies and expressly provided in the plan of
merger and merger agreement, subsections (3), (4), and (5) are not applicable to
a resulting bank or trust company or to the shares or holders of shares of a
resulting bank or trust company the cash, shares, rights, obligations, or other
securities or property of which, in whole or in part, is provided in the plan of
merger or merger agreement to be exchanged for the shares of the other
constituent banks or trust companies.
(8) The stock, rights, obligations, and other securities of a resulting
bank or trust company may be issued as provided by the terms of the plan of
merger and merger agreement, free from any preemptive rights of the holders of
any of the shares of stock or of any of the rights, obligations, or other
securities of such resulting bank or trust company or of any of the constituent
banks or trust companieerger and merger agreement by the stockholders as
provided in subsection (1), there shall be filed with the department, within 30
days after the time limit in s. 658.43(5), a fully executed counterpart of the
plan of merger and merger agreement as so approved if it differs in any respect
from any fully executed counterpart thereof theretofore filed with the
department, and copies of the resolutions approving the same by the stockholders
of each constituent bank or trust company, certified by the president, or chief
executive officer if other than the president, and the cashier or corporate
secretary of each constituent bank or trust company, respectively, with the
corporate seal impressed thereon.
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<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 20. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Section 607.0831 of the Florida Business Corporation Act provides that a
corporation's articles of incorporation may contain a provision eliminating or
limiting the personal liability of a director to the corporation or its
shareholders for monetary damages for breach of duty of care or other duty as a
director. This Section also provides, however, that such a provision shall not
eliminate or limit the liability of a director (i) for any appropriation, in
violation of his duties, of any business opportunity of the corporation, (ii)
for acts or omissions involving intentional misconduct or a knowing violation of
law, (iii) for certain other types of liability set forth in the Act, and (iv)
for transactions from which the director derived an improper personal benefit.
Article 6 of the Registrant's Articles of Incorporation contains a provision
eliminating or limiting the personal liability of a director of the Registrant
to the fullest extent authorized by the Florida Business Corporation Act.
In addition, Section 607.0850 of the Florida Business Corporation Act
provides for indemnification of directors and officers of the Registrant for
liability and expenses reasonably incurred by them in connection with any civil,
criminal, administrative or investigative action, suit or proceeding in which
they may become involved by reason of being a director or officer of the
Registrant. Indemnification is permitted if the director or officer acted in a
manner which he believed in good faith to be in or not opposed to the best
interests of the Registrant and, with respect to, in criminal actions, if he had
no reasonable cause to believe his conduct to be unlawful. Article 8 of the
Registrant's Articles of Incorporation contains a provision providing for the
indemnification of officers and directors and advancement of expenses to the
fullest extent authorized by the Florida Business Corporation Act.
The Registrant maintains directors and officers liability insurance which
insures against liabilities that directors and officers of the Registrant may
incur in such capacities.
ITEM 21. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.
The documents as set forth on the Exhibit Index on page II-5 are
incorporated herein by reference, and such documents are filed as exhibits to
this Registration Statement.
ITEM 22. UNDERTAKINGS.
(a) The undersigned Registrant hereby undertakes as follows:
(1) Prior to any public reoffering of the securities registered
hereunder through the use of a prospectus which is part of this
Registration Statement by any person or party who is deemed to
be an underwriter within the meaning of Rule 145(c), the
Registrant undertakes that such reoffering prospectus will
contain the information called for by the applicable
registration form with respect to reofferings by persons who
may be deemed underwriters, in addition to the information
called for by other Items of the applicable form.
(2) That every prospectus (i) that is filed pursuant to paragraph
(a) immediately preceding, or (ii) that purports to meet the
requirements of Section 10(a)(3) of the Securities Act of 1933
and is used in connection with an offering of securities
subject to Rule 415, will be filed as a part of an amendment to
the Registration Statement and will not be used until such
II-1
<PAGE>
amendment is effective, and that, for purposes of determining
any liability under the Securities Act of 1933, each such post-
effective amendment shall be deemed to be a new Registration
Statement relating to the securities offered therein, and the
offering of such securities shall be deemed to be the initial
bona fide offering thereof.
(b) The undersigned Registrant hereby undertakes as follows:
(1) The undersigned Registrant hereby undertakes to respond to
requests for information that is incorporated by reference into
the prospectus pursuant to Items 4, 10(b), 11 or 13 of this
Form, within one business day of receipt of such request, and
to send the incorporated documents by first class mail or other
equally prompt means. This includes information contained in
documents filed subsequent to the effective date of the
Registration Statement through the date of responding to the
request.
(c) The undersigned Registrant hereby undertakes as follows:
(1) The undersigned Registrant hereby undertakes to supply by means
of a post-effective amendment all information concerning a
transaction, and the company being acquired involved therein,
that was not the subject of and included in the Registration
Statement when it became effective.
II-2
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Key West, State of
Florida, on April 23, 1996.
TIB FINANCIAL CORP.
By: /s/ Edward V. Lett
--------------------------------------
Edward V. Lett, President
POWER OF ATTORNEY
Know All Men By These Presents, that each person whose signature appears
below constitutes and appoints Edward V. Lett and W. Kenneth Meeks, and each of
them, his true and lawful attorneys-in-fact and agents, with full power of
substitution, and resubstitution, for him and in his name, place and stead, in
any and all capacities, to sign any and all amendments (including post-effective
amendments) to this Registration Statement, and to file the same, with all
exhibits thereto, and other documents in connection therewith, with the
Securities and Exchange Commission, granting unto said attorneys-in-fact and
agents, full power and authority to do and perform each and every act and thing
requisite or necessary to be done in and about the premises, as fully to all
intents and purposes as he might or could do in person, hereby ratifying and
confirming all that said attorneys-in-fact and agents, or his or their
substitute or substitutes, may lawfully do or cause to be done by virtue
thereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the date indicated:
<TABLE>
<CAPTION>
Signature Title Date
- --------- ----- ----
<S> <C> <C>
/s/ Edward V. Lett Director, President and April 23, 1996
- --------------------------------
Edward V. Lett Principal Executive Officer;
Principal Financial and
Accounting Officer
/s/ W. Kenneth Meeks Director and Chairman April 23, 1996
- --------------------------------
W. Kenneth Meeks
/s/ B.G. Carter Director April 23, 1996
- --------------------------------
B.G. Carter
</TABLE>
II-3
<PAGE>
<TABLE>
<S> <C> <C>
/s/ William E. Chasteen Director April 23, 1996
- --------------------------------
William E. Chasteen
/s/ Armando J. Henriquez Director April 23, 1996
- --------------------------------
Armando J. Henriquez
/s/ James R. Lawson, III Director April 23, 1996
- --------------------------------
James R. Lawson, III
/s/ Scott A. Marr Director April 23, 1996
- --------------------------------
Scott A. Marr
/s/ Derek D. Martin-Vegue Director April 23, 1996
- --------------------------------
Derek D. Martin-Vegue
/s/ Joseph H. Roth, Jr. Director April 23, 1996
- --------------------------------
Joseph H. Roth, Jr.
/s/ Richard J. Williams Director April 23, 1996
- --------------------------------
Richard J. Williams
</TABLE>
II-4
<PAGE>
EXHIBIT INDEX
-------------
<TABLE>
<CAPTION>
Exhibit No. Description Sequential Page
- ----------- ----------- ---------------
<S> <C> <C>
2.1 Agreement and Plan of Merger
(Incorporated by reference from Exhibit A
attached to the Proxy Statement/Prospectus
included in this Registration Statement)
3.1 Articles of Incorporation
3.2 Bylaws
4.1 Specimen Stock Certificate
5.1 Opinion of Holland & Knight as to legality
of the securities being registered
8.1 Form of opinion of Holland & Knight as to tax
aspects of the transaction
10.1 Employment Contract between Edward V. Lett and
TIB Bank of the Keys
10.2 401(K) Savings and Employee Stock Ownership Plan
10.3 Employee Incentive Stock Option Plan
24.1 Consent of Holland & Knight (included in Exhibit 5.1)
99.1 Form of Proxy
</TABLE>
II-5
<PAGE>
ARTICLES OF INCORPORATION
OF
TIB FINANCIAL CORP.
ARTICLE 1. NAME. The name of the Corporation is TIB Financial Corp.
--------- ----
ARTICLE 2. STATE OF ORGANIZATION. The Corporation is organized
--------- ---------------------
pursuant to the provisions of the Florida Business Corporation Act (the "Code").
ARTICLE 3. CAPITAL STOCK.
--------- -------------
(A) AUTHORIZED SHARES. The total number of shares of all
classes of capital stock which the Corporation shall have authority to issue
5,000,000 shares of common stock, par value $0.10 per share (the "Common
Stock"). The shares may be issued from time to time as authorized by the Board
of Directors of the Corporation without further approval of the shareholders
except as otherwise provided herein or to the extent that such approval is
required by statute, rule or regulation.
(B) COMMON STOCK. Except as otherwise provided by statute, the
holders of the Common Stock shall exclusively possess all voting power. Each
holder of shares of Common Stock shall be entitled to one vote for each share
held of record by such holder, including the election of directors. There shall
be no cumulative voting rights in the election of directors of the Corporation.
ARTICLE 4. REGISTERED OFFICE, REGISTERED AGENT, AND PRINCIPAL OFFICE.
--------- ---------------------------------------------------------
The initial registered office of the Corporation shall be at 317 Whitehead
Street, Key West, Florida 33040. The initial registered agent of the Corporation
at that address shall be James Hendrick, Esq. The initial principal office of
the Corporation shall be at 99451 Overseas Highway, Key Largo, Florida 33037.
<PAGE>
ARTICLE 5. DIRECTORS.
--------- ---------
(A) The Corporation shall be under the direction of the Board of
Directors. The Board of Directors shall consist of not less than five (5) nor
more than twenty-five (25) directors. The number of directors within this range
shall be fixed from time to time only by the Board of Directors pursuant to a
resolution adopted by a majority of the directors then in office.
(B) The initial Board of Directors of the Corporation shall
consist of the ten (10) members who shall serve in the classes indicated, whose
names and addresses are set forth below:
CLASS I - 1997
<TABLE>
<CAPTION>
NAME ADDRESS
---- -------
<S> <C>
William Eldon Chasteen 127 Harbor View Drive
Tavernier, Florida 33070
W. Kenneth Meeks Pen Key Club
Islamorada, Florida 33036
Richard J. Williams Williams Drive
Islamorada, Florida 33036
</TABLE>
CLASS II - 1998
<TABLE>
<CAPTION>
NAME ADDRESS
---- -------
<S> <C>
B. G. Carter Long Ben Lane
Cudjoe Key, Florida 33042
Armando J. Henriquez 3615 Sunrise Drive
Key West, Florida 33040
James R. Lawson, III 122 East Shore Drive
Key Largo, Florida 33037
</TABLE>
2
<PAGE>
CLASS III - 1999
<TABLE>
<CAPTION>
NAME ADDRESS
---- -------
<S> <C>
Edward V. Lett 87465 Old Highway, #225
Islamorada, Florida 33036
Scott A. Marr 496 Caribbean Drive
Key Largo, Florida 33037
Derek D. Martin-Vegue 2020 Manor Lane
Marathon, Florida 33050
Joseph H. Roth, Jr. 88181 State Road, #E-33
Islamorada, Florida 33036
</TABLE>
(C) The Board of Directors shall be divided into three classes:
Class I, Class II, and Class III, with each class to be as nearly equal in
number as possible. Each director shall serve for a term ending on the date of
the third annual meeting of shareholders of the Corporation (the "Annual
Meeting") following the Annual Meeting at which such director was elected;
provided, however, that the directors first elected to Class I shall serve for a
term ending on the date of the Annual Meeting held in 1997, the directors first
elected to Class II shall serve for a term ending on the date of the Annual
Meeting held in 1998, and the directors first elected to Class III shall serve
for a term ending on the date of the Annual Meeting held in 1999.
Notwithstanding the foregoing, each director shall serve until his successor is
elected and qualified or until his death, resignation or removal.
(D) Any vacancy occurring in the Board of Directors, including
any vacancy created by reason of an increase in the number of directorships, may
be filled by the vote of a majority of directors then in office. Any director so
chosen shall hold office until such director's successor shall have been elected
and qualified. Any director chosen by the Board of Directors to fill a vacancy
created, other than by reason of an increase in the number of
3
<PAGE>
directorships, shall serve for the unexpired term of the director whose vacancy
is being filled. Any director chosen by the Board of Directors to fill a
vacancy created by reason of an increase in the number of directorships shall
serve for a term to expire at the next election of directors by the
shareholders.
ARTICLE 6. DIRECTOR'S LIABILITY. A director of the Corporation shall
--------- --------------------
not be personally liable to the Corporation or its shareholders for monetary
damages for breach of his duty of care or other duty as a director by reason of
any act or omission occurring subsequent to the effective date of this
provision, except for liability (i) for any appropriation, in violation of his
duties, of any business opportunity of the Corporation; (ii) for acts or
omissions which involve intentional misconduct or a knowing violation of law;
(iii) for the types of liability set forth in Section 607.0831 of the Code; or
(iv) for any transaction from which the director derives an improper personal
benefit. If the Code is amended to authorize corporate action further limiting
the personal liability of directors, then the liability of a director of the
Corporation shall be limited to the fullest extent permitted the Code, as so
amended. Any repeal or modification of this Article by the shareholders of the
Corporation shall not adversely affect any right or protection of a director of
Corporation existing at the time of such repeal or modification.
ARTICLE 7. SHAREHOLDER MEETINGS.
--------- --------------------
A. CALL OF SPECIAL MEETINGS. Special meetings of shareholders
may be called at any time by the Chairman of the Board or the President or by a
majority of the directors then in office or by the written request of the
holders of at least 67% of the then outstanding shares of capital stock of the
Corporation entitled to be cast, voting together as a single class.
4
<PAGE>
B. NO ACTION BY WRITTEN CONSENT. The shareholders of the
Corporation shall not be entitled to take any action by written consent in lieu
of taking such action at an annual or special meeting of shareholders called for
that purpose.
C. NOTICE. Advance notice of shareholder nominations for
election of directors and of business to be brought by shareholders before any
meeting the shareholders of the Corporation shall be given in the manner
provided in the Bylaws of the Corporation.
ARTICLE 8. INDEMNIFICATION.
--------- ---------------
A. Each person who is or was a director or officer of the
Corporation, and each person who is or was a director or officer of the
Corporation who at request of the Corporation is serving or has served as an
officer, director, partner, joint venturer or trustee of another corporation,
partnership, joint venture, trust or other enterprise, shall be indemnified by
the Corporation against those expenses (and the Corporation may pay or reimburse
expenses incurred by such person as a party to a proceeding in advance of final
disposition of the proceeding if such person executes a written undertaking to
repay such advances if it is ultimately determined that he is not entitled to
indemnification under this Article or otherwise) (including attorneys' fees up
to and through any final appeal), judgments, fines and amounts paid in
settlement which are allowed to be paid or reimbursed by the Corporation under
the laws of the State of Florida and which are actually and reasonably incurred
in connection with any action, suit or proceeding, pending or threatened,
whether civil, criminal, administrative or investigative, in which such person
may be involved by reason of his being or having been a director or officer of
this Corporation or of such other enterprises. Such indemnification shall be
made only in accordance with the laws of the State of Florida and subject to the
conditions prescribed therein.
5
<PAGE>
B. In any instance where the laws of the State of Florida
permit indemnification to be provided to persons who are or have been an officer
or director of the Corporation or who are or have been an officer, director,
partner, joint venturer trustee of any such other enterprise only on a
determination that certain specified standards of conduct have been met, upon
application for indemnification by any such person, the Corporation shall
promptly cause such determination to be made (i) by the Board of Directors by
majority vote of a quorum consisting of directors not at the time parties to
proceeding; (ii) if a quorum cannot be obtained, then by majority vote of a
committee duly designated by the Board of Directors (in which designation
directors who are parties participate), consisting solely of two (2) or more
directors not at the time parties to proceeding; (iii) by special legal counsel
selected by the Board of Directors or its committee in the manner prescribed in
(i) or (ii), or if a quorum of the Board of Directors cannot be obtained under
(i) and a committee cannot be designated under (ii), selected by majority vote
of the full Board of Directors (in which selection directors who are parties
participate); or (iv) by the shareholders, but shares owned or voted under the
control of directors who are at the time parties to the proceeding may not be
voted on the determination.
C. As a condition to any such right of indemnification, the
Corporation may require that it be permitted to participate in the defense of
any such action or proceeding through legal counsel designated by the
Corporation and at the expense of the Corporation.
D. The Corporation may purchase and maintain insurance on
behalf of any such officers and directors whether or not the Corporation would
have the power to indemnify such officers and directors against any liability
under the laws of the State of Florida. If any expenses or other amounts are
paid by way of indemnification, other than by court order, action
6
<PAGE>
by shareholders or by an insurance carrier, the Corporation shall provide notice
of such payment to the shareholders in accordance with the provisions of laws of
the State of Florida.
E. The indemnification and advancement of expenses provided in
this Article shall not be deemed exclusive of any other rights, in respect to
indemnification or otherwise, to which the persons seeking indemnification or
advancement of expenses may be entitled under any bylaws, resolution, agreement,
statute or otherwise.
F. The rights to indemnification and advancement of expenses
provided by this Article shall be deemed a contract between the Corporation and
each such person and any modification or repeal of this Article shall not affect
any right or obligation then existing with respect to any stated fact then or
previously existing or any action, or proceeding previously or thereafter
brought or threatened based in whole or in part on any such state of facts. Such
contract right may not be modified or repealed without consent of each such
person. The rights to indemnification and advancement of expenses provided by
this Article shall continue to a person entitled to indemnification hereunder
who has ceased to be a director or officer and shall inure to the benefit of the
heirs, executors or administrators of each such person.
G. Notwithstanding anything contained herein to the contrary,
Article 8 is intended to provide indemnification to each director and officer of
the Corporation to the fullest extent authorized by the Code, as the same exists
or may hereafter be amended (but, in the case of any such amendment, only to the
extent that such amendment permits the Corporation to provide broader rights
than said statute permitted the Corporation to provide prior thereto).
ARTICLE 9. BYLAWS. In furtherance and not in limitation of the
--------- ------
power conferred by statute, the Board of Directors is expressly authorized to
make, alter, amend and repeal the
7
<PAGE>
Bylaws of the Corporation by vote of a majority of the directors then in office,
subject to the powers of the holders of the capital stock of the Corporation to
alter, amend or repeal the Bylaws; provided, however, that, with respect to the
powers of the holders of capital stock to alter, amend and repeal the Bylaws of
the Corporation, notwithstanding any other provisions of these Articles of
Incorporation or any provision of law which might otherwise permit a lesser vote
or no vote, but in addition to any affirmative vote of holders of any particular
class or series of the capital stock of the Corporation required by law, or
these Articles of Incorporation, the affirmative vote of holders of at least 67%
of the voting power of the then outstanding shares of capital stock entitled to
be cast, voting together as a single class, shall be required to alter, amend or
repeal any provision of Bylaws.
ARTICLE 10. AMENDMENT OF ARTICLES OF INCORPORATION. The Corporation
---------- --------------------------------------
reserves the right to amend, alter, or repeal any provision contained in these
Articles of Incorporation in the manner now or hereafter prescribed by statute,
and all rights conferred on shareholders herein are granted subject to this
reservation. Notwithstanding the preceding sentence, the provisions set forth
in this Article and Articles 3, 6, 7, 8, and 9 hereof may not be altered,
amended or repealed in any respect, and no other provision(s) may be adopted
which would impair in any respect the operation or effect of any such
provisions, except by the affirmative vote of holders of at least 67% of the
voting power of the then outstanding shares of capital stock, voting together as
a single class; provided, however, that such 67% voting requirement shall not be
applicable if the Board of Directors of the Corporation shall approve such
action by resolution adopted by at least 67% of the directors then in office, in
which case the affirmative vote of holders of a majority of the then outstanding
shares of capital stock entitled to be cast at the
8
<PAGE>
meeting of shareholders called for that purpose, voting together as a single
class, shall be required to approve such action.
ARTICLE 11. SAVINGS CLAUSE. In the event any provision (or portions
---------- --------------
thereof) of these Articles of Incorporation shall be found to be invalid,
prohibited or unenforceable for any reason, the remaining provisions (or
portions thereof) of these Articles of Incorporation shall remain in full force
and effect, and shall be construed as if such invalid, prohibited or
unenforceable provision had been stricken herefrom or otherwise rendered
inapplicable, it being the intent of the Corporation and its shareholders that
each such remaining provision (or portions thereof) of these Articles of
Incorporation remain, to the fullest extent permitted by law, applicable and
enforceable as to all shareholders notwithstanding any such finding.
ARTICLE 12. INCORPORATOR. The name and address of the incorporator
---------- ------------
of the Corporation is Edward V. Lett, 99451 Overseas Highway, Key Largo, Florida
33037.
IN WITNESS WHEREOF, the undersigned has executed these Articles of
Incorporation.
/s/ Edward V. Lett
---------------------------------------
Edward V. Lett, Incorporator
9
<PAGE>
CERTIFICATE DESIGNATING PLACE OF BUSINESS OR DOMICILE
FOR THE SERVICE OF PROCESS WITHIN THIS STATE,
NAMING AGENT UPON WHOM PROCESS MAY BE SERVED.
Pursuant to Chapter 48.091, Florida Statutes, the following is submitted:
That TIB FINANCIAL CORP., desiring to organize under the laws of the State
of Florida with its initial registered office, as indicated in the Articles of
Incorporation, at 317 Whitehead Street, Key West, State of Florida, 33040, has
named James Hendrick, Esq. as its agent to accept service of process within this
state.
ACKNOWLEDGMENT:
Having been named to accept service of process for the corporation named
above, at the place designated in this Certificate, I agree to act in that
capacity, to comply with the provisions of the Florida Business Corporation Act,
and am familiar with, and accept, the obligations of that position.
/s/ James Hendrick
--------------------------------------
James Hendrick, Esq.
10
<PAGE>
EXHIBIT 3.2
BYLAWS
<PAGE>
BYLAWS OF
TIB FINANCIAL CORP.
TABLE OF CONTENTS
-----------------
<TABLE>
<CAPTION>
PAGE
----
<S> <C> <C>
ARTICLE ONE - OFFICES
Section 1.1 Registered Office and Agent...................... 1
Section 1.2 Other Offices.................................... 1
ARTICLE TWO - SHAREHOLDERS' MEETINGS
Section 2.1 Date, Time and Place of Meetings................. 1
Section 2.2 Annual Meetings.................................. 1
Section 2.3 Special Meetings................................. 1
Section 2.4 Notice of Meetings............................... 1
Section 2.5 Quorum........................................... 2
Section 2.6 Adjournment...................................... 2
Section 2.7 Vote Required.................................... 2
Section 2.8 Voting of Shares................................. 2
Section 2.9 No Action by Written Consent..................... 3
Section 2.10 Shareholders' List............................... 3
Section 2.11 Inspections of Election.......................... 3
Section 2.12 Conduct of Meetings.............................. 3
Section 2.13 Voting of Shares by Certain Holders.............. 4
ARTICLE THREE - THE BOARD OF DIRECTORS
Section 3.1 General Powers................................... 5
Section 3.2 Number and Tenure................................ 6
Section 3.3 Qualification of Directors....................... 6
Section 3.4 Vacancy.......................................... 6
Section 3.5 Removal.......................................... 6
Section 3.6 Compensation..................................... 6
Section 3.7 Nominations of Directors......................... 6
Section 3.8 Directors Emeritus............................... 7
ARTICLE FOUR - MEETINGS OF THE BOARD OF DIRECTORS
Section 4.1 Annual and Other Regular Meetings................ 8
Section 4.2 Special Meetings................................. 8
Section 4.3 Notice........................................... 8
Section 4.4 Quorum and Adjournment........................... 9
Section 4.5 Voting........................................... 9
Section 4.6 Presumption of Assent............................ 9
Section 4.7 Meeting by Means of Conference Telephone
Similar Telecommunications Equipment............. 9
</TABLE>
<PAGE>
<TABLE>
<S> <C> <C>
Section 4.8 Action by Directors Without a Meeting............ 9
Section 4.9 Conduct of Meetings.............................. 9
Section 4.10 Resignation...................................... 10
ARTICLE FIVE - BOARD COMMITTEES
Section 5.1 Committees....................................... 10
ARTICLE SIX - OFFICERS
Section 6.1 Officers......................................... 11
Section 6.2 Compensation..................................... 11
Section 6.3 Election and Term of Office...................... 11
Section 6.4 Removal.......................................... 11
Section 6.5 Vacancy.......................................... 11
Section 6.6 Chairman of the Board............................ 11
Section 6.7 President........................................ 12
Section 6.8 Vice President................................... 12
Section 6.9 Secretary........................................ 12
Section 6.10 Treasurer....................................... 12
Section 6.11 Assistant Vice President, Assistant
Secretary and Assistant Treasurer................ 13
Section 6.12 Delegation of Authority......................... 13
ARTICLE SEVEN - CAPITAL STOCK
Section 7.1 Stock Certificates............................... 13
Section 7.2 Stock Records.................................... 13
Section 7.3 Stock Transfers.................................. 13
Section 7.4 Record Dates..................................... 14
Section 7.5 Transfer Agents and Registrars................... 14
Section 7.6 Lost Certificates................................ 14
ARTICLE EIGHT - GENERAL PROVISIONS
Section 8.1 References....................................... 15
Section 8.2 Reference to Gender.............................. 15
Section 8.3 Legal Restrictions............................... 15
Section 8.4 Seal............................................. 15
Section 8.5 Fiscal Year...................................... 15
Section 8.6 Voting Shares in Subsidiaries.................... 15
Section 8.7 Inspection of Books.............................. 15
Section 8.8 Contracts........................................ 16
Section 8.9 Amendment of Bylaws.............................. 16
ARTICLE NINE - INDEMNIFICATION
Section 9.1 Indemnification.................................. 16
</TABLE>
ii
<PAGE>
BYLAWS OF
TIB FINANCIAL CORP.
(a Florida corporation)
ARTICLE ONE
OFFICES
SECTION 1.1 REGISTERED OFFICE AND AGENT. The Corporation will
----------- ---------------------------
maintain a registered office and will have a registered agent whose business
office is identical with such registered office. The registered office need not
be identical with the principal business office of the Corporation.
SECTION 1.2 OTHER OFFICES. The Corporation may have offices at such
----------- -------------
other place(s), within or without the State of Florida, as the Board of
Directors may from time to time determine or the business of the Corporation may
require.
ARTICLE TWO
SHAREHOLDERS' MEETINGS
SECTION 2.1 DATE, TIME AND PLACE OF MEETINGS. All meetings of the
----------- --------------------------------
share-holders shall be held on such date, time and place, within or without the
State of Florida, as the Board of Directors may set forth from time to time, or
if no place is so specified, at the principal executive office of the
Corporation.
SECTION 2.2 ANNUAL MEETINGS. The annual meeting of shareholders
----------- ---------------
shall be held on a date and at a time following the end of the Corporation's
fiscal year as may be determined by the Board of Directors, for the purpose of
electing directors and transacting any and all business that may properly come
before the meeting.
SECTION 2.3 SPECIAL MEETINGS. Special meetings of the shareholders
----------- ----------------
for any purpose(s) may be called at any time by the Chairman of the Board or the
President or by a majority of the directors then in office or by written request
of the holders of at least 51% of the then outstanding shares of capital stock
of the Corporation entitled to be cast, voting together as a single class.
Business transacted at any special meeting of shareholders shall be limited to
the purpose(s) stated in the notice thereof.
SECTION 2.4 NOTICE OF MEETINGS. Written notice of each shareholders'
----------- ------------------
meeting stating the date, time and place of the meeting will be delivered either
personally or by mail to each shareholder of record entitled to vote at such
meeting, not less than 10 days nor more than 60 days before the date of the
meeting. In the case of an annual meeting, the notice of the meeting need not
state the purpose(s) for which the meeting is called. In the case of a special
meeting, the notice of meeting shall state the purpose(s) for which the meeting
is called. If
<PAGE>
mailed, such notice shall be deemed to be delivered when deposited in the United
States mail with first class postage affixed thereon, prepaid, addressed to each
shareholder at his address as it appears on the Corporation's record of
shareholders. Attendance of a shareholder at a meeting of the shareholders shall
constitute a waiver of notice of such meeting and of all objections to the place
or time of such meeting, or the manner in which it has been called or convened,
except when a shareholder attends a meeting solely for the purpose of stating,
at the beginning of the meeting, any such objection to the transaction of any
business. Notice need not be given to any shareholder who signs a waiver of
notice, in person or by proxy, either before or after the meeting. If the
language of a proposed resolution or plan requiring the approval of the
shareholders is included in a written notice of a meeting of the shareholders,
the shareholders' meeting considering the resolution or plan may adopt it with
such clarifying or other amendments as do not enlarge its original purpose
without further notice to shareholders not present in person or by proxy.
SECTION 2.5 QUORUM. The presence, in person or by proxy, of the
----------- ------
holders of a majority of shares then issued and outstanding and entitled to
vote, shall constitute a quorum for the transaction of business at any meeting
of shareholders, except as otherwise required by statute or the Articles of
Incorporation. Where a quorum is once present at a meeting, it shall not be
broken by the subsequent withdrawal of any of those present.
SECTION 2.6 ADJOURNMENT. In the absence of a quorum or for any other
----------- -----------
reason, the holders of the majority of the shares then issued and outstanding
and entitled to vote at any meeting of the shareholders, present in person or
represented by proxy, or the Chairman of the Board, or the President, shall have
the power to adjourn the meeting from time to time, without notice other than
announcement at the meeting of the date, time and place of the adjourned
meeting. At such adjourned meeting in which a quorum shall be present or
represented, any business may be transacted which might have been transacted at
the meeting as originally notified. If after the adjournment a new record date
is picked for the adjourned meeting, notice of the adjourned meeting shall be
given to each shareholder of record entitled to vote at the adjourned meeting.
SECTION 2.7 VOTE REQUIRED. When a quorum is present at any meeting,
----------- -------------
the affirmative vote of the holders of a majority of the shares of stock of the
Corporation entitled to vote and present in person or represented by proxy,
voting together as a single class, shall decide any questions brought before
such meeting, except as otherwise required by statute or the Articles of
Incorporation.
SECTION 2.8 VOTING OF SHARES. Except as otherwise required by statue
----------- ----------------
or the Articles of Incorporation, each shareholder shall be entitled to one
vote, in person or represented by proxy, for each share of stock having voting
power held by such shareholder at every meeting of the shareholders.
Shareholders may vote in person or by written proxy; provided, however, no proxy
shall be voted or acted on after 11 months from its date, unless the proxy
provides for a longer period. Any proxy to be voted at a meeting of shareholders
shall be filed with the Secretary of the Corporation before or at the time of
the meeting. Voting on matters brought
2
<PAGE>
before a shareholders' meeting may, at the discretion of the person presiding at
the meeting, be by voice vote or show of hands, unless any qualified voter,
prior to the voting on such matter, demands vote by ballot, in which event the
voting shall be by ballot.
SECTION 2.9 NO ACTION BY WRITTEN CONSENT. Shareholders shall not be
----------- ----------------------------
entitled to take any action by written consent in lieu of taking such action at
an annual or special meeting of shareholders.
SECTION 2.10 SHAREHOLDERS' LIST. A complete list of shareholders
------------ ------------------
entitled to vote at any meeting of shareholders, arranged in alphabetical order
showing the address of each such shareholder as it appears in the records of the
Corporation and the number of shares registered in the name of such shareholder,
shall be prepared by the Secretary of the Corporation at least 10 days prior to
every meeting of shareholders. Such list shall be open to the examination of any
shareholder, for any purpose relating to the meeting, during ordinary business
hours for a period of at least 10 days prior to the meeting, either at a place
within the city where the meeting is to be held or, if not so specified, the
place where the meeting is to be held, and a duplicate list shall be similarly
open to examination at the principal executive office of the Corporation. The
list shall also be produced and kept at the time and place of the meeting during
the duration thereof, and may be inspected by any shareholder who is present.
SECTION 2.11 INSPECTORS OF ELECTION. In advance of any meeting of
------------ ----------------------
shareholders, the Board of Directors may appoint any persons, other than
nominees for office, as inspectors of election to act at such meeting or any
adjournment thereof. The number of inspectors shall be either one or three. If
such persons are not so appointed or fail or refuse to act, the presiding
officer of such meeting shall make such appointment(s) at the meeting. The
number of inspectors shall be either one or three. If there are three
inspectors, the decision, action or certificate of a majority of such inspectors
shall be effective and shall represent the decision, action or certificate of
all. No such inspector need be a shareholder of the Corporation.
Unless otherwise required by statute or the Articles of Incorporation,
the duties of such inspectors shall include: determining the number of shares
outstanding and the voting power of each share, the number of shares represented
at the meeting, the existence of a quorum, the authenticity, validity and effect
of proxies; receiving votes or ballots; hearing and determining all challenges
and questions in any way arising in connection with the right to vote; counting
and tabulating all ballots or votes and determining the results thereof; and
such acts as may be proper to conduct the election or vote with fairness to all
shareholders. Upon request, the inspectors shall make a report in writing to the
secretary of the meeting concerning any challenge, question or other matter as
may have been determined by them and shall execute and deliver to such secretary
a certificate of any fact found by them.
SECTION 2.12 CONDUCT OF MEETINGS.
------------ -------------------
(a) All annual and special meetings or shareholders shall be
conducted in accordance with such rules and procedures as the Board of Directors
may determine subject to
3
<PAGE>
the requirements of statute and, as to matters not governed by such rules and
procedures, as the presiding officer of such meeting shall determine. The
presiding officer of any annual or special meeting of shareholders shall be the
President or, in his absence, such person as designated by the Board of
Directors. The Secretary, or in his absence, a person designated by the
presiding officer, shall act as secretary of the meeting.
(b) At any annual meeting of shareholders, only such business shall
be conducted as shall have been brought before the meeting (i) as specified in
the notice of the meeting given by or at the direction of the Board of
Directors, (ii) otherwise properly brought before the meeting by or at the
direction of the Board of Directors, or (iii) otherwise properly brought before
the meeting by any shareholder of the Corporation who is entitled to vote with
respect thereto and who complies with the notice procedures set forth in this
subparagraph (b).
For business to be properly brought before an annual meeting by a
shareholder, the shareholder must have given timely notice thereof in writing to
the Secretary of the Corporation. To be timely, a shareholder's notice must be
delivered or mailed to and received at the principal executive office of the
Corporation not less than 30 days prior to the date of the annual meeting;
provided, however, that in the event that less than 40 days' notice or prior
public disclosure of the date of the meeting is given or made to shareholders,
notice by a shareholder to be timely must be received not later than the close
of business on the 10th day following the day on which such notice of the date
of the annual meeting was mailed or such public disclosure was made. A
shareholder's notice to the Secretary shall set forth as to each matter such
shareholder proposes to bring before the annual meeting (i) a brief description
of the business desired to be brought before the annual meeting and the reasons
for conducting such business at the annual meeting (ii) the name and address, as
they appear on the books of the Corporation, of the shareholder proposing such
business, (iii) the class and number of shares of the Corporation's capital
stock that are beneficially owned by such shareholder and (iv) any material
interest of such shareholder in such business. Notwithstanding anything in these
Bylaws to the contrary, no business shall be brought before or conducted at an
annual meeting except in accordance with the provisions of this subparagraph
(b). The presiding officer at the annual meeting shall, if the facts so warrant,
determine and declare to the meeting that a matter of busi-ness was not properly
brought before the meeting in accordance with the provisions of this
subparagraph (b) and, if he should so determine, he shall so declare to the
meeting and any such business so determined to be not properly brought before
the meeting shall not be transacted.
(c) At any special meeting of the shareholders, only such business
shall be conducted as shall have been brought before the meeting by or at the
direction of the Board of Directors.
Section 2.13 Voting of Shares by Certain Holders.
------------ -----------------------------------
(a) If shares or other securities having voting power stand of record
in the names of two or more persons, whether fiduciaries, members of a
partnership, joint tenants, tenants in common, tenants by the entirety or
otherwise, or if two or more persons have the same fiduciary relationship
respecting the same shares, unless the Secretary of the Corporation is given
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written notice to the contrary and is furnished with a copy of the instrument or
order appointing them or creating the relationship wherein it is so provided,
their acts with respect to voting shall have the following effect: (1) if only
one votes, his act binds all; (2) if more than one vote, the act of the majority
so voting binds all; (3) if more than one vote, but the vote is evenly split on
any particular matter, each faction may vote the securities in question
proportionally, or any person voting the shares, or a beneficiary, if any, may
apply to such Court as may have jurisdiction to appoint an additional person to
act with the persons so voting the shares, which shall then be voted as
determined by the majority of such persons and the person appointed by the
Court. If the instrument so filed shows that any such tenancy is held in unequal
interests, a majority or even-split for the purposes hereof shall be a majority
or even-split in interests. Shares standing in the name of another corporation
may be voted by any officer, agent or proxy as the bylaws of such corporation
may prescribe, or, in the absence of such provision, as the board of directors
of such corporation may determine. Shares held by an administrator, executor,
guardian or conservator may be voted by him, either in person or by proxy,
without a transfer of such shares into his name. Shares standing in the name of
a trustee may be voted by him, either in person or by proxy, but no trustee
shall be entitled to vote shares held by him without a transfer of such shares
into his name. Shares standing in the name of a receiver may be voted by such
receiver, and shares held by or under the control of a receiver may be voted by
such receiver without the transfer thereof into his name if authority so to do
is contained in an appropriate order of the court or other public authority by
which such receiver was appointed.
(b) A shareholder whose shares are pledged shall be entitled to vote
such shares until the shares have been transferred into the name of the pledgee,
and thereafter the pledgee shall be entitled to vote the shares so transferred.
ARTICLE THREE
THE BOARD OF DIRECTORS
SECTION 3.1 GENERAL POWERS. The business and affairs of the
----------- --------------
Corporation will be managed by or under the direction of the Board of Directors.
In addition to the powers and authority expressly conferred upon it by these
Bylaws, the Board of Directors may exercise all such powers of the Corporation
and do all such lawful acts and things as are not by statute, by any legal
agreement among shareholders, by the Articles of Incorporation or by these
Bylaws directed or required to be exercised or done by the shareholders. The
Board of Directors shall annually elect a Chairman of the Board from among its
members and may elect a Vice Chairman of the Board from among its members.
SECTION 3.2 NUMBER AND TENURE. The Board of Directors shall consist
----------- -----------------
of not less than 5 nor more than 25 directors. The number of directors shall be
determined from time to time by resolution of the Board of Directors. The Board
of Directors shall be divided into three classes subject to the provisions of
the Articles of Incorporation. Each director shall hold office until his
successor is elected and qualified or until his earlier death, resignation,
attaining
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the age of 70 years, incapacity to serve or removal. No decrease in the number
of directors shall shorten the term of any incumbent director. Except as
otherwise provided in the Articles of Incorporation and these Bylaws, directors
shall be elected at each annual meeting of shareholders, or at a special meeting
of shareholders called for purposes that include the election of directors.
SECTION 3.3 QUALIFICATION OF DIRECTORS. Directors shall be natural
----------- --------------------------
persons who have attained the age of 21 years but need not be residents of the
State of Florida or shareholders of the Corporation. A director shall not be
permitted to stand for election after his 75th birthday.
SECTION 3.4 VACANCY. Any vacancy occurring in the Board of
----------- -------
Directors, including any vacancy occurring by reason of an increase in the
number of directors or by the removal of a director, may be filled by the vote
of a majority of the directors then in office, though less than a quorum. Any
director so chosen shall hold office until such director's successor shall have
been elected and qualified. Any director chosen by the Board of Directors to
fill a vacancy created, other than by reason of an increase in the number of
directorships, shall serve for the unexpired term of the director whose vacancy
is being filled. Any director chosen by the Board of Directors to fill a vacancy
created by reason of an increase in the number of directorships shall serve for
a term to expire at the next election of directors by the shareholders.
SECTION 3.5 REMOVAL. At a meeting of shareholders with respect to
----------- -------
which notice of such purpose has been given, any or all members of Board of
Directors may be removed for cause, and then only by the affirmative vote of the
holders of a majority of the then outstanding shares of stock of the Corporation
entitled to be cast, voting together as single class. For purposes hereof,
"cause" shall mean any act or omission for which a director may be personally
liable to the Corporation or its shareholders pursuant to the Articles of
Incorporation, as well as any other act or omission which relates to personal
dishonesty, incompetence or intentional failure to perform stated duties.
SECTION 3.6 COMPENSATION. The Board of Directors shall have the
----------- ------------
authority to set the compensation of directors and members of any committees
thereof. The directors and members of any committees thereof may also be paid
for their expenses, if any, of attendance at each meeting of the Board or any
committee thereof. No provision of these Bylaws shall be construed to preclude
any director or committee member from serving the Corporation in any other
capacity and receiving compensation therefor.
SECTION 3.7 NOMINATIONS OF DIRECTORS.
----------- ------------------------
(a) Only persons who are nominated in accordance with the procedures
set forth in these Bylaws shall be eligible for election as Directors.
Nominations of persons for election to the Board of Directors of the Corporation
may be made at any meeting of shareholders at which Directors are to be elected
only (i) by or at the direction of the Board of Directors or (ii) by any
shareholder of the Corporation entitled to vote for the election of Directors at
the meeting who complies with the notice procedures set forth in this Section.
Each year the
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President shall appoint a special committee of three directors to recommend to
the Board of Directors persons to be the management nominees for election as
directors. Based on such recommendations, the Board of Directors shall act as a
nominating committee to select the management nominees for election as
directors. Except in the case of a nominee substituted as a result of the death
or other incapacity of a management nominee, the nominating committee shall
deliver the names of its nominees to the Secretary at least 25 days prior to the
date of the annual meeting.
(b) Nominations, other than those management nominees made by or at
the direction of the Board of Directors, shall be made by timely notice in
writing to the Secretary of the Corporation. To be timely, a shareholder's
notice shall be delivered or mailed to and received at the principal executive
offices of the Corporation not less than 30 days prior to the date of the
meeting; provided, however, that in the event that less than 40 days' notice or
prior public disclosure of the date of the meeting is given or made to
shareholders, notice by the shareholder to be timely must be so received not
later than the close of business on the 10th day following the day on which such
notice of the date of the meeting is mailed or such public disclosure was made.
Such shareholder's notice shall set forth (i) as to each person whom the
shareholder proposes to nominate for election or re- election as a director, all
information relating to such person as required to be disclosed in solicitation
of proxies for election of directors, or as otherwise required, in each case
pursuant to Regulation 14A under the Securities and Exchange Act of 1934, as
amended (including such person's written consent to being named in a proxy
statement as a nominee and to serving as a director if elected); and (ii) as to
the shareholder giving the notice (x) the name and address, as they appear on
the books of the Corporation, of such shareholder and (y) the class and number
of shares of the Corporation's capital stock that are beneficially owned by such
shareholder. At the request of the Board of Directors any person nominated by
the Board of Directors for election as a director shall furnish to the Secretary
of the Corporation that information required to be set forth in a shareholder's
notice of nomination which pertains to the nominee. No person shall be eligible
for election as a Director of the Corporation unless nominated in accordance
with the provisions of this Section. The officer presiding at the meeting shall,
if the facts so warrant, determine and declare to the meeting that a nomination
was not made in accordance with the provisions of this Section and, if he should
so determine, he shall so declare to the meeting and the defective nomination
shall be discharged.
SECTION 3.8 DIRECTORS EMERITUS. The Board of Directors shall have
----------- ------------------
the authority, at its discretion, to choose persons to serve as directors
emeritus. Such action, if taken, shall be taken at the regular meeting of the
Board of Directors next following the annual meeting of shareholders. No more
than three persons may serve as directors emeritus at any one time. Once
elected, a director emeritus shall serve a term of one year, but he may be re-
elected by the Board to serve additional terms. A director emeritus shall be
allowed to attend all regular and special meetings of the Board of Directors,
and he may actively participate in such meetings except that he shall not be
allowed to vote on any matters voted upon by the directors, nor shall he be
counted for purposes of determining if there is a quorum. A director emeritus
may also serve in an advisory capacity on committees, but again, he shall not be
allowed to vote. A director emeritus may be removed from office at any time,
with or without cause, by majority
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vote of the Board of Directors. A director emeritus shall be entitled to
reasonable compensation for his services as a director emeritus and to
reasonable expenses incurred in attending meetings, all as determined by the
Board of Directors, provided that no such compensation shall be paid unless the
direct members of the Board of Directors are likewise being compensated, and
provided further that such compensation shall be less than that paid to the
members of the Board of Directors. A director emeritus shall not have the
responsibility imposed upon a director, nor shall he be subject to any liability
imposed upon a director, or otherwise be deemed a director.
ARTICLE FOUR
MEETINGS OF THE BOARD OF DIRECTORS
SECTION 4.1 ANNUAL AND OTHER REGULAR MEETINGS. The annual regular
----------- ---------------------------------
meeting of the Board of Directors shall be held at the time and place of the
regularly scheduled meeting of the Board of Directors next following the annual
meeting of the shareholders. Regular meetings of the Board of Directors or any
committee thereof may be held between annual meetings without notice at such
time and at such place, within or without the State of Florida, as from time to
time shall be determined by the Board or any committee thereof, as the case may
be.
SECTION 4.2 SPECIAL MEETINGS. Special meetings of Board of Directors
----------- ----------------
may be called for any purpose(s) by the Chairman of the Board or the President
or by written request of any two or more directors then in office. Special
meetings of any committee of the Board of Directors may be held on the date set
at the previous meeting of the committee or when called by its chairman or by a
majority of its members. Any such special meetings shall be held at such date,
time and place, within or without the State of Florida, as shall be communicated
in the notice of the meeting.
SECTION 4.3 NOTICE. Notice of any special meeting of the Board of
----------- ------
Directors or any committee thereof, setting forth the date, time and place of
the meeting, shall be delivered to each director or committee member, addressed
to him at his residence or usual place of business, or by telephone, telegram,
cable, telecommunication, teletype, facsimile transmission or personal delivery
not later than the second business day immediately preceding the date of the
meeting. Neither the business to be transacted at, nor the purpose of, any
regular or special meeting need be specified in the notice or any waiver of
notice.
Notice of any meeting need not be given to any director or committee
member who shall attend such meeting in person (except when the person attends a
meeting for the express purpose of objecting, at the beginning of the meeting,
to the transaction of any business because the meeting is not properly called or
convened) or who shall waive notice thereof, before or after such meeting, in a
signed writing.
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SECTION 4.4 QUORUM AND ADJOURNMENT. At all meetings of the Board of
----------- ----------------------
Directors or any committee thereof, the presence of a majority of the directors
or committee members then in office shall constitute a quorum for the
transaction of business. In the absence of a quorum or for any other reason, a
majority of the directors or committee members present thereat may adjourn the
meeting from time to time. Notice of any adjourned meeting shall be given to
each director or committee member who was not present at the time of adjournment
and, unless the time and place of the adjourned meeting are announced at the
time of adjournment, to the other directors or committee members. At any
reconvened meeting following such adjournment at which a quorum shall be
present, any business may be transacted which might have transacted at the
meeting as originally notified.
SECTION 4.5 VOTING. At all meetings of the Board of Directors or any
----------- ------
committee thereof, each director or committee member present shall have one
vote. The act of a majority of the directors or committee members present at any
meeting, in which there is a quorum, shall be the act of the Board of Directors
or any committee thereof, except as otherwise provided by statute, the Articles
of Incorporation or these Bylaws. On any question on which the Board of
Directors or any committee thereof shall vote, the names of those voting and
their votes shall be entered into the minutes of the meeting when any member of
the Board of Directors or any committee member present at the meeting so
requests.
SECTION 4.6 PRESUMPTION OF ASSENT. Any director or committee member
----------- ---------------------
present at a meeting of the Board of Directors or any committee thereof shall be
presumed to have assented to any action taken at the meeting unless his dissent
or abstention is entered in the minutes of the meeting or unless he files, at
the meeting or immediately after its adjournment, his written dissent to the
action with the person acting as secretary of the meeting. This right to dissent
shall not be available to a director or committee member who voted in favor of
the action.
SECTION 4.7 MEETING BY MEANS OF CONFERENCE TELEPHONE OR SIMILAR TELE-
----------- ---------------------------------------------------------
COMMUNICATIONS EQUIPMENT. Members of the Board of Directors or any committee
- ------------------------
thereof may participate in a meeting of the Board or any committee by means of
conference telephone or similar telecommunications equipment, by means of which
all persons participating in the meeting can hear each other. Participation in
the meeting in this matter shall constitute presence in person at such meeting.
SECTION 4.8 ACTION BY DIRECTORS WITHOUT A MEETING. Any action
----------- -------------------------------------
required or permitted to be taken at any meeting of the Board of Directors or
any committee thereof may be taken without a meeting if a written consent,
setting forth the action so taken, is signed by all the directors or all the
committee members, as the case may be, and filed with the minutes of the
proceedings of the Board or the committee. Such consent will have the same force
and effect as a unanimous vote of the Board of Directors or the committee.
SECTION 4.9 CONDUCT OF MEETINGS. All meetings of the Board of
----------- -------------------
Directors or any committee thereof shall be conducted in accordance with such
rules and procedures as the directors may determine subject to the requirements
of statute and, as to matters not governed by
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such rules and procedures, as the presiding officer of such meeting shall
determine. The presiding officer of any meeting of the Board of Directors shall
be the Chairman of the Board or, in his absence, the President, or, in the
absence of both, such person as designated by the Board of Directors. The
Secretary, or in his absence, a person designated by the presiding officer,
shall act as secretary of the meeting.
SECTION 4.10 RESIGNATION. Any director may resign at any time by
------------ -----------
giving written notice thereof to the Corporation addressed to the Chairman of
the Board or the President. Unless otherwise specified, such resignation shall
take effect upon delivery of such notice unless some other date is specified in
such notice. Acceptance of any resignation shall not be necessary to make it
effective unless the resignation is tendered subject to such acceptance. A
director's absence from more than three consecutive regular meetings of the
Board of Directors, unless excused by resolution of the Board of Directors,
shall be deemed to constitute the resignation of such a director, effective once
such resignation is accepted by resolution of the Board of Directors.
ARTICLE FIVE
BOARD COMMITTEES
SECTION 5.1 COMMITTEES.
----------- ----------
(a) The Board of Directors may, by the vote of a majority of the
directors then in office, establish committees, including standing or special
committees, which shall have such duties as are authorized by the Board or by
these Bylaws. Committee members, and the chairman of each committee, shall be
appointed by the Board of Directors. If an executive committee or similar
committee is designated by the Board of Directors, the President shall serve as
a member of that committee. The presiding officer of any committee meeting shall
be the chairman of the committee and the chairman shall designate a person to
act as secretary of the committee meeting.
(b) Each committee shall keep minutes of its actions and proceedings.
Any action taken by the Board of Directors with respect to the actions or
proceedings of any committee shall be entered into the minutes of the Board of
Directors.
(c) The Board of Directors may, by the vote of majority of the
directors then in office, remove any member of any committee, with or without
cause, or fill any vacancies in any committee, and dissolve or discontinue any
committee.
(d) The designation of any committee under this Article and the
delegation of authority thereto shall not operate to relieve the Board of
Directors, or any director, of any responsibility imposed by statute.
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ARTICLE SIX
OFFICERS
SECTION 6.1 OFFICERS. The officers of the Corporation shall include
----------- --------
a President, one or more Vice Presidents, a Secretary, and a Treasurer. The
Board of Directors may also designate the Chairman of the Board as an officer of
the Corporation. The Board of Directors may also designate one or more Vice
Presidents as Executive Vice President or Senior Vice President. The Board of
Directors may also elect or authorize the appointment of such other officers or
assistant officers as the business of the Corporation may require. In addition
to the duties and powers enumerated in this Article, the officers of the
Corporation shall perform such other duties and exercise such further powers as
the Board of Directors may authorize or determine from time to time. Any two or
more of the above offices may be held by the same persons except as prohibited
by statute, but no officers shall execute, acknowledge or verify an instrument
in more than one capacity if the instrument is required by statute or the
Articles of Incorporation to be executed, acknowledged or verified by two or
more officers. No officer need be a shareholder of the Corporation.
SECTION 6.2 COMPENSATION. The salaries of the officers of the
----------- ------------
Corporation shall be fixed by the Board of Directors. No officer shall be
prevented from receiving compensation by reason of also being a director of the
Corporation.
SECTION 6.3 ELECTION AND TERM OF OFFICE. The officers of the
----------- ---------------------------
Corporation shall be elected annually by the Board of Directors at the first
meeting of the Board of Directors held after each annual meeting of the
shareholders. If the election of officers is not held at such meeting, such
election shall be held as soon as possible thereafter. Each officer of the
Corporation shall hold office until his successor is elected or until his
earlier resignation, death or removal, or the termination of his office. The
election or appointment of an officer, employee or agent shall not itself create
contractual rights. The Board of Directors may authorize the Corporation to
enter into an employment contract or other arrangement with any officer; but no
such contract shall impair the rights of the Board of Directors to remove any
officer at any time in accordance with this Article.
SECTION 6.4 REMOVAL. Any officer may be removed from office at any
----------- -------
time, with or without cause, by the vote of a majority of the directors then in
office whenever in their judgement, the best interest of the Corporation will be
served thereby. Any such removal shall be without prejudice to the contract
rights, if any, of the officer so removed.
SECTION 6.5 VACANCY. Any vacancy in an office resulting from any
----------- -------
cause may be filled by the Board of Directors in the manner prescribed by these
Bylaws.
SECTION 6.6 CHAIRMAN OF THE BOARD. The Chairman of the Board shall
----------- ---------------------
be elected annually by the Board of Directors from among its members. The
Chairman shall preside at all meetings of the Board and shall perform all of the
duties and shall have all the powers
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commonly incident to his office or delegated to him by the Board of Directors,
or which are or may at any time be authorized or required by statute or these
Bylaws. Unless a Vice President has been elected and has as one of his duties to
act in the President's stead in the event of his absence or inability to serve,
then the Chairman of the Board, in the event of the President's absence,
inability to serve or refusal to serve, shall act in the President's stead and
shall have all the powers of and be subject to all the restrictions of the
President until such time as the President resumes his duties, a new President
is chosen, or an officer of the Corporation is selected by the Board of
Directors to perform the duties of the President.
SECTION 6.7 PRESIDENT. The President shall be the Chief Executive
----------- ---------
Officer of the Corporation and shall have general responsibility for the
management and supervision of the business of the Corporation and corporate
policy. The President shall have administrative authority over the business of
the Corporation, and shall have such further authority and perform such other
duties as may be delegated to him by the Board of Directors.
SECTION 6.8 VICE PRESIDENT. Each Executive Vice President, each
----------- --------------
Senior Vice President and each other Vice President shall have such powers and
perform such duties as may be delegated to him by the Board of Directors or
delegated by the President. In the absence or disability of the President, those
powers, duties and functions of the President may be temporarily performed and
exercised by such one of the Executive Vice Presidents, Senior Vice Presidents
or the other Vice Presidents as shall be expressly designated by the Board of
Directors. When more than one Vice President is elected, the Board may specify
an order of seniority among such Vice Presidents.
SECTION 6.9 SECRETARY. The Secretary shall attend all meetings of
----------- ---------
the Board of Directors and all meetings of the shareholders and record all votes
and the minutes of all proceedings in books to be kept for that purpose, and
shall perform like duties for any Board committees when required. The Secretary
shall give, or cause to be given, any notice required to be given of any
meetings of the shareholders, of the Board of Directors or any Board committees
when required, and shall perform such other duties as may be prescribed by the
Board of Directors or the President, under whose supervision the Secretary shall
be. The Secretary shall cause to be kept such books and records as the Board of
Directors or the President may require and shall cause to be prepared, recorded,
transferred, issued, sealed and cancelled certificates of stock as required by
the transactions of the Corporation and its shareholders. The Secretary shall
attend to such other correspondence and shall perform such other duties as may
be incident to such office or as may be assigned to him by the Board of
Directors or the President. The Secretary shall have custody of the seal of the
Corporation, shall have the authority to affix the same to any instrument, the
execution of which on behalf of the Corporation under its seal is duly
authorized, and shall attest the same by his signature whenever required. The
Board of Directors may give general authority to any other officer to affix the
seal of the Corporation and to attest the same by his signature.
SECTION 6.10 TREASURER. The Treasurer shall have charge of and be
------------ ---------
responsible for all funds, securities, receipts and disbursements of the
Corporation, and shall deposit, or cause
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to be deposited, in the name of the Corporation, all monies or other valuable
effects, in such banks, trust companies or other depositories as shall from time
to time be selected by the Board of Directors. He shall render to the President
and to the Board of Directors, whenever requested, an account of the financial
condition of the Corporation, and in general, he shall perform all such other
duties as may be delegated to him by the Board of Directors or the President.
SECTION 6.11 ASSISTANT VICE PRESIDENT, ASSISTANT SECRETARY AND
------------ -------------------------------------------------
ASSISTANT TREASURER. The Assistant Vice President, Assistant Secretary and
- -------------------
Assistant Treasurer, in the absence or disability of any Vice President, the
Secretary or the Treasurer, respectively, shall perform the duties and exercise
the powers of those offices, and, in general, they shall perform such other
duties as shall be delegated to them by the Board of Directors or by the person
appointing them. Specifically, the Assistant Secretary may affix the seal of the
Corporation to all necessary documents and attest the signature of any officer
of the Corporation.
SECTION 6.12 DELEGATION OF AUTHORITY. In the case of the absence of
------------ -----------------------
any officer of the Corporation or for any other reason that the Board of
Directors may deem sufficient, the Board of Directors may delegate, for the time
being, any or all of the powers or duties of such officer to any other officer
or to any director.
ARTICLE SEVEN
CAPITAL STOCK
SECTION 7.1 STOCK CERTIFICATES. Each shareholder shall be entitled
----------- ------------------
to a certificate representing the number of shares of capital stock of the
Corporation owned by such person. The certificate shall be in such form as
approved by the Board of Directors of the Corporation. Each certificate shall be
signed by the President or a Vice President and by the Secretary or an Assistant
Secretary and shall be sealed with the seal of the Corporation or a facsimile
thereof. The signatures upon a certificate may be facsimiles. In case any
officer who shall have signed or whose facsimile signature has been placed upon
a certificate shall have ceased to be such officer of the Corporation before
such certificate shall have been issued by the Corporation, such certificate may
nevertheless be issued as though the person who signed such certificate had not
ceased to be such officer.
SECTION 7.2 STOCK RECORDS. Each certificate for shares of Stock in
----------- -------------
the Corporation shall be numbered or otherwise identified in the stock records
of the Corporation. The Corporation shall keep stock records which shall show
the names and addresses of the persons to whom the shares are issued, with the
number of shares and date of issuance.
SECTION 7.3 STOCK TRANSFERS. Transfers of shares of stock of the
----------- ---------------
Corporation shall be made on the stock transfer books of the Corporation only
when authorized by the person named in the certificate, or by his legal
representative, who shall furnish written evidence of such
13
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authority, or by his attorney authorized by a duly executed power of attorney
and filed with the Corporation. Such transfer shall be made only upon surrender
of the certificate therefor, or in the case of a certificate alleged to have
been lost, stolen or destroyed, upon compliance with the provisions of this
Article and as may otherwise be provided by statute. The Corporation shall be
entitled to recognize the exclusive right of a person registered on its books as
the owner of shares to receive dividends and to vote as such owner, and for all
other purposes, and shall not be bound to recognize any equitable or other claim
to or interest in such share or shares on the part of any other person, whether
or not it shall have express or other notice thereof, except as otherwise
provided by law. No transfer shall be valid, except between the parties thereto,
until such transfer shall have been made upon the books of the Corporation as
herein provided. The Board of Directors shall have the power and authority to
make such other rules and regulations concerning the issue, transfer and
registration of certificates of the Corporation's stock as it may deem
appropriate.
SECTION 7.4 RECORD DATES. The Board of Directors may fix, in
----------- ------------
advance, a date as the record date for the purpose of determining shareholders
entitled to notice of, or to vote at, any meeting of shareholders or any
adjournment thereof, or shareholders entitled to receive payment of any dividend
of other distribution or allotment of any rights, or entitled to exercise any
rights in respect of any change, conversion or exchange of stock, or in order to
make a determination of shareholders for any other purpose. Such date in any
case shall not be more than 70 days, and in the case of the meeting of
shareholders, not less than 10 days, prior to the date on which the particular
action, requiring the determination of shareholders is to be taken. Only those
shareholders of record on the dates so fixed shall be entitled to any of the
foregoing rights, notwithstanding the transfer of any such stock on the books of
the Corporation after any such record date fixed by the Board of Directors.
SECTION 7.5 TRANSFER AGENTS AND REGISTRARS. The Corporation may have
----------- ------------------------------
one or more transfer agents and one or more registrars of its stock whose
respective duties the Board of Directors or Secretary may, from time to time,
determine. No certificate of stock shall be valid until countersigned by a
transfer agent, if the Corporation has a transfer agent, or until registered by
the registrar, if the Corporation has a registrar. The duties of transfer agent
and registrar may be combined.
SECTION 7.6 LOST CERTIFICATES. The Corporation may issue a new
----------- -----------------
certificate of stock in place of any certificate previously issued and alleged
to have been lost, stolen or destroyed, and the Corporation may require the
owner of the lost, stolen or destroyed certificate, or his legal representative
to give the Corporation a bond sufficient to indemnify it against any claim that
may be made against it on account of the alleged loss, theft or destruction of
any such certificate or the issuance of such new certificate and any other
conditions as may otherwise be provided by statute.
14
<PAGE>
ARTICLE EIGHT
GENERAL PROVISIONS
SECTION 8.1 REFERENCES. Whenever in these Bylaws reference is made
----------- ----------
to an Article or Section number, such reference is to the number of an Article
or Section of the Bylaws. Whenever in the Bylaws reference is made to the
Bylaws, such reference is to these Bylaws of the Corporation as the same may be
amended from time to time. Whenever in the Bylaws reference is made to the
Articles of Incorporation, such reference is to the Articles of Incorporation of
the Corporation as the same may be amended from time to time.
SECTION 8.2 REFERENCE TO GENDER. Whenever in the Bylaws reference is
----------- -------------------
made to the masculine gender, such reference shall where the context so requires
be deemed to include the feminine gender and the neuter gender, and the Bylaws
shall be read accordingly.
SECTION 8.3 LEGAL RESTRICTIONS. All matters covered in these Bylaws
----------- ------------------
shall be subject to such restrictions as shall be imposed on the Corporation by
applicable state and federal statutes, rules and regulations.
SECTION 8.4 SEAL. The seal of the Corporation shall be in such form
----------- ----
as the Board of Directors may determine from time to time. The seal may be used
by causing it or by facsimile thereof to be impressed or affixed or reproduced
or otherwise. If it is inconvenient to use such a seal at any time, the
signature of the Chairman of the Board, President, Secretary or an Assistant
Secretary of the Corporation, followed by the word "Seal" shall be deemed the
seal of the Corporation.
SECTION 8.5 FISCAL YEAR. The fiscal year of the Corporation shall be
----------- -----------
fixed by resolution of the Board of Directors and may be changed from time to
time.
SECTION 8.6 VOTING SHARES IN SUBSIDIARIES. In the absence of other
----------- -----------------------------
arrange-ments by the Board of Directors, shares of stock issued by another
corporation and owned or controlled by the Corporation, whether in a fiduciary
capacity or otherwise, may be voted by the President of the Corporation or by
such other person as the Board of Directors by resolution shall so designate,
and such person may execute the aforementioned powers by executing proxies and
written waivers and consents on behalf of the Corporation.
SECTION 8.7 INSPECTION OF BOOKS. The Board of Directors shall have
----------- -------------------
the power to determine which accounts and books of the Corporation, if any,
shall be opened to the inspection of shareholders, except such as may by statute
be specifically opened to inspection, and shall have the power to affix
reasonable rules and regulations not in conflict with the applicable statute for
the inspection of accounts and books which by statute or by the determination of
the Board of Directors shall be opened to inspection, and the shareholders'
rights in this respect are and shall be restricted and limited accordingly.
15
<PAGE>
SECTION 8.8 CONTRACTS. No contract or other transaction between
----------- ---------
Corporation and any other corporation, partnership or other entity shall be
affected or invalidated by the fact that a shareholder, director or officer of
the Corporation is a shareholder, director, partner or other officer of, or is
interested in, such other corporation, partnership or other entity, and no
contract or other transaction between Corporation and any other person shall be
affected or invalidated by the fact that a shareholder, director or officer of
the Corporation is a party to, or interested in, such contract or transaction;
provided that, in each such case, the nature and extent of the interest of such
shareholder, director or officer in such contract or other transaction or the
fact that such shareholder, director or officer is a shareholder, director,
officer, partner or other party of such other corporation, partnership, entity
or other person is known to the Board of Directors or is disclosed at the
meeting of the Board of Directors at which such contract or the transaction is
authorized.
SECTION 8.9 AMENDMENT OF BYLAWS. These Bylaws may be altered,
----------- -------------------
amended or repealed, or new Bylaws adopted, pursuant to the provisions of the
Articles of Incorporation.
ARTICLE NINE
INDEMNIFICATION
SECTION 9.1 INDEMNIFICATION. Subject to the provisions of the
----------- ---------------
Articles of Incorporation, the Corporation shall indemnify any person acting in
the capacity of a director or officer of the Corporation to the fullest extent
authorized by statute.
The undersigned, being the duly elected Secretary of the Corporation,
hereby certifies that the foregoing Bylaws were duly adopted by the Board of
Directors on the ____ day of ____________, 199__.
_________________________________________
Secretary
16
<PAGE>
NUMBER SHARES
0 INCORPORATED UNDER THE LAWS OF THE STATE OF FLORIDA
TIB FINANCIAL CORP.
TOTAL AUTHORIZED ISSUE SEE REVERSE FOR
5,000,000 SHARES PAR VALUE $.10 EACH CERTAIN DEFINITIONS
COMMON STOCK
THIS IS TO CERTIFY THAT _____________________________________________ IS THE
OWNER OF __________________________________________________________ fully paid
and non-assessable shares of the above Corporation transferable only on the
books of the Corporation by the holder hereof in person or by duly authorized
Attorney upon surrender of this Certificate properly endorsed.
WITNESS, the seal of the Corporation and the signatures of its duly authorized
officers.
DATED
____________________________ ______________________________
SECRETARY PRESIDENT
<PAGE>
[LETTER HEAD OF HOLLAND & KNIGHT APPEARS HERE]
May 1, 1996
TIB Financial Corp.
99451 Overseas Highway
Key Largo, Florida 33037
Gentlemen:
We are acting as counsel for TIB Financial Corp. (the "Company") in
connection with the issuance by the Company of shares of Common Stock in
connection with the merger of TIB Interim Corp., a wholly-owned subsidiary of
the Company, with and into TIB Bank of the Keys, a state chartered bank,
pursuant to the terms of the Plan and Agreement of Reorganization, as described
in the Registration Statement filed on Form S-4 (the "Registration Statement")
by the Company under the Securities Act of 1933, as amended.
We have examined such documents as we have deemed necessary or appropriate
for the purpose of our opinion. In our examination, we have assumed the
authenticity of all signatures, the authenticity of all documents submitted to
us as original, and the conformity to the originals of all documents submitted
to us as certified, photostatic or conformed copies.
Based upon the foregoing, we are of the opinion that:
1. The Company is duly incorporated and is validly existing as a
corporation under the laws of Florida.
2. After the Registration Statement becomes effective and the
provisions of applicable state securities laws have been complied
with, the shares of Common Stock, when issued in accordance with
the terms of the Plan and Agreement of Reorganization as
described in the Registration Statement, will be validly issued,
fully paid and non-assessable under the laws of Florida.
We consent to the filing of this opinion and our opinion as to tax aspects
of the transaction as exhibits to the Registration Statement and to the
reference to our firm name under the heading "Legal Matters" in the Proxy
Statement/Prospectus which is a part of the Registration Statement.
Yours truly,
/s/ Holland & Knight
HOLLAND & KNIGHT
<PAGE>
[LETTERHEAD OF HOLLAND & KNIGHT]
________, 1996
TIB Financial Corp.
99451 Overseas Highway
Key Largo, Florida
TIB Bank of the Keys
99451 Overseas Highway
Key Largo, Florida
Gentlemen:
You have requested an opinion regarding the income tax consequences, under
the Internal Revenue Code of 1986, as amended ("Code"), of the proposed issuance
by TIB Financial Corp. ("Holding Company"), a Florida corporation, of a maximum
of 1,423,288 shares of voting common stock ("Holding Company Stock") in
connection with the merger of TIB Interim Corp. (In Organization) ("Interim"), a
Florida interim financial institution and wholly-owned subsidiary of Holding
Company, with and into TIB Bank of the Keys, a Florida Banking corporation
("Bank") (which transaction is hereinafter referred to as "Reorganization"). As
a result of the Reorganization, Holding Company will acquire 100% of the
outstanding voting common stock of Bank ("Bank Stock") pursuant to the terms of
the Agreement and Plan of Merger ("Agreement") among the parties.
The following steps either have occurred or are proposed to occur in
connection with the Reorganization:
(1) Holding Company has been organized under the laws of the State of
Florida as a bank holding company pursuant to the Federal Bank Holding
Company Act of 1956, as amende.d Holding Company has authorized
5,00,000 shares of holding Company Stock, $0.10 par value, of which
one share is issued and outstanding. This one outstanding share was
issued to permit Holding Company to have capital to commence business
under Florida law pending the consummation of the Agreement.
(2) Bank is an existing Florida banking corporation with 1,765,616 shares
of Bank Stock, $1.25 par value, authorized, and 1,426,288 of those
shares outstanding.
<PAGE>
Page 2
________, 1996
(3) Interim, a wholly-owned subsidiary of Holding Company, is being formed
as a Florida interim financial institution and organized for the sole
purpose of effectuating the Florida reorganization described in the
Agreement.
(4) Pursuant to the Agreement, and in accordance with Florida law, Holding
Company will cause Interim to merge with and into Bank, with Bank
being the surviving corporation. The corporate organization and
separate existence of Interim will cease and Bank will succeed to the
rights, assets, liabilities, and obligations of Interim. The
outstanding shares of Interim will be exchanged for a number of shares
of Bank Stock equal to the number of shares outstanding immediately
prior to the reorganization described in the Agreement.
(5) On the effective date of the reorganization, each issued and
outstanding share of Bank Stock, except for shares held by dissenting
shareholders, will be converted into and exchanged for one share of
Holding Company Stock.
(6) Under Florida law, each Bank shareholder has a right to dissent from
the proposed transaction. Upon proper and timely exercise of these
rights, dissenting Bank shareholders will receive fair value for their
shares from Bank.
(7) Notwithstanding the immediately preceding subparagraph, more than
eighty percent (80%) of the outstanding Bank Stock will be exchanged
for Holding Company Stock.
For purposes hereof, we have assumed that the following additional
representations have been or will be made by the parties in connection with the
reorganization described in the Agreement:
(1) The fair market value of Holding Company Stock to be received by each
Bank shareholders will be approximately equal to the fair market value
of Bank Stock surrendered in exchange therefor.
(2) The management of Bank has no knowledge of any plan or intention on
the part of Bank shareholders to sell, exchange, or otherwise dispose
of an amount of Holding Company Stock received in the reorganization
that would reduce Bank shareholders' ownership of Holding Company to a
number of shares having a value as of the date of the reorganization
of less than fifty percent (50%) of the value of all of the formerly
outstanding Bank Stock as of the same date. For purposes of this
representation, Bank Stock exchanged for cash by dissenters will be
treated as outstanding Bank Stock on the date of the reorganization.
<PAGE>
Page 3
________, 1996
Moreover, Bank Stock and shares of Bank Stock and Holding Company
Stock held by Bank shareholders otherwise sold, redeemed, or disposed
of prior or subsequent to the transaction will be considered in making
this determination.
(3) Upon consummation of the reorganization, Bank will hold at least
ninety percent (90%) of the fair market value of the respective net
assets, and at least seventy percent (70%) of the fair market value of
the respective gross assets held by both itself and Interim
immediately before the transfer. For purposes of this representation,
amounts paid by Bank to dissenters, amounts used by Bank or Interim to
pay Reorganization expenses, and all redemptions and distributions
(except for regular, normal dividends) made by Bank will be included
as assets of Bank or Interim, respectively, immediately prior to the
Reorganization.
(4) Bank has no plan or intention to issue additional shares of Bank Stock
that would result in Holding Company's loss of control of Bank as
defined in Code Section 368(c).
(5) Holding Company has no plan or intention to redeem or otherwise
reacquire any of its Holding Company Stock to be issued in the
reorganization.
(6) Holding Company has no plan or intention to sell or otherwise dispose
of Bank Stock, to liquidate Bank, to merge Bank with or into another
corporation, or to cause Bank to sell or otherwise dispose of any of
its assets, except for dispositions made in the ordinary course of
business.
(7) Interim will have no assets or liabilities to transfer to or be
assumed by Bank in the reorganization.
(8) Bank will continue in the active conduct of its present business and
will remain a wholly-owned subsidiary of Holding Company following the
reorganization.
(9) Bank will pay all of its expenses, if any, which are incurred in
connection with the reorganization; and Holding Company shall pay all
of such expenses incurred by it and by Interim; provided, that in the
event the merger described in the Agreement is not consummated, all
such expenses of Holding Company and Interim shall be paid by Bank.
(10) There is no intercorporate debt between Holding Company and Bank or
between Interim and Bank which was issued, acquired, settled, or will
be settled, at a discount.
<PAGE>
Page 4
_______, 1996
(11) Taking into account shares held by dissenters, Holding Company will
acquire, solely in exchange for its Holding Company Stock, control of
Bank as that term is defined in Code Section 368(c). For purposes of
this representation, Bank Stock exchanged for cash or other property
originating with Holding Company will be treated as outstanding Bank
Stock on the date of the transaction.
(12) At the time of the reorganization, Bank will not have outstanding any
warrants, options, convertible securities, or any other type of right
pursuant to which any person could acquire stock in Bank, that if
exercised or converted, would affect Holding Company's acquisition or
retention of control of Bank as defined in Code Section 368(c).
(13) No two parties to the proposed transaction will be investment
companies within the meaning of Code Sections 368(a)(2)(F)(iii) and
(iv).
(14) On the date of the reorganization, the fair market value of the assets
of Bank will exceed the sum of its liabilities, plus the amount of
liabilities, if any, to which the assets are subject.
(15) Neither Bank, Holding Company, nor Interim is or will be under the
jurisdiction of a court in a title 11 or similar case within the
meaning of Code Section 368(a)(3)(A).
(16) At the time of the Reorganization, at least eight percent (80%) of
Bank Stock will be exchanged solely for Holding Company Stock. Bank
has only one class of equity securities authorized or outstanding,
that is, Bank Stock, which, by definition, is voting common stock.
(17) Holding Company neither presently owns, directly or indirectly, nor
owned within the preceding five years, directly or indirectly, any
Bank Stock.
(18) Holding Company, Interim and Bank are each corporations within the
meaning of Code Section 7701(a)(3).
Based on the facts and representations set forth above, we conclude that:
(1) The reorganization described in the Agreement will constitute a
reorganization within the meaning of Code Sections 368(a)(1)(A) and
(a)(2)(E) and will not be disqualified by reason of the fact that
Holding Company Stock is issued in the
<PAGE>
Page 5
________,1996
transaction. Holding Company, Interim, and Bank will each be "a
party to a reorganization" within the meaning of Code Section 368(b).
(2) No gain or loss will be recognized by Holding Company on the receipt
of solely Bank Stock in exchange for Interim Stock.
(3) No gain or loss will be recognized by Bank on its receipt, by reason
of the reorganization, of Interim's assets.
(4) No gain or loss will be recognized by Interim upon the transfer of its
assets to Bank as a result of the reorganization.
(5) No gain or loss will be recognized by the shareholders of Bank upon
the exchange of Bank Stock solely for Holding Company Stock.
(6) The basis of Holding Company Stock to be received by Bank shareholders
will, in each case, be the same as the basis of Bank Stock surrendered
in exchange therefor, decreased by the amount of cash received by the
shareholder and increased by the amount of capital gain recognized and
any amount treated as a dividend.
(7) The holding period of Holding Company Stock to be received by the
shareholders of Bank will include the period during which Bank Stock
exchanged therefor was held by them, provided that such Bank Stock is
held as a capital asset as of the date of the exchange.
(8) The basis of the assets of Interim acquired by Bank will be the same
as the basis of such assets in the hands of Interim immediately prior
to the exchange.
(9) The holding period of Interim assets in the hands of Bank will include
the holding period during which such assets were held by Interim
immediately prior to the exchange.
(10) A Bank shareholder who dissents and receives only cash in redemption
of his or her Bank Stock as a result of the reorganization will, in
general, recognize pain or loss measured by the difference between the
amount of the cash received and the tax basis of the Bank Stock held
by the shareholders. Pursuant to Code Section 302, such gain or loss
will, in general, be treated as capital gain or loss if the Bank Stock
was held as a capital asset; provided, however, a Bank shareholder
must take into account certain provisions of Code Sections 302 and
<PAGE>
Page 6
________, 1996
318 in determining the consequences of the transaction if he or she
receives only cash. A Bank shareholder who receives only cash as a
result of the reorganization upon the redemption of Bank Stock which
he or she actually owns, but who is considered under constructive
ownership rules of Code Section 318 to own other Bank Stock that is
converted into share of the Holding Company Stock in the
reorganization, must take into account the provisions of Code Section
302, particular the "80% test" described therein, to determine if the
cash which he or she receives is to be taxed as a dividend. Pursuant
to Code Section 318, a shareholder is, for example, considered to own
shares that are directly or indirectly owned by certain members of his
or her family or by certain related entities and to own shares with
respect to which he or she holds options. In general, under the 80%
test of Section 3902, cash received by a Bank shareholder in
redemption or his or her Bank Stock as a result of the reorganization
will not be treated as a dividend for federal income tax purposes if,
immediately after the reorganization, the holder's percentage
ownership (considering Bank Stock owned actually and constructively)
of the total amount of Holding Company Stock issued to holders of Bank
Stock in the reorganization is less than 80% of such shareholder's
percentage ownership of Bank Stock immediately before the
reorganization. Hence, cash received by a Bank shareholder who
"qualifies" under the 80% test will be taxed as capital gain or loss
if the Bank Stock was held as a capital asset.
(11) Accordingly, a Bank shareholder may still fail to qualify under the
80% test described above as a result of making an election to dissent
and receiving cash in the redemption of all of his or her Bank Stock
actually owned, if an election to receive Holding Company Stock is
made by other persons whose Bank Stock is considered to be
constructively owned by the shareholder under Code Section 318.
(12) If a Bank shareholder fails to meet the 80% test described above,
other exceptions from dividend treatment may be available depending on
the facts and circumstances of the particular case.
(13) In the event the cash received by a Bank shareholder in redemption of
his or her Bank Stock is treated as a "dividend", he or she will not
be able to use his tax basis in his or her Bank Stock shares to offset
the amount includable in his income. Therefore, the total amount of
cash received would be includable in his or her income.
<PAGE>
Page 7
________, 1996
Please be advised that our conclusions are based on the code and Treasury
Regulations in effect on the date of this letter, which authorities may
subsequently be amended. No opinion is expressed as to the tax treatment of any
conditions existing at the time of, or effects resulting from, the transactions
that are not specifically covered by the above opinion.
Yours truly,
HOLLAND & KNIGHT
<PAGE>
TIB BANK OF THE KEYS
EXECUTIVE EMPLOYMENT AGREEMENT
THIS AGREEMENT is made and entered into this 18th day of February, 1994,
---- --------
between TIB BANK OF THE KEYS, a Florida Banking corporation ("Bank"), and
Edward V. Lett ("Employee").
- --------------
RECITALS
--------
A. Employee is an at-will management executive with the Bank.
B. The Bank desires to ensure continuity of management stability of the
Bank currently and in the event that ownership control of the Bank is
transferred.
C. Employee desires a measure of employment security in the event that
owners' control of the Bank is transferred.
D. The Board of Directors of Bank has determined that it is in the best
interests of the shareholders of the Bank to promote executive employees'
loyalty by providing them with a measure of security and to ensure a continuity
of management stability of the Bank in the event that ownership control of the
Bank is transferred.
NOW, THEREFORE, in consideration of the covenants set forth herein, and
other good and valuable consideration, the receipt and sufficiency of which is
hereby acknowledged by both parties, Bank and Employee hereby agree as follows:
AGREEMENTS
----------
1. Continuation of At-Will Employment.
-----------------------------------
a. The Bank agrees to continue Employee's employment in the
capacity of EVP & Chief Operating Officer to perform such services and duties as
-----------------------------
the Board of Directors may, from time to time, designate during the term hereof.
Subject to the terms and conditions hereof, Employee will perform such duties
and exercise such authority as is customarily performed and exercised by persons
holding such office, subject to the general direction of the Board of Directors
of the Bank.
b. Employee agrees to continue such at-will employment and shall
devote his or her full-time attention and efforts to the diligent performance of
his or her duties herein specified and as an officer of the Bank. Employee will
not accept employment with any other individual, corporation, partnership,
governmental authority, or any other entity, or engage in any other venture for
profit that the Bank may consider to be in conflict with its best interests or
to be in competition with the Bank's business, or that might interfere in any
way with the Employee's
<PAGE>
performance of his or her duties hereunder. Employee will not accept outside
employment or participate directly or indirectly in any outside venture without
first notifying Bank in writing of his or her intent to do so, supplying all
information the Bank requests in connection with such notification, and
obtaining prior written approval from the Bank. Employee agrees that he or she
will, at all times, refrain from conduct that is likely to harm the image or
reputation of the Bank.
2. Compensation. In payment for the services of Employee rendered
------------
to Bank pursuant to this Agreement, Bank shall pay to Employee the sum of
$116,630.00 per Year ("Base Salary") Employee's Base Salary is payable in
---------- ----
arrears in equal semi-monthly installments and is subject to such deductions as
are required by law. Bank shall review and evaluate Employee's performance in
December of each year that Employee is employed with Bank. Following such
review, Employee may receive, in the sole and absolute discretion of the Board
of Directors, an increase in pay over and above Employee's Base Salary.
3. Benefits. Employee shall be entitled to participate in any plan
--------
adopted by the Bank providing stock options, stock purchase, profit sharing,
vacations, group life insurance, medical coverage, education and any other
retirement or employee benefit plan adopted by the Bank for the benefit of its
employees. Employee's participation in such plan or plans shall be in accordance
with the documents controlling such employee benefit plan and in accordance with
the policies of the Bank as established by the Board of Directors.
4. Change of Ownership Control.
---------------------------
a. In the event of a change of ownership control of the Bank,
this Employee shall no longer remain an at-will employee and this Agreement
shall become an employment agreement for a term of twenty-four months on the
effective date of such change of ownership control. Employee's salary shall not
be reduced for any reason during the twenty-four month term of employment,
except as provided under Paragraph 5(b), below.
b. Following a change of ownership control, the Employee shall
be entitled to credit for all years of service with Bank (i.e., all years prior
----
to change of ownership control, plus the greater of 24 months or the actual
period of employment after change of ownership control) in determining
eligibility for and benefits from any and all retirement, disability, profit-
sharing and other employee benefit programs offered by the Bank.
c. For the purposes of this Agreement, a change of ownership
control shall have occurred upon the acquisition by any person, or persons
acting as a group within the meaning of Section 13(d) of the Securities Exchange
Act of 1934, of fifty-one percent
2
<PAGE>
or more of the voting securities of the Bank, or of any lesser percentage of the
voting securities of the Bank if the Board of Directors of the Bank, the
Comptroller of Florida, the FDIC, or the Federal Reserve Bank makes a
determination that such acquisition constitutes or will constitute control of
the Bank. The term "person" as used herein includes an individual, corporation,
bank holding company or any other legal entity.
5. Termination of Employment.
-------------------------
a. Prior to any change of ownership control of the Bank, and
while Employee is an at-will employee of the Bank, Employee's employment may be
terminated by either party as permitted under the laws of the State of Florida
and the United States of America.
b. Following a change of ownership control of the Bank, this
Agreement shall terminate upon the death or incapacity of Employee or upon
discharge of Employee by Bank for cause. "Cause" shall mean:
(1) Employee's willful and deliberate violation of any law
or governmental regulation applicable to the conduct of
Bank's business;
(2) Employee's failure or refusal to comply with the
provisions of this Agreement;
(3) Employee's conviction of a felony;
(4) Employee's failure to perform his ordinary duties at
acceptable levels and in conformity with Bank's performance
standards as reasonably determined by the Board of Directors,
utilizing performance standards applicable to comparable
branches of the acquiring entity.
(5) Employee's physical or mental disability rendering
Employee physically or mentally unable to perform his or her
duties for a period of at least 180 consecutive days.
6. Post-termination Covenants. Employee acknowledges that certain
--------------------------
information acquired while employed by Bank constitutes trade secrets and
proprietary information which are the exclusive property of the Bank and that
unauthorized use or disclosure of the same will irreparably harm Bank.
Therefore, during any period during which Employee is receiving compensation
pursuant to this Agreement, Employee shall not, without the prior written
consent of the Bank:
3
<PAGE>
(1) furnish any person with the name of any customer of the Bank,
or any list or list of customers of the Bank or otherwise use
such customer names and lists in connection with any banking
business, provided, that this prohibition shall not prevent
compliance with a Court Order or subpoena directed to Employee in
his/her official capacity with Bank;
(2) Furnish, use, or divulge to any person any information
acquired by Employee concerning the Bank's manner and methods of
doing business;
(3) solicit, directly or indirectly, for any purpose, the
customers of the Bank;
(4) Hire, directly or indirectly, for himself or any other
employer, any employee of Bank, or otherwise cause or encourage
any employee of Bank to leave his employment or become employed
by another.
The parties agree that the restrictions and prohibitions set forth in this
Section 6 are separate, discrete and independent. In the event that any single
restriction or prohibition, or portion thereof, set forth in this Section 6 is
determined by a court of competent jurisdiction to be invalid or unenforceable
for any reason, such finding shall not affect the remaining restrictions and
prohibitions which shall remain valid, binding and subsisting.
7. Waiver. Waiver of any default by any party shall not be deemed
------
to be a continuing waiver and shall not bar a party from enforcing this
Agreement in strict accordance with its terms and conditions.
8. Governing Law. This Agreement shall be governed by and
-------------
construed and enforced in accordance with the laws of the State of Florida.
9. Severability. If for any reason any provision of this Agreement
------------
shall be held by a court of competent jurisdiction to be void or unenforceable,
the same shall be considered severable and the remaining provisions of this
Agreement shall remain valid, binding and subsisting.
10. Entire Agreement. This Agreement contains the entire agreement
----------------
between the parties and supersedes all prior discussions and agreements between
them.
11. Modification. This Agreement may not be modified except by an
------------
instrument in writing signed by the parties.
4
<PAGE>
12. Counterparts and Headings. This Agreement may be executed
-------------------------
simultaneously in any number of which shall be deemed an original but all of one
and the same instrument. The headings set out herein are for convenience of
reference and shall not be deemed a part of this Agreement.
13. No Assignment. This agreement may not be assigned or transferred
-------------
by any party hereto, in whole or in part, without the prior written consent of
the other party.
14. Arbitration. Any controversy or claim arising out of or relating
-----------
to this Agreement, or the breach thereof, shall be settled by binding
arbitration in accordance with the Commercial Arbitration Rules of the American
Arbitration Association, and judgment upon the award rendered by the
arbitrator(s) may be entered in any court having jurisdiction thereof.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the year and date first above written.
EMPLOYEE:
[SIGNATURE ILLEGIBLE] [SIGNATURE ILLEGIBLE]
- ---------------------------------- --------------------------------
Witness Edward V. Lett
[SIGNATURE ILLEGIBE]
- ----------------------------------
Witness
TIB BANK OF THE KEYS:
[SIGNATURE ILEGIBLE] By:[SIGNATURE ILLEGIBLE]
- ---------------------------------- ------------------------------
Chairman of the Board
[SIGNATURE ILLEGIBE]
- ---------------------------------- W. Kenneth Meeks
Witness
5
<PAGE>
TIB BANK OF THE KEYS
KEY LARGO, FLORIDA
EMPLOYEE STOCK OWNERSHIP PLAN
(With 401(k) Provisions)
Amended and Restated as of January 1, 1994
<PAGE>
<TABLE>
<CAPTION>
SECTION PAGE
<S> <C>
1. Nature of Plan..................................... 1.1
2. Definitions........................................ 2.1
3. Eligibility and Participation...................... 3.1
4. Employer and Employee Contributions................ 4.1
5. Investment of Trust Assets......................... 5.1
6. Allocations to Participants' Accounts.............. 6.1
7. Expenses of the Plan and Trust..................... 7.1
8. Voting Bank Stock.................................. 8.1
9. Disclosure to Participants......................... 9.1
10. Capital Accumulation............................... 10.1
11. Retirement, Disability or Death.................... 11.1
12. Termination of Service, Break in Service,
Vesting and Forfeitures............................ 12.1
13. Credited Service................................... 13.1
14. When Capital Accumulation
Will Be Distributed................................ 14.1
15. How Capital Accumulation Will Be Distributed....... 15.1
16. Rights, Options and Restrictions on
Bank Stock......................................... 16.1
17. No Assignments of Benefits, Dividends, Hardship,
Optional Distributions and Loans................... 17.1
18. Administration..................................... 18.1
19. Claims Procedure................................... 19.1
20. Guaranties......................................... 20.1
21. Future of the Plan................................. 21.1
22. "Top-Heavy" Contingency Provisions................. 22.1
23. Diversification.................................... 23.1
24. Governing Law...................................... 24.1
25. Execution.......................................... 25.1
</TABLE>
<PAGE>
TIB BANK OF THE KEYS
KEY LARGO, FLORIDA
EMPLOYEE STOCK OWNERSHIP PLAN
(With 401(k) Provisions)
SECTION 1. NATURE OF PLAN.
--------------
The purpose of this Plan is to enable participating Employees to share in the
growth and prosperity of the Bank through Employer contributions to the Plan and
to provide Participants with an opportunity to accumulate capital for their
future economic security. The Plan is designed to permit both Employer and
Employee contributions to the Plan. The primary purpose of the Plan is to
enable Participants to acquire stock ownership interests in the Bank.
Therefore, the Trust Assets held under the Plan will be invested primarily in
Bank Stock.
The Plan is also designed to be available as a technique of corporate finance
to the Bank. Accordingly, it may be used to accomplish the following objectives:
(a) To meet general financing requirements of the Bank, including capital
growth and transfers in the ownership of Bank Stock;
(b) To provide Participants with beneficial ownership of Bank Stock and
other assets through Employer and Employee contributions to the Plan;
and
(c) To receive loans (or other extensions of credit) to finance the
acquisition of Bank Stock ("Acquisition Loans"), with such loans to be
repaid by Employer Contributions to the Trust and dividends received on
such Bank Stock.
The Plan, hereby effective as of January 1, 1994, is a complete amendment,
restatement and consolidation of the TIB Bank of the Keys 401(k) Plan,
originally effective January 1, 1990 and Employee Profit Sharing Trust,
originally effective January 1, 1978. The Plan is a stock bonus plan containing
Section 401(k) features that is intended to qualify under Section 401(a) of the
Internal Revenue Code. The Plan is also designed to be an
1.1
<PAGE>
employee stock ownership plan under Section 4975(e)(7) of the Code.
All Trust Assets under the Plan will be administered, distributed,
forfeited and otherwise governed by the provisions of this Plan and the related
Trust Agreement. The Plan is administered by a Board of Trustees and an
Administrative Committee for the exclusive benefit of Participants (and their
Beneficiaries).
1.2
<PAGE>
SECTION 2. DEFINITIONS
-----------
In this Plan, whenever the context so indicates, the singular or plural
number and the masculine, feminine or neuter gender shall be deemed to
include the other, the terms "he," "his," and "him" shall refer to a
Participant, and the capitalized terms shall have the following meanings:
Account
- -------
One of the several accounts maintained to record the interest of a
Participant under the Plan. See Section 6.
Acquisition Loan
- ----------------
A loan made to the Plan by a disqualified person or a loan to the Plan which
is guaranteed by a disqualified person.
Adjusted Compensation
- ---------------------
The total remuneration paid to an Employee as a Participant in each Plan
Year, as reported on IRS Form W-2, plus the amount (if any) of his Salary
Reduction Contributions for the Plan Year. For any Plan Year, however,
Adjusted Compensation exceeding $150,000 for any Employee (adjusted in
accordance with the Section 415(d)(2) of the Code for cost of living
increases) shall not be taken into account. For purposes of applying the
$150,000 limit on compensation, the family unit of an Employee who either is
a five percent (5%) owner or is both a highly compensated Employee and one of
the ten most highly compensated Employees will be treated as a single
Employee with one compensation, and, except for the purpose of determining
compensation below the Plan's integration level, if applicable, the $150,000
limit will be allocated among the members of the family in proportion to
their respective compensation. For this purpose, a family unit consists of
the Employee who is a five percent (5%) owner or one of the ten most highly
compensated Employees, the Employee's spouse, and the lineal descendants who
have not attained age 19 before the close of the year.
Affiliated Company
- ------------------
Any corporation or business which is a member of a controlled group of
corporations or businesses with the Bank pursuant to Section 414(b), (c), (m)
or (o) of the Code.
Anniversary Date
- ----------------
The 31st day of December of each year (the last day of each Plan Year).
Annuity Starting Date
- ---------------------
The first day of the first period for which an amount is payable as an
annuity; or in the case of a benefit not payable in the form of an annuity,
the first day on which all events have occurred which entitle the participant
to such benefit.
2.1
<PAGE>
Approved Absence
- ----------------
A leave of absence (without pay) granted to an Employee by an Employer under
its established leave policy.
Bank
- ----
TIB Bank of the Keys, a Bank organized under the laws of the State of
Florida.
Bank Stock
- ----------
Common stock issued by the Employer (or by a corporation which is a member of
the same control group) which is readily tradable on an established
securities market. If there is no common stock which meets the requirements
of the preceding sentence, the term "Bank Stock" means common stock issued by
the Employer (or by a corporation which is a member of the same control
group) having a combination of voting power and dividend rights equal to or
in excess of: (a) that class of common stock of the Employer (or of any other
such corporation) having the greatest voting power, and (b) the class of
common stock of the Employer (or of any such corporation) having the greatest
dividend fights.
Bank Stock Account
- ------------------
The Account of a Participant which reflects his interest in Bank Stock held
under the Plan. See Section 6(e).
Beneficiary
- -----------
The person (or persons) entitled to receive any benefit under the Plan in the
event of a Participant's death. See Section 15(b).
Board of Directors
- ------------------
The Board of Directors of the Bank.
Break in Service
- ----------------
A Plan Year in which a Participant is not credited with more than 500 Hours
of Service by reason of his termination of Service. See Section 12(b).
Buyout
- ------
A transaction or series of related transactions by which the Bank is sold,
either through the sale of a Controlling Interest in the Bank's voting stock
or through the sale of substantially all of the Bank's assets, to a party not
having a Controlling Interest in the Bank's voting stock on the date of
execution of this Agreement.
2.2
<PAGE>
Capital Accumulation
- --------------------
A Participant's vested, nonforfeitable interest in his Accounts under the
Plan. See Section 10.
Change in Control
- -----------------
A Buyout, Merger or Substantial Change in Ownership.
Code
- ----
The Internal Revenue Code of 1986.
Committee
- ---------
The Administrative Committee appointed by the Board of Directors to
administer the Plan. See Section 18.
Compensation
- ------------
Compensation is wages, salaries, and fees from professional services and
other amounts received (without regard to whether or not an amount is paid in
cash) for personal service actually rendered in the course of employment with
the employer maintaining the Plan to the extent that the amounts are
includable in gross income (including, but not limited to, commissions paid
to salesmen, compensation for services on the basis of a percentage of
profits, commission on insurance premiums, tips, bonuses, fringe benefits,
and reimbursements or other expense allowances under a nonaccountable Plan)
as described in Regulation 1.62-2(c), and excluding the following:
(a) Employer Contributions to a plan of deferred compensation which are not
includable in the Employee's gross income for the taxable year in which
contributed, or employer contributions under a simplified employee pension
plan to the extent such contributions are deductible by the Employee, or any
distributions from a plan of deferred compensation;
(b) Amounts realized from the exercise of a nonqualified stock option, or
unrestricted stock (or property) held by the Employee either becomes freely
transferable or is no longer subject to a substantial risk of forfeiture;
(c) Amounts realized from the sale, exchange or other disposition of stock
acquired under a qualified stock option plan; and
(d) Other amounts which receive special tax benefits, or contributions made
by the employer (whether or not under a salary reduction agreement) towards
the purchase of an annuity contract described in Section 403(b) of the Code
(whether or not the contributions are actually excludable from the gross
income of the Employee.
The compensation that may be taken into account in determining contributions
on behalf of any Employee is limited to no more than $150,000 (as adjusted)
in a Plan Year. For purposes of applying the $150,000 limit on compensation,
the family unit of an Employee
2.3
<PAGE>
who is either a five percent (5%) owner or is both a Highly Compensated
Participant and one of the ten most highly compensated Employees will be
treated as a single Employee with one compensation, and the $150,000 limit
will be allocated among the members of the family unit in proportion to their
respective compensation. For this purpose, a family unit consists of the
Employee who is a five percent (5%) owner or one of the ten most highly
compensated Employees, the Employee's spouse and the lineal descendants who
have not attained age 19 before the close of the year.
Controlling Interest
- --------------------
The ownership, either directly or indirectly, of more than fifty (50%) of the
Bank's voting stock.
Credited Service
- ----------------
The number of calendar years during which an Employee is credited with at
least 1000 Hours of Service. See Section 13.
Defined Contribution Dollar Limitation
- --------------------------------------
The dollar amount of $30,000, or, if greater, one-fourth of the defined
benefit dollar limitation set forth in Section 415(b)(1) of the Code as in
effect for the Plan Year.
Determination Year
- ------------------
The Plan year for which the determination of who is highly compensated is
being made.
Direct Rollover
- ---------------
A payment by the Plan to the Eligible Retirement Plan specified by the
Distributee.
Distributee
- -----------
A Distributee includes an Employee or former Employee. In addition, the
Employee's or former Employee's spouse or former spouse who is the alternate
payee under a qualified domestic relations order, as defined in Section
414(p) of the Code, or Distributees with regard to the interests of the
spouse or former spouse.
Eligible Retirement Plan
- ------------------------
An individual retirement account described in Section 408(a) of the Code, an
individual retirement annuity described in Section 408(b) of the Code, an
annuity plan described in Section 403(a) of the Code, or a qualified trust
described in Section 401(a) of the Code, that accepts the Distributee's
Eligible Rollover Distribution. However, in the case of an Eligible Rollover
Distribution to the surviving spouse, an Eligible Retirement Plan is an
individual retirement account or individual retirement annuity.
2.4
<PAGE>
Eligible Rollover Distribution
- ------------------------------
Any distribution of all or any portion of the balance to the credit of the
Distributee, except that an Eligible Rollover Distribution does not include:
any distribution that is one of a series of substantially equal periodic
payments (not less frequently than annually) made for the life (or life
expectancy) of the Distributee or the joint lives (or joint life
expectancies) of the Distributee and the Distributee's designated
Beneficiary, or for a specified period of ten years or more; any distribution
to the extent such distribution is required under Section 401(a)(9) of the
Code; and the portion of any distribution that is not includable in gross
income determined without regard to the exclusion for net unrealized
appreciation with respect to employer securities.
Employee
- --------
Any common-law employee of an Employer.
Employer
- --------
The Bank and any other Affiliated Company which is designated by the Board of
Directors as an Employer and which adopts the Plan for the benefit of its
Employees.
Employer Discretionary Basic Contributions
- ------------------------------------------
Plan contributions made pursuant to Plan Section 4(l)(a)(3).
Employer Contributions
- ----------------------
Payments made to the Trust by an Employer which include Basic Contributions,
Matching Contributions and Optional Contributions. See Section 4.
Employer Discretionary Matching Contributions
- ---------------------------------------------
Plan contributions made pursuant to Plan Section 4(l)(a)(2).
Employer Discretionary Optional Contributions
- ---------------------------------------------
Plan contributions made pursuant to Plan Section 4(l)(a)(4).
ERISA
- -----
The Employee Retirement Income Security Act of 1974, as amended.
Family Members
- --------------
The spouse and the lineal ascendant and descendants (and spouses of such
ascendant and descendants) of any Employee or former Employee.
2.5
<PAGE>
Financed Shares
- ---------------
Shares of Bank Stock acquired by the Trust with the proceeds of an
Acquisition Loan.
Forfeiture
- ----------
Any portion of a Participant's Accounts which does not become a part of his
Capital Accumulation upon the occurrence of a Break in Service. The balance
in the account that is not vested at the time of termination will be
forfeited at the earlier of: (i) when the employee receives a distribution,
or (ii) after the employee incurs five (5) consecutive one year breaks in
service. See Sections 12(b) and (c).
Highly Compensated Participant
- ------------------------------
An Employee who performs service during the determination year and is
described in one or more of the following groups:
(1) An Employee who is a five percent (5%) owner, as defined in Section
416(i)(1)(A)(iii), at any time during the determination year or the look-back
year.
(2) An Employee who receives Compensation in excess of $75,000 (indexed in
accordance with Section 415(d)) during the look-back year.
(3) An Employee who receives Compensation in excess of $50,000 (indexed in
accordance with Section 415(d) during the look-back year and is a member of
the top paid group for the look-back year.
(4) An Employee who is an officer, within the meaning of Section 416(i)
during the lookback year and who receives Compensation in the look-back year
greater than fifty percent (50%) of the dollar limitation in effect under
Section 415(b)(1)(A) for the calendar year in which the look-back year
begins.
(5) An Employee who is both described in paragraphs 2, 3, or 4 above when
these paragraphs are modified to substitute the determination year for the
look-back year and 1 of the 100 Employees who receive the most Compensation
from the Employer during the determination year.
The top-paid group consists of the top twenty percent (20%) of Employees
ranked on the basis of Compensation received during the year. For purposes of
determining the number of Employees in the top-paid group, Employees
described in Section 414(q)(8) and Q & A 9(b) of Section 1.414(q)-lT of the
regulations are excluded. The number of officers is limited to 50 (or, if
lesser, the greater of three Employees or ten percent (10%) of the Employees)
excluding those Employees who may be excluded in determining the top-paid
group. When no officer has Compensation in excess of fifty percent (50%) of
the Section 415(b)(1)(A) limit, the highest paid officer is treated as highly
compensated.
Hour of Service
- ---------------
Each hour of Service for which an Employee is credited under the Plan, as
described in Section 3(d).
2.6
<PAGE>
KEY EMPLOYEE
- ------------
An employee who, an any time during the Plan Year or any of the four
preceding Plan Years, is (i) an officer of the Employer having an annual
compensation greater than fifty percent (50%) of the amount in effect under
Section 415(b)(1)(A) for any such Plan Year, (ii) one of the ten Employees
having an annual compensation from the Employer of more than the limitation
in effect under Section 415(c)(1)(A) and owning (or considered as owning
within the meaning of Section 318) the largest interest in the Employer, or
(iii) a five percent (5%) owner of the Employer, or (iv) a one percent (1%)
owner of the Employer having an annual compensation from the Employer or
more than $150,000 per year.
LOAN SUSPENSE ACCOUNT
- ---------------------
The account to which financed shares are credited and maintained while an
Acquisition Loan is outstanding. See Sections 5(b) and 6(e).
LOOK-BACK YEAR
- --------------
The twelve (12) months period immediately preceding the determination year,
or, if the employee elects, the calendar year ending with or within the
determination year.
MERGER
- ------
A transaction or series of transactions wherein the Bank is combined with
another business entity, and after which the persons or entities who had
owned, either directly or indirectly, a Controlling Interest in the Bank's
voting stock on the date of execution of this Agreement own less than a
Controlling Interest in the voting stock of the combined entity.
NON-KEY EMPLOYEE
- ----------------
Any Employee or former Employee not defined as a Key Employee.
OTHER INVESTMENTS ACCOUNT
- -------------------------
The portion of the Optional Contribution Account of a Participant which
reflects his interest under the Plan attributable to Trust Assets other
than Bank Stock. See Section 6(e).
PARTICIPANT
- -----------
Any Employee who is participating in this Plan. See Section 3.
PLAN
- ----
The TIB Bank of the Keys Employee Stock Ownership Plan (with Section 401(k)
provisions), which includes the Trust Agreement.
PLAN YEAR
- ---------
The twelve-month period ending on each Anniversary Date.
2.7
<PAGE>
PROFIT SHARING ACCOUNT
- ----------------------
The account of a Participant representing Employer Contributions under the
Profit Sharing Plan.
PROFIT SHARING PLAN
- -------------------
The TIB Bank of the Keys Profit Sharing Plan, effective as of January 1,
1978, and of which this plan is a restatement.
SUBSTANTIAL CHANGE IN OWNERSHIP
- -------------------------------
A transaction or series of transactions in which a Controlling Interest in
the Bank is acquired by or for a person or business entity, either of which
did not own, either directly or indirectly, a Controlling Interest in the
Bank on the date that this Agreement was executed. The above shall not
apply to stock purchased by the Plan.
SALARY REDUCTION ACCOUNT
- ------------------------
The account balance of a Participant attributable to Salary Reduction
Contributions.
SALARY REDUCTION CONTRIBUTIONS
- ------------------------------
Plan contributions made as a result of the salary reduction elections of
Participants pursuant to Plan Section 4(2).
SERVICE
- -------
Employment with the Bank (or an Affiliated Company).
TREASURY REGULATION
- -------------------
A regulation promulgated under Title 26 of the Code of Federal Regulations
and formally adopted pursuant to a Treasury Directive.
TRUST
- -----
The TIB Bank of the Keys Employee Stock Ownership Trust, created by the
Trust Agreement entered into between the Bank and the Trustee.
TRUST AGREEMENT
- ---------------
The agreement between the Bank and the Trustee establishing the Trust and
specifying the duties of the Trustee.
2.8
<PAGE>
TRUST ASSETS
- ------------
The Bank Stock and other assets held in the Trust for the benefit of
Participants. See Section 5.
TRUSTEE
- -------
The Board of Trustees (and any successor Trustee) appointed by the Board of
Directors to hold and invest the Trust Assets. See Section 18.
VESTED ACCOUNT
- --------------
The fair market value of a Participant's nonforfeitable benefit under the
Plan.
2.9
<PAGE>
SECTION 3. ELIGIBILITY AND PARTICIPATION.
-----------------------------
(a) All current participants in the 401(k) Plan and Profit Sharing Plan will
continue to participate in the Plan. Thereafter, each Employee will become
eligible to participate on the January 1st or July 1st, whichever the case may
be, following his initial date of Service (the date he is first credited with an
Hour of Service), provided that he has attained the age of eighteen (18) and is
employed in a position requiring the completion of at least 1000 Hours of
Service for the Plan Year. If an Employee actually completes 1,000 or more hours
of service during the computation period, they will enter the Plan on the same
entry date as if their position had required 1,000 or more Hours of Service as
of the beginning of the computation period. For purposes of determining years of
service and breaks in service for purposes of eligibility, the initial
eligibility computation period is the 12-consecutive month period beginning on
the date the employee first performs an Hour of Service for the employer
(employment commencement date). The succeeding 12-consecutive month periods
commence with the first plan year which commences prior to the first anniversary
of the employee's employment commencement date regardless of whether the
employee is entitled to be credited with 1,000 Hours of Service during the
initial eligibility computation period. An employee who is credited with 1,000
Hours of Service in both the initial eligibility computation period and the
first plan year which commences prior to the first anniversary of the employee's
initial eligibility computation period will be credited with two years of
service for purposes of eligibility to participate.
(b) A Participant is generally entitled to share in the allocations of
Employer Contributions (other than Employer Discretionary Matching
Contributions) and Forfeitures only for a Plan Year in which he was an Employee
(or on Approved Absence) on the Anniversary Date and has completed 1000 Hours of
Service. Employer Discretionary Matching Contributions shall be allocated to the
Accounts of Participants regardless of whether they are employed on the
Anniversary Date or complete 1000 Hours of Service. A Participant shall also
share in the allocations of Employer Contributions for the Plan Year of his
retirement, disability or death (as
3.1
<PAGE>
Provided in Section 12).
(c) A former Employee who is reemployed by an Employer and has previously
satisfied the eligibility requirements of Section 3(a) shall become a
Participant as of his date of reemployment. An Employee who is on an Approved
Absence shall not become a Participant until the end of his Approved Absence but
a Participant who is on an Approved Absence shall continue as a Participant
during the period of his Approved Absence. Failure to return to work by the end
of the Approved Absence will terminate Service as of the beginning of the
Approved Absence.
(d) Hours of Service. For purposes of determining the Hours of Service to
----------------
be credited to an Employee under the Plan, the following rules shall be applied:
(1) Hours of Service shall include:
(a) each hour of Service for which an Employee is paid, or
entitled to payment, for the performance of duties, with
such hours of Service being credited in the Plan Year in
which the duties are performed; and
(b) each hour of Service for which an Employee is paid, or
entitled to payment, for a period during which no duties are
performed (irrespective of whether the employment relations-
hip has terminated) due to vacation, holiday, illness,
incapacity (including disability), layoff, jury duty,
military duty or leave of absence; provided that no more
than 501 Hours of Service need be credited for one
continuous period during which an Employee does not perform
duties; and
(c) each hour of Service for which back pay, irrespective of
mitigation of damages, is either awarded or agreed to;
provided, however, that Hours of Service credited under
either subparagraph (a) or (b) above shall not be credited
under this subparagraph (c). These Hours of Service will be
credited to Employee for the Plan Year to which the award or
agreement pertains rather than the Plan Year in which the
award, agreement or payment is made.
(2) The crediting of Hours of Service shall be determined by the Committee
in accordance with the rules set forth in Section 2530.200b-2(b) and (c) of
the regulations prescribed by the Department of Labor, which rules shall be
consistently applied with respect to all Employees within the same job
classification.
(3) Hours of Service shall not be credited to an Employee for a period
during which no duties are performed if payment is made or due under a plan
maintained solely for the purpose of complying with applicable workers
compensation, unemployment compensation or disability insurance laws, and
Hours of Service shall not be credited on account of any payment made or
due an Employee solely in reimbursement of medical or medically-related
expenses.
3.2
<PAGE>
(4) Hours of Service will be credited for employment with other members of
an affiliated service group (under Section 414(m) of the Code), a
controlled group of corporations (under Section 414 (b) of the Code), a
group of trades or businesses under common control (under Section 414 (c)
of the Code), or a group described in the regulations promulgated under
Section 414(o) of the Code of which an Employer is, or may become, a
member.
(5) For purposes of determining whether an Employee has incurred a Break
in Service and for vesting and participation purposes, if an Employee
begins a maternity/paternity leave of absence described in Section
411(a)(6)(E)(i) of the Code, his Hours of Service shall include the Hours
of Service that would have been credited to him if he had not been so
absent (or eight (8) Hours of Service for each day of such absence if the
actual Hours of Service cannot be determined). An Employee shall be
credited for such Hours of Service (up to a maximum of 501 Hours of
Service) in the Plan Year in which his absence begins (if such crediting
will prevent him from incurring a Break in Service in such Plan Year) or,
in all other cases, in the following Plan Year. For purposes of this
provision, a maternity/paternity leave of absence described in Section 411
(a)(6)(E)(i) of the Code pertains to a Participant who is absent from work
for any period by reason of the pregnancy of the Participant, by reason of
the birth of a child of the Participant, by reason of the placement of a
child with the Participant in connection with the adoption of such child by
such Participant, or for purposes of caring for such child for a period
beginning immediately following such birth or placement.
3.3
<PAGE>
SECTION 4. EMPLOYER AND EMPLOYEE CONTRIBUTIONS.
------------------------------------
1. EMPLOYER CONTRIBUTIONS
----------------------
(a) The Employer shall contribute the following amounts to the Plan each Plan
Year:
1. The amount of each Participant's Salary Reduction Contribution made
pursuant to Section 4(2). As provided in Section 12(a), the
interests of a Participant in the Salary Reduction Contributions
allocated to his account will always be 100% vested.
2. An Employer Discretionary Matching Contribution on behalf of each
Participant up to a maximum of one hundred percent (100%) of the
Participant's Salary Reduction Contributions, provided, however,
that the maximum Employer Discretionary Matching Contribution shall
be based on a percentage of a Participant's Compensation selected by
the Board of Directors, which shall in no event exceed six percent
(6%). All Participants will receive the same percentage match of
their Salary Reduction Contribution. As provided in Section 12(a),
the interests of a Participant in the Employer Matching
Contributions allocated to his account will always be 100% vested.
3. An Employer Discretionary Basic Contribution, which shall be
determined at the sole discretion of the Board of Directors.
Employer Discretionary Basic Contributions will only be made to non-
highly compensated Participants to the extent necessary to satisfy
the actual deferral percentage test and actual contribution
percentage test under Sections 4(2) and 4(3) of the Plan,
respectively, to satisfy the nondiscrimination requirements of Code
Sections 401(k) and 401(m). As provided in Section 12(a), the
interests of a Participant in the Employer Basic Contributions
allocated to his account will always be 100% vested.
4. An Employer Discretionary Optional Contribution, which shall be
determined in the sole discretion of the Board of Directors. The
interests of a Participant in the Employer Discretionary Optional
Contributions allocated to his account will become nonforfeitable
pursuant to the vesting schedule contained in Section 12(a).
(b) Salary Reduction Contributions shall be paid to the Trustee promptly (and
in no event later than 30 days after the end of the Plan Year) following each
pay period.
(c) Employer Discretionary Matching, Basic, and Optional Contributions for
each Plan Year shall be paid to the Trustee not later than the due date
(including extensions) for filing the Employee's Federal income tax return for
that Plan Year.
(d) In the event Employer Contributions are paid to the Trust by reason of a
mistake of fact, such Employer Contributions may be returned to the Employer
(upon the request of the Employer) by the Trustee within one (1) year after the
payment to the Trust.
4.1
<PAGE>
2. Employee Salary Reduction Contributions
---------------------------------------
(a) A Participant may authorize his Employer to contribute to the Trust on
his behalf Salary Reduction Contributions. Such Salary Reduction Contributions
shall be stated as a whole percentage, and shall not be less than 1%, or more
than 15%, of the Participant's Compensation. The total amount of Salary
Reduction Contributions for any Plan Year shall not exceed $9,240, multiplied by
any cost of living adjustment factor prescribed by the Secretary of the Treasury
under Section 415(d) of the Code. Any Salary Reduction Contribution in excess of
the aforementioned limitation, plus any income allocable thereto, shall be
returned to the participant no later than the first April 15 following the close
of the tax year in which such contributions were made.
(b) Each Participant electing to have his Employer contribute Salary
Reduction Contributions on his behalf during the Plan Year shall file a whiten
notice with the Plan Administrator at least thirty (30) days prior to the
January 1st or July 1st that he intends such election to take effect. This
requirement shall be waived on adoption of the Plan and each Participant shall
be given a reasonable time to elect Salary Reduction Contributions. Such written
notice shall contain an election of the percentage of his Compensation to be
contributed and authorization for his Employer to reduce his Compensation by
such amount. Salary Reduction Contributions may be suspended at any time by
giving prior written notice. After suspension, the Participant shall not be
eligible for further Salary Reduction Contributions until the beginning of the
next Plan Year, unless the Committee determines that an earlier resumption is
administratively feasible. A Participant may change the percentage of his Salary
Reduction Contributions only as of the January 1st or July 1st of any Plan Year,
but upon not less than thirty (30) days prior written notice. A Participant
shall be fully vested at all times in the portion of his Account from Salary
Reduction Contributions.
(c) For any Plan Year, the Committee shall have the right to limit or reduce
the Salary Reduction Contributions of the Highly Compensated Participants in
order to insure that the Maximum Deferral Percentage Limit under Code Section
401(k) is not exceeded. Furthermore, in accordance with Treasury Regulation
1.401(k)-1(f), the Employer may make additional Employer Discretionary Basic
Contributions and/or Employer Discretionary Matching Contributions or may
distribute such contributions made during the Plan Year in order to provide that
the Maximum Deferral Percentage Limit under Code Section 401(k) is not exceeded.
The Maximum Deferral Percentage Limit under Code Section 401(k) is equal to the
4.2
<PAGE>
greater of Limit 1 or Limit 2:
Limit 1. The Actual Deferral Percentage of the Highly Compensated
Participants may not exceed one hundred twenty-five percent
(125%) of the Actual Deferral Percentage of all other
Participants; or
Limit 2. The Actual Deferral Percentage of the Highly Compensated
Participants may not exceed the lesser of:
(a) The Actual Deferral Percentage of all other Participants,
plus two percent (2%) or
(b) The Actual Deferral Percentage of all other Participants,
multiplied by two hundred percent (200%).
Actual Deferral Percentage with respect to any specific group of Participants
for a Plan Year shall mean the average of the ratios (calculated separately for
each Participant in such group) of (A) the amount of each eligible Employee's
Salary Reduction Contributions (including Employer Discretionary Basic
Contributions and Employer Discretionary Matching Contributions that are treated
as Salary Reduction Contributions) paid into the Trust Fund on behalf of each
Participant for such Plan Year to (B) the Participant's Compensation for such
Plan Year. For this purpose, an eligible Employee is any Employee who is
directly or indirectly eligible to make a cash or deferred election under the
Plan for all or a portion of a Plan Year and includes: an Employee who would be
a Plan Participant bur for the failure to make required contributions; an
Employee whose eligibility to make Salary Reduction Contributions has been
suspended because of an election (other than certain one-time electing) not to
participate, a distribution, or a loan; and an Employee who cannot defer because
of the Section 415 limits on annual additions. In the case of an eligible
Employee who makes no Salary Reduction Contributions, the deferral ratio that is
to be included in determining the ADP is zero.
For purposes of determining whether a Plan satisfies the actual deferral
percentage test of Section 401(k), all Salary Reduction Contributions that are
made under two or more Plans that are aggregated for purposes of Sections
401(a)(4) or 410(b) (other than Section 410(b)(2)(A)(ii)) are to be treated as
made under a single Plan. If two or more plans that are permissively aggregated
for purposes of Section 401(k), the aggregated plans must also satisfy Sections
401 (a)(4) and 410(b) as though they were a single plan.
In the case of a Highly Compensated Participant who is either a five percent
%) owner or one of the ten most highly compensated Employees and is thereby
subject to the family
4.3
<PAGE>
aggregation rules of Section 414(q)(6), the Actual Deferral Ratio (ADR) for the
family group (which is treated as one Highly Compensated Participant) is the ADR
determined by combining the Salary Reduction Contributions, Compensation, and
amounts treated as Salary Reductions Contributions of all eligible Family
Members. Except to the extent taken into account in the preceding sentence, the
amounts treated as Salary Reduction Contributions of all Family Members are
disregarded in determining the actual deferral percentages for the groups of
highly compensated Employees and nonhighly compensated Employees.
Employer Discretionary Basic Contributions and Employer Discretionary
Matching Contributions may be treated as Salary Reduction Contributions for
purposes of the actual deferral percentage test of 401 (k) only if such
contributions are nonforfeitable when made and subject to the same distribution
restrictions that apply to Salary Reduction Contributions. Employer
Discretionary Basic Contributions and Employer Discretionary Matching
Contributions which may be treated as Salary Reduction Contributions must
satisfy it requirements without regard to whether they are actually taken into
account as Salary Reduction Contributions. Employer Discretionary Basic
Contributions and/or Employer Discretionary Matching Contributions may be
treated as Salary Reduction Contributions only if the conditions described in
Section 1.401(k)-l(b)(5) of the Regulations are satisfied.
(d) In the event the Maximum Deferral Percentage Limit under Code Section
401(k) is exceeded, the amount of excess contributions for a Highly Compensated
Participant or a Highly Compensated Participant whose Maximum Deferral
Percentage Limit is determined under the family aggregation rules shall be
distributed pursuant to Treasury Regulation 1.401(k)-1(f)(2) and will be
determined in the following manner. First, the Actual Deferral Percentage (ADP)
of the Highly Compensated Participant with the highest ADP will be reduced to
the extent necessary to satisfy the Maximum Deferral Percentage Limit under Code
Section 401(k) or to cause such Participant's ADP to equal the ADP of the Highly
Compensated Participant with the next highest ADP. Second, this process is
repeated until the Maximum Deferral Percentage Limit under Code Section 401(k)
is satisfied. For each such Highly Compensated Participant whose ADP is reduced,
the amount of such Participant's excess contributions is equal to the
Participant's total Employer Discretionary Basic Contribution (to the extent
actually used) and Salary Reduction Contributions (determined prior to the
application of this paragraph) minus the amount determined by multiplying the
Participant's ADP (determined after application of this paragraph) by such
Participant's Compensation. In
4.4
<PAGE>
the case of a Highly Compensated Participant whose ADP is determined pursuant to
the Code Section 414(q)(6) family aggregation rules, the determination of the
amount of excess assets shall be made pursuant to Treasury Regulation 1.401(k)-
1(f)(5)(ii). The excess contributions are allocated among the Family Members in
proportion to the contributions of each Family Member that have been combined.
The amount of a Participant's excess contributions distributed pursuant to
Treasury Regulation 1.401(k)-1(f) shall be reduced by any excess deferrals
previously distributed during such Plan Year. The distribution of excess
contributions will include any income attributable thereto from the date such
excess contributions were made until such date of distribution. The
distribution of any excess contribution is to be made prior to the two and one-
half month period following the end of the Plan Year in which such excess
contributions were made.
(e) In the event a Participant's Salary Reduction Contribution or Employer
Contribution:
(1) is made under a mistake of fact;
(2) is conditioned upon initial qualification of the Plan under Code
Section 401(a) and the Plan does not so qualify,
the contribution may be returned to the Employer within one (1) year after the
payment of the contribution, the disallowance of the deduction to the extent
disallowed, or the date of denial of the qualification of the Plan, whichever is
applicable. Except as provided under this paragraph, the assets of the Plan
will be used for the exclusive purpose of providing benefits to Participants
under the Plan and their Beneficiaries and for defraying reasonable
administrative expenses of the Plan.
3. LIMITATIONS ON MATCHING CONTRIBUTIONS
-------------------------------------
(a) For any Plan Year, the Committee shall have the right to limit or
reduce the Employer Discretionary Matching Contributions attributable to the
Highly Compensated Participants in order to insure that the Maximum Contribution
Percentage Limit under Code Section 401(m) is not exceeded. The Maximum
Contribution Percentage Limit under Code Section 401 (m) is equal to the greater
of Limit 1 or Limit 2:
Limit 1. The Actual Contribution Percentage of the Highly Compensated
Participants may not exceed one hundred twenty-five percent
(125%) of the Actual Contribution Percentage of all other
Participants; or
Limit 2. The Actual Contribution Percentage of the Highly Compensated
Participants may not exceed the lesser of:
4.5
<PAGE>
(a) The Actual Contribution Percentage of all other
Participants, plus two percent (2%) or
(b) The Actual Contribution Percentage of all other
Participants, multiplied by two hundred percent (200%).
Actual Contribution Percentage with respect to any specific group of
Participants for a Plan Year shall mean the average of the ratios (calculated
separately for each Participant in such group) of the amount of Employer
Discretionary Matching Contributions paid into the Trust Fund on behalf of each
Participant for such Plan Year to (B) the Participant's Compensation for such
Plan Year. A Participant's Employer Discretionary Matching Contributions are to
be taken into account if they are paid to the Trust during the Plan Year or are
paid to an agent of the Plan and are transmitted to the Trust within a
reasonable period after the end of the Plan Year. In the case of a Participant
who has no Employer Discretionary Matching Contributions, the Actual
Contribution Percentage is considered to be zero. The income allocable to excess
aggregate contributions is equal to the sum of the allocable gain or loss for
the Plan Year. The determination of income for excess aggregate contributions
will be determined under the method in Section 6(i). For purposes of determining
whether the Plan satisfies the actual contribution percentage test of Section
401(m), all Employee and Employer Discretionary Matching Contributions that are
made under two or more plans that are aggregated for purposes of Sections
401(a)(4) and 410(b) (other than Section 410(b)(2)(A)(ii) are to be treated as
made under a single plan. If two or more plans are permissively aggregated for
purposes of Section 401(m), the aggregated plans must also satisfy Sections
401(a)(4) and 410(b) as though they were a single plan. In the case of a Highly
Compensated Participant who is either a five percent (5%) owner or one of the
ten most highly compensated Participants and is thereby subject to the family
aggregation rules of Section 414(q)(6), the Actual Contribution Ratio (ACR) for
the family group (which is treated as one Highly Compensated Participant) is the
ACR determined by combining the contributions and Compensation of all eligible
Family Members. Except to the extent taken into account in the preceding
sentence, the contributions and Compensation of all Family Members are
disregarded in determining the actual contribution percentages for the groups of
Highly Compensated Participants and nonhighly compensated Participants.
(b) In the event the Maximum Contribution Percentage Limit under Code
Section 401(m) is
4.6
<PAGE>
exceeded, the amount of excess contributions for a Highly Compensated
Participant or for a Highly Compensated Participant whose Maximum Contribution
Percentage Limit is determined under the family aggregation rules will be
distributed or forfeited pursuant to Treasury Regulation 1.401(m)-l(e) and
determined in the following manner. First, the Actual Contribution Percentage
(ACP) of the Highly Compensated Participant with the highest ACP will be reduced
to the extent necessary to satisfy the Maximum Contribution Percentage Limit
under Code Section 401 (m) or to cause such Participant's ACP to equal the ACP
of the Highly Compensated Participant with the next highest ACP. Second, this
process is repeated until the Maximum Contribution Percentage Limit under Code
Section 401 (m) is satisfied. For each such Highly Compensated Participant whose
ACP is reduced, the amount of such Participant's excess contributions is equal
to the Participants total Employer Discretionary Matching Contributions
(determined prior to the application of this paragraph) minus the amount
determined by multiplying the Participant's ACP (determined after application of
this paragraph) by such Participant's Compensation. In the case of a Highly
Compensated Participant whose ACP is determined pursuant to the Code Section
414(q)(6) family aggregation rules, the excess aggregate contributions are
allocated among the Family Members in proportion to the contributions of each
Family Member that have been combined. The income allocable to the excess
aggregate contributions includes income for the Plan Year for which the excess
aggregate contributions were made.
The amount of a Participant's excess contributions distributed shall be
reduced by any excess contributions previously distributed during such Plan
Year. The distribution of excess contributions will include any income
attributable thereto from the date such excess contributions were made until
such date of distribution. The distribution of any excess contribution is to be
made prior to the two and one-half month period following the end of the Plan
Year in which such excess contributions were made.
(c) For any Plan Year, the application of the Maximum Contribution Percentage
Limitations pursuant to Sections 4(2)(c) and 4(3)(d) of the Plan shall be made
in accordance with the multiple use limitations under Regulation 1.401(m)-2. If
multiple use of the alterative limitation occurs, it must be corrected by
reducing the actual deferral percentage of all Highly Compensated Participants,
regardless of whether they are eligible under both the arrangement subject to
Section 401(k) and a plan subject to Section 401(m), Salary Reduction
Contributions and/or Employer Discretionary Basic Contributions may be treated
as Employer
4.7
<PAGE>
Discretionary Matching Contributions only if the conditions described in section
1.401(m)-l(b)(5) of the regulations are satisfied.
(d) To the extent Matching Contributions are used, pursuant to Plan Section
4(2)(c), to compute the Maximum Deferral Percentage Limit under Code Section
401(k), they will not be used to compute the Maximum Contribution Percentage
Limit under Code Section 401(m). Furthermore, at the election of the Employer,
Employer Discretionary Basic Contributions (to the extent not utilized to
compute the Maximum Deferral Percentage Limit under Code Section 401(k)) may be
used in the computation of the Maximum Contribution Percentage Limit under Code
Section 401 (m). Employer Discretionary Basic Contributions may be treated as
Employer Discretionary Matching Contributions for purposes of the actual
contribution percentage test of Section 401(m) only if such contributions are
nonforfeitable and made distributable only under the following circumstances:
(1) The Employee's retirement, death, disability, or separation from service;
(2) The termination of the Plan without establishment or maintenance of another
defined contribution plan (other than an ESOP or SEP); (3) In the case of a
profit sharing or stock bonus plan, the Employee's attainment of age 59 1/2 or
the Employee's hardship; (4) The sale or other disposition by a corporation to
an unrelated corporation of substantially all of the assets used in the trade or
business, but only with respect to Employees who continue employment with the
acquiring corporation and the acquiring corporation does not maintain the Plan
after the disposition; and (5) The sale or other disposition by a corporation of
its interest in the subsidiary to an unrelated entity, but only with respect to
Employees who continue employment with the subsidiary and the acquiring entity
does not maintain the Plan after the disposition. Paragraphs 2, 4, and 5 above,
apply only if the transferor corporation continues to maintain the Plan.
Employer Discretionary Basic Contributions which may be treated as Employer
Discretionary Matching Contributions must satisfy these requirements without
regard to whether they are actually taken into account as Employer Discretionary
Matching Contributions. Salary Reduction Contributions and/or Employer
Discretionary Basic Contributions may be treated as Employer Discretionary
Matching Contributions only if the conditions described in Section 1.401(m)-
l(b)(5) of the Regulations are satisfied.
4. Employee Rollover Contribution
------------------------------
(a) With the Employer's consent, a Rollover Contribution may be made by or
for an Employee if either of the following conditions are met:
4.8
<PAGE>
(1) The Contribution is a rollover contribution which the Code permits
to be transferred to a plan that meets the requirements of Section
401 (a) of the Code; and
(2) The Contribution is made within 60 days after the Employee receives
or would be entitled to receive the distribution; and
(3) The Employee furnishes evidence satisfactory to the Committee that
proposed transfer is in fact a rollover contribution which meets
conditions (1) and (2) above.
-OR-
(4) The Contribution is made pursuant to Plan Section 23 diversification
requirements.
The Rollover Contribution may be made by the Employee or may be made with
his consent by the named fiduciary of another plan. The Contribution will be
made according to procedures set up by the Committee.
(b) If the Employee is not a Participant at the time the Rollover
Contribution is made, he will be deemed to be a Participant only for the
purposes of investment and distribution of the Rollover Contribution. No
Employer Contribution will be made for him and he may not make Participant
Contributions, until the time he meets all of the requirements to become a
Participant.
(c) Any Rollover Contribution made by or for an Employee is credited to his
Account when made and is at all times fully vested and nonforfeitable.
(d) Notwithstanding any provision of the Plan to the contrary that would
otherwise limit a Distributee's election under Code Section 401(a)(31), a
Distributee may elect, at the time and in the manner prescribed by the Plan
administrator, to have any portion of an eligible rollover distribution paid
directly to an eligible retirement plan specified by the Distributee in a direct
rollover.
4.9
<PAGE>
SECTION 5. INVESTMENT OF TRUST ASSETS.
---------------------------
(a) Subject to the exceptions contained in Section 5(c), Trust Assets under
the Plan will be invested by the Trustee primarily in Bank Stock in accordance
with the Trust Amendment. Employer Contributions (and other Trust Assets) may
be used to acquire shares of Bank Stock from Bank shareholders or from the Bank.
The Trustee may also invest Trust Assets in such other prudent investments as
the Trustee deems to be desirable for the Trust, or Trust Assets may be held
temporarily in cash. All purchases of Bank Stock by the Trustee shall be made
at prices which do not exceed the fair market value of Bank Stock, as determined
in good faith by the Trustee in accordance with the provisions of Section 18.
The Trustee may invest and hold up to one hundred percent (100%) of the Trust
Assets in Bank Stock.
(b) The Trustee may incur Acquisition Loans from time to time to finance the
acquisition of Bank Stock (Financed Shares) for the Plan or to repay a prior
Acquisition Loan. An installment obligation incurred in connection with the
purchase of Bank Stock shall constitute an Acquisition Loan. An Acquisition Loan
shall be for a specific term, shall bear a reasonable rate of interest and shall
not be payable on demand except in the event of default. An Acquisition Loan may
be secured by a pledge of the Financed Shares so acquired (or acquired with the
proceeds of a prior Acquisition Loan which is being refinanced). No other Trust
Assets may be pledged as collateral for an Acquisition Loan, and no lender shall
have recourse against Trust Assets other than any Financed Shares remaining
subject to pledge. If the lender is a party in interest (as defined in ERISA),
Financed Shares may be transferred to the lender only upon and to the extent of
the failure of the Plan to meet the payment schedule of the loan. Any pledge of
Financed Shares must provide for the release of the shares so pledged as
payments on the Acquisition Loan are made by the Trustee and such Financed
Shares are allocated to Participants' Bank Stock Accounts under Section 6(a).
Payments of principal and interest on any Acquisition Loan shall be made by the
Trustee only from Employer Contributions to enable the Trust to repay such
Acquisition Loan, from earnings attributable to such Employer Contributions,
from Salary Reduction Contributions which have been directed to the purchase of
Bank Stock pursuant to Section 5(c)(1), and from any dividends received by the
Trust on such Financed Shares.
5.1
<PAGE>
(c) A Participants Profit Sharing Account and Salary Reduction
Contributions will not normally be invested in Bank Stock. However, a
Participant may, with the consent of the Trustee, direct the investment of his
Profit Sharing Account and Salary Reduction Contributions in the following
Investment Funds:
(1) An Equity Fund shall be a fund, the principal investment goal of
which shall be capital appreciation primarily through investment in
Bank Stock. The Trustee may apply Employer Contributions and Salary
Reduction Contributions directed pursuant to this Section to
payments of principal and interest on an Acquisition Loan.
(2) A General Investment Fund shall be a fund, the principal goal of
which shall be the preservation of principal and the production of
high current income with liquidity.
(3) Any other Fund which the Trustees may establish from time to time.
(d) As of each Anniversary Date, the Trustee shall determine the fair
market value of each Investment Fund, where applicable, in accordance with
Section 17 of this document. With respect to each such Investment Fund, the
Trustee shall determine the net gain or loss resulting from expenses paid, and
realized and unrealized gains and losses. After each Anniversary Date, the net
gain or loss of each Investment Fund shall be allocated by the Committee, or its
agent, to the Accounts of Participants participating in such Investment Fund.
The reasonable and equitable decision of the Trustee as to the value of each
Investment Fund and of any Account as of each Anniversary Date shall be
conclusive and binding upon all Participants having any interest, direct or
indirect, in the Investment Funds or in any Account.
5.2
<PAGE>
SECTION 6. ALLOCATIONS TO PARTICIPANT'S ACCOUNT.
------------------------------------
Separate Accounts shall be established to reflect each Participant's
interest in the Plan. Within each of the Accounts described in Sections (a),
(b), and (c) herein, a separate Bank Stock Account and Other Investments Account
will be determined and maintained in accordance with the procedures contained in
Subsection (e).
(a) EMPLOYER DISCRETIONARY MATCHING CONTRIBUTION ACCOUNT. The Employer
----------------------------------------------------
Discretionary Matching Contribution Account maintained for each Participant will
be credited annually with the amount of the Employer Discretionary Matching
Contribution allocable to such Participant, as determined pursuant to Section
(4)(1)(a)(2), and with his share of the net income (or loss) of the Trust.
(b) EMPLOYER DISCRETIONARY BASIC CONTRIBUTION ACCOUNT. The Employer
-------------------------------------------------
Discretionary Basic Contribution Account maintained for each Participant will be
credited annually with his allocable share of Employer Discretionary Basic
Contributions and with his share of the net income (or loss) of the Trust.
Employer Discretionary Basic Contributions will be made only to satisfy the
actual contribution percentage test and actual deferral percentage test in
Sections 4(2) and 4(3) of the Plan as of the Anniversary Date among the Accounts
of all nonhighly compensated Participants so entitled under Section 3(b) based
on the percentage of such nonhighly compensated Participants' Adjusted
Compensation to the Total Adjusted compensation of all nonhighly compensated
Participants.
(c) EMPLOYEE SALARY REDUCTION ACCOUNT. The Employee Salary Reduction
---------------------------------
Contribution Account maintained for each Participant will be credited (or
debited) annually with his share of the net income (or loss) of the Trust, his
Salary Reduction Contributions, if any, made during the Plan Year, and with any
financed shares released from the Loan Suspense Account on account of his Salary
Reduction Contributions.
(d) EMPLOYEE ROLLOVER CONTRIBUTION ACCOUNT. The Rollover Contribution
--------------------------------------
Account maintained for each Participant will be credited (or debited) annually
with his share of net income (or loss) of the Trust and with his Rollover
Contributions, if any, made during the Plan Year.
6.1
<PAGE>
(e) EMPLOYER DISCRETIONARY OPTIONAL CONTRIBUTION ACCOUNT. The Employer
----------------------------------------------------
Discretionary Optional Contribution Account will be allocated as of the
Anniversary Date among the Accounts of Participants so entitled under Section
3(b) in the ratio which the Adjusted Compensation of each such Participant bears
to the Adjusted Compensation of all such Participants for that Plan Year. A
separate Bank Stock Account and Other Investments Account shall be established
to reflect each Participant's interest under the Employer Optional Contribution
portion of the Plan. The Bank Stock Account maintained for each Participant
will be credited annually with his allocable share of Bank Stock (including
fractional shares) purchased and paid for by the Trust or contributed in kind to
the Trust, with any Forfeitures of Bank Stock and with any stock dividends on
Bank Stock allocated to his Bank Stock Account. Financed Shares shall initially
be credited to a Loan Suspense Account and shall be allocated to the Bank Stock
Accounts of Participants only as payments on the Acquisition Loan are made by
the Trustee. The number of Financed Shares to be released from the Loan
Suspense Account for allocation to Participants' Bank Stock Accounts for each
Plan Year shall be determined by the Committee as described under (e)(1) and
(e)(2) below.
(1) GENERAL RULE. The number of Financed Shares held in the Loan
------------
Suspense Account immediately before the release for the current Plan Year shall
be multiplied by a fraction. The numerator of the fraction shall be the amount
of principal or principal and interest paid on the Acquisition Loan for that
Plan Year. The denominator of the fraction shall be the sum of the numerator
plus the total payments of principal or principal and interest on the
Acquisition Loan projected to be paid for all future Plan Years. For this
purpose, the interest to be paid in future years is to be computed by using the
interest rate in effect as of the Anniversary Date of the Plan Year.
(2) SPECIAL RULE. The Committee may elect (at the time an Acquisition
------------
Loan is incurred) or the provisions of the Acquisition Loan may provide for the
release of shares from the Loan Suspense Account based solely upon the ratio
that the payments of principal for each Plan Year bear to the total principal
amount of the Acquisition Loan. This method may be used only if: (A) the
Acquisition Loan provides for annual payments of principal and interest at a
cumulative rate that is not less rapid at any time than level annual payments of
such amounts for ten (10) years; (B) interest included in any payment on the
Acquisition Loan is
6.2
<PAGE>
disregarded only to the extent that it would be determined to be interest under
standard loan amortization tables; and (C) the entire duration of the
Acquisition Loan repayment period does not exceed ten (10) years, even in the
event of a renewal, extension or refinancing of the Acquisition Loan.
(3) OTHER INVESTMENTS ACCOUNTS. The Other Investments Account maintained
--------------------------
for each Participant will be credited (or debited) annually with his share of
the net income (or loss) of the Trust, with any cash dividends on Bank Stock
allocated to his Bank Stock Account (other than currently distributed dividends)
and with his allocable share of Employer Contributions in cash and any
Forfeitures from Other Investments Accounts. Such Account will be debited for
the Participant's share of any cash payments made for the acquisition of Bank
Stock or for the repayment of any principal and interest on an Acquisition Loan.
The allocations to Participants' Accounts for each Plan Year will be made
as follows under the remaining subsections of this Section.
(f) EMPLOYER CONTRIBUTIONS AND FORFEITURES. Employer Discretionary
--------------------------------------
Optional Contributions under Section 4 and Forfeitures under Section 12(b) and
(c) for each Plan Year will be allocated as of the Anniversary Date among the
Accounts of Participants so entitled under Section 3(b) in the ratio which the
Adjusted Compensation of each such Participant bears to the total Adjusted
Compensation of all such Participants for that Plan Year. If securities
acquired with the proceeds of an exempt loan available for distribution consist
of more than one class, a Distributee must receive substantially the same
proportion of each such class.
(g) ALLOCATION LIMITATIONS. For each Plan Year, the Annual Additions with
----------------------
respect to any Participant may not exceed the lesser of:
(1) Twenty-five percent (25%) of his Adjusted Compensation; or
(2) The Defined Contribution Dollar Limitation.
For this purpose, "Annual Additions" shall be the total amount of any Employer
Contributions, Salary Reduction Contributions and Forfeitures (including any
income attributable to Forfeitures and amounts described in Code Sections
415(L)(1) and 419A(d)(2)) allocated to the Participant in this Plan and any
other Employer defined contribution plan. For purposes of
6.3
<PAGE>
applying these limitations only, the Plan uses the safe harbor definition of
Compensation pursuant to Section 1.415-2(d)(10) of the Treasury Regulations, as
defined in Section 2 of the Plan. In computing Annual Additions, Forfeitures of
Bank Stock and Employer Contributions of Bank Stock shall be based on the fair
market value of Bank Stock as of the Anniversary Date.
Prior to the allocation of the Employer Contributions for any Plan Year,
the Committee shall determine whether the amount to be allocated would cause the
limitation described herein to be exceeded as to any Participant. In the event
that the limitation is exceeded for any Participant due to the allocation of a
forfeiture or a reasonable error in the estimation of a Participants
Compensation, the excess shall be maintained in a separate suspense account and
shall be allocated in the next subsequent Plan Year as if such amounts were an
additional contribution to the appropriate Account. No contributions which
would be included in the next limitation year's Annual Addition may be made
before the total suspense account has been reallocated.
Any excess amount shall be reallocated among the Accounts of the other
Participants according to the ratio which the Adjusted Compensation of each such
Participant bears to the total Adjusted Compensation of all such Participants
for the Plan Year, to the extent possible without exceeding the limitations with
respect to any other Participant for that Plan Year.
In addition, for any Participant who was covered under a defined benefit
plan, Annual Additions may not be allocated to his Accounts (under this Plan) in
amounts which cause the sum of the defined benefit plan fraction and the defined
contribution plan fraction to exceed 1.0 for any Plan Year. For this purpose,
the "defined benefit plan fraction" shall have as its numerator the projected
annual benefit of the Participant under the defined benefit plan as of the
Anniversary Date and shall have as its denominator the lesser of (i) the product
of 1.25 multiplied by the dollar limitation in effect under Section 415(b)(1)(A)
of the Code for such Plan Year; or (ii) the product of 1.4 multiplied by the
amount which may be taken into account under Section 415(b)(1)(B) of the Code
with respect to the Participant for such Plan Year. The "defined contribution
plan fraction" shall have as its numerator the total of the Annual Additions of
the Participant (under this Plan and any other Employer defined contributions
for all Plan Years and shall have as its denominator the lesser of the following
amounts determined for such Plan Years and for each prior year of Service with
an Employer: (i) the
6.4
<PAGE>
product of 1.25 multiplied by the dollar limitation taken into account under
Section 415(c)(1)(A) of the Code for the year, or (ii) the product of 1.4
multiplied by the amount which may be taken into account under Section
415(c)(1)(B) of the Code with respect to such Participant for such year.
(h) Special Limitation Provision. Any Employer Contributions which are
----------------------------
applied by the Trust (not later than the due date, including extensions, for
filing the Bank's Federal income tax return for that Plan Year) to pay interest
on an Acquisition Loan, and any Financed Shares which are allocated as
Forfeitures, shall not be included as Annual Additions under Section 6(g);
provided, however, that the provisions of this Section 6(h) shall be applicable
only for Plan Years for which not more than one-third (1/3) of the Employer
Contributions applied to pay principal or interest, or both, on an Acquisition
Loan are allocated to Participants who are Highly Compensated Participants
within the meaning of Code Section 414(q).
(i) Net Income (or Loss) of the Trust. The net income (or loss) of the Trust
---------------------------------
for each Plan Year will be determined as of the Anniversary Date. Each
Participant's share of the net income (or loss) will be allocated to his
Accounts in the ratio which the balance of such Accounts on the preceding
Anniversary Date (reduced by the amount of any distribution of Capital
Accumulation from such Account during the Plan Year) bears to the sum of the
Account balances for all Participants as of that date. The net income (or loss)
of the Trust includes the increase (or decrease) in the fair market value of
Trust Assets (other than Bank Stock), interest income, dividends and other
income and gains (or loss) attributable to Trust Assets (other than any
dividends on Bank Stock allocated to Bank Stock Accounts) since the preceding
Anniversary Date, reduced by any expenses charged to the Trust Assets for that
Plan Year. The computation of the net income (or loss) of the Trust shall not
take into account any interest paid by the Trust under an Acquisition Loan.
(j) Dividends on Bank Stock. Cash dividends received on shares of Bank
-----------------------
Stock allocated to Participants' Accounts will be allocated to the respective
Other Investments Account portion of the account to which such Bank Stock was
allocated. Cash dividends received on unallocated shares of Bank Stock shall be
included in the computation of net income (or loss) of the Trust. Stock
dividends received on Bank Stock shall be credited to the Accounts to which such
Bank Stock was allocated. Any cash dividends which are currently distributed to
6.5
<PAGE>
Participants, used to repay a loan to the ESOP under Sections 17(b) or (c), or
used to pay administrative expenses of the Plan shall not be credited to
Participants' Accounts. Employer Securities with a fair market value of not
less than the amount of a dividend used to make payments on a loan in which the
proceeds are used to acquire the employer securities (whether or not allocated
to Participants with respect to which the dividend is paid are allocated to such
Participant for the year which (but for Code Section 404(k)(2)(A)) such dividend
would have been allocated to such Participant.
(k) Accounting for Allocations. The Committee shall establish accounting
--------------------------
procedures for the purpose of making the allocations to Participants' Accounts
provided for in this Section. The Committee shall maintain adequate records of
the aggregate cost basis of Bank Stock allocated to each Participant's Bank
Stock Account. The Committee shall also keep separate records of Financed Shares
and of Employer Contributions (and any earnings thereon) made for the purpose of
enabling the Trust to repay any Acquisition Loans. From time to time, the
Committee may modify the accounting procedures for the purposes of achieving
equitable and nondiscriminatory allocations among the Accounts of Participants
in accordance with the general concepts of the Plan, the provisions of this
Section and the requirements of the Code and ERISA.
(l) Limitation on Allocation to Certain Shareholders. To the extent that a
------------------------------------------------
Bank shareholder sells qualifying Bank securities to the Plan Trust and elects
(with the consent of the Bank) nonrecognition of gain under Section 1042 of the
Code or elects (with the consent of the Bank) to qualify a sale under Section
2057 of the Code, no portion of the assets of the Plan attributable to (or
allocable in lieu of employer securities acquired by the Plan in a sale to which
Section 1042 applies may accrue (or be allocated directly or indirectly under
any plan of the Employer meeting the requirements of Section 401(a)); (a) during
the nonallocation period, for the benefit of (i) any taxpayer who make an
election under Section 1042(a) with respect to employer securities, (ii) any
individual who is related to the taxpayer or the decedent (within the meaning of
Section 267(b)), or (b) for the benefit of any other person who owns (after
application of Section 318(a)) more than twenty-five percent (25%) of (i) any
class of outstanding stock of the corporation which issued such employer
securities or of any corporation which is member of the same control group or
corporation (within the meaning of
6.6
<PAGE>
Code Section 409(1)(4)) of such corporation, or (ii) the total value of any
class of outstanding stock of any such corporation. For the purposes of (b)
above, Code Section 318(a) shall be applied without regard to the employee trust
exception in Section 318(a)(2)(B)(i). Nonallocation period means the period
beginning on the date of sale of the qualified securities and ending on the
later of: (i) the date which is 10 years after the date of sale, or (ii) the
date of the Plan allocation attributable to the final payment of acquisition
indebtedness incurred in connection with such sale. The nonallocation period is
the period beginning on the date of the sale of the qualified securities and
ending on the later of (i) the date which is 10 years after the date of sale, or
(ii) the date of the Plan allocation attributable to the final payment of
acquisition indebtedness incurred in connection with such sale.
6.7
<PAGE>
SECTION 7. EXPENSES OF THE PLAN AND TRUST.
-------------------------------
All expenses of administering the Plan and Trust shall be charged to and
paid out of the Trust Assets. The Bank may pay all or any portion of such
expenses, and payment of expenses by the Bank shall not be deemed to be Employer
Contributions.
7.1
<PAGE>
SECTION 8. VOTING BANK STOCK.
------------------
All Bank Stock in the Trust shall normally be voted by the Trustee in such
manner as it shall determine in its sole discretion. However, with respect to
any corporate matter which involves the voting of Bank Stock as to the approval
or disapproval of any corporate merger or consolidation, recapitalization,
reclassification, liquidation, dissolution, sale of substantially all assets of
a trade or business, or such similar transactions as may be prescribed in Code
regulations, each Participant will be entitled to direct the Trustee as to the
exercise of any voting rights attributable to shares of Bank Stock then
allocated to his Bank Stock Account but only to the extent required by Sections
401(a)(22) and 409(e)(3) of the Code and the regulations thereunder. In that
event, any allocated Bank Stock with respect to which voting instructions are
not received from Participants shall not be voted, and all Bank Stock which is
not then allocated to Participants' Bank Stock Accounts shall be voted in the
manner determined by the Trustee.
8.1
<PAGE>
SECTION 9. DISCLOSURE TO PARTICIPANTS.
---------------------------
(a) Summary Plan Description. Each Participant shall be furnished with the
------------------------
summary plan description required by Sections 102(a)(1) and 104(b)(1) of ERISA.
Such summary plan description shall be updated from time to time as required
under ERISA and Department of Labor regulations thereunder.
(b) Summary Annual Report. Within nine (9) months after each Anniversary
---------------------
Date, each Participant shall be furnished with the summary annual report of the
Plan required by Section 104(b)(3) of ERISA, in the form required by regulations
of the Department of Labor.
(c) Annual Statement. Following each Anniversary Date, each Participant
----------------
shall be furnished with a statement reflecting the following information:
(1) The balance (if any) in his Accounts as of the beginning of the Plan
Year.
(2) The amounts of Employer Contributions, Salary Reduction
Contributions, and Forfeitures allocated to his Accounts for that
Plan Year.
(3) The adjustments to his Accounts to reflect his share of dividends (if
any) on Bank Stock and the net income (or loss) of the Trust for that
Plan Year.
(4) The new balance in his Accounts, including the number of shares of
Bank Stock allocated to his Bank Stock Account and the fair market
value of Bank Stock as of that Anniversary Date.
(5) His number of years of Credited Service and his vested percentage in
his Account balances (under Sections 12 and 13) as of that
Anniversary Date.
(d) Additional Disclosure. The Committee shall make available for
----------------------
examination by any Participant copies of the Plan, the Trust Agreement and the
latest annual report of the Plan filed (on Form 5500) with the Internal Revenue
Service. Upon written request of any Participant, the Committee shall furnish
copies of such documents and may make a reasonable charge to cover the cost of
furnishing such copies, as provided in regulations of the Department of Labor.
9.1
<PAGE>
SECTION 10. CAPITAL ACCUMULATION.
---------------------
A Participants vested (nonforfeitable) interest under the Plan is called his
Capital Accumulation. His Capital Accumulation shall be determined in accordance
with the provisions of Sections 11 and 12. Each Participant's Capital
Accumulation will be distributed as provided in Sections 14 and 15.
10.1
<PAGE>
SECTION 11. RETIREMENT, DISABILITY, OR DEATH.
---------------------------------
Upon a Participant's retirement, disability or death, his Capital Accumulation
will be the total of his Account balances (100% vested). The Participant will
share in the allocation of Employer Contributions and Forfeitures for the Plan
Year in which his Service terminates by retirement, disability, or death.
A Participant will be treated as having retired under the Plan if his Service
ends by any of the following:
(a) Normal Retirement
-----------------
A Participant's right to his or her normal retirement benefit will be
nonforfeitable on attainment of normal retirement age; that is, the
earlier of Normal Retirement Age under the Plan or the later of age
65 or the fifth anniversary of the time the Participant commenced
participation in the Plan.
(b) Early Retirement
----------------
A Participant may elect early retirement under the Plan at any time
after he has attained age fifty-five (55) and completed at least ten
(10) years of Service.
(c) Deferred Retirement
-------------------
In the event a Participant's Service continues beyond his Normal
Retirement Age, he shall continue to participate in the Plan.
(d) Disability Retirement
---------------------
If the Committee determines that a Participant has suffered a
disability (while employed by the Bank or an Affiliated Company) of a
type that entitles him to receive total disability benefits under
Social Security, he will be granted disability retirement under the
Plan without regard to his age or period of Service.
11.1
<PAGE>
SECTION 12. OTHER TERMINATION OF SERVICE, BREAK IN SERVICE, VESTING AND
-----------------------------------------------------------
FORFEITURES.
------------
(a) If Participants Service terminates for any reason other than his
retirement, disability or death, his Employer Discretionary Optional
Contribution Account Capital Accumulation will be determined on the basis of his
nonforfeitable interest, in accordance with the following vesting schedule:
<TABLE>
<CAPTION>
Credited Service Nonforfeitable
Under Section 13 Percentage
---------------- ----------
<S> <C>
Less than Three Years 0%
Three Years 20%
Four Years 40%
Five Years 60%
Six Years 80%
Seven Years or More 100%
</TABLE>
A Participant is 100% vested at all times in his Account due to Employer
Discretionary Basic Contributions, Employer Discretionary Matching
Contributions, Employee Salary Reduction Contributions, and Rollover
Contributions. A Participant will not share in the allocation of Employer
Contributions and Forfeitures for the Plan year if his Service terminates prior
to the Anniversary Date (except for reasons of retirement, disability or death).
(b) Any portion of the final balances in a Participant's Accounts which is not
vested (and does not become part of his Capital Accumulation) will become a
Forfeiture upon the occurrence of a Break in Service, provided the Participant
has first received a distribution of his nonforfeitable interest in his Account
balances. If the Participant has not received a distribution of his Account
balances, then the portion of his Account balance which is not vested shall be
forfeited only upon the occurrence of a five-consecutive-year Break in Service.
Forfeitures shall first be charged against a Participant's Other Investments
Account, with any balance charged against his Bank Stock Account at the then
fair market value of Bank Stock. Financed Shares shall be forfeited only after
other shares of Bank Stock have been forfeited. Forfeitures will be reallocated
among the Participants, as provided in Section 6(f), as of the Anniversary Date
of the Plan Year in which a Break in Service occurs. A Break in Service will
12.1
<PAGE>
occur only in a Plan Year for which a Participant is not credited with more than
500 hours of Service and is not an Employee on the Anniversary Date by reason of
his termination of Service.
(c) Restoration of Forfeited Accounts. If a Participant is reemployed after a
---------------------------------
one-year Break in Service but prior to the occurrence of a five-consecutive-year
Break in Service, the portion of his Accounts (attributable to the prior period
of Service) that was forfeited upon the occurrence of a one-year Break in
Service shall be restored as if there had been no Forfeiture, provided the
Participant repays any amounts previously distributed. Such restoration shall
be made out of Forfeitures in the Plan Year of reemployment (prior to
allocations under Section 6(f). To the extent such Forfeitures are not
sufficient, the Bank shall make a special contribution to the Participant's
restored Accounts. Any amount so restored to a Participant shall not constitute
an Annual Addition under Section 6(g).
(d) Subsequent Vesting. If a Participant received a distribution of his
------------------
Capital Accumulation and is reemployed prior to the occurrence of five
consecutive one year breaks in service, his Capital Accumulation ("X") shall be
determined (prior to one hundred percent (100%) vesting) at the time his
participation in the Plan subsequently terminates, in accordance with, the
following formula:
X = P(AB + D) - D
For purposes of applying this formula, P is the vested percentage at the time of
the subsequent termination; AB is the total of such Account balances at that
time; and D is the amount of his Capital Accumulation previously distributed.
(e) Offset for Loss due to Fraud, Embezzlement, or Dishonesty. If the
---------------------------------------------------------
Employer incurs a pecuniary loss due to the fraud, dishonesty, embezzlement, or
other bad acts of a Participant, as determined by a Court having jurisdiction
thereof, the Employer may recoup its loss by offsetting the Participant's vested
Account Balance to the extent so directed by an Order of Restitution issued by
the Court.
(f) Change of Control. Upon a Change in Control, a Participant will be 100%
-----------------
vested in his Bank Stock Account and Other Investments Account.
12.2
<PAGE>
SECTION 13. CREDITED SERVICE.
-----------------
(a) General Rule. For purposes of vesting, an Employee's Credited Service
-------------
includes the total number of years of service in which he is credited with at
least 1 000 Hours of Service with the Employer. Credited Service shall include
such Service with the Bank, any other Employer and any Affiliated Company.
Service of any Employee who is a leased employee to any Employer aggregated
under Section 414(b), (c), or (m) must be credited for vesting purposes whether
or not such individual is eligible to participate in the Plan. An Employee who
separates from service and is reemployed prior to incurring a Break in Service
will continue to vest, starting at the point in the vesting schedule where he
left employment, in both his pre-separation and post-separation accrued benefit.
(b) Reemployment. If a former Participant is reemployed after the
------------
occurrence of a Break in Service, the following special rules shall apply in
determining his Credited Service:
(1) New Accounts will be established to reflect his interest in the Plan
attributable to his Service after the Break in Service.
(2) If he is reemployed after the occurrence of a five-consecutive-year
Break in Service, Credited Service after the Break in Service will
not increase his vested interest in his Accounts attributable to
Service prior to the Break in Service.
(3) After he completes one (1) Plan Year of Credited Service following
his reemployment, his Credited Service with respect to his new
Accounts will include his Credited Service accumulated prior to the
Break in Service.
(4) In the case of a Participant who is reemployed who has not attained a
vested interest under this Plan, Service prior to the Break in
Service shall not be included in determining his Credited Service
provided the number of consecutive one-year Breaks in Service equals
or exceeds the greater of five (5), or the aggregate number of years
of Credited Service before such consecutive Breaks in Service.
13.1
<PAGE>
SECTION 14. WHEN CAPITAL ACCUMULATION WILL BE DISTRIBUTED.
---------------------------------------------
(a) A Participant's Capital Accumulation will be computed following the
termination of his Service. The Committee will, upon implementation of the
Plan, determine whether distribution of a Participant's Capital Accumulation for
any reason other than retirement, disability or death be made: (i) as soon as
reasonably possible after termination of Service, (ii) at some set date or dates
during the Plan Year, or (iii) as soon as reasonably possible after a Break in
Service has occurred. Once such determination has been made by the Committee,
it must be applied equally and in a nondiscriminatory manner to all terminating
Participants. In the event of a Participant's retirement, disability or death,
his Capital Accumulation will be distributed in a single distribution as soon as
reasonably possible after the close of the Plan Year in which the Participant
retires, is disabled or dies. In no event, however, shall distribution in such
case be delayed later than one year after the close of the Plan Year in which
the Participant retires, is disabled or dies. Under certain circumstances
described in Section 14(d), the Committee may delay the timing of a distribution
to the Participant because the Plan lacks sufficient cash liquidity to convert a
Participant's Stock Account to cash. However, in no event shall distribution of
the Other Investments Account of a Participant terminating for reasons other
than retirement, disability, or death be delayed later than the Anniversary Date
of the Plan Year following the year of termination.
In no event, however (with the exception of Financed Shares described in the
succeeding sentence), shall distribution be deferred more than one year after
the close of the fifth Plan Year following the Participant's termination of
Service (unless the Participant has been reemployed by the Bank at the end of
the fifth Plan Year following the termination of Service or the Participant has
chosen to delay the distribution of his Capital Accumulation beyond this date).
In the event any portion of the Participant's Account consists of Bank Stock
attributable to a loan made to the Plan (pursuant to Section 5 of the Plan)
which has not been fully repaid, if the Plan lacks sufficient cash liquidity as
described in Section 14(d), the above timing as to
14.1
<PAGE>
distributions may be delayed until the earlier of the Plan Year in which
sufficient cash liquidity is available or the Plan Year following the year in
which the loan is fully repaid. Once entitled to distribution, the Participant
may choose the following alternative modes of distribution:
(1) Distribution of a Participant's Capital Accumulation in a single
distribution at some later date; or
(2) Distribution of a Participant's Capital Accumulation in substantially
equal, annual installments over a period not exceeding five (5) years
(provided that such period does not exceed the life expectancy of the
Participant); or
(3) Any combination of the foregoing.
A Participant's consent is required for distributions under Code Section
414(o) while such distributions are immediately distributable. The failure to
consent to a distribution by a Participant constitutes an election to defer. The
restrictions described therein are applicable to any distribution including one
under Code Section 409(o). Notwithstanding any provision of the Plan to the
contrary that would otherwise limit a Distributee's election under Code Section
401(a)(31), a Distributee may elect, at the time and in the manner prescribed by
the Plan Administrator, to have any portion of an Eligible Rollover Distribution
paid directly to an Eligible Retirement Plan specified by the Distributee in a
Direct Rollover. Notwithstanding Section 14(a)(2) above, if the fair market
value of a Participants' Account attributable to Bank Stock is in excess of
$500,000 as of the date distribution is to begin, the five-year maximum
distribution period shall be extended by one additional year (up to an
additional five years) for each $100,000 increment, or fraction of such
increment, by which the value of the Participants' Account exceeds $500,000. The
$500,000 and $100,000 dollar amounts shall be subject to adjustment in
accordance with Section 409(o)(2) of the Code.
(b) Distribution of a Participant's Capital Accumulation shall commence not
later than sixty (60) days after the Anniversary Date coinciding with or next
following his Normal Retirement Age (or his termination of Service, if later).
The distribution of the Capital Accumulation of any
14.2
<PAGE>
Participant with respect to the Plan Year in which he attains age 70 1/2 must
commence not later than April 1st of the next Plan Year (even if he has not
terminated Service and regardless of any consent requirements pursuant to
Section 15(c) of the Plan). A Participant who terminates Service prior to
attaining age fifty-five (55) but after completing at least ten (10) years of
Service shall be entitled, upon his request, to have the distribution of his
Capital Accumulation commence upon his attaining age fifty-five (55). If the
amount of a Participant's Capital Accumulation cannot be ascertained by the
Committee by the date on which a distribution is to commence, or if the
Participant cannot be located, distribution of his Capital Accumulation shall
commence within sixty (60) days after the date on which his Capital Accumulation
is able to be determined or after the date on which the Committee locates the
Participant.
(c) If any part of a Participant's Capital Accumulation is retained in the
Trust after his Service or participation ends, his Accounts will continue to be
treated as provided in Section 6. However, such Accounts will not be credited
with any additional Employer Contributions or Forfeitures.
(d) In accordance with Section 15 of the Plan, if Bank Stock is not readily
tradable on an established market, the Participant must be given the right to
demand distribution of his Capital Accumulation entirely in cash, Bank Stock or
some combination of the two. In such case, the Trustees will strive to create
sufficient cash reserves in the Plan to permit a terminating Participant to
convert the portion of his Capital Accumulation consisting of Bank Stock to
cash. However, should Plan cash reserves not permit conversion of Bank Stock to
cash, the Committee may delay distribution of a Participant's Capital
Accumulation, within the limits described in Section 14(a), until the date such
Plan cash reserves can be reasonably generated through either additional
Employer contributions to the Plan or a restructuring of existing Plan assets.
14.3
<PAGE>
SECTION 15. HOW CAPITAL ACCUMULATION WILL BE DISTRIBUTED.
- --------------------------------------------------------
(a) Distribution of a Participant's Capital Accumulation will be made in
whole shares of Bank Stock, cash or a combination of both, as determined by the
Committee; provided, however, that the Committee shall notify the Participant of
his right to demand distribution of his Capital Accumulation entirely in cash or
entirely in whole shares of Bank Stock (with the value of any fractional share
paid in cash). If Bank Stock is readily tradable on an established market, a
Participant need not be given the right to demand distribution in cash. In the
event a distribution is to be made in shares of Bank Stock, any balance in a
Participants Other Investments Account may be applied to provide whole shares of
Bank Stock for distribution, at the then fair market value. If securities
acquired with the proceeds of an exempt loan are available for distribution and
consist of more than one class of Bank Stock, a Participant must receive
substantially the same proportion of each such class of Bank Stock.
(b) The Trustee will make distributions from the Trust only upon the direction
of the Committee. Distribution will be made to the Participant if living, and
if not, to his Beneficiary. Upon the death of a Participant, the Participant's
Beneficiary shall be his surviving spouse, or if none, his estate. A
Participant (with the consent of his spouse, if any) may designate a different
Beneficiary (and contingent Beneficiaries) and alternate forms of distribution
of his Capital Accumulation from time to time (and may change such designation
of Beneficiary or form of distribution at any time) with the consent of his
spouse (unless the original consent permits subsequent choice of Beneficiary or
form of distribution without further spousal consent) by filing a written
designation with the Committee. The consent for a designation of a Beneficiary
(or change in designation of Beneficiary and form of distribution) must be in
writing, must acknowledge the effect of such election, and must be witnessed by
a Plan representative or a notary public. A deceased Participant's entire
Capital Accumulation shall be distributed to his Beneficiary within five (5)
years after his death, except to the extent that distribution has previously
commenced in accordance with Section 14(a).
(c) The Company shall furnish the recipient of a distribution with the tax
explanation required by Section 402(9) of the Code and shall comply with the
applicable
15.1
<PAGE>
withholding requirements of Section 3405 of the Code with respect to
distributions from the Trust (other than any dividend distributions under
Section 17(b)). If a Participants Accumulation has at any time exceeded $3,500,
no portion of his Capital Accumulation shall be distributed to him without his
consent, or where the participant has died, the consent of the surviving
Participant's Beneficiary. Regardless of the value of a Participants Capital
Accumulation, no distribution may be made under the preceding sentence after the
Annuity Starting Date unless the Participant and the spouse of the Participant
(or where the Participant has died, the surviving spouse) consents in writing to
such distribution in accordance with Section 417 of the Code and the Regulations
thereunder.
15.2
<PAGE>
SECTION 16. RIGHTS, OPTIONS AND RESTRICTIONS ON BANK STOCK.
----------------------------------------------
(a) Shares of Bank Stock distributed by the Trust shall be subject to a
"right of first refusal" if the Bank Stock is not publicly traded at the time
the light may be exercised. The right of first refusal shall not be applicable
if Bank Stock is publicly traded at the time the right may otherwise be
exercised. For this purpose, "publicly traded" refers to shares of Bank Stock
which are listed on a national securities exchange or which are quoted on a
system sponsored by a national securities association. If the Bank Stock is
subject to a right of first refusal, the right shall provide that, prior to any
subsequent transfer of such shares, the shares must first be offered for
purchase in writing to the Bank, and then to the Trust, at the greater of their
then fair market value or a bona fide third party offer. A bona fide written
offer from an independent prospective buyer shall be deemed to be the fair
market value of such Bank Stock for this purpose. The Bank and the Trustee
shall have a total of fourteen (14) days to exercise the right of first refusal
on the same terms offered by a prospective buyer. The Bank or the Trustee may
require that a Participant entitled to a distribution of Bank Stock execute an
appropriate stock transfer agreement (evidencing the right of first refusal)
prior to receiving a distribution of Bank Stock.
(b) In accordance with Section 409(h) of the Code and the regulations
thereunder, the Bank shall not be required to issue a "put option" to any
Participant who receives a distribution of Bank Stock if the Bank Stock is
readily tradable on any established market or if the Bank is not allowed by law
to purchase its own stock. If the Bank is permitted by law to purchase its own
stock and the Bank's stock is not readily tradable on an established market, the
Bank shall issue a "put option" to any Participant who receives a distribution
of Bank Stock. The put option shall permit the Participant to sell such Bank
Stock to the Bank at any time during two option periods, at the fair market
value of such shares. The first put option period shall be for at least sixty
(60) days beginning on the date of distribution. The second put option period
shall be for at least sixty (60) days beginning after the new determination of
the fair market value of Bank Stock by the Trustee (and notice to the
Participant) in the following Plan Year. The Bank may allow the Trustee to
purchase shares of Bank Stock tendered to the Bank under a put option. In the
event neither the Trustee nor the Bank wishes to purchase such
16.1
<PAGE>
shares, then the Participant has the right to demand distribution in cash. If
the distribution to the Participant constituted a total distribution within the
meaning of Code 409(h)(5), payment of the fair market value of a Participants'
Account consisting of Bank Stock may be made in five substantially equal annual
payments. The first installment shall be paid not later than 30 days after the
Participant exercises the put option. The Plan will pay a reasonable rate of
interest (as determined by the Bank or the Trustees) and will provide adequate
security on amounts not paid after 30 days. If the distribution to the
Participant did not constitute a total distribution within the meaning of Code
Section 409(h)(5), the Participant shall be paid an amount equal to the fair
market value of the Bank Stock repurchased no later than 30 days after the
Participant exercises the put option.
(c) The Bank or the Trustee may at any time offer to purchase any shares of
Bank Stock (including, if a put option is issued, those shares not sold under
the put option described in Section 16(b)) which are held by former Participants
(or Beneficiaries), at the then fair market value. The terms of payment for any
such purchase of Bank Stock may be either in a lump sum or in installments over
a period not exceeding ten (10) years, with interest payable at a reasonable
rate on any unpaid installment balance (as determined by the Trustee).
(d) Shares of Bank Stock held or distributed by the Trustee may include
such legend restrictions on transferability as the Bank may reasonably require
in order to assure compliance with applicable federal and state securities and
banking laws. Except as otherwise provided in this Section 16, no shares of
Bank Stock held or distributed by the Trustee may be subject to a put, call or
other option, or buy-sell or similar arrangement. Furthermore, except as
otherwise provided in this Section 16, the Trustee may not obligate the Plan or
Trust to acquire securities from a particular security holder at an indefinite
time determined upon the happening of an event. The provisions of this Section
16 shall continue to be applicable to Bank Stock even if the Plan ceases to be
an employee stock ownership plan under Section 4975(e)(7) of the Code.
16.2
<PAGE>
SECTION 17. NO ASSIGNMENT OF BENEFITS, DIVIDENDS, HARDSHIP AND OPTIONAL
-----------------------------------------------------------
DISTRIBUTIONS; AND LOANS
------------------------
(a) Prior to a Participant receiving distribution of his Capital Accumulation,
such Participant's Capital Accumulation may not be anticipated, assigned (either
at law or in equity), alienated or subject to attachment, garnishment, levy,
execution or other legal or equitable process, except in accordance with a
"qualified domestic relations order" (as defined in Section 414(p) of the Code).
(b) DIVIDENDS ON ALLOCATED STOCK. Any cash dividends on Bank Stock allocated
----------------------------
to the Accounts of Participants may be paid currently (or within ninety (90)
days after the end of the Plan Year in which the dividends are paid to the
Trust) in cash to such Participants on a nondiscriminatory basis, as determined
by the Committee. Such distribution (if any) of cash dividends to Participants
may be limited to dividends on shares of Bank Stock which are then vested or may
be applicable to dividends on all shares allocated to Bank Stock Accounts.
(c) DIVIDENDS USED TO REPAY LOAN TO PLAN. Any cash dividends on allocated
------------------------------------
and unallocated Bank Stock may also be used to repay a loan to the Plan which
meets the requirements of Code Section 4975 and the Regulations thereunder.
Employer securities with a fair market value of not less than the amount of a
dividend used to make payments on a loan in which the proceeds are used to
acquire the employer securities (whether or not allocated to participants) with
respect to which the dividend is paid shall be allocated to such Participant for
the year which (but for Code Section 404(k)(2)(A)) such dividend would have been
allocated to such Participant.
(d) TRUSTEE DISCRETION AS TO DIVIDENDS. The decision as to whether cash
----------------------------------
dividends on Bank Stock will be distributed to Participants, used to repay a
loan to the ESOP, or held in the Trust shall be made in the sole discretion of
the Trustee, and the Trustee may request the Bank to pay such dividends directly
to Participants.
(e) HARDSHIP DISTRIBUTIONS. Upon prior written notice but not more than
----------------------
once in any two year period, a Participant under age 59 1/2 years may be
permitted to make a withdrawal from his Salary Reduction Account in accordance
with the rules listed below:
17.1
<PAGE>
(1) An application for approval shall be made in writing on a form
provided for such purposes by the Committee, and
(2) Withdrawals shall be subject to the following conditions:
(i) Withdrawals shall be approved only on account of an
immediate and heavy financial need and shall be approved only up
to the amount that is necessary to satisfy such financial need.
The determination of the existence of an immediate and heavy
financial need and of the amount necessary to meet such need is
to be made in a nondiscriminatory and objective manner on the
basis of all relevant facts and circumstances. The determination
of the Committee as to justification of the withdrawal and the
amount thereof shall be final.
(ii) A distribution will generally be treated as necessary to
satisfy a financial need if the Committee reasonably relies upon
the Participants' representation that the need cannot be
relieved:
(A) through reimbursement or compensation by insurance or
otherwise, or
(B) by reasonable liquidation of the Participants' assets (or
those of his spouse), to the extent such liquidation would
not itself cause any immediate and heavy financial need, or
(C) by cessation of Salary Reduction Contributions under the
Plan, or
(D) by other distributions or nontaxable (at the time of the
loan) loans from any tax-qualified employee benefit plans
maintained by the Employer or any other employer of the
Participant, or by borrowing from commercial sources on
reasonable commercial terms.
(iii) For the purpose of this Section, the term "financial hardship"
shall mean the financial inability to the Participant to
provide the necessary funds:
(A) to meet the extraordinary medical expenses (described
in Code Section 213(d)) incurred by the Participant, the
Participants spouse, or any dependents of the Participant
(as defined in Code Section 152), or
(B) to provide payment of tuition and related educational
fees for the next twelve (12) months of post-secondary
education for the Participant, his or her spouse, children
or dependents, or
(C) to provide funds for the purchase (excluding mortgage
payments) of a principal residence for the Participant or
to provide funds to prevent the eviction of the
Participant from his principal residence or foreclosure on
the mortgage of the Participant's principal residence.
17.2
<PAGE>
(iv) Withdrawals shall be in an amount of not less than five hundred
dollar ($500) and shall not exceed one hundred percent (100%)
of the portion of the Participant's Salary Reduction
Contribution Account which is not invested in Bank Stock.
(v) Withdrawals shall be made in cash.
However, a Participant shall cease Salary Deferrals for a one year period
after receipt of a hardship distribution.
(f) A Participant may elect to receive a distribution of his Salary Reduction
Account upon attainment of age fifty-nine and one-half (59 1/2) by providing
written notification to the Administrative Committee.
(g) LOANS TO PARTICIPANTS. The Committee is hereby designated with sole
---------------------
authority and responsibility to approve or deny loans and, except as provided in
this Section, collect unpaid loans. Loans may be made on any Quarterly Date
upon the written application of a Participant submitted to the Committee during
the period 30 days prior to and ending 15 days before the date the loan is to be
made. Loans should be made only for reasons of financial hardship described in
Section 17(e) and in amounts no less than $1,000.
Written application shall be in a form acceptable to the Trustee and shall set
forth the reason the loan is being requested. Loans shall be made available to
all Participants in a uniform and nondiscriminatory manner. All loans will be
adequately secured and will bear a reasonable rate of interest as determined by
the Committee. The term of the loan shall be determined by the Committee, but
shall not exceed five (5) years, except that the Committee, in its discretion,
may permit a repayment period in excess of five years for loans used to acquire,
construct, or substantially rehabilitate any dwelling unit which is to be used
as a principal residence of the Participant.
The Committee shall bear sole responsibility for ensuring compliance with all
applicable federal or state laws and regulations. Each loan shall be secured by
a written assignment of that portion of the Participant's vested Account which
the Committee determines to be necessary to adequately secure repayment of the
loan. However, no portion of the Participant's Capital Accumulation may be used
as security for such loan unless the spouse (if
17.3
<PAGE>
any) consents in writing to such use during the 90-day period ending on the date
on which the loan is secured. No loan shall be approved by the Committee to any
Participant in any amount which exceeds (1) minus (2) where:
(1) is the lesser of:
(i) $50,000; or
(ii) fifty percent (50%) of the Participants Vested Account or one
hundred percent (100%) of the Participant's Other Investment
Account, whichever is greater.
(2) is the aggregate unpaid amount of all loans made to the Participant under
this or any other qualified plan maintained by the Employer.
Each loan shall be made from the borrowing Participant's Account. Repayments
of the loan and interest shall be credited to his Account. No loan shall be
considered a general investment of the Trust Fund. In the event a Participant
does not repay the principal of such loan within the time prescribed by the
Committee or interest thereon at such times as are required by the terms of the
loan or if the Participant ceases to be an Employee while such Participant has a
loan which is outstanding, the Committee may direct the Trustee to take such
action as the Committee may reasonably determine, including:
(1) demand repayment of the loan and institute legal action to enforce
collection, or
(2) demand repayment of the loan and charge the total amount against the
balance credited to the Participant's vested Account which was assigned as
security, and reduce any payment or distribution from the Trust Fund to
which the Participant or his Beneficiary may become entitled to the extent
necessary to discharge the obligation on the loan.
17.4
<PAGE>
SECTION 18. ADMINISTRATION.
The Plan will be administered by a Board of Trustees (the "Trustee") and an
Administrative Committee (the "Committee"), each composed of individuals
appointed by the Board of Directors to serve at its pleasure and without
compensation. The Trustee shall be the named fiduciary with authority and
responsibility for the management and investment of the Trust Assets. The
Committee members shall be the named fiduciaries with authority to control and
manage all other aspects of the administration of the Plan. Any Committee
member may also serve as a Trustee of the Plan, if so designated by the Board of
Directors.
Committee action shall be by vote of a majority of the members at a meeting or
in wilting without a meeting. Minutes of each meeting of the Committee shall be
kept. The Committee shall make such rules, regulations, computations,
interpretations, and decisions, and shall maintain such records and accounts as
may be necessary to administer the Plan in a nondiscriminatory manner for the
exclusive benefit of the Participants and their Beneficiaries, as required under
the Code and ERISA. The Committee shall establish procedures to determine the
qualified status of domestic relations orders and to administer distributions
under such qualified orders (in accordance with Section 414(p) of the Code). The
costs associated with such qualified orders shall be charged to the Account of
the Participant to whom the order relates.
The Committee will give instructions to the Trustee with respect to matters
which require instructions, as provided in this Plan and the Trust Agreement.
The Committee members may allocate their fiduciary responsibilities among
themselves and may designate other persons (including the Trustee) to carry out
its fiduciary responsibilities under the Plan. In the event that the Committee
specifically designates the Trustee to perform any of the Committee's fiduciary
responsibilities, or if the Trustee is composed - of the same individuals as the
Committee, then any specific instructions otherwise required by the Plan or
Trust Agreement from the Committee to the Trustee with respect to such
designated fiduciary responsibilities shall not be required.
The Trustee shall be responsible for investing the Trust Assets under the
Plan. The Trustee shall establish a funding policy and method for acquiring Bank
Stock for the Trust in a manner that is consistent with the objectives of the
Plan and the requirements of ERISA. If Bank Stock is readily tradable on an
established securities market, the fair market value of
18.1
<PAGE>
Bank Stock shall be based upon the offering price established by current bid and
asked prices quoted by persons independent of the Bank, pursuant to Section
3(18)(A)(ii) of ERISA. In the absence of Bank Stock trading on an established
securities market, all valuations of Bank Stock pursuant to activities carried
on by the Plan shall be made by an independent appraiser meeting requirements
similar to those contained in Treasury Regulations under Section 170(a)(1) of
the Code. In the case of a transaction between the Plan and a disqualified
person, value must be determined as of the date of the transaction. For all
other purposes, value must be determined as of the most recent valuation date
under the Plan. An independent appraisal will not in itself be a good faith
determination of value in the case of a transaction be the Plan and a
disqualified person. However, in other cases, a determination of fair market
value based on at least an annual appraisal independently arrived at by a person
who customarily makes such appraisals and who is independent of any party to a
transaction under Sections 54.4975-7(b)(9) and (12) will be deemed to be a good
faith determination of value.
The Trustee and the Committee are empowered, on behalf of the Plan, to employ
investment advisers, accountants, legal counsel and other agents to assist them
in the performance of their duties under the Plan. The Bank shall secure
fidelity bonding for the fiduciaries of the Plan, as required by Section 412 of
ERISA. All reasonable expenses of the Trustee and the Committee shall be paid as
provided in Section 7. The Bank shall indemnity each member of the Board of
Trustees and the Committee against any personal liability or expense, except
such liability or expense as may result from his own willful misconduct.
The Bank shall be the Plan Administrator under Section 414(g) of the Code and
under Section 3(16)(A) of ERISA. The Committee shall be the designated agent of
the Plan for the service of legal process.
18.2
<PAGE>
SECTION 19. CLAIMS PROCEDURE.
-----------------
Unless otherwise specified in the Plan, distributions of Capital Accumulations
under the Plan will normally be paid without a Participant (or Beneficiary)
having to file a claim for benefits. However, a Participant (or Beneficiary) who
does not receive a distribution to which he believes he is entitled may present
a claim to the Committee for any unpaid benefits. All questions and claims
regarding benefits under the Plan shall be acted upon by the Committee.
Each Participant (or Beneficiary) who wishes to file a claim for benefits with
the Committee shall do so in writing, addressed to the Committee or to the Bank.
If the claim for benefits is wholly or partially denied, the Committee shall
notify the Participant (or Beneficiary) in writing of such denial of benefits
within ninety (90) days after the Committee initially received the benefit
claim.
Any notice of a denial of benefits shall advise the Participant (or
Beneficiary) of:
(a) the specific reason or reasons for the denial;
(b) the specific provisions of the Plan on which the denial is based;
(c) any additional material or information necessary for the Participant
(or Beneficiary) to perfect his claim and an explanation of why such
material or information is necessary; and
(d) the steps which the Participant (or Beneficiary) must take to have his
claim for benefits reviewed.
Each Participant (or Beneficiary) whose claim for benefits is denied shall
have the opportunity to file a written request for a full and fair review of his
claim by the Committee, to review all documents pertinent to his claim and to
submit a written statement regarding issues relative to his claim. Such written
request for review of his claim must be filed by the Participant (or
Beneficiary) within sixty (60) days after receipt of written notification of the
denial of his claim.
The decision of the Committee will be made within sixty (60) days after
receipt of a request for review and shall be communicated in wilting to the
claimant. Such written notice shall set forth the specific reasons and specific
Plan provisions on which the Committee based its
19.1
<PAGE>
decision. If there are special circumstances (such as the need to hold a
hearing) which require an extension of time for completing the review, the
Committee's decision shall be rendered not more than one hundred twenty (120)
days after receipt of a request for review.
All notices by the Committee denying a claim for benefits, and all decisions
on request for a review of the denial of a claim for benefits, shall be written
in a manner calculated to be understood by the Participant (or Beneficiary)
filing the claim or requesting the review.
19.2
<PAGE>
SECTION 20. GUARANTIES.
-----------
All Capital Accumulations will be paid only from the Trust Assets. An
Employer, the Trustee or the Committee shall not have any duty or liability to
furnish the Trust with any funds, securities or other assets, except as
expressly provided in the Plan.
The adoption and maintenance of the Plan shall not be deemed to constitute a
contract of employment or otherwise between an Employer and any Employee, or to
be a consideration for, or an inducement or condition of, any employment.
Nothing contained in this Plan shall be deemed to give an Employee the right to
be retained in the Service of an Employer or to interfere with the right of an
Employer to discharge, with or without cause, any Employee at any time.
20.1
<PAGE>
SECTION 21. FUTURE OF THE PLAN.
------------------
As future conditions cannot be foreseen, the Bank reserves the right to amend
or terminate the Plan (in whole or in part) and the Trust Agreement at any time,
by action of its Board of Directors. Neither amendment nor termination shall
retroactively reduce the vested rights of Participants or permit any part of the
Trust Assets to be diverted to or used for any purpose other than for the
exclusive benefit of the Participants (and their Beneficiaries).
The Bank specifically reserves the right to amend the Plan and the Trust
Agreement retroactively in order to satisfy any applicable requirements of the
Code and ERISA. The Plan may only be amended to eliminate or reduce benefits of
a Participant if the amendment constitutes timely compliance with a change in
law affecting plan qualification, the IRS gives Code Section 7805(b) relief, and
the elimination or reduction is made only to the extent necessary to comply with
the plan qualification rules.
The Bank further reserves the right to terminate the Plan in the event of a
determination by the Internal Revenue Service (after a timely Application for
Determination is filed by the Bank) that the Plan initially fails to satisfy the
requirements of Section 401(a) and 4975(e)(7) of the Code. In that event, all
Trust Assets shall (upon written direction of the Bank) be returned to the Bank,
and the Plan and the Trust shall terminate.
If the Plan is terminated (or partially terminated) by the Bank, participation
of all Participants affected by the termination will end. The Accounts of all
Participants affected by the will become nonforfeitable as of the date of
termination. A complete discontinuance of Employer Contributions shall be deemed
to be a termination of the Plan for this purpose. The Plan will not be
considered "terminated," however, if Employer Contributions are replaced by
contributions to a comparable plan that meets the requirements of Section 401
(a) of the Code. After termination of the Plan, the Trust will be maintained
until the Capital Accumulations of all Participants have been distributed.
Capital Accumulations will be distributed following termination of the Plan in
accordance with Section 14 of the Plan.
In the event of the merger or consolidation of this Plan with another Plan, or
the transfer of Trust Assets (or liabilities) to another Plan, the Account
balances of each Participant
21.1
<PAGE>
immediately after such merger, consolidation or transfer must be at least as
great as immediately before such merger, consolidation or transfer (as if the
Plan had then terminated).
21.2
<PAGE>
SECTION 22. "TOP HEAVY" CONTINGENCY PROVISIONS.
-----------------------------------
(a) The provisions of this Section 22 are included in the Plan pursuant to
Section 401(a)(10)(B)(ii) of the Code and shall become applicable only if the
Plan becomes a "topheavy plan" under Section 416(g) of the Code for any Plan
Year.
(b) The determination as to whether the Plan becomes "top-heavy" for any Plan
Year shall be made as of the Anniversary Date of the immediately preceding Plan
Year by considering the Account balances of Participants in (1) the Plan, (2)
any other plan (such as a defined contribution or defined benefit plan) of the
Employer in which a Key Employee participates (in the Plan Year containing the
determination date or any of the preceding four Plan Years, even if the plan was
terminated), and (3) each other plan which enables any plan in which a Key
Employee participates during the period tested to meet the requirements of Code
Section 401 (a)(4) or 410(b). All employers aggregated under Code Section
414(b), (c), (m) or (o) are considered a single employer. The Plan (and any
other defined contribution plan or any defined benefit plan) shall be "top-
heavy" only if the total of the Account balances under the Plan and any other
defined contribution plan and the value of accrued benefits under any defined
benefit plan for Key Employees as of the determination date for that Plan Year
exceeds sixty percent (60%) of the total of the Account balances for all
Participants. For such purpose, Account balances (including Participants'
Account balances under any other defined contribution plan) and accrued benefit
values shall be computed and adjusted pursuant to Section 416(g) of the Code. In
determining Key Employees under this Section 22(b), the term plan annual
compensation" in Section 416(i)(1)(A) of the Code shall mean Compensation (as
defined in Section 2).
Employer Discretionary Matching Contributions allocated to Key Employees are
treated as Employer Contributions for purposes of determining the minimum
contribution or benefit under section 416. However, if the Plan uses
contributions allocated to Employees other than Key Employees on the basis of
Employee Contributions or Salary Reduction Contributions to satisfy the minimum
contribution requirement, these contributions are not treated as Employer
22.1
<PAGE>
Discretionary Matching Contributions for purposes of applying the requirements
of sections 401(k) and 401(m) for Plan Years beginning after December 31, 1988.
These contributions must meet the nondiscrimination requirements of section
401(a)(4) without regard to section 401 (m).
(c) For any Plan Year in which the Plan is "top-heavy," each Participant who
is an Employee on the Anniversary Date and is not a participant in a defined
benefit plan and who is a Non-Key Employee shall receive, regardless of his
Hours of Service for that Plan Year, a minimum allocation of Employer
Contributions and Forfeitures which is equal to the lesser of:
(1) Three percent (3%) of his Compensation; or
(2) The same percentage of his Compensation as the allocation to the Key
Employee for whom the Percentage is the highest for that Plan Year.
For purposes of this calculation, any salary reduction or other
similar arrangement of a Key Employee shall be included in
determining the percentage allocation to a Key Employee.
If such Employee is also a Participant in any other defined contribution plan,
he shall receive only the minimum allocation in this Plan and shall not receive
the minimum allocation provided in the defined contribution plan.
(d) For any Plan Year in which the Plan is "top-heavy," each Participant who
is an Employee on the Anniversary Date and is also a participant in a defined
benefit plan and who is a Non-Key Employee shall receive only the defined
benefit minimum provided in the defined benefit plan and shall not receive the
minimum allocation provided in Section 22(c) of this Plan (or the minimum
allocation in any other defined contribution plan).
(e) For any Plan Year, including years in which the Plan is "top-heavy",
Compensation of each Employee for purposes of the Plan shall not take into
account any amount in excess of $200,000, as adjusted for increases in the cost
of living pursuant to Section 416(d)(2) of the Code.
(f) For any Plan Year in which the Plan is "top-heavy," with respect to any
Participant who is covered under a defined benefit plan, the "defined benefit
plan fraction" and the "defined contribution plan fraction" referred to in
Section 6(g) shall be computed by substituting "1.0" in
22.2
<PAGE>
lieu of "1.25" in both denominators.
(g) The Capital Accumulation of an Employee who has not performed any Service
for the Employer at any time during the five-year period ending on the
determination date is excluded from the calculation to determine top-heaviness.
22.3
<PAGE>
SECTION 23. DIVERSIFICATION.
----------------
(a) Within 90 days after the last day of each Plan Year during the
Participants' Qualified Election Period, any Plan participant who has attained
age fifty-five (55) and has completed ten (10) years of service with the
Employer (i.e., a "Qualified Participant") shall have the right to make an
election to direct the Plan as to the investment of twenty-five percent (25%) of
the total number of shares of employer securities acquired by or that have been
contributed to the Plan that have ever been allocated to a qualified
Participant's account before the most recent plan allocation date; less the
number of shares of employer securities previously distributed, transferred, or
diversified pursuant to a diversification election. Within 90 days after the
close of the last Plan Year in the Participants' Qualified Election Period, a
Qualified Participant may direct as to the investment of fifty percent (50%) of
the value of such Account. The term Qualified Election Period shall mean the
six (6) Plan Year period beginning with the Plan Year in which a Plan
Participant first becomes a Qualified Participant (i.e., attainment of age sixty
(60)).
(b) Method of Directing Investment. The Participant's election to
------------------------------
diversify his Account shall be provided to the Plan Administrator in writing and
shall be effective no later than 180 days after the close of the Plan Year to
which the election applies.
(c) Distribution of Account. Upon a Qualified Participant applying to
-----------------------
direct the investment of a portion of the Participant's Account, the Plan may
distribute the Account that is covered by the election within 90 days after the
last day of the period during which the election can be made. Such distribution
shall be subject to such requirements of the Plan concerning put options
(Section 16) and such provisions under Section 15 as require the consent of the
Participant and the Participant's spouse (if any) to a distribution with a value
in excess of $3,500.
23.1
<PAGE>
SECTION 24. GOVERNING LAW.
-------------
The provisions of the Plan and the Trust Agreement shall be construed,
administered and enforced in accordance with the laws of the State of Florida,
to the extent such laws are not superseded by ERISA.
24.1
<PAGE>
SECTION 25. EXECUTION.
---------
To record the adoption of this Plan, the Bank has caused this document to
be executed this 22nd day of March, 1994.
---- -----
TIB BANK OF THE KEYS
By:R.A. Drake Jr.
------------------------
President R. A. Drake, Jr.
By:Susan Beattie
------------------------
Secretary Susan Beattie
25.1
<PAGE>
AMENDMENT NUMBER 1
TO THE
TIB BANK OF THE KEYS
EMPLOYEE STOCK OWNERSHIP PLAN (WITH 401(K) PROVISIONS)
TIB Bank of the Keys, a bank organized and operating under the laws of the
state of Florida, hereby adopts the following amendments to the TIB Bank of the
Keys Employee Stock Ownership Plan (with 401(k) Provisions) ("Plan") as a
condition to the issuance of an IRS Favorable Determination Letter dated March
-----
2, 1995.
- -
1. The definition of "Adjusted Compensation" in Section 2 of the Plan is
hereby deleted and replaced with the following language:
"Wages within the meaning of section 3401(a) (for purposes of income tax
withholding at the source) but determined without regard to any rules that
limit the remuneration included in images based on the nature or location
of the employment or the services performed Adjusted Compensation includes:
(1) elective contributions that are made by the Employer on behalf of its
Employees that are not includable in gross income under section 125,
section 402(e)(3), section 402(h) and section 403(b); (ii) compensation
deferred under an eligible deferred compensation plan within the meaning of
section 457(b) (deferred compensation plans of state and local governments
and tax-exempt organizations); and (iii) employee contributions (under
governmental plans) described in section 414(h) (2) that are picked up by
the employing unit and thus are treated as employer contributions.
For any Plan Year, however, Adjusted Compensation exceeding $150,000 for
any Employee (adjusted in accordance with the Section 415(d) (2) of the
Code for cost of living increases) shall not be taken into account. For
purposes of applying the $150,000 limit on compensation, the family unit of
an Employee who either is a five percent (5%) owner or is both a highly
compensated Employee and one of the ten most highly compensated Employees
will be treated as a single Employee with one compensation, and, except for
the purpose of determining compensation below the Plan's integration level,
if applicable, the $150,000 limit will be allocated among the members -of
the family in proportion to their respective compensation. For this
purpose, a family unit consists of the Employee who is a five percent
<PAGE>
(5%) owner or one of the ten most highly compensated Employees, the
Employee's spouse, and the lineal descendants who have not attained age 19
before the close of the year."
2. The definition of "Highly Compensated Participant" in Section 2 of the
Plan is hereby amended to add the following language:
"Compensation is compensation within the meaning of Section 415(c)(3),
including elective or salary reduction contributions to a cafeteria plan,
cash or deferred arrangement or tax-sheltered annuity. Employers aggregated
under Section 414(b), (c), (m), or (o) are treated as a single Employer."
3. Section 4(2)(c) is hereby amended to add the following language:
"In calculating the actual deferral percentage for purposes of section 401
(k), the actual deferral ratio of a Highly Compensated Participant will be
determined by treating all cash or deferred arrangements under which the
Highly Compensated Participant is eligible (other than those that may not
be permissively aggregated) as a single arrangement."
4. The first paragraph of Section 4(2)(d) of the Plan is hereby amended
to add the following language:
"The income allocable to excess contributions includes income for the Plan
year for which the excess contributions were made. The income allocable to
excess contributions is equal to the sum of the allocable gain or loss for
the Plan Year. The income or loss allocable to excess contributions is the
sum of : (1) income or loss allocable to the Participant's Salary Reduction
Account (and, if applicable, the Basic Contribution Account or the
qualified matching contributions account or both) for the Plan Year
multiplied by a fraction, the numerator of which is such Participant's
excess contributions for the year and the denominator is the Participant's
account balance attributable to Salary Reduction Contributions (and
Employer Discretionary Basic Contributions or qualified matching
contributions, or both, if any of such contributions are included in the
ADP test without regard to any income or loss occurring during such Plan
Year; and (2) ten percent of the amount determined under (1) multiplied by
the number of whole calendar months between the end of the Plan Year and
the date of distribution, counting the month of distribution if
distribution occurs after the 15th of such month."
2
<PAGE>
5. Subsection (2) in Section 4(2)(e) of the Plan is hereby deleted and
replaced with the following language:
"(2) is conditioned upon initial qualification of the Plan under Code
Section 401 (a) and the Plan does not so qualify and/or contributions to
the Plan are determined to be nondeductible"
6. Section 4(3)(a) of the Plan is hereby amended to add the following
language:
"The actual contribution ratio of a Highly Compensated Participant will be
determined by treating all plans subject to Section 401(m) under which the
Highly Compensated Participant is eligible (other than those that may not
be permissively aggregated) as a single plan."
7. Section 4(3)(d) of the Plan is hereby deleted and replaced with the
following language:
"(d) To the extent Matching Contributions are used, pursuant to Plan
Section 4(2)(c), to compute the Maximum Deferral Percentage Limit under
Code Section 401(k), they will not be used to compute the Maximum
Contribution Percentage Limit under Code Section 401(m). Furthermore, at
the election of the Employer, Employer Discretionary Basic Contributions
(to the extent not utilized to compute the Maximum Deferral Percentage
Limit under Code Section 401(k)) may be used in the computation of the
Maximum Contribution Percentage Limit under Code Section 401(m). Employer
Discretionary Basic Contributions may be treated as Employer Discretionary
Matching Contributions for purposes of the actual contribution percentage
test of Section 401 (m) only if such contributions are nonforfeitable and
made distributable only under the following circumstances: (1) The
Employee's retirement, death, disability, or separation from service; (2)
The termination of the Plan without establishment or maintenance of another
defined contribution plan (other than an ESOP or SEP); (3) In the case of a
profit sharing or stock bonus plan, the Employee's attainment of age 59
1/2; (4) The sale or other disposition by a corporation to an unrelated
corporation of substantially all of the assets used in the trade or
business, but only with respect to Employees who continue employment with
the acquiring corporation and the acquiring corporation does not maintain
the Plan after the disposition, and (5) The sale or other disposition by a
corporation of its interest in the subsidiary to an unrelated entity, but
only with respect to Employees who continue employment with the subsidiary
and the
3
<PAGE>
acquiring entity d oes not maintain the Plan after the disposition.
Paragraphs 2, 4, and 5 above, apply only if the transferor corporation
continues to maintain the Plan. Employer Discretionary Basic Contributions
which may be treated as Employer Discretionary Matching Contributions must
satisfy these requirements without regard to whether they are actually
taken into account as Employer Discretionary Matching Contributions. Salary
Reduction Contributions and/or Employer Discretionary Basic Contributions
may be treated as Employer Discretionary Matching Contributions only if the
conditions described in Section 1.401(m)-I(b)(5) of the Regulations are
satisfied."
8. The first three paragraphs of Section 6(g) of the Plan are hereby
deleted and replaced with the following language:
"(g) Allocation Limitations. For each Plan Year, the Annual Additions with
----------------------
respect to any Participant may not exceed the lesser of:
(1) Twenty five percent (25%) of his Compensation; or
(2) The Defined Contribution Dollar Limitation.
For this purpose, "Annual Additions " shall be the total amount of any
Employer Contributions, Salary Reduction Contributions, voluntary
contributions and Forfeitures (including any income attributable to
Forfeitures and amounts described in Code Sections 415(f)(l), and 419A (d)
(2)) allocated to the Participant in this Plan and any other Employer
defined contribution plan. For purposes of applying these limitations only,
the Plan uses the safe harbor definition of Compensation pursuant to
Treasury Regulation Section 1.415-2(d)(10), as defined in Section 2 of the
Plan. In computing Annual Additions, Forfeitures of Bank Stock and Employer
Contributions of Bank Stock shall be based on the fair market value of Bank
Stock as of the Anniversary Date.
Prior to the allocation of the Employer Contributions for any Plan Year,
the Committee shall determine whether the amount to be allocated would
cause the limitation described herein to be exceeded as to any Participant.
In the event that the limitation is exceeded for any Participant due to the
allocation of a forfeiture or a reasonable error in the estimation of a
Participant's Compensation, the excess shall be maintained in a separate
suspense account and shall be allocated in the next limitation year to all
of the Participants in the Plan as if such amounts were an additional
contribution to the appropriate Account. No contributions which would be
included in the next limitation year's Annual Addition may be made before
the total suspense account has been reallocated.
4
<PAGE>
Any excess amount shall be reallocated among the Accounts of the other
Participants according to the ratio which the Adjusted Compensation of each
such Participant bears to the total Adjusted Compensation of all such
Participants for the Plan Year, to the extent possible, without exceeding
the limitations with respect to any other Participant for that Plan Year.
Notwithstanding the above, elective deferrals (within the meaning of
section 402(g)(3)) may be distributed or Employee contributions (whether
voluntary or mandatory) may be returned to the extent that the distribution
or return would reduce the excess amounts in the Participants account.
These amounts are disregarded for purposes of section 402(g), the actual
deferral percentage test of section 401(k)(3), and the actual contribution
percentage test of section 401(m)(2). If gains attributable to the returned
Employee contributions are not returned, such earnings will be considered
as an Employee contribution for the limitation year in which the returned
contribution was made."
9. The last sentence in Section 60) of the Plan is hereby deleted and
replaced with the following language:
"Employer Securities with a fair market value of not less than the amount
of a dividend used to make payments on a loan in which the proceeds are
used to acquire the Employer Securities (whether or not allocated to
Participants) with respect to which the dividend is paid are allocated to
such Participant for the year which (but for Code Section 404(k) (2) (A))
such dividend would have been allocated to such Participant."
10. Section 12(d) of the Plan is hereby deleted and replaced with the
following language:
"(d) Subsequent Vesting. If a Participant received a distribution of his
------------------
Capital Accumulation based on an in service distribution, his Capital
Accumulation ("X") shall be determined (prior to one hundred percent (100%)
vesting) at the time his participation in the Plan subsequently terminates,
in accordance with the following formula:
X= P(AB + D) - D
For purposes of applying this formula, P is the vested percentage at the
time of the subsequent termination; AB is the total of such Account
balances at that time; and D Is the amount of his Capital Accumulation
previously distributed."
5
<PAGE>
11. Section 12(e) is hereby deleted in its entirety, and the subsequent
Subsection (f) is redesignated as (e).
12. The first paragraph in Section 14(a) of the Plan is hereby deleted and
substituted therefor is the following language:
"A Participant's Capital Accumulation will be computed following the
termination of his Service. Distribution of a Participant's Capital
Accumulation for any reason other than retirement, disability or death
shall commence as soon as reasonably possible after a Break in Service has
occurred In the event of a Participant's retirement, disability or death,
his Capital Accumulation will be distributed as soon as reasonably possible
after the close of the Plan Year in which the Participant retires, is
disabled or dies. In no event however, shall distribution in such case be
delayed later than one year after the close of the Plan Year in which the
Participant retires, is disabled or dies. Under certain circumstances
described in Section 14(d), the Committee may delay the timing of a
distribution to the Participant because the Plan lacks sufficient cash
liquidity to convert a Participant's Stock Account to cash. However, in no
event shall distribution of the Other Investments Account of a Participant
terminating for reasons, other than retirement, disability, or death be
delayed later than the Anniversary Date of the Plan Year following the year
of termination."
13. The first sentence in the third paragraph of Section 14(a) of the Plan
is hereby deleted and substituted therefor is the following language:
"A Participant's consent is required for distributions when the value of
the vested portion is greater than $3,500 while such distributions are
immediately distributable (prior to the later of the time a Participant has
attained Normal Retirement Age (as defined in section 411(a)(8)) or age
62). Amounts attributable to elective contributions may not be distributed
earlier than upon one of the following events: (1) The Employee's
retirement, death, disability or separation from service; and (2) The
termination of the Plan without establishment or maintenance of another
defined contribution plan (other than an ESOP or SEP)."
14. The second sentence in Section 15(c) of the Plan is hereby deleted and
replaced with the following language:
"If a Participant's Capital Accumulation exceeds or at the time of a prior
distribution exceeded $3,500 and is immediately distributable, no portion
of his Capital Accumulation shall be distributed to him without his
consent."
6
<PAGE>
15. The fourth and fifth sentence in Section 16(a) of the Plan is hereby
deleted and replaced with the following, language:
"If the Bank Stock is subject to a right of first refusal, the right shall
provide that, prior to any subsequent transfer of such shares, the shares
must first be offered for purchase in writing to the Bank; and then to the
Trust, at the greater of fair market value (as determined under Section 18)
or an arms-length third party offer. Fair market value for all purposes of
the Plan will be determined pursuant to Section 18."
16. The seventh sentence is Section 16(b) of the Plan is hereby deleted.
17. The last sentence in the first paragraph of Section 22(b) of the Plan
is hereby deleted and replaced with the following language:
"In determining Key Employees under this Section 22(b), the term "annual
compensation" in Section 416(i) (1) (A) of the Code shall mean Adjusted
Compensation (as defined in Section 2)."
18. Section 22(e) of the Plan is hereby deleted and substituted therefore
is the following language:
"For Plan Years beginning before January 1, 1994, including years in which
the Plan is "top-heavy", Compensation of each Employee for purposes of the
Plan shall not take into account any amount in excess of $200, 000, as
adjusted for increases in the cost of living pursuant to Section 416(d)(2)
of the Code. For Plan Years beginning on or after January 1, 1994,
including years in which the Plan is "top-heavy", Compensation of each
Employee for purposes of the Plan shall not take into account any amount in
excess of $150,000, as adjusted for increases in the cost of living
pursuant to Section 416(d)(2) of the Code. Compensation means compensation
within the meaning of section 415(c)(3) without regard to sections 125,
402(e)(3), and 402(h)(1)(B), and in the case of Employer Contributions made
pursuant to a salary reduction agreement, without regard to section
403(b)."
19. Section 23(a) of the Plan is hereby deleted and replaced with the
following language:
"For Bank Stock acquired on or after January 1, 1994, within 90 days after
the last day of each Plan Year during the Participants' Qualified Election
Period, any Plan Participant who has attained age fifty-five (55) and has
completed ten (10) years of service with the Employer (i.e., a "Qualified
Participant") shall have the right to make an election to direct the Plan
as to the investment of twenty-five percent (25%) of the
7
<PAGE>
total number of shares of Employer Securities acquired by or that have been
contributed to the Plan that have ever been allocated to a qualified
Participant's Account on or before the most recent Plan allocation date;
less the number of shares of Employer Securities previously distributed,
transferred, or diversified pursuant to a diversification election. Within
90 days after the close of the last Plan year in the Participants'
Qualified Election Period, a Qualified Participant may direct the Plan as
to the investment of fifty percent (50%) of the value of such Account. The
term Qualified Election Period shall mean the six (6) plan year period
beginning with the later of the first plan year in which the individual
first became a qualified participant or the first plan year beginning after
December 31, 1986."
IN WITNESS WHEREOF, the undersigned, a duly authorized officer of TIB Bank
of the Keys hereby adopts this Amendment Number I to TIB Bank of the Keys
Employee Stock Ownership Plan (with 4Ol(k) Provisions) on this 9th day of March,
--- -----
1995.
TIB BANK OF THE KEYS
By: R.A. Drake Jr.
--------------------------------------
R.A. Drake, Jr.
As Its: President and Chief Executive Officer
--------------------------------------
8
<PAGE>
[LOGO OF TIB BANK OF KEYS APPEARS HERE]
The Island Bank
Incentive Stock Option Plan
and
Nonstatutory Stock Option Plan
<PAGE>
[LOGO OF TIB BANK OF KEYS APPEARS HERE]
INCENTIVE STOCK OPTION PLAN AND
NONSTATUTORY STOCK OPTION PLAN
1. PURPOSE AND SCOPE
-----------------
The purpose of this Plan is to promote the interests of the Bank and its
shareholders by strengthening its ability to attract and retain key officers and
directors by furnishing additional incentives whereby such present and future
officers, key employees and directors may be encouraged to acquire, or to
increase their acquisition of, the Bank's common stock, thus maintaining their
personal and proprietary interest in the Bank's continued success and progress.
The Plan provides for the grant of Incentive Stock Options and the grant of
Nonstatutory Stock Options in accordance with the terms and conditions set forth
below.
2. DEFINITIONS
-----------
Unless otherwise required by the context:
2.01. "BOARD" shall mean the Board of Directors of the Bank.
2.02. "COMMITTEE" shall mean the Stock Option Plan Committee, which
consists of three members appointed by the Board.
2.03. "BANK" shall mean TIB Bank of the Keys, a Florida corporation, and
any subsidiary corporation.
2.04. "CODE" shall mean the Internal Revenue Code of 1986, as amended.
2.05. "INCENTIVE STOCK OPTION" shall mean a right to purchase stock,
granted pursuant to the Plan, which qualifies under Section 422 of the Code and
the regulations thereunder.
2.06. "NONSTATUTORY STOCK OPTION" shall mean a right to purchase Stock
granted pursuant to the Plan, which does not qualify under Section 422 of the
Code and the regulations thereunder.
2.07. "OPTIONS" shall mean either an Incentive Stock Option or
Nonstatutory Stock Option.
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<PAGE>
2.08. "OPTION PRICE" shall mean the purchase price for Stock under an
Incentive Stock Option or Nonstatutory Stock Option, as determined in Section 6
below.
2.09. "PARTICIPANT" shall mean anyone to whom an Incentive Stock Option or
Nonstatutory Stock Option is granted under the Plan.
2.10. "PLAN" shall mean the TIB Bank of the Keys Stock Option Plan.
2.11. "STOCK" shall mean the common stock of TIB Bank of the Keys.
3. STOCK TO BE OPTIONED
--------------------
Subject to the provisions of Section 14 of the Plan, the maximum number of
shares of Stock that may be optionee or sold under the Plan is 163,000 shares.
Such shares may be treasury, or author, but unissued, shares of Stock of the
Bank. If any Incentive Stock Option or Nonstatutory Stock Option granted under
the Plan shall expire or terminate for any reason without having been exercised
in full, the shares not purchased shall again be available for purposes of the
Plan.
4. ADMINISTRATION
--------------
The Plan shall be administered by the Committee. Two members of the
Committee shall constitute a quorum for the transaction of business. The
Committee shall be responsible to the Board for the operation of the Plan, and
shall make recommendations to the Board with respect to participation in the
Plan by employees and directors of the Bank, and math respect to the extent of
that participation. The interpretation and construction of any provision of the
Plan by the Committee shall be final, unless otherwise determined by the Board.
No member of the Board or the Committee shall be liable for any action or
determination made by him in good faith.
5. ELIGIBILITY
-----------
The Board, upon recommendation of the Committee, may grant Nonstatutory
Stock Options to any director and Incentive Stock Options or Nonstatutory Stock
Options to any officer, key executive, administrative or other employee
(including an employee who is a director of the Bank). Options may be awarded by
the Board at any time and from time to time to new Participants, or to then
Participants, or to a greater or lesser number of Participants, and may include
or exclude previous Participants, as the Board, upon recommendation by the
Committee shall determine. Options granted at different times need not contain
similar provisions.
6. OPTION PRICE
------------
The purchase price for stock under each Nonstatutory Stock Option shall be
100 percent of the fair market value of the Stock at the time the Option is
granted, unless the Committee determines otherwise. The purchase price for stock
under each Incentive Stock Option shall not be less than 100 percent of the fair
market value of the Stock at the time the Incentive Stock Option is granted.
2
<PAGE>
7. TERMS AND CONDITIONS OF OPTIONS
-------------------------------
Options granted pursuant to the Plan shall be authorized by the Board and
shall be evidenced by a Stock Option Agreement in such form as the Board, upon
recommendation of the Committee, shall from time to time approve. Such
agreements shall comply with and be subject to the following terms and
conditions:
7.01. EMPLOYMENT AGREEMENT. The Board may, in its discretion, include in
any Option granted under the Plan a condition that the Participant shall agree
to remain in the employ of, and to render services to, the Bank for a period of
time (specified in the agreement) following the date the Option is granted. No
such agreement shall impose upon the Bank, however, any obligation to employ the
Participant for any period of time.
7.02. NONCOMPETITION. The Board may, in its discretion, include in any
Option granted under the Plan a condition that the Participant agree not to
compete with the Bank for a specific period of time and/or within a specific
geographic area.
7.03. TIME and METHOD of PAYMENT. The Option Price shall be paid in cash
at the time an Option is exercised under the Plan. Promptly after the exercise
of an Option and the payment of the Option Price in cash, the Participant shall
be entitled to the issuance of a stock certificate evidencing his ownership of
such share of Stock. A Participant shall have all of the rights of a shareholder
until shares are issued to him, and no adjustment will be made for dividends or
other rights for which the record date is prior to the date such stock
certificate is issued.
7.04. NUMBER of SHARES. Each Option shall state the total number of
shares of Stock to which it pertains.
7.05. OPTION PERIOD and LIMITATIONS on EXERCISE OF OPTIONS. The Board
may, in its discretion, provide that an Option may not be exercised in whole or
in part for any period or periods of time specified in the Option Agreement.
Except as provided in the Option Agreement, an Option may be exercised in whole
or in part at any time during its term. No Option may be exercised after the
expiration of ten years from the date it is granted. No Option may be exercised
for a fractional share of Stock.
8. PROVISIONS APPLICABLE TO INCENTIVE STOCK OPTIONS
------------------------------------------------
It is intended that Incentive Stock Options under the Plan shall constitute
Incentive Stock Options within the meaning of Section 422 of the Code. The
following are applicable to any Incentive Stock Option granted under the Plan.
8.01. TERM of INCENTIVE STOCK OPTION. No incentive Stock Option shall be
exercisable prior to the date one year, or after the date ten years, from the
date such Incentive Stock Option is granted.
8.02. PERCENT SHAREHOLDER. Notwithstanding any other provision herein
contained, no Plan Participant may receive an Incentive Stock Option under the
Plan if
3
<PAGE>
such Participant, at the time the award is granted, owns (as defined in Section
424(d) of the Code) stock possessing more than ten percent of the total combined
voting power of all cb= of stock of the Bank, unless the option price for such
Incentive Stock Option is at least 1 10 percent of the fair market value of the
Stock subject to such Incentive Stock Option on the date of the grant and such
Incentive Stock Option is not exercisable after the date five years from the
date such Incentive Stock Option is granted.
8.03. LIMITATION on AMOUNTS. The aggregate fair market value (determined
with respect to each Incentive Stock Option as of the time such Incentive Stock
Option is granted) of the Stock with respect to which Incentive Stock Options
are exercisable for the first time by a Participant during any calendar year
shall not exceed $100,000.
8.04. GRANT of INCENTIVE STOCK OPTION. An Incentive Stock Option granted
pursuant to the Plan must be granted within ten years from the date the Plan is
adopted or the date the Plan is approved by Bank shareholders, whichever is
earlier.
9. EXERCISE OF OPTIONS
-------------------
The Committee, in granting Options hereunder, shall have discretion to
determine the terms upon which such Options shall be exercisable, subject to the
applicable provisions of the Plan. If a Participant is discharged for just cause
at any time, the entire number of shares of Stock granted to a Participant shall
be forfeited. For this purpose, "just cause" shall mean theft, fraud, or
embezzlement as determined by a court of competent jurisdiction, or wilful
misconduct causing property damage to the Bank of at least $5,000, as determined
by the Committee.
10. TERMINATION OF EMPLOYMENT
-------------------------
Following the date of cessation of employment, the Participant may at any
time within three months exercise his Options to the extent that he was entitled
to exercise them on the date of cessation of employment, but in no event shall
any Option be exercisable more than ten (10) years from the date it was granted.
In the sole discretion of the Committee, the Stock Option Agreement ME provide
that should the Participant engage in employment or activities contrary, in the
opinion of the Committee, to the best interests of the Bank or any of its
subsidiaries, then any Stock issued or to be issued to the Participant shall
become null and void. The Committee shall determine in each case whether a
termination of employment shall be considered a retirement with the consent of
the Bank or a subsidiary, and, subject to applicable law, whether a leave of
absence shall constitute a termination of employment. Any such determination of
the Committee shall be final and conclusive, unless overruled by the Board.
11. RIGHTS IN EVENT OF DEATH
------------------------
If a Participant dies while employed by the Bank, or any of its subsidiary,
or within three months after having retired with the consent of the Bank or any
of its subsidiaries, without having fiery exercised his Options, the executors
or administrators, or legatees or heirs, of his estate shall have the right to
exercise such Options to the extent that such deceased Participant was entitled
4
<PAGE>
to exercise the Options on the date of his death; provided, however, that in no
event shall the Options be exercisable more than ten years from the date they
were granted.
12. NO OBLIGATIONS TO EXERCISE OPTION
---------------------------------
The granting of an Option shall impose no obligation upon the Participant
to exercise such Option.
13. NONASSIGNABILITY
----------------
Options shall not be transferable other than by will or by the laws of
descent and distribution, and during a Participant's lifetime shall be
exercisable only by such Participant.
14. EFFECT OF CHANGE IN STOCK SUBJECT TO THE PLAN.
----------------------------------------------
The aggregate number of shares of Stock available for Options under the
Plan, the shares subject to any Option, and the price per share shall be
proportionately adjusted for any increase or decrease in the number of issued
shares of Stock subsequent to the effective date of the Plan resulting from (1)
a subdivision or consolidation of shares or any other capital adjustment, (2)
the payment of a stock dividend, or (3) other increase or decrease in such
shares effected without receipt of consideration by the Bank. If the Bank shall
be the surviving corporation in any merger or consolidation, any Option shall
pertain, apply, and relate to the securities to which a holder of the number of
shares of Stock subject to the Option would have been entitled after the merger
or consolidation. Upon dissolution or of the Bank, or upon a merger or
consolidation in which the Bank is not the surviving corporation, all Options
outstanding under the Plan shall terminate; provided, however, that each
Participant (and each other person entitled under Section 11 to exercise an
Option) may have the right, immediately prior to such dissolution or
liquidation, or such merger or consolidation, to exercise such Participant's
Options in whole or in part, regardless of the extent to which the Participant's
Options are otherwise vested under the terms of the Plan.
15. AMENDMENT AND TERMINATION
-------------------------
Neither the Board nor the Committee may, without the consent of the holder
of an Option, alter or impair any Option previously granted under the Plan,
except as authorized herein. Unless sooner terminated, the Plan shall remain in
effect for a period of ten (10) years from the earlier of the date of the Plan's
adoption by the Board or approval by the Bank shareholders. Termination of the
Plan shall not affect any Option previously granted.
With respect to any shares of Stock to which Options have not been granted
under the Plan, the Board, without further action on the part of the
shareholders of the Bank, may from time to time alter, amend, or suspend certain
provisions of the Plan except that it may not, without the approval of the
shareholders of the Bank. (i) change the number of shares of Stock available for
grant under the Plan, (ii) extend the duration of the Plan, (iii) increase the
maximum term of Incentive Stock Options under the Plan, (iv) decrease the
minimum option price of Incentive Stock
5
<PAGE>
Options, (v) change the class of employees eligible to be granted Incentive
Stock Options under the Plan, or (vi) effect a change relating to Incentive
Stock Options granted under the Plan which is inconsistent with Code Section 422
or the regulations thereunder.
16. AGREEMENT AND REPRESENTATION OF EMPLOYEES
-----------------------------------------
As a condition to the exercise of any portion of an Option, the Bank may
require the person exercising such Option to represent and wan-ant at the time
of such exercise that any shares of Stock acquired at exercise are being
acquired only for investment and without any present intention to sell or
distribute such shares, if, in the opinion of counsel for the Bank, such a
representation is required under the Securities Act of 1933 or any other
applicable law, regulation, or rule of any governmental agency.
17. RESERVATION OF SHARES OF STOCK
------------------------------
The Bank, during the term of this Plan, will at all times reserve and keep
available, and will seek or obtain from any regulatory body having jurisdiction
any requisite authority necessary to issue and to sell, the number of shares of
Stock that shall be sufficient to satisfy the requirements of this Plan. The
inability of the Bank to obtain from any regulatory body having jurisdiction the
authority deemed necessary by counsel for the Bank for the lawful License and
sale of its Stock hereunder shall relieve the Bank of any liability in respect
of the failure to issue or sell Stock as to which the requisite authority has
not been obtained.
18. WITHHOLDING TAXES
-----------------
Whenever under the Plan shares are to be issued upon the exercise of
Options thereunder, the Bank shall have the right to require the Optionee to
revert to the Bank an amount sufficient to satisfy federal, state and local
withholding tax requirements, if any, prior to the delivery of any Stock
certificate or certificates for such shares. Whenever under the Plan payments
are made in cash, such payment shall be net of an amount sufficient to satisfy
federal, state and local withholding tax requirements.
19. EFFECTIVE DATE OF PLAN
----------------------
The Plan shall be effective from the date that the Plan is approved by both
the Board and the shareholders of the Bank.
Date Approved by Board of Directors: March 8, 1994
Date Approved by Bank Shareholders: March 22, 1994
---------
6
<PAGE>
REVOCABLE PROXY
TIB BANK OF THE KEYS
REVOCABLE PROXY SOLICITED BY AND ON BEHALF OF THE
BOARD OF DIRECTORS FOR THE SPECIAL MEETING
OF SHAREHOLDERS TO BE HELD ON JUNE 27, 1996
The undersigned hereby appoints W. Kenneth Meeks and Edward V. Lett, or either
of them, with individual power of substitution, as proxies to vote all shares of
the $1.25 par value common stock of TIB Bank of the Keys (the "Bank") which the
undersigned is entitled to vote at the Special Meeting of Shareholders
(including any postponement or adjournment thereof, the "Special Meeting") to be
held on Thursday, June 27, 1996, at 3:00 p.m., local time, at the Sheraton
Hotel, 97000 South Overseas Highway, Key Largo, Florida 33037.
SAID PROXIES WILL VOTE ON THE PROPOSALS SET FORTH IN THE NOTICE OF SPECIAL
MEETING AND PROXY STATEMENT AS SPECIFIED ON THIS PROXY AND ARE AUTHORIZED TO
VOTE IN THEIR DISCRETION AS TO ANY OTHER BUSINESS WHICH MAY COME PROPERLY BEFORE
THE MEETING. IF A VOTE IS NOT SPECIFIED, SAID PROXIES WILL VOTE FOR APPROVAL OF
THE PROPOSALS.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE FOLLOWING PROPOSAL AND TO
GRANT AUTHORITY AS INDICATED:
(1) Approval of the proposed Agreement and Plan of Merger (the "Merger
Agreement") providing for a merger (the "Merger") whereby (a) the Bank will
become a wholly-owned subsidiary of TIB Financial Corp. (the "Company"), a
new Florida corporation formed to become a bank holding company for the
Bank, (b) each outstanding share of common stock of the Bank will be
converted into and exchanged for one share of common stock of the Company,
and (c) the shareholders of the Bank will become shareholders of the
Company, with the Bank surviving the Merger and continuing its business as
a wholly-owned subsidiary of Company.
FOR [_] AGAINST [_] ABSTAIN [_]
(2) As determined in the discretion of said proxies as regards any other matter
business as may properly come before the Special Meeting or any
adjournments thereof.
WITH AUTHORITY [_] WITHHOLD AUTHORITY [_]
PLEASE SIGN EXACTLY AS NAME APPEARS ON THE LABEL BELOW. When shares are held by
joint tenants both should sign. When signing as attorney, executor,
administrator, trustee, or guardian please give full title as such. If a
corporation, please sign in full corporate name by President or other authorized
officer. If a partnership, please sign in partnership name by authorized person.
__________________________________
Signature
[LABEL]
__________________________________
Signature if held jointly
DATED: _____________________, 1996
PLEASE MARK, SIGN ABOVE, DATE AND RETURN THIS PROXY
PROMPTLY IN THE ENVELOPE FURNISHED.
