[LETTERHEAD OF ALLEN PARISH BANCORP, INC.]
March 30, 1998
Dear Fellow Stockholder:
On behalf of the Board of Directors and management of First
Allen Parish Bancorp, Inc. (the "Company"), I cordially invite
you to attend the Annual Meeting of Stockholders. The meeting
will be held at 2:00 p.m., Oakdale, Louisiana time on April 30,
1998 at the Company's main office located at 222 South 10th
Street, Oakdale, Louisiana 71463.
The enclosed Notice of Annual Meeting and Proxy Statement
describe the formal business to be transacted. During the Annual
Meeting we will also report on the 1997 financial performance and
operations of the Company.
An important aspect of the Annual Meeting process is the
stockholder vote on corporate business items. I urge you to
exercise your rights as a stockholder to vote and participate in
this process. Stockholders are being asked to consider and vote
upon the proposals to ratify the adoption of the 1998 Stock
Option and Incentive Plan and the Recognition and Retention Plan.
Stockholders are also being asked to consider and vote upon the
proposals to elect two directors of the Company and to ratify the
appointment of independent auditors of the Company for the fiscal
year ending December 31, 1998. The Board has carefully
considered each of these proposals and believes that their
approval is in the best interests of the Company and its
stockholders. Accordingly, your Board of Directors unanimously
recommends that you vote for each of the proposals.
I encourage you to attend the Annual Meeting in person.
Whether or not you attend the Annual Meeting, I hope that you
will read the enclosed Proxy Statement and then complete, sign
and date the enclosed proxy card and return it in the postage
prepaid envelope provided. Returning a properly executed and
dated proxy card will save the Company additional expense in
soliciting proxies and will ensure that your shares are
represented. Please note that you may vote in person at the
Annual Meeting even if you have previously returned the proxy.
Thank you for your attention to this important matter.
Sincerely,
/s/ Charles L. Galligan
-----------------------------------
Charles L. Galligan
President and Chief Executive Officer
<PAGE>
FIRST ALLEN PARISH BANCORP, INC.
222 South 10th Street
Oakdale, Louisiana 71463
(318) 335-2031
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
To be Held on April 30, 1998
Notice is hereby given that the Annual Meeting of
Stockholders (the "Meeting") of First Allen Parish Bancorp, Inc.
will be held at the Company's main office, located at 222 South
10th Street, Oakdale, Louisiana at 2:00 p.m., Oakdale, Louisiana
time, on April 30, 1998.
A Proxy Card and a Proxy Statement for the Meeting are
enclosed.
The Meeting is for the purpose of considering and acting
upon:
1. The election of two directors of the Company for three
year terms;
2. The ratification of the adoption of the 1998 Stock
Option and Incentive Plan;
3. The ratification of the adoption of the Recognition and
Retention Plan;
4. The ratification of the appointment of Kolder,
Champagne, Slaven & Rainey, LLC as the auditors of the Company
for the fiscal year ending December 31, 1998;
and such other matters as may properly come before the Meeting,
or any adjournments thereof. The Board of Directors is not aware
of any other business to come before the Meeting.
Any action may be taken on the foregoing proposals at the
Meeting on the date specified above, or on any date or dates to
which the Meeting may be adjourned. Stockholders of record at
the close of business on March 23, 1998 are the stockholders
entitled to vote at the Meeting and any adjournments thereof.
You are requested to complete and sign the enclosed form of
proxy, which is solicited on behalf of the Board of Directors,
and to mail it promptly in the enclosed envelope. The proxy will
not be used if you attend and vote at the Meeting in person.
BY ORDER OF THE BOARD OF DIRECTORS
/s/ Leslie A. Smith
---------------------------------
Leslie A. Smith
Secretary
Oakdale, Louisiana
March 30, 1998
IMPORTANT: THE PROMPT RETURN OF PROXIES WILL SAVE THE COMPANY
THE EXPENSE OF FURTHER REQUESTS FOR PROXIES TO ENSURE A QUORUM AT
THE MEETING. A SELF-ADDRESSED ENVELOPE IS ENCLOSED FOR YOUR
CONVENIENCE. NO POSTAGE IS REQUIRED IF MAILED WITHIN THE UNITED
STATES.
<PAGE>
PROXY STATEMENT
FIRST ALLEN PARISH BANCORP, INC.
222 South 10th Street
Oakdale, Louisiana 71463
(318) 335-2031
ANNUAL MEETING OF STOCKHOLDERS
To Be Held April 30, 1998
This Proxy Statement is furnished in connection with the
solicitation on behalf of the Board of Directors of First Allen
Parish Bancorp, Inc. (the "Company"), the holding company of
First Federal Savings and Loan Association of Allen Parish (the
"Association"), of proxies to be used at the Annual Meeting of
Stockholders of the Company (the "Meeting") which will be held at
the Company's main office, located at 222 South 10th Street,
Oakdale, Louisiana on April 30, 1998, at 2:00 p.m., Oakdale,
Louisiana time, and all adjournments of the Meeting. The
accompanying Notice of Annual Meeting and this Proxy Statement
are first being mailed to stockholders on or about March 30,
1998.
At the Meeting, stockholders of the Company are being asked
to consider and vote upon the proposals to elect two directors of
the Company, to ratify the adoption of the 1998 Stock Option and
Incentive Plan ("Stock Option Plan") and the Recognition and
Retention Plan ("RRP"), and to ratify the appointment of Kolder,
Champagne, Slaven & Rainey, LLC as independent auditors of the
Company for the fiscal year ending December 31, 1998.
Vote Required and Proxy Information
All shares of the Company's Common Stock, par value $.01 per
share (the "Common Stock"), represented at the Meeting by
properly executed proxies received prior to or at the Meeting,
and not revoked, will be voted at the Meeting in accordance with
the instructions thereon. If no instructions are indicated,
properly executed proxies will be voted for the proposals set
forth in this Proxy Statement. The Company does not know of any
matters, other than as described in the Notice of Annual Meeting,
that are to come before the Meeting. If any other matters are
properly presented at the Meeting for action, the persons named
in the enclosed form of proxy and acting thereunder will have the
discretion to vote on such matters in accordance with their best
judgment.
As to the election of Directors, the proxy card being
provided by the Board of Directors enables a stockholder to vote
FOR the election of the nominees proposed by the Board, or to
WITHHOLD AUTHORITY to vote for one or more of the nominees being
proposed. Under Delaware law and the Company's Certificate of
Incorporation and Bylaws, directors are elected by a plurality of
votes cast, without regard to either broker non-votes, or proxies
as to which authority to vote for one or more of the nominees
being proposed is withheld.
<PAGE>
As to the proposals to adopt the Stock Option Plan and the
RRP, the proxy card being provided by the Board of Directors
enables a stockholder to check the appropriate box on the proxy
card to (i) vote FOR, (ii) vote AGAINST, or (iii) vote to ABSTAIN
from voting on, such matter. An affirmative vote of the holders
of a majority of the votes cast, in person or by proxy, and
entitled to vote is required to constitute stockholder approval,
without regard to broker non-votes, or proxies marked ABSTAIN.
As to the ratification of Kolder, Champagne, Slaven &
Rainey, LLC as independent auditors of the Company, by checking
the appropriate box, a stockholder may: (i) vote FOR the item;
(ii) vote AGAINST the item; or (iii) ABSTAIN from voting on such
item. Under the Company's Certificate of Incorporation and
Bylaws, the ratification of this matter shall be determined by a
majority of the votes cast, without regard to broker non-votes,
or proxies marked ABSTAIN.
Any other matters that may be brought before the Annual
Meeting will be determined by majority of the votes cast, without
regard to broker non-votes, or any proxies as to which a
stockholder abstains. One-third of the shares of the Common
Stock, present in person or represented by proxy, shall
constitute a quorum for purposes of the Meeting. Abstentions and
broker non-votes are counted for purposes of determining a
quorum.
A proxy given pursuant to the solicitation may be revoked at
any time before it is voted. Proxies may be revoked by: (i)
filing with the Secretary of the Company at or before the Meeting
a written notice of revocation bearing a later date than the
proxy, (ii) duly executing a subsequent proxy relating to the
same shares and delivering it to the Secretary of the Company at
or before the Meeting, or (iii) attending the Meeting and voting
in person (although attendance at the Meeting will not in and of
itself constitute revocation of a proxy). Any written notice
revoking a proxy should be delivered to Leslie A. Smith,
Secretary, First Allen Parish Bancorp, Inc., 222 South 10th
Street, Oakdale, Louisiana 71463.
Voting Securities and Certain Holders Thereof
Stockholders of record as of the close of business on March
23, 1998 will be entitled to one vote for each share of Common
Stock then held. As of that date, the Company had 264,506 shares
of Common Stock issued and outstanding. The following table sets
forth information as of March 23, 1998 regarding share ownership
of those persons or entities known by management to own
beneficially more than five percent of the Common Stock and of
all directors and executive officers of the Company and the
Association as a group.
<PAGE>
<TABLE>
Shares
Name and Address Beneficially Percent
of Beneficial Owner Owned of Class
- --------------------------------------------------------
<S> <C> <C>
First Allen Parish Bancorp, Inc.
Employee Stock Ownership Plan(1)
222 South 10th Street
Oakdale, Louisiana 71463 21,160 8.00%
Jonathan Brooks
950 Third Avenue, 20th Floor
New York, New York 10022 25,600 9.68%
Directors and executive officers of
the Company and the Association
as a group (7 persons) 53,664(2) 20.29%
</TABLE>
(1) The amount reported represents all shares held by the
Employee Stock Ownership Plan ("ESOP"), of which 2,645 shares
have been allocated to accounts of participants. First Bankers
Trust Company, N.A. of Quincy, Illinois, the trustee of the ESOP,
may be deemed to beneficially own the shares held by the ESOP
which have not been allocated to accounts of participants.
Participants in the ESOP are entitled to instruct the trustee as
to the voting of shares allocated to their accounts under the
ESOP. Unallocated shares held in the ESOP's suspense account are
voted by the trustee in the same proportion as allocated shares
voted by participants.
(2) Amount includes shares held directly, as well as shares held
jointly with family members, shares held in retirement accounts,
shares held in a fiduciary capacity or by certain family members,
with respect to which shares the group members may be deemed to
have sole or shared voting and/or investment power. The amount
above excludes options to purchase shares of Common Stock
conditionally granted under the Company's Stock Option Plan and
awards of shares of restricted Common Stock under the Company's
RRP to directors and executive officers of the Company. The
adoption of the Stock Option Plan and RRP is subject to approval
of the stockholders at the Meeting. See "Proposal II -
Ratification of the 1998 Stock Option and Incentive Plan" and
"Proposal III - Ratification of the Recognition and Retention
Plan."
PROPOSAL I - ELECTION OF DIRECTORS
The Company's Board of Directors is presently composed of
six members, each of whom is also a director of the Association.
The Directors are divided into three classes. Directors of the
Company are generally elected to serve for a three-year term
which is staggered to provide for the election of approximately
one-third of the directors each year.
The following table sets forth certain information regarding
the Company's Board of Directors, including their terms of office
and nominees for election as directors. It is intended that the
proxies solicited on behalf of the Board of Directors (other than
proxies in which the vote is withheld as to the nominee) will be
voted at the Meeting for the election of the nominees identified
in the following table. If any nominee is unable to serve, the
shares represented by all such proxies will be voted for the
election of such substitute as the Board of Directors may
recommend. At this time, the Board of Directors knows of no
reason why the nominee might be unable to serve, if elected.
Except as described herein, there are no arrangements or
understandings between any director or nominee and any other
person pursuant to which such director or nominee was selected.
<PAGE><TABLE>
<CAPTION>
Shares of
Common Stock
Age at Beneficially
December 31, Positions Held Director Current Term Owned at March Percent
Name 1997 with the Bank Since(1) To Expire 23, 1998(2) Of Class
- -----------------------------------------------------------------------------------------------------------
BOARD NOMINEES FOR TERMS TO EXPIRE IN 2001
<S> <C> <C> <C> <C> <C> <C>
Jesse Boyd, Jr. 73 Director 1962 1998 10,000 3.78%
James E. Riley 73 Director 1962 1998 5,000 1.89%
DIRECTORS CONTINUING IN OFFICE
Charles L. Galligan 57 President and Chief 1991 2000 10,845 4.10%
Executive Officer,
and Director
J.C. Smith 67 Director 1995 2000 10,000 3.78%
Dr. James D. Sandefur 56 Chairman of the Board 1989 1999 10,463 3.96%
Leslie A. Smith 65 Corporate Secretary 1993 1999 5,000 1.89%
and Director
</TABLE>-------------------------------
(1) Includes service as a director of the Association.
(2) Includes shares held directly, as well as shares held
jointly with family members, shares held in retirement accounts,
shares held by certain members of the named individuals'
families, or held by trusts of which the named individual is a
trustee or substantial beneficiary, with respect to which shares
the named individuals may be deemed to have sole or shared voting
and/or investment power. Also includes shares allocated to the
individual account of Mr. Charles Galligan under the
Association's Employee Stock Ownership Plan. The amount above
excludes options to purchase shares of Common Stock conditionally
granted under the Company's Stock Option Plan and awards of
shares of restricted Common Stock under the Company's RRP.
The business experience of each director and director
nominee is set forth below. All directors have held their
present positions for at least the past five years, except as
otherwise indicated.
Jesse Boyd, Jr. Mr. Boyd is the owner and president of Boyd
Buick-Cadillac-Chevrolet-Pontiac-Olds-GMC, Inc., a car
dealership, and Boyd Oil Company, a bulk oil distributorship,
located in Oakdale and Glenmora, Louisiana, respectively.
James E. Riley. Mr. Riley owned and operated a pharmacy in
Oberlin, Louisiana until his retirement in 1990.
Charles L. Galligan. Mr. Galligan has served as the
President and Chief Executive Officer since joining the
Association in 1991. In these capacities, he is responsible for
overseeing the day to day operations of the Association.
J. C. Smith. Mr. Smith's principal business is farming. He
is also involved in J.C. Smith & Sons, Partnership, a farming
operation, and J. C. Smith & Sons Auto and Home Service Center, a
retail hardware store, both located in Oberlin, Louisiana.
<PAGE>
Dr. James D. Sandefur. Dr. Sandefur has served as Chairman
of the Board since January 1996. Dr. Sandefur was a practicing
optometrist, and was the owner of the Vision Clinic located in
Oakdale, Louisiana, from March 1968 until June 1996. Dr.
Sandefur is presently semi-retired and works as a consultant for
the Vision Clinic, Oakdale, Louisiana.
Leslie A. Smith. Mr. Smith was the principal of the Oakdale
Elementary School until his retirement in 1997.
Executive Officers Who Are Not Directors
Executive officers of the Company and the Association are
elected annually by the Board of Directors of the Company and the
Association, respectively. The business experience of the
executive officer of the Company and the Association who is not
also a director is set forth below.
Betty Jean Parker. Mrs. Parker, age 53, is the Treasurer
and Chief Financial Officer of the Company. Until June 1996,
Mrs. Parker was also Corporate Secretary of the Association.
Mrs. Parker is responsible for the supervision of the accounting
department and reporting to the regulatory authorities. Mrs.
Parker is the beneficial owner of 2,356 shares, or .90% of the
shares outstanding.
Ownership Reports by Officers and Directors
The Common Stock of the Company is registered pursuant to
Section 12(g) of the 1934 Act. The officers and directors of the
Company and beneficial owners of greater than 10% of the
Company's Common Stock ("10% beneficial owners") are required to
file reports on Forms 3, 4, or 5 with the SEC disclosing changes
in beneficial ownership of the Common Stock. SEC rules require
disclosure in the Company's Proxy Statement and Annual Report on
Form 10-K of the failure of an officer, director or 10%
beneficial owner of the Company's Common Stock to file a Form 3,
4, or 5 on a timely basis. Based on the Company's review of such
ownership reports, no officer, director or 10% beneficial owner
of the Company failed to file ownership reports on a timely basis
for the fiscal year ended December 31, 1997.
Meetings of the Board of Directors and Committees
The Board of Directors met 6 times during the year ended
December 31, 1997. During fiscal 1997, no director of the
Company attended fewer than 75% of the aggregate of the total
number of Board meetings and the total number of meetings held by
the committees of the Board of Directors on which he served.
The Company formed standing Audit, Nominating and
Compensation Committees in connection with its organization in
June 1996.
The Audit Committee reviews audit reports and related
matters to ensure effective compliance with regulations and
internal policies and procedures. This committee also acts on
the recommendation by management of an accounting firm to perform
the Company's annual audit and acts as a liaison between the
auditors and the Board. The current members of this committee
are
<PAGE>
Directors Sandefur, Riley and Leslie A. Smith. The Company's
Audit Committee met one time in fiscal 1997.
The Nominating Committee meets annually in order to nominate
candidates for membership on the Board of Directors. This
committee is comprised of the Board members who are not up for
election. The Nominating Committee met one time during fiscal
1997.
The Compensation Committee establishes the Company's
compensation policies and reviews compensation matters. The
current members of this Committee are Directors Sandefur, Riley
and Boyd. The Compensation Committee did not meet in fiscal
1997.
Director Compensation
The Company pays directors a fee of $3,000 per annum,
payable quarterly. Additionally, during fiscal 1997, all outside
directors of the Association received a fee of $650 per month for
serving on the Board of Directors. Directors do not receive any
additional fees for attending special board meetings or for
participation on committees.
Stock Benefit Plans. Subject to stockholder approval of
the stock benefit plans at this Meeting, each member of the Board
of Directors will be granted awards pursuant to the Stock Option
Plan and the RRP. For additional information regarding the stock
benefit plans, see Proposals II and III hereinafter discussed.
Director Deferred Fee Agreement. In December 1993, the
Association developed and offered a deferred compensation plan to
the members of the board. Director Sandefur was the only director
who elected to enter into an unfunded deferred compensation
agreement pursuant to this program. Under the agreement, Dr.
Sandefur has elected to defer 100% of his director fees until he
reaches age 59-1/2. Upon reaching that age, Dr. Sandefur
receives the total amount of deferred fees, plus interest, in a
lump sum payment. In the event of Dr. Sandefur's disability or
death, the total amount of deferred fees plus interest would be
paid to Dr. Sandefur or his beneficiaries in a lump sum payment.
In the event the Association is acquired by another company, the
agreement automatically terminates, and the deferred fees plus
interest are payable in a lump sum.
Executive Compensation
The Company has not paid any compensation to its executive
officers since its formation. However, the Company does
reimburse the Association for services performed on behalf of the
Company by its officers. The Company does not presently
anticipate paying any compensation to such persons until it
becomes actively involved in the operation or acquisition of
businesses other than the Association.
<PAGE>
The following table sets forth the compensation paid or
accrued by the Association for services rendered by Charles L.
Galligan, the President and Chief Executive Officer of the
Association. No other executive officer earned in excess of
$100,000 during fiscal year 1997.<TABLE>
<CAPTION>
SUMMARY COMPENSATION TABLE
Long-Term Compensation
----------------------
Annual Compensation Awards
------------------------- ----------------------
Other Restricted
Annual Stock Options/
Name and Fiscal Compensation Awards SARs All Other
Principal Position(1) Year Salary($) Bonus($) ($)(1) ($) (#) Compensation($)(4)
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Charles L. Galligan, 1997 $54,000 $10,000 $--- ---(2) ---(3) $16,500
President and Chief 1996 $54,000 $10,000 $--- ---(2) ---(3) $10,942
Executive Officer 1995 $54,000 $10,000 $--- ---(2) ---(3) $ 7,788
</TABLE>____________________
(1) Mr. Galligan did not receive any additional benefits or
perquisites which, in the aggregate, exceeded 10% of his salary
and bonus or $50,000.
(2) No awards of restricted stock were made during the fiscal
year presented. See Proposal III herein for a description of
restricted stock awards made subject to stockholder approval of
the RRP.
(3) No options or Stock Appreciation Rights ("SARs") were
awarded during the fiscal years presented. See Proposal II
herein for options awarded subject to stockholder approval of
the Stock Option Plan.
(4) In 1997 includes $3,000 of Company board fees, and $13,500
contributed under the Association's Employee Stock Ownership
Plan. Includes $500 of Company board fees, $2,342 contributed
under the Association's Employee Stock Ownership Plan and $8,100
contributed under the Association's Profit Sharing Plan in 1996
and $7,788 contributed under the Association's Profit Sharing
Plan in 1995.
Employment Agreements
The Association entered into an employment agreement
effective upon consummation of the Association's conversion to a
stock institution, with Charles L. Galligan, the Association's
President and Chief Executive Officer, providing for a term of
three years. The contract provides for payment to the employee
for the remaining term of the contract unless the employee is
terminated "for cause."
The employment agreement for Mr. Galligan provides for an
annual base salary as determined by the Board of Directors, but
not less than the employee's current salary. Mr. Galligan's base
salary (exclusive of director fees and bonuses) was $54,000 in
fiscal 1997. So long as the contract remains in force, salary
increases will be reviewed not less often than annually
thereafter, and are subject to the sole discretion of the Board
of Directors. The employment contract provides for annual
extensions for one additional year, but only upon express
authorization by the Board of Directors at the end of each year.
The contract provides for termination upon the employee's death,
for cause or in certain events specified by OTS regulations. The
employment contract is terminable by the employee upon 90 days'
notice to the Association.
In the event there is a change in control of the Company or
the Association, as defined in the agreement, if employment
terminates involuntarily in connection with such change in
control or within 12 months thereafter, the employment contract
provides for a payment equal to 299% of
<PAGE>
Mr. Galligan's base amount of compensation as defined in the
Code. Assuming a change in control were to take place as of
December 31, 1997, the aggregate amounts payable to Mr. Galligan
pursuant to this change in control provision would be
approximately $162,000.
The contract provides, among other things, for participation
in an equitable manner in employee benefits applicable to
executive personnel. The employment contract may have an "anti-
takeover" effect that could affect a proposed future acquisition
of control of the Association after its Conversion.
The Association has also entered into an employment
agreement with Betty Jean Parker, as Treasurer and Chief
Financial Officer. The agreement provides for a term of three
years and a change of control payment equal to 299% of Ms.
Parker's base amount of compensation, and is otherwise similar to
the employment agreement with Mr. Galligan.
Benefit Plans
General. First Federal currently provides health care
benefits, including medical and disability, subject to certain
deductibles and copayments by employees, a retirement plan and
group life insurance to its employees.
Profit Sharing Plan. The Association maintains a Profit
Sharing Plan which is a qualified, tax-exempt profit sharing plan
with a salary deferred feature under Section 401(k) of the
Internal Revenue Code. All employees who have attained age 21
and have completed one year of employment during which they
worked at least 1,000 hours are eligible to participate. The
Association's contribution to the plan for each plan year is a
sum that the Association, by action of the Board of Directors,
authorizes in its discretion (so long as the contribution, along
with the employee's voluntary contribution for any plan year does
not exceed the maximum amount permissible under Section 415(c) of
the Code.) Association contributions and plan forfeitures are
allocated among plan participants in the proportion that the
compensation of each participant bears to the total compensation
of all participants.
Under the plan, participants are permitted to make salary
reduction contributions equal to a percentage of up to 10% of
compensation. All employee contributions and earnings thereon
are fully and immediately vested. If a participant's employment
is terminated, voluntarily or involuntarily, for any reason other
than death, disability or attainment of the normal retirement age
of 65 or later, the participant's interest in the Association
contributions vests at the rate of 20% per year beginning after
completion of three years of service with full vesting occurring
after seven years of service. A participant may withdraw
employee after-tax voluntary contributions at any time, but may
only withdraw Association contributions (including pre-tax salary
reduction contributions) in the event the participant suffers a
financial hardship, termination of employment, death, disability,
retirement, or the attainment of age 59 1/2.
Contributions under the plan are invested under a group
annuity contract with a life insurance company. Contributions
under the group annuity contract are invested in the insurance
company's general fund which is made up of fixed income
investments such as mortgages and bonds.
<PAGE>
Plan benefits will be paid to each participant as an
annuity, in lump sum or installments, at the participant's
election. For the fiscal year ended December 31, 1997, the
Association did not contribute to the Profit-Sharing Plan.
Indebtedness of Management
The Association has followed a policy of granting loans,
including loans secured by one- to four-family real estate, to
officers, directors and employees. All loans by the Association
to its directors and executive officers are subject to OTS
regulations restricting loan and other transactions with
affiliated persons of the Association. Federal law and
regulation generally requires that all loans to executive
officers and directors be made on substantially the same terms
and conditions comparable to those for similar transactions with
non-affiliates. However, recent regulations now permit executive
officers and directors to receive the same terms through benefit
or compensation plans that are widely available to other
employees, as long as the director or executive officer is not
given preferential treatment compared to the other participating
employees. Still, the Association has adopted a policy that
loans or extensions of credit to the Association's executive
officers and directors are made at the same rates and terms as
those offered to the general public. Such loans are approved by a
majority of the independent, disinterested directors. Loans to
all directors, executive officers, employees and their associates
totaled $249,429 at December 31, 1997, which was approximately
7.1% of the Association's equity capital at that date and 5.5% of
the Company's stockholders' equity at that date. There were no
loans outstanding to any director, executive officer or their
affiliates at preferential rates or terms which in the aggregate
exceeded $60,000 during the three years ended December 31, 1997.
All loans to directors and officers were performing in accordance
with their terms at December 31, 1997 and do not in the opinion
of management involve more than the normal risk of collectibility
or present other unfavorable features.
PROPOSAL II -
RATIFICATION OF THE 1998 STOCK OPTION AND INCENTIVE PLAN
General
Establishment and implementation of the Stock Option Plan
are subject to approval by stockholders and the satisfaction of
certain other conditions.
The 1998 Stock Option and Incentive Plan (the "Stock Option
Plan") has been adopted by the Board of Directors of the Company,
subject to ratification by stockholders at the Meeting. Pursuant
to the Stock Option Plan, 26,450 shares of the Company's Common
Stock are reserved for issuance by the Company under the Stock
Option Plan. The Company may determine to reacquire shares in
the open market for purposes of fulfilling its obligations under
the Stock Option Plan, or may alternatively issue additional
shares for this purpose. Since stockholders do not have
preemptive rights, to the extent the Company issues all shares
reserved for issuance under the Stock Option Plan, the interests
of current stockholders will be diluted 9.1%.
The Board of Directors believes that it is appropriate for
the Company to adopt a flexible and comprehensive stock option
and incentive plan which permits the granting of a variety of
long-term incentive awards to directors, advisory directors,
officers and employees as a means of enhancing and encouraging
the recruitment and retention of those individuals on whom the
continued success
<PAGE>
of the Company most depends. However, because the awards are
granted only to persons affiliated with the Company, the adoption
of the Stock Option Plan could make it more difficult for a third
party to acquire control of the Company and therefore could
discourage offers for the Company's stock that may be viewed by
the Company's stockholders to be in their best interest. In
addition, certain provisions included in the Company's
Certificate of Incorporation and Bylaws may discourage potential
takeover attempts, particularly those that have not been
negotiated directly with the Board of Directors of the Company.
Included in the Certificate of Incorporation and Bylaws are
provisions (i) limiting the voting power of shares held by
persons owning 10% or more of the Common Stock, (ii) requiring a
supermajority vote of shareholders for approval of certain
business combinations, (iii) establishing a staggered Board of
Directors, (iv) permitting special meetings of shareholders to be
called only by the Board of Directors and (v) authorizing a class
of preferred stock with terms to be established by the Board of
Directors. These provisions could prevent the sale or merger of
the Company even where a majority of the stockholders approve of
such transaction.
In addition, federal regulations prohibit the beneficial
ownership of more than 10% of the stock of a converted savings
institution or its holding company without prior approval of the
OTS. Federal law and regulations also require OTS approval prior
to the acquisition of "control" (as defined in the regulations)
of an insured institution, including a holding company thereof.
These regulations could have the effect of discouraging takeover
attempts of the Company.
Attached as Appendix A to this Proxy Statement is the
complete text of the Stock Option Plan. The principal features
of the Stock Option Plan are summarized below.
Principal Features of the Stock Option Plan
The Stock Option Plan provides for awards in the form of
stock options, stock appreciation rights ("SARs") and limited
stock appreciation rights ("Limited SARs"). Each award shall be
on such terms and conditions, consistent with the Stock Option
Plan and applicable OTS Regulations, as the committee
administering the Stock Option Plan may determine.
The term of stock options will not exceed ten years from the
date of grant. The Stock Option Committee may grant either
"Incentive Stock Options" as defined under Section 422 of the
Code or stock options not intended to qualify as such ("non-
qualified stock options").
Shares may be either authorized but unissued shares or
reacquired shares held by the Company in its treasury. Any
shares subject to an award which expires or is terminated
unexercised will again be available for issuance under the Stock
Option Plan. Generally, in the discretion of the Board, all or
any non-qualified stock options granted under the Stock Option
Plan may be transferable by the Participant but only to the
persons or classes of persons determined by the Board in any
determination permitting transferability. No other award or any
right or interest therein is assignable or transferable except
under certain limited exceptions set forth in the Stock Option
Plan.
The Stock Option Plan is administered by a committee of the
Board (the "Stock Option Committee") consisting of either two or
more "non-employee directors" (as defined in the Stock Option
Plan), or the entire Board of Directors. The members of the
Stock Option Committee shall be appointed by the Board of
Directors of the Company. Currently, the Stock Option Committee
is comprised of directors Dr. James D. Sandefur and Leslie A.
Smith. Pursuant to the terms of the
<PAGE>
Stock Option Plan, any director, advisory director, officer or
employee of the Company or its affiliates is eligible to
participate in the Stock Option Plan. The Stock Option Committee
will determine to whom the awards will be granted under the Stock
Option Plan, in what amounts, and the period over which such
awards will vest. In granting awards under the Stock Option
Plan, the Stock Option Committee considers, among other things,
position and years of service, value of the Participant's
services to the Company and the Association and the added
responsibilities of such individuals as employees, directors and
officers of a public company. As of December 31, 1997, there
were 5 non-employee directors and 2 employees eligible to
participate in the Stock Option Plan.
Stock Options
In general, stock options will not be exercisable after the
expiration of their terms. If a Participant to whom an Option or
Right was granted shall cease to maintain Continuous Service for
any reason (excluding death, disability, normal retirement or
following a change in control of the Association or the Company,
and termination of employment by the Corporation or any Affiliate
for cause), such Participant may, but only within the period of
three months immediately succeeding such cessation of Continuous
Service and in no event after the expiration date of such Option
or Right, exercise such Option or Right to the extent that such
Participant was entitled to exercise such Option or Right at the
date of cessation, provided, however, that such right of exercise
after cessation of Continuous Service shall not be available to a
Participant if the Stock Option Committee otherwise determines
and so provides in the applicable instrument or instruments
evidencing the grant of such Option or Right. If a Participant
to whom an Option or Right was granted shall cease to maintain
Continuous Service by reason of death, disability, normal
retirement or following a change in control of the Association or
the Company then, unless the Committee shall otherwise provide in
the instrument evidencing the grant of an Option or Right, all
Options and Rights granted and not fully exercisable shall become
exercisable in full upon the happening of such an event and shall
remain exercisable in the event of death for the period described
below and in the event of disability, normal retirement or
following a change in control for a period of one year following
such date. If the Continuous Service of a Participant to whom an
Option or Right was granted by the Company is terminated for
cause, all rights under any Option or Right of such Participant
shall expire immediately upon the effective date of such
termination.
In the event of the death of a Participant while in the
Continuous Service of the Company or an Affiliate or within the
one year period referred to above, the person to whom any Option
or Right held by the Participant at the time of his death is
transferred by will or the laws of descent and distribution,
may, but only to the extent such Participant was entitled to
exercise such Option or Right immediately prior to his death,
exercise such Option or Right at any time within a period of one
year succeeding the date of death of such Participant, but in no
event later than ten years from the date of grant of such Option
or Right. Following the death of any Participant, the Stock
Option Committee may, as an alternative means of settlement of an
option, elect to pay to the holder an amount of cash equal to the
amount by which the market value of the shares covered by the
option on the date of exercise exceeds the exercise price,
multiplied by the number of shares with respect to which such
option is properly exercised. A stock option will automatically
terminate and will no longer be exercisable as of the date a
Participant is terminated for cause.
<PAGE>
The exercise price for the purchase of shares subject to a
stock option at the date of grant may not be less than 100% of
the market value of the shares covered by the option on that
date. The exercise price must be paid in full in cash or shares
of Common Stock, or a combination of both.
Subject to stockholder approval of the Stock Option Plan,
the Committee intends to provide for the grant of a non-qualified
stock option to purchase 2,645 shares of Common Stock to each
director of the Company, who is not an employee, as of the date
of stockholder ratification of the adoption of the Stock Option
Plan. It is expected that such options will be awarded with a
term of ten years, and vest at the rate of 20% per year generally
commencing on the date of stockholder approval of the Stock
Option Plan with each additional installment vesting on the four
subsequent anniversaries of each date (subject to certain
exceptions set forth in the stock option award). The exercise
price per share of such options shall be equal to the fair market
value of the Common Stock on the date of grant.
Stock Appreciation Rights
The Stock Option Committee may grant SARs at any time,
whether or not the participant then holds stock options, granting
the right to receive the excess of the market value of the shares
represented by the SARs on the date exercised over the exercise
price. SARs generally will be subject to the same terms and
conditions and exercisable to the same extent as stock options,
as described above. Upon the exercise of a SAR, the participant
will receive the amount due in cash or shares, or a combination
of both, as determined by the Stock Option Committee. SARs may
be related to stock options ("tandem SARs"), in which case the
exercise of one will reduce to that extent the number of shares
represented by the other. If a SAR is granted with and related
to an Incentive Stock Option, the SAR must satisfy all the
restrictions and limitations to which the related Incentive Stock
Option is subject.
SARs will require an expense accrual by the Company each
year for the appreciation on the SARs which it is anticipated
will be exercised. The amount of the accrual is dependent upon
whether and the extent to which the SARs are granted and the
amount, if any, by which the market value of the SARs exceeds the
exercise price.
Limited Stock Appreciation Rights
Limited SARs will be exercisable only in the event of a
change in control of the Association or the Company. The amount
paid on exercise of a Limited SAR will be the excess of the
market value of the shares on the date of exercise, over the
exercise price. Payment upon exercise of a Limited SAR will be
in cash, or in the event of a change in control in which pooling
accounting treatment is a condition to the transaction, for
shares of stock of the Company, or in the event of a merger
transaction, for shares of the acquiring corporation or its
parent, as applicable.
Limited SARs may be granted at the time of, and must be
related to, the grant of a stock option or SAR. The exercise of
one will reduce to that extent the number of shares represented
by the other. If a Limited SAR is granted with and related to an
Incentive Stock Option the Limited SAR must satisfy all the
restrictions and limitations to which the related Incentive Stock
Option is subject.
<PAGE>
Effect of Adjustments
Shares as to which awards may be granted under the Stock
Option Plan, and shares then subject to awards, will be adjusted
by the Stock Option Committee in the event of any merger,
consolidation, reorganization, recapitalization, stock dividend,
stock split, combination or exchange of shares or other change in
the corporate structure of the Company.
In the case of any merger, consolidation or combination of
the Company with or into another thrift holding company or other
entity, whereby either the Company is not the continuing thrift
holding company or its outstanding shares are converted into or
exchanged for securities, cash or other property, or any
combination thereof, any Participant to whom a stock option, SAR
and Limited SAR has been granted at least six months prior to
such event will have the right (subject to the provisions of the
Stock Option Plan and any applicable vesting period) upon
exercise of the option, SAR or Limited SAR to an amount equal to
the excess of fair market value on the date of exercise of the
consideration receivable in the merger, consolidation or
combination with respect to the shares covered or represented by
the stock option, SAR or Limited SAR over the exercise price of
the option multiplied by the number of shares with respect to
which the option, SAR or Limited SAR has been exercised.
Amendment and Termination
The Board of Directors of the Company may at any time,
amend, suspend or terminate the Stock Option Plan or any portion
thereof, provided, however, that no such amendment, suspension or
termination shall impair the rights of any Participant, without
his consent, in any Award made pursuant to the Plan. Unless
previously terminated, the Stock Option Plan shall continue in
effect for a term of ten years, after which no further awards may
be granted under the Stock Option Plan.
Federal Income Tax Consequences
Under present federal income tax laws, awards under the
Stock Option Plan will have the following consequences:
(1) The grant of an Award, by itself, will neither result in the
recognition of taxable income to the Participant nor entitle the
Company to a deduction at the time of such grant.
(2) The exercise of a stock option which is an "Incentive Stock
Option" within the meaning of Section 422 of the Code will
generally not, by itself, result in the recognition of taxable
income to the Participant nor entitle the Company to a deduction
at the time of such exercise. However, the difference between
the exercise price and the fair market value of the option shares
on the date of exercise is an item of tax preference which may,
in certain situations, trigger the alternative minimum tax. The
alternative minimum tax is incurred only when it exceeds the
regular income tax. The alternative minimum tax will be payable
at the rate of 26% to the first $175,000 of "ordinary income" in
excess of $33,750 (single person) or $45,000 (married person
filing jointly). This tax applies at a flat rate of 28% of so
much of the taxable ordinary income in excess of $175,000. The
alternative minimum tax will be payable at a maximum rate of 20%
on net capital gain. If a taxpayer has alternative minimum
taxable income in excess of $150,000 (married persons filing
jointly) or $112,500 (single person), the $45,000 or $33,750
exemptions are reduced by an amount equal to 25% of the amount by
which the alternative
<PAGE>
minimum taxable income of the taxpayer exceeds $150,000 or
$112,500, respectively. The Participant will recognize long term
capital gain or loss upon the resale of the shares received upon
such exercise, provided the Participant holds the shares for more
than eighteen months from the date of exercise.
(3) The exercise of a stock option which is not an Incentive
Stock Option will result in the recognition of ordinary income by
the Participant on the date of exercise in an amount equal to the
difference between the exercise price and the fair market value
on the date of exercise of the shares acquired pursuant to the
stock option.
(4) The exercise of a SAR will result in the recognition of
ordinary income by the Participant on the date of exercise in an
amount of cash, and/or the fair market value on that date of the
shares, acquired pursuant to the exercise.
(5) The Company will be allowed a deduction at the time, and in
the amount of, any ordinary income recognized by the Participant
under the various circumstances described above, provided that
the Company meets its federal withholding tax obligations.
Awards Under the Stock Option Plan
The following table presents information with respect to the
number of awards of options which are intended to be granted
under the Stock Option Plan, subject to stockholder approval of
the Stock Option Plan, to the Company's Chief Executive Officer,
to all executive officers as a group, to directors who are not
executive officers of the Company and the Association as a group,
and to non-executive employees as a group. All options will be
granted at the fair market value on the date of grant.
STOCK OPTION PLAN
<TABLE>
Number
Name and Position Dollar Value(1) of Units
- -------------------------------------------------------------------
<S> <C> <C>
Charles L. Galligan,
Chief Executive Officer $--- 6,613
Executive Group (1 person)(2) $--- 2,645
Non-Executive Director Group (5 persons) $--- 13,225
Non-Executive Employee Group (0 persons) $--- 3,968
</TABLE>
- --------------------------
(1) Any value realized will be the difference between the
exercise price and the market value upon exercise. Since the
options have not been granted, there is no current value.
(2) Excluding Mr. Galligan
Subject to the conditions of the Stock Option Plan described
herein, the proposed awards to be made in 1998 described herein
will vest in five equal annual installments with the first
installment generally vesting on the date of stockholder
ratification of the Stock Option Plan.
<PAGE>
THE BOARD OF DIRECTORS RECOMMENDS THAT STOCKHOLDERS VOTE
"FOR" THE RATIFICATION OF THE ADOPTION OF THE 1998 STOCK OPTION
AND INCENTIVE PLAN.
PROPOSAL III -
RATIFICATION OF THE RECOGNITION AND RETENTION PLAN
General
Establishment and implementation of the RRP are subject to
approval by stockholders, and the satisfaction of certain other
conditions.
Subject to ratification by stockholders, the Board of
Directors of the Company has adopted a Recognition and Retention
Plan (the "RRP") as a method of providing key officers and
directors with a proprietary interest in the Company in a manner
designed to encourage such individuals to remain with the
Company. Pursuant to the RRP, restricted stock awards covering
10,580 shares have been reserved for issuance under the RRP.
Attached as Appendix B to this Proxy Statement is the
complete text of the form of the RRP. The principal features of
the RRP are summarized below.
Principal Features of the RRP
The RRP provides for the award of shares of Common Stock
("RRP Shares") subject to the restrictions described below. Each
award under the RRP will be made on such terms and conditions,
consistent with the RRP, as the RRP Committee administering the
RRP shall determine.
The RRP is administered by a committee of the Board
consisting of either (i) at least two "non-employee directors"
(as defined in the RRP) or (ii) the entire Board of Directors
(the "RRP Committee"), The members of the RRP Committee shall be
appointed by the Board of Directors of the Company. Currently,
the RRP Committee is comprised of directors Dr. James D. Sandefur
and Leslie A. Smith. The RRP Committee will select the
recipients and terms of awards pursuant to the RRP. In
determining to whom and in what amount to grant awards, the RRP
Committee considers the position and responsibilities of eligible
employees, the value of their services to the Company and the
Association and other factors it deems relevant. Pursuant to the
terms of the RRP, any director, advisory director, officer or
employee of the Company or its affiliates may be selected by the
RRP Committee to participate in the RRP. As of December 31,
1997, there were five non-employee directors and one employee
eligible to participate in the RRP.
The RRP provides that RRP Shares used to fund awards under
such plan may be either authorized but unissued shares or issued
shares heretofore or hereafter reacquired by the Company in the
open market and held as treasury shares. Since stockholders do
not have preemptive rights, to the extent the Company utilizes
authorized but unissued shares to fund the RRP, the interests of
the current stockholders will be diluted by approximately 3.85%.
Award recipients earn (i.e., become vested in) awards, over
a period of time as determined by the RRP Committee, at the time
of grant. It is expected that RRP Shares to be awarded in 1998
<PAGE>
to directors, officers and employees (including executive
officers) will vest in five equal annual installments, with the
first installment vesting on the date of shareholder approval, in
each case subject to the conditions described below. RRP Shares
are subject to forfeiture if the recipient fails to remain in the
continuous service (as defined in the RRP) as an employee,
officer, director, or advisory director of the Company or the
Association for a stipulated period (the "restricted period").
The RRP Committee may, in its discretion, accelerate the
time at which any or all restrictions will lapse, or may remove
any or all of the restrictions. In the event a recipient ceases
to maintain continuous service with the Company or the
Association by reason of normal retirement, death, disability, or
a change in control of the Association or the Company, RRP
Shares still subject to restrictions will be free of these
restrictions and shall not be forfeited. In the event of
termination for any other reason, all nonvested shares will be
forfeited and returned to the Company. Prior to vesting of the
nonvested RRP shares, a recipient will have the right to vote the
nonvested RRP Shares which have been awarded to the recipient and
will receive any dividends declared on such RRP Shares.
Effect of Adjustments
Restricted stock awarded under the RRP will be adjusted by
the RRP Committee in the event of a reorganization,
recapitalization, stock split, stock dividend, combination or
exchange of shares, merger, consolidation or other change in
corporate structure.
Federal Income Tax Consequences
Holders of restricted stock will recognize ordinary income
on the date that the shares of restricted stock are no longer
subject to a substantial risk of forfeiture, in an amount equal
to the fair market value of the shares on that date. In certain
circumstances, a holder may elect to recognize ordinary income
and determine such fair market value on the date of the grant of
the restricted stock. Holders of restricted stock will also
recognize ordinary income equal to their dividend or dividend
equivalent payments when such payments are received. Generally,
the amount of income recognized by participants will be a
deductible expense for tax purposes by the Association.
Amendment to the RRP
The Board of Directors of the Company may at any time amend,
suspend or terminate the RRP or any portion thereof, provided,
however, that no such amendment, suspension or termination shall
impair the rights of any award recipient, without his consent, in
any award therefore made pursuant to the RRP.
Awards Under the RRP
The following table presents information with respect to the
number of awards of restricted stock which are intended to be
granted under the RRP, subject to stockholder approval of the
RRP, to the Company's Chief Executive Officer, to all executive
officers as a group, to directors who are not executive officers
of the Company and the Association as a group and to all non-
executive employees as a group. Subject to stockholder
ratification of the RRP, the Committee intends to provide for the
award of 1,587 shares of restricted stock to each director of the
Company who is not also an employee.
<PAGE>
RECOGNITION AND RETENTION PLAN
<TABLE>
Dollar Shares of
Name and Position Value(1) Restricted Stock
- ---------------------------------------------------------------------------
<S> <C> <C>
Charles L. Galligan,
Chief Executive Officer $ 64,141 2,645
Executive Group (1 person)(2) --- ---
Non-Executive Director Group (5 persons) $192,424 7,935
Non-Executive Employee Group (0 persons) --- ---
</TABLE>
________________________
(1) Assumes an aggregate market value of the shares of
restricted stock based on the closing sales price of the
Company's Common Stock of $24.25 per share on February 23, 1998.
(2) Excluding Mr. Galligan.
PROPOSAL IV - RATIFICATION OF APPOINTMENT
OF INDEPENDENT AUDITORS
The Company's independent auditors for the fiscal year ended
December 31, 1997 were Kolder, Champagne, Slaven & Rainey, LLC
The Company's Board of Directors has reappointed Kolder,
Champagne, Slaven & Rainey, LLC to continue as independent
auditors for the Company for the fiscal year ending December 31,
1998, subject to ratification of such appointment by the
stockholders. Representatives of Kolder, Champagne, Slaven &
Rainey, LLC are expected to attend the Meeting. They will be
given the opportunity to make a statement if they desire to do so
and will be available to respond to appropriate questions from
stockholders present at the Meeting.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE
RATIFICATION OF THE APPOINTMENT OF KOLDER, CHAMPAGNE, SLAVEN &
RAINEY, LLC AS THE INDEPENDENT AUDITORS OF THE COMPANY FOR THE
FISCAL YEAR ENDING DECEMBER 31, 1998.
STOCKHOLDER PROPOSALS
In order to be eligible for inclusion in the Company's proxy
materials for the next annual meeting of stockholders, any
stockholder proposal to take action at such meeting must be
received at the Company's office located at 222 South 10th
Street, Oakdale, Louisiana 71463 no later than December 1, 1998.
Any such proposal shall be subject to the requirements of the
proxy rules adopted under the Exchange Act.
<PAGE>
OTHER MATTERS
The Board of Directors is not aware of any business to come
before the Meeting other than those matters described above in
this Proxy Statement. However, if any other matter should
properly come before the Meeting, it is intended that holders of
the proxies will act in accordance with their best judgment.
The cost of solicitation of proxies will be borne by the
Company. The Company will reimburse brokerage firms and other
custodians, nominees and fiduciaries for reasonable expenses
incurred by them in sending proxy materials to the beneficial
owners of Common Stock. In addition to solicitation by mail,
directors, officers and regular employees of the Company and the
Association may solicit proxies personally or by telegraph or
telephone without additional compensation.
Oakdale, Louisiana
March 30, 1998
<PAGE>
APPENDIX A
FIRST ALLEN PARISH BANCORP, INC.
1998 STOCK OPTION AND INCENTIVE PLAN
1. Plan Purpose.
The purpose of the Plan is to promote the long-term
interests of the Corporation and its stockholders by providing a
means for attracting and retaining directors, advisory directors,
directors emeriti, officers and employees of the Corporation and
its Affiliates. It is intended that designated Options granted
pursuant to the provisions of this Plan to persons employed by
the Corporation or its Affiliates will qualify as Incentive Stock
Options. Options granted to persons who are not employees will
be Non-Qualified Stock Options.
2. Definitions.
The following definitions are applicable to the Plan:
"Affiliate" - means any "parent corporation" or
"subsidiary corporation" of the Corporation, as such terms are
defined in Section 424(e) and (f), respectively, of the Code.
"Award" - means the grant of an Incentive Stock Option,
a Non-Qualified Stock Option, a Stock Appreciation Right, a
Limited Stock Appreciation Right, or any combination thereof, as
provided in the Plan.
"Bank" - means First Federal Savings and Loan
Association of Allen Parish and any successor entity.
"Board" or "Board of Directors"- means the board of
directors of the Corporation or its Affiliate, as applicable.
"Change in Control" of the Bank or the Corporation
means a change in control of a nature that: (i) would be required
to be reported in response to Item 1(a) of the current report on
Form 8-K, as in effect on the date hereof, pursuant to Section 13
or 15(d) of the Securities Exchange Act of 1934 (the "Exchange
Act"); or (ii) results in a Change in Control of the Bank or the
Corporation within the meaning of the Bank Holding Company Act of
1956, as amended ("BHCA"), and applicable rules and regulations
promulgated thereunder, as in effect at the time of the Change in
Control; or (iii) without limitation such a Change in Control
shall be deemed to have occurred at such time as (a) any "person"
(as the term is used in Sections 13(d) and 14(d) of the Exchange
Act) is or becomes the "beneficial owner" (as defined in Rule
13d-3 under the Exchange Act), directly or indirectly, of
securities of the Corporation representing 25% or more of the
combined voting power of Corporation's outstanding securities
except for any securities purchased by the Bank's employee stock
ownership plan or trust; or (b) individuals who constitute the
Board on the date hereof (the "Incumbent Board") cease for any
reason to constitute at least a majority thereof, provided,
however, that this subsection (b) shall not apply if the
Incumbent Board is replaced by the appointment by a Federal
banking agency of a conservator or receiver for the Bank and,
provided further that any person becoming a director subsequent
to the date hereof whose election was approved by a vote of at
least two-thirds of the directors comprising the Incumbent Board,
or whose nomination for election by the Corporation's
stockholders was approved by the same nominating committee
serving under an Incumbent Board, shall be, for purposes of this
clause (b), considered as though he were a member of the
Incumbent Board; or (c) a plan of reorganization, merger,
consolidation, sale of all or substantially all the assets of the
Bank or the Corporation or similar transaction in which the Bank
or Corporation is not the surviving institution occurs; or (d) a
proxy statement soliciting proxies from stockholders of the
Corporation, by someone other than the current management of the
Corporation, seeking stockholder approval of a plan of
reorganization, merger or consolidation of the Corporation or
Bank or similar transaction with one or more corporations as a
result of which the outstanding shares of the class of securities
then subject to such plan or transaction are to be exchanged for
or converted into cash or property or securities not issued by
the Bank or Corporation shall be distributed and the requisite
number of proxies approving such plan of reorganization, merger
or consolidation of the Corporation or Bank are received and
voted in favor of such transactions; or (e) a tender offer is
made for 25% or more of the outstanding securities of the Bank or
Corporation and the shareholders owning beneficially or of record
25% or more of the outstanding securities of the Bank or
Corporation have tendered or
<PAGE>
offered to sell their shares pursuant to such tender offer and
such tendered shares have been accepted by the tender offeror.
"Code" - means the Internal Revenue Code of 1986, as
amended.
"Committee" - means the Committee referred to in
Section 3 hereof.
"Continuous Service" - means the absence of any
interruption or termination of service as a director, advisory
director, director emeritus, officer or employee of the
Corporation or an Affiliate, except that when used with respect
to persons granted an Incentive Option means the absence of any
interruption or termination of service as an employee of the
Corporation or an Affiliate. Service shall not be considered
interrupted in the case of sick leave, military leave or any
other leave of absence approved by the Corporation or in the case
of transfers between payroll locations of the Corporation or
between the Corporation, its parent, its subsidiaries or its
successor. With respect to any advisory director or director
emeritus, continuous service shall mean availability to perform
such functions as may be required of such persons.
"Corporation" - means First Allen Parish Bancorp, Inc.,
a Delaware corporation.
"Disability" - means the permanent and total inability
by reason of mental or physical infirmity, or both, of an
employee to perform the work customarily assigned to him.
Additionally, a medical doctor selected or approved by the Board
must advise the committee that it is either not possible to
determine whether such Disability will terminate or that it
appears probable that such Disability will be permanent during
the remainder of said Participant's lifetime.
"Employee" - means any person, including an officer or
director, who is employed by the Corporation or any Affiliate.
"ERISA" - means the Employee Retirement Income Security
Act of 1974, as amended.
"Exercise Price" - means (i) in the case of an Option,
the price per Share at which the Shares subject to such Option
may be purchased upon exercise of such Option and (ii) in the
case of a Right, the price per Share (other than the Market Value
per Share on the date of exercise and the Offer Price per Share
as defined in Section 10 hereof) which, upon grant, the Committee
determines shall be utilized in calculating the aggregate value
which a Participant shall be entitled to receive pursuant to
Sections 9, 10 or 12 hereof upon exercise of such Right.
"Incentive Stock Option" - means an option to purchase
Shares granted by the Committee pursuant to Section 6 hereof
which is subject to the limitations and restrictions of Section 8
hereof and is intended to qualify under Section 422 of the Code.
"Limited Stock Appreciation Right" - means a stock
appreciation right with respect to Shares granted by the
Committee pursuant to Sections 6 and 10 hereof.
"Market Value" - means the average of the high and low
quoted sales price on the date in question (or, if there is no
reported sale on such date, on the last preceding date on which
any reported sale occurred) of a Share on the Composite Tape for
the New York Stock Exchange-Listed Stocks, or, if on such date
the Shares are not quoted on the Composite Tape, on the New York
Stock Exchange, or, if the Shares are not listed or admitted to
trading on such Exchange, on the principal United States
securities exchange registered under the Securities Exchange Act
of 1934 on which the Shares are listed or admitted to trading,
or, if the Shares are not listed or admitted to trading on any
such exchange, the mean between the closing high bid and low
asked quotations with respect to a Share on such date on the
NASDAQ System, or any similar system then in use, or, if no such
quotations are available, the fair market value on such date of a
Share as the Committee shall reasonably determine.
"Non-Employee Director" - means a Director who (a) is
not employed by the Corporation or an Affiliate; (b) does not
receive compensation directly or indirectly as a consultant (or
in any other capacity than as a director) greater than $60,000;
(c) does not have an interest in a transaction requiring
disclosure under Item 404(a) of Regulation
<PAGE>
S-K; or (d) is not engaged in a business relationship for which
disclosure would be required pursuant to Item 404(b) of
Regulation S-K.
"Non-Qualified Stock Option" - means an option to
purchase Shares granted by the Committee pursuant to Section 6
hereof to (i) a Director who is not an employee of the
Corporation or Affiliate or (ii) to any other Participant and
such Option is either (A) not designated by the Committee as an
Incentive Stock Option, or (B) fails to satisfy the requirements
of an Incentive Stock Option as set forth in Section 422 of the
Code and the regulations thereunder.
"Normal Retirement" means retirement after reaching 65
years of age.
"Option" - means an Incentive Stock Option or a Non-
Qualified Stock Option.
"Outside Director" - means a director of the
Corporation or an Affiliate who is not an employee of the
Corporation or an Affiliate.
"Participant" - means any director, advisory director,
director emeritus, officer or employee of the Corporation or any
Affiliate who is selected by the Committee to receive an Award.
"Plan" - means the 1998 Stock Option and Incentive Plan
of the Corporation.
"Related" - means (i) in the case of a Right, a Right
which is granted in connection with, and to the extent
exercisable, in whole or in part, in lieu of, an Option or
another Right and (ii) in the case of an Option, an Option with
respect to which and to the extent a Right is exercisable, in
whole or in part, in lieu thereof has been granted.
"Right" - means a Limited Stock Appreciation Right or a
Stock Appreciation Right.
"Shares" - means the shares of common stock of the
Corporation.
"Stock Appreciation Right" - means a stock appreciation
right with respect to Shares granted by the Committee pursuant to
Sections 6 and 9 hereof.
"Termination for Cause" - means the termination of
employment or termination of service on the Board caused by the
individual's personal dishonesty, willful misconduct, any breach
of fiduciary duty involving personal profit, intentional failure
to perform stated duties, or the willful violation of any law,
rule or regulation (other than traffic violations or similar
offenses), or a final cease-and-desist order, any of which
results in material loss to the Corporation or one of its
Affiliates.
3. Administration.
The Plan shall be administered by a Committee of the
Board consisting of either (i) at least two Non-Employee
Directors of the Corporation, or (ii) the entire Board of the
Corporation. Except as limited by the express provisions of the
Plan, the Committee shall have sole and complete authority and
discretion, to (i) select Participants and grant Awards; (ii)
determine the number of Shares to be subject to types of Awards
generally, as well as to individual Awards granted under the
Plan; (iii) determine the terms and conditions upon which Awards
shall be granted under the Plan; (iv) describe the form and terms
of instruments evidencing such grants; and (v) establish from
time to time regulations for the administration of the Plan,
interpret the Plan, and make all determinations deemed necessary
or advisable for the administration of the Plan.
A majority of the Committee shall constitute a quorum,
and the acts of a majority of the members present at any meeting
at which a quorum is present, or acts approved in writing by a
majority of the Committee without a meeting, shall be acts of the
Committee.
<PAGE>
4. Participation in Committee Awards.
The Committee may select from time to time Participants
in the Plan from those directors, advisory directors, directors
emeriti, officers and employees, of the Corporation or its
Affiliates who, in the opinion of the Committee, have the
capacity for contributing to the successful performance of the
Corporation or its Affiliates.
5. Shares Subject to Plan.
Subject to adjustment by the operation of Section 11
hereof, the maximum number of Shares with respect to which Awards
may be made under the Plan is 26,450 Shares. The Shares with
respect to which Awards may be made under the Plan may be either
authorized and unissued shares or issued shares heretofore or
hereafter reacquired and held as treasury shares. Shares which
are subject to Related Rights and Related Options shall be
counted only once in determining whether the maximum number of
Shares with respect to which Awards may be granted under the Plan
has been exceeded. An Award shall not be considered to have been
made under the Plan with respect to any Option or Right which
terminates and new Awards may be granted under the Plan with
respect to the number of Shares as to which such termination has
occurred.
6. General Terms and Conditions of Options and Rights.
The Committee shall have full and complete authority
and discretion, except as expressly limited by the Plan, to grant
Options and/or Rights and to provide the terms and conditions
(which need not be identical among Participants) thereof. In
particular, the Committee shall prescribe the following terms and
conditions: (i) the Exercise Price of any Option or Right, which
shall not be less than the Market Value per Share at the date of
grant of such Option or Right, (ii) the number of Shares subject
to, and the expiration date of, any Option or Right, which
expiration date shall not exceed ten years from the date of
grant, (iii) the manner, time and rate (cumulative or otherwise)
of exercise of such Option or Right, and (iv) the restrictions,
if any, to be placed upon such Option or Right or upon Shares
which may be issued upon exercise of such Option or Right.
Furthermore, at the time of any Award, the Participant
shall enter into an agreement with the Corporation in a form
specified by the Committee, agreeing to the terms and conditions
of the Award and such other matters as the Committee, in its sole
discretion, shall determine (the "Option Agreement").
7. Exercise of Options or Rights.
(a) Except as provided herein, an Incentive Stock
Option or Related Right granted under the Plan shall be
exercisable during the lifetime of the Participant to whom such
Incentive Stock Option or Related Right was granted only by such
Participant. Except as provided in paragraphs (c) and (d) of
this Section 7, no Option or Right may be exercised unless at the
time such Participant exercises such Option or Right, such
Participant has maintained Continuous Service since the date of
grant of such Option or Right.
(b) To exercise an Option or Right under the Plan, the
Participant to whom such Option or Right was granted shall give
written notice to the Corporation in form satisfactory to the
Committee (and, if partial exercises have been permitted by the
Committee, by specifying the number of Shares with respect to
which such Participant elects to exercise such Option or Right)
together with full payment of the Exercise Price, if any and to
the extent required. The date of exercise shall be the date on
which such notice is received by the Corporation. Payment, if
any is required, shall be made either (I) in cash (including
check, bank draft or money order) or (ii) if permitted by the
Committee, (A) by delivering Shares already owned by the
Participant and having a fair market value equal to the
applicable exercise price, such fair market value to be
determined in such appropriate manner as may be provided by the
Committee or as may be required in order to comply with or to
conform to requirements of any applicable laws or regulations,
(B) by delivering a combination of cash and such Shares, or (C)
by a "cashless exercise". Upon a cashless exercise, the
Participant shall give the Corporation written notice of the
exercise of the Option together with an order to a registered
<PAGE>
broker-dealer or equivalent third party, to sell part or all of
the Common Stock subject to the Option and to deliver enough of
the proceeds to the Corporation to pay the Option exercise price
and any applicable withholding taxes. If the Participant does
not sell the Common Stock subject to the Option through a
registered broker-dealer or equivalent third party, the Optionee
can give the Corporation written notice of the exercise of the
Option and the third party purchaser of the Common Stock subject
to the Option shall pay the Option exercise price plus applicable
withholding taxes to the Corporation.
(c) If a Participant to whom an Option or Right was
granted shall cease to maintain Continuous Service for any reason
(excluding death, Disability, Normal Retirement, following a
Change in Control, or Termination For Cause), such Participant
may, but only within the period of three months immediately
succeeding such cessation of Continuous Service and in no event
after the expiration date of such Option or Right, exercise such
Option or Right to the extent that such Participant was entitled
to exercise such Option or Right at the date of such cessation,
provided, however, that such right of exercise shall not be
available to a Participant if the Committee otherwise determines
and so provides in the applicable instrument or instruments
evidencing the grant of such Option or Right. If a Participant
to whom an Option or Right was granted shall cease to maintain
Continuous Service by reason of death, Disability, Normal
Retirement or following a Change in Control, then, unless the
Committee shall have otherwise provided in the instrument
evidencing the grant of an Option or Right, all Options and
Rights granted, whether or not fully exercisable, shall become
exercisable in full upon the happening of such event and shall
remain so exercisable for a period of one year following the date
of his cessation of Continuous Service, provided, however, that
any such Option shall not be eligible for treatment as an
Incentive Stock Option in the event such Option is exercised more
than three months following the date of his Normal Retirement or
Change in Control; and provided further, that no Option shall be
eligible for treatment as an Incentive Stock Option in the event
such Option is exercised more than one year following cessation
of Continuous Service due to Disability and provided further, in
order to obtain Incentive Stock Option treatment for Options
exercised by heirs or devisees of an Optionee, the Optionee's
death must have occurred while employed or within three (3)
months of termination of employment. In no event shall the
exercise period extend beyond the expiration of the Incentive
Stock Option term. If the Continuous Service of a Participant to
whom an Option or Right was granted by the Corporation is
terminated in a Termination for Cause, all rights under any
Option or Right of such Participant shall expire immediately upon
the effective date of such termination.
(d) In the event of the death of a Participant while
in the Continuous Service of the Corporation or an Affiliate or
within the one-year period referred to in paragraph (c) of this
Section 7, the person to whom any Option or Right held by the
Participant at the time of his death is transferred by will or
the laws of descent and distribution, may, but only to the extent
such Participant was entitled to exercise such Option or Right
immediately prior to his death, exercise such Option or Right at
any time within a period of one year succeeding the date of death
of such Participant, but in no event later than ten years from
the date of grant of such Option or Right. Following the death
of any Participant to whom an Option was granted under the Plan,
irrespective of whether any Related Right shall have theretofore
been granted to the Participant or whether the person entitled to
exercise such Related Right desires to do so, the Committee may,
as an alternative means of settlement of such Option, elect to
pay to the person to whom such Option is transferred by will or
by the laws of descent and distribution, the amount by which the
Market Value per Share on the date of exercise of such Option
shall exceed the Exercise Price of such Option, multiplied by the
number of Shares with respect to which such Option is properly
exercised. Any such settlement of an Option shall be considered
an exercise of such Option for all purposes of the Plan.
(e) Notwithstanding the provisions of subparagraphs
(c) and (d) above, the Committee may, in its sole discretion,
establish different terms and conditions pertaining to the effect
of termination to the extent permitted by applicable federal and
state law.
<PAGE>
8. Incentive Stock Options.
Incentive Stock Options may be granted only to
Participants who are Employees. Any provision of the Plan to the
contrary notwithstanding, (i) no Incentive Stock Option shall be
granted more than ten years from the date the Plan is adopted by
the Board of Directors of the Corporation and no Incentive Stock
Option shall be exercisable more than ten years from the date
such Incentive Stock Option is granted, (ii) the Exercise Price
of any Incentive Stock Option shall not be less than the Market
Value per Share on the date such Incentive Stock Option is
granted, (iii) any Incentive Stock Option shall not be
transferable by the Participant to whom such Incentive Stock
Option is granted other than by will or the laws of descent and
distribution, and shall be exercisable during such Participant's
lifetime only by such Participant, (iv) no Incentive Stock Option
shall be granted to any individual who, at the time such
Incentive Stock Option is granted, owns stock possessing more
than ten percent of the total combined voting power of all
classes of stock of the Corporation or any Affiliate unless the
Exercise Price of such Incentive Stock Option is at least 110
percent of the Market Value per Share at the date of grant and
such Incentive Stock Option is not exercisable after the
expiration of five years from the date such Incentive Stock
Option is granted, and (v) the aggregate Market Value (determined
as of the time any Incentive Stock Option is granted) of the
Shares with respect to which Incentive Stock Options are
exercisable for the first time by a Participant in any calendar
year shall not exceed $100,000. In the event paragraph (v)
hereof is exceeded, the first $100,000 of Incentive Stock Options
(determined as of the date of grant) shall be exercisable as
Incentive Stock Options and any excess shall be exercisable as
Non-Qualified Stock Options, but shall remain subject to the
provisions of this Section 8 to the extent permitted.
9. Stock Appreciation Rights.
A Stock Appreciation Right shall, upon its exercise,
entitle the Participant to whom such Stock Appreciation Right was
granted to receive a number of Shares or cash or combination
thereof, as the Committee in its discretion shall determine, the
aggregate value of which (i.e., the sum of the amount of cash
and/or Market Value of such Shares on date of exercise) shall
equal (as nearly as possible, it being understood that the
Corporation shall not issue any fractional shares) the amount by
which the Market Value per Share on the date of such exercise
shall exceed the Exercise Price of such Stock Appreciation Right,
multiplied by the number of Shares with respect of which such
Stock Appreciation Right shall have been exercised. A Stock
Appreciation Right may be Related to an Option or may be granted
independently of any Option as the Committee shall from time to
time in each case determine. At the time of grant of an Option
the Committee shall determine whether and to what extent a
Related Stock Appreciation Right shall be granted with respect
thereto; provided, however, and notwithstanding any other
provision of the Plan, that if the Related Option is an Incentive
Stock Option, the Related Stock Appreciation Right shall satisfy
all the restrictions and limitations of Section 8 hereof as if
such Related Stock Appreciation Right were an Incentive Stock
Option and as if other rights which are Related to Incentive
Stock Options were Incentive Stock Options. In the case of a
Related Option, such Related Option shall cease to be exercisable
to the extent of the Shares with respect to which the Related
Stock Appreciation Right was exercised. Upon the exercise or
termination of a Related Option, any Related Stock Appreciation
Right shall terminate to the extent of the Shares with respect to
which the Related Option was exercised or terminated.
10. Limited Stock Appreciation Rights.
At the time of grant of an Option or Stock Appreciation
Right to any Participant, the Committee shall have full and
complete authority and discretion to also grant to such
Participant a Limited Stock Appreciation Right which is Related
to such Option or Stock Appreciation Right; provided, however and
notwithstanding any other provision of the Plan, that if the
Related Option is an Incentive Stock Option, the Related Limited
Stock Appreciation Right shall satisfy all the restrictions and
limitations of Section 8 hereof as if such Related Limited Stock
Appreciation Right were an Incentive Stock Option and as if all
other Rights which are Related to Incentive Stock Options were
Incentive Stock Options. In no event shall a Limited Stock
Appreciation Right be exercisable in whole or in part before the
expiration of six months from the date of grant of the Limited
Rights. A Limited Right may be exercised only in the event of a
Change in Control of the Corporation.
<PAGE>
A Limited Stock Appreciation Right shall, upon its
exercise, entitle the Participant to whom such Limited Stock
Appreciation Right was granted to receive an amount of cash equal
to the amount by which the Market Value on the date of such
exercise, as shall have been provided by the Committee in its
discretion at the time of grant, shall exceed the Exercise Price
of such Limited Stock Appreciation Right, multiplied by the
number of Shares with respect to which such Limited Stock
Appreciation Right shall have been exercised. Upon the exercise
of a Limited Stock Appreciation Right, any Related Option and/or
Related Stock Appreciation Right shall cease to be exercisable to
the extent of the Shares with respect to which such Limited Stock
Appreciation Right was exercised. Upon the exercise or
termination of a Related Option or Related Stock Appreciation
Right, any Related Limited Stock Appreciation Right shall
terminate to the extent of the Shares with respect to which such
Related Option or Related Stock Appreciation Right was exercised
or terminated. In the event of a Change in Control in which
pooling accounting treatment is a condition to the transaction,
the Limited Right shall be exercised solely for shares of stock
of the Corporation, or in the event of a merger transaction, for
shares of the acquiring corporation or its parent, as applicable.
The number of shares to be received on the exercise of such
Limited Right shall be determined by dividing the amount of cash
that would have been available under the first sentence above by
the Market Value at the time of exercise of the shares underlying
the Option subject to the Limited Right.
11. Adjustments Upon Changes in Capitalization.
In the event of any change in the outstanding Shares
subsequent to the effective date of the Plan by reason of any
reorganization, recapitalization, stock split, stock dividend,
pro rata return of capital to all shareholders, combination or
exchange of shares, or any merger, consolidation or any change in
the corporate structure or Shares of the Corporation, without
receipt or payment of consideration by the Corporation, the
maximum aggregate number and class of shares as to which Awards
may be granted under the Plan and the number, class and exercise
price of shares with respect to which Awards have been granted
under the Plan shall be appropriately adjusted by the Committee,
whose determination shall be conclusive; provided, however, that
no such adjustments may be made which will change materially the
value of benefits available to a Participant under a previously
granted Award. With respect to Incentive Stock Options, no such
adjustment shall be made if it would be deemed a "modification"
of the Award under Section 424 of the Code.
12. Effect of Merger.
In the event of any merger, consolidation or
combination of the Corporation (other than a merger,
consolidation or combination in which the Corporation is the
continuing entity and which does not result in the outstanding
Shares being converted into or exchanged for different
securities, cash or other property, or any combination thereof)
pursuant to a plan or agreement the terms of which are binding
upon all stockholders of the Corporation (except to the extent
that dissenting stockholders may be entitled, under statutory
provisions or provisions contained in the certificate of
incorporation, to receive the appraised or fair value of their
holdings), any Participant to whom an Option or Right has been
granted at least six months prior to such event shall have the
right (subject to the provisions of the Plan and any limitation
or vesting period applicable to such Option or Right), thereafter
and during the term of each such Option or Right, to receive upon
exercise of any such Option or Right an amount equal to the
excess of the fair market value on the date of such exercise of
the securities, cash or other property, or combination thereof,
receivable upon such merger, consolidation or combination in
respect of a Share over the Exercise Price of such Right or
Option, multiplied by the number of Shares with respect to which
such Option or Right shall have been exercised. Such amount may
be payable fully in cash, fully in one or more of the kind or
kinds of property payable in such merger, consolidation or
combination, or partly in cash and partly in one or more of such
kind or kinds of property, all in the discretion of the
Committee.
13. Assignments and Transfers.
No Award of Incentive Stock Options nor any right or
interest of a Participant under the Plan in any instrument
evidencing any Award of Incentive Stock Options under the Plan
may be assigned, encumbered or transferred except, in the event
of the death of a Participant, by will or the laws of descent and
distribution. In the discretion of the Board, all or any Non-
Qualified Stock Options granted hereunder may be transferable by
the
<PAGE>
Participant, provided, however, that the Board may limit the
transferability of such Option or Options to a designated class
or classes of persons.
14. Employee Rights Under the Plan.
No director, officer or employee shall have a right to
be selected as a Participant nor, having been so selected, to be
selected again as a Participant and no director, officer,
employee or other person shall have any claim or right to be
granted an Award under the Plan or under any other incentive or
similar plan of the Corporation or any Affiliate. Neither the
Plan nor any action taken thereunder shall be construed as giving
any employee any right to be retained in the employ of the
Corporation or any Affiliate.
15. Delivery and Registration of Stock.
The Corporation's obligation to deliver Shares with
respect to an Award shall, if the Committee so requests, be
conditioned upon the receipt of a representation as to the
investment intention of the Participant to whom such Shares are
to be delivered, in such form as the Committee shall determine to
be necessary or advisable to comply with the provisions of the
Securities Act of 1933 or any other Federal, state or local
securities legislation or regulation. It may be provided that
any representation requirement shall become inoperative upon a
registration of the Shares or other action eliminating the
necessity of such representation under such Securities Act or
other securities legislation. The Corporation shall not be
required to deliver any Shares under the Plan prior to (I) the
admission of such shares to listing on any stock exchange or
other system on which Shares may then be listed, and (ii) the
completion of such registration or other qualification of such
Shares under any state or Federal law, rule or regulation, as the
Committee shall determine to be necessary or advisable.
This Plan is intended to comply with Rule 16b-3 under
the Securities Exchange Act of 1934. Any provision of the Plan
which is inconsistent with said Rule shall, to the extent of such
inconsistency, be inoperative and shall not affect the validity
of the remaining provisions of the Plan.
16. Withholding Tax.
The Corporation shall have the right to deduct from all
amounts paid in cash with respect to the exercise of a Right
under the Plan any taxes required by law to be withheld with
respect to such cash payments. Where a Participant or other
person is entitled to receive Shares pursuant to the exercise of
an Option or Right pursuant to the Plan, the Corporation shall
have the right to require the Participant or such other person to
pay the Corporation the amount of any taxes which the Corporation
is required to withhold with respect to such Shares, and may, in
its sole discretion, withhold sufficient Shares to cover the
amount of taxes which the Corporation is required to withhold.
17. Amendment or Termination.
The Board of Directors of the Corporation may amend,
suspend or terminate the Plan or any portion thereof at any time,
provided, however, that no such amendment, suspension or
termination shall impair the rights of any Participant, without
his consent, in any Award made pursuant to the Plan. Any
amendment or modification of the Plan or an outstanding Award
under the Plan, including but not limited to the acceleration of
vesting of an outstanding Award for reasons other than death,
Disability, Normal Retirement or a Change in Control, shall be
approved by the Committee or the full Board of the Corporation.
18. Effective Date and Term of Plan.
The Plan shall become effective upon its ratification
by stockholders of the Corporation. It shall continue in effect
for a term of ten years unless sooner terminated under Section 17
hereof.
<PAGE>
APPENDIX B
FIRST ALLEN PARISH BANCORP, INC.
RECOGNITION AND RETENTION PLAN
1. Plan Purpose.
The purpose of the Plan is to promote the long-term
interests of the Corporation and its stockholders by providing a
means for attracting and retaining directors, advisory directors
and officers of the Corporation and its Affiliates.
2. Definitions.
The following definitions are applicable to the Plan:
"Award" - means the grant by the Committee of Restricted
Stock, as provided in the Plan.
"Affiliate" - means any "parent corporation" or "subsidiary
corporation" of the Corporation, as such terms are defined in
Section 424(e) and (f), respectively, of the Code.
"Bank" - means First Federal Savings and Loan Association of
Allen Parish, a capital stock savings institution and its
predecessors and successors.
"Board" or "Board of Directors" - means the board of
directors of the Corporation or its Affiliate, as applicable.
"Change in Control" of the Bank or the Corporation means a
change in control of a nature that: (I) would be required to be
reported in response to Item 1(a) of the current report on Form
8-K, as in effect on the date hereof, pursuant to Section 13 or
15(d) of the Securities Exchange Act of 1934 (the "Exchange
Act"); or (ii) results in a Change in Control of the Bank or the
Corporation within the meaning of the Bank Holding Company Act of
1956, as amended ("BHCA"), and applicable rules and regulations
promulgated thereunder, as in effect at the time of the Change in
Control; or (iii) without limitation such a Change in Control
shall be deemed to have occurred at such time as (a) any "person"
(as the term is used in Sections 13(d) and 14(d) of the Exchange
Act) is or becomes the "beneficial owner" (as defined in Rule
13d-3 under the Exchange Act), directly or indirectly, of
securities of the Corporation representing 25% or more of the
combined voting power of Corporation's outstanding securities
except for any securities purchased by the Bank's employee stock
ownership plan or trust; or (b) individuals who constitute the
Board on the date hereof (the "Incumbent Board") cease for any
reason to constitute at least a majority thereof, provided,
however, that this subsection (b) shall not apply if the
Incumbent Board is replaced by the appointment by a Federal
banking agency of a conservator or receiver for the Bank and,
provided further that any person becoming a director subsequent
to the date hereof whose election was approved by a vote of at
least two-thirds of the directors comprising the Incumbent Board,
or whose nomination for election by the Corporation's
stockholders was approved by the same nominating committee
serving under an Incumbent Board, shall be, for purposes of this
clause (b), considered as though he were a member of the
Incumbent Board; or (c) a plan of reorganization, merger,
consolidation, sale of all or substantially all the assets of the
Bank or the Corporation or similar transaction in which the Bank
or Corporation is not the surviving institution occurs; or (d) a
proxy statement soliciting proxies from stockholders of the
Corporation, by someone other than the current management of the
Corporation, seeking stockholder approval of a plan of
reorganization, merger or consolidation of the Corporation or
Bank or similar transaction with one or more corporations as a
result of which the outstanding shares of the class of securities
then subject to such plan or transaction are to be exchanged for
or converted into cash or property or securities not issued by
the Bank or Corporation shall be distributed and the requisite
number of proxies approving such plan of reorganization, merger
or consolidation of the Corporation or Bank are received and
voted in favor of such transactions; or (e) a tender offer is
made for 25% or more of the outstanding securities of the Bank or
Corporation and the shareholders owning
<PAGE>
beneficially or of record 25% or more of the outstanding
securities of the Bank or Corporation have tendered or offered to
sell their shares pursuant to such tender offer and such tendered
shares have been accepted by the tender offeror.
"Code" - means the Internal Revenue Code of 1986, as
amended.
"Committee" - means the Committee referred to in Section 6
hereof.
"Continuous Service" - means the absence of any interruption
or termination of service as a director, advisory director,
director emeritus, officer or employee of the Corporation or any
Affiliate. Service shall not be considered interrupted in the
case of sick leave, military leave or any other leave of absence
approved by the Corporation or any Affiliate or in the case of
transfers between payroll locations of the Corporation or between
the Corporation, its subsidiaries or its successor. With respect
to any advisory director or director emeritus, continuous service
shall mean availability to perform such functions as may be
required of such persons.
"Corporation" - means First Allen Parish Bancorp, Inc., a
Delaware corporation.
"Disability" - means the permanent and total inability by
reason of mental or physical infirmity, or both, of an employee
to perform the work customarily assigned to him. Additionally, a
medical doctor selected or approved by the Board must advise the
committee that it is either not possible to determine whether
such Disability will terminate or that it appears probable that
such Disability will be permanent during the remainder of said
Participant's lifetime.
"ERISA" - means the Employee Retirement Income Security Act
of 1974, as amended.
"Non-Employee Director" - means a director who (a) is not
employed by the Company or an Affiliate; (b) does not receive
compensation directly or indirectly as a consultant (or in any
other capacity than as a director) greater than $60,000; (c) does
not have an interest in a transaction requiring disclosure under
Item 404(a) of Regulation S-K; or (d) is not engaged in a
business relationship for which disclosure would be required
pursuant to Item 404(b) of Regulation S-K.
"Normal Retirement" means retirement after reaching 65 years
of age.
"Outside Director" - means a director of the Corporation or
an Affiliate who is not an employee of the Corporation or an
Affiliate.
"Participant" - means any director, advisory director,
director emeritus, officer or employee of the Corporation or any
Affiliate who is selected by the Committee to receive an Award.
"Plan" - means the Recognition and Retention Plan of the
Corporation.
"Restricted Period" - means the period of time selected by
the Committee for the purpose of determining when restrictions
are in effect under Section 3 hereof with respect to Restricted
Stock awarded under the Plan.
"Restricted Stock" - means Shares which have been
contingently awarded to a Participant by the Committee subject to
the restrictions referred to in Section 3 hereof, so long as such
restrictions are in effect.
"Shares" - means the common stock, par value $0.01 per
share, of the Corporation.
<PAGE>
3. Terms and Conditions of Restricted Stock.
The Committee shall have full and complete authority,
subject to the limitations of the Plan, to grant awards of
Restricted Stock and, in addition to the terms and conditions
contained in paragraphs (a) through (f) of this Section 3, to
provide such other terms and conditions (which need not be
identical among Participants) in respect of such Awards, and the
vesting thereof, as the Committee shall determine.
(a) At the time of an award of Restricted Stock, the
Committee shall establish for each Participant a Restricted
Period during which or at the expiration of which, as the
Committee shall determine and provide in the agreement referred
to in paragraph (d) of this Section 3, the Shares awarded as
Restricted Stock shall vest, and subject to any such other terms
and conditions as the Committee shall provide, shares of
Restricted Stock may not be sold, assigned, transferred, pledged,
voted or otherwise encumbered by the Participant, except as
hereinafter provided, during the Restricted Period. Except for
such restrictions, and subject to paragraphs (c) and (e) of this
Section 3 and Section 4 hereof, the Participant as owner of such
shares shall have all the rights of a stockholder. The
Committee shall have the authority, in its discretion, to
accelerate the time at which any or all of the restrictions shall
lapse with respect thereto, or to remove any or all of such
restrictions, whenever it may determine that such action is
appropriate by reason of changes in applicable tax or other laws
or other changes in circumstances occurring after the
commencement of such Restricted Period.
(b) If a Participant ceases to maintain Continuous Service
for any reason (other than death, Disability, Normal Retirement,
or following a Change in Control), all Shares of Restricted Stock
awarded to such Participant and which at the time of such
termination of Continuous Service are subject to the restrictions
imposed by paragraph (a) of this Section 3 shall upon such
termination of Continuous Service be forfeited and returned to
the Corporation. If a Participant ceases to maintain Continuous
Service by reason of death, Disability, Normal Retirement, or
following a Change in Control, Restricted Stock then still
subject to restrictions imposed by paragraph (a) of this Section
3 will be free of those restrictions and shall be immediately
vested.
(c) Each certificate in respect of Shares of Restricted
Stock awarded under the Plan shall be registered in the name of
the Participant or in the name of the Plan on behalf of the
Participant and deposited by the Participant, together with a
stock power endorsed in blank, with the Corporation and shall
bear the following (or a similar) legend:
"The transferability of this certificate and the shares
of stock represented hereby are subject to the terms and
conditions (including forfeiture) contained in the Recognition
and Retention Plan of First Allen Parish Bancorp, Inc. Copies of
such Plan are on file in the office of the Secretary of First
Allen Parish Bancorp, Inc., 222 South 10th Street, Oakdale,
Louisiana 71463."
(d) At the time of any Award, the Participant shall enter
into an agreement with the Corporation in a form specified by the
Committee, agreeing to the terms and conditions of the Award and
such other matters as the Committee, in its sole discretion,
shall determine (the "Restricted Stock Agreement").
(e) After an Award has been granted but before such Award
has been earned, the Participant shall receive any cash dividends
paid with respect to such shares, or shall share in any pro-rata
return of capital to all shareholders with respect to the Common
Stock. Stock dividends declared by the Corporation and paid on
Awards that have not yet been earned shall be subject to the same
restrictions as the Restricted Stock and the certificate(s) or
other instruments representing or evidencing such shares shall be
legended in the manner provided in paragraph 3(c) and shall be
delivered to the Escrow Agent for distribution to the Participant
when the Restricted Stock upon which such dividends were
<PAGE>
paid are earned. Unless the Participant has made an election
under Section 83(b) of the Code, cash dividends or other amounts
so paid on shares that have not yet been earned by the
Participant shall be treated as compensation income to the
Participant when paid. If dividends are paid with respect to
shares of Restricted Stock under the Plan that have been issued
but not awarded, or that have been forfeited and returned to the
Corporation or to a trust established to hold issued and
unawarded or forfeited shares, the Committee can determine to
award such dividends to any Participant or Participants under the
Plan, to any other employee or director of the Corporation or the
Bank, or can return such dividends to the Corporation.
(f) After an Award has been granted, the Participant as
conditional owner of the Restricted Stock shall have the
right to vote such shares.
(g) At the expiration of the restrictions imposed by
paragraph (a) of this Section 3, the Corporation shall redeliver
to the Participant (or where the relevant provision of paragraph
(b) of this Section 3 applies in the case of a deceased
Participant, to his legal representative, beneficiary or heir)
the certificate(s) and stock power deposited with it pursuant to
paragraph (c) of this Section 3 and the Shares represented by
such certificate(s) shall be free of the restrictions referred to
in paragraph (a) of this Section 3.
4. Adjustments Upon Changes in Capitalization.
In the event of any change in the outstanding Shares
subsequent to the effective date of the Plan by reason of any
reorganization, recapitalization, stock split, stock dividend,
combination or exchange of shares, or any merger, consolidation
or any change in the corporate structure or Shares of the
Corporation, without receipt or payment of consideration of the
Corporation, the maximum aggregate number and class of shares as
to which Awards may be granted under the Plan and the number and
class of shares with respect to which Awards theretofore have
been granted under the Plan shall be appropriately adjusted by
the Committee, whose determination shall be conclusive. Any
shares of stock or other securities received, as a result of any
of the foregoing, by a Participant with respect to Restricted
Stock shall be subject to the same restrictions and the
certificate(s) or other instruments representing or evidencing
such shares or securities shall be legended and deposited with
the Corporation in the manner provided in Section 3 hereof.
5. Assignments and Transfers.
No Award nor any right or interest of a Participant under
the Plan in any instrument evidencing any Award under the Plan
may be assigned, encumbered or transferred except, in the event
of the death of a Participant, by will or the laws of descent and
distribution or pursuant to a domestic relations order as defined
in the Code or Title I of ERISA or the rules thereunder.
6. Administration.
The Plan shall be administered by a Committee of the Board
consisting of either (i) at least two Non-Employee Directors of
the Corporation, or (ii) the entire Board of the Corporation.
Except as limited by the express provisions of the Plan, the
Committee shall have sole and complete authority and discretion,
to (i) select Participants and grant Awards; (ii) determine the
number of shares to be subject to types of Awards generally, as
well as to individual Awards granted under the Plan; (iii)
determine the terms and conditions upon which Awards shall be
granted under the Plan; (iv) prescribe the form and terms of
instruments evidencing such grants; and (v) establish from time
to time regulations for the administration of the Plan, interpret
the Plan, and make all determinations deemed necessary or
advisable for the administration of the Plan.
<PAGE>
A majority of the Committee shall constitute a quorum, and
the acts of a majority of the members present at any meeting at
which a quorum is present, or acts approved in writing by a
majority of the Committee without a meeting, shall be acts of the
Committee.
7. Shares Subject to Plan.
Subject to adjustment by the operation of Section 4 hereof,
the maximum number of Shares with respect to which Awards may be
made under the Plan is 10,580. The shares with respect to which
Awards may be made under the Plan may be either authorized and
unissued shares or issued shares reacquired and held as treasury
shares. An Award shall not be considered to have been made under
the Plan with respect to Restricted Stock which is forfeited and
new Awards may be granted under the Plan with respect to the
number of Shares as to which such forfeiture has occurred.
8. Employee Rights Under the Plan.
No director, officer or employee shall have a right to be
selected as a Participant nor, having been so selected, to be
selected again as a Participant and no director, officer,
employee or other person shall have any claim or right to be
granted an Award under the Plan or under any other incentive or
similar plan of the Corporation or any Affiliate. Neither the
Plan nor any action taken thereunder shall be construed as giving
any employee any right to be retained in the employ of the
Corporation, the Bank or any Affiliate.
9. Withholding Tax.
Upon the termination of the Restricted Period with respect
to any shares of Restricted Stock (or at any such earlier time,
if any, that an election is made by the Participant under Section
83(b) of the Code, or any successor provision thereto, to include
the value of such shares in taxable income), the Corporation may
withhold from any payment or distribution made under this Plan
sufficient Shares or may withhold or cause to be paid by
Participant sufficient cash to cover any applicable withholding
and employment taxes. The Corporation shall have the right to
deduct from all dividends paid with respect to shares of
Restricted Stock the amount of any taxes which the Corporation is
required to withhold with respect to such dividend payments. No
discretion or choice shall be conferred upon any Participant with
respect to the form, timing or method of any such tax
withholding.
10. Amendment or Termination.
The Board of Directors of the Corporation may amend, suspend
or terminate the Plan or any portion thereof at any time,
provided, however, that no such amendment, suspension or
termination shall impair the rights of any Participant, without
his consent, in any Award theretofore made pursuant to the Plan.
Any amendment or modification of the Plan or an outstanding Award
under the Plan, including but not limited to the acceleration of
vesting of an outstanding Award for reasons other than death,
Disability, Normal Retirement, or termination following a Change
in Control, shall be approved by the Committee or the full Board
of the Corporation.
11. Term of Plan.
The Plan shall become effective upon its ratification by
stockholders of the Corporation. It shall continue in effect
until the earlier of (i) ten years unless sooner terminated under
Section 10 hereof, or (ii) the date on which all shares of common
stock available for award hereunder have vested in the recipients
of such Awards.
<PAGE>
FIRST ALLEN PARISH BANCORP, INC.
ANNUAL MEETING OF STOCKHOLDERS
April 30, 1998
The undersigned hereby appoints Dr. James D. Sandefur and
James E. Riley, with full powers of substitution, to act as
attorneys and proxies for the undersigned to vote all shares of
capital stock of First Allen Parish Bancorp, Inc. (the "Company")
which the undersigned is entitled to vote at the Annual Meeting
of Stockholders (the "Meeting") to be held at the Company's main
office, located at 222 South 10th Street, Oakdale, Louisiana, on
April 30, 1998 at 2:00 p.m., Oakdale, Louisiana time and at any
and all adjournments and postponements thereof.
1. The election as directors of all nominees listed below
(except as marked to the contrary):
/ / FOR / / VOTE WITHHELD
INSTRUCTION: To withhold your vote for any individual
nominee, strike a line in that nominee's name
below.
JESSE BOYD, JR. JAMES E. RILEY
2. The ratification of the appointment of the 1998 Stock Option
and Incentive Plan.
/ / FOR / / AGAINST / / VOTE WITHHELD
3. The ratification of the adoption of the Recognition and
Retention Plan.
/ / FOR / / AGAINST / / VOTE WITHHELD
4. The ratification of the appointment of Kolder, Champagne,
Slaven & Rainey, LLC as auditors for the Company for the fiscal
year ending December 31, 1998.
In their discretion, the proxies are authorized to vote on
any other business that may properly come before the Meeting or
any adjournment or postponement thereof.
THIS PROXY WILL BE VOTED AS DIRECTED, BUT IF NO INSTRUCTIONS
ARE SPECIFIED, THIS PROXY WILL BE VOTED FOR THE PROPOSAL AND EACH
OF THE NOMINEES LISTED ABOVE. IF ANY OTHER BUSINESS IS PRESENTED
AT THE MEETING, THIS PROXY WILL BE VOTED BY THOSE NAMED IN THIS
PROXY IN THEIR BEST JUDGMENT. AT THE PRESENT TIME, THE BOARD OF
DIRECTORS KNOWS OF NO OTHER BUSINESS TO BE PRESENTED AT THE
MEETING.
The Board of Directors recommends a vote "FOR" the proposal
and the election of the nominees listed above.
(Continued and to be SIGNED on Reverse Side)
<PAGE>
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
Should the undersigned be present and choose to vote at the
Meeting or at any adjournments or postponements thereof, and
after notification to the Secretary of the Company at the Meeting
of the stockholder's decision to terminate this proxy, then the
power of such attorneys or proxies shall be deemed terminated and
of no further force and effect. This proxy may also be revoked
by filing a written notice of revocation with the Secretary of
the Company or by duly executing a proxy bearing a later date.
The undersigned acknowledges receipt from the Company, prior
to the execution of this proxy, of notice of the Meeting, a Proxy
Statement and an Annual Report to Stockholders.
Dated: -----------, 1998 -----------------------------------
Signature of Stockholder
Please sign exactly as your name(s)
appear(s) to the left. When
signing as attorney, executor,
administrator, trustee or guardian,
please give your full title. If
shares are held jointly, each
holder should sign.
PLEASE COMPLETE, DATE, SIGN AND MAIL THIS PROXY PROMPTLY IN THE
ENCLOSED POSTAGE-PAID ENVELOPE
