[FIRST ROBINSON FINANCIAL CORPORATION LETTERHEAD]
June 26, 1998
Dear Fellow Stockholder:
On behalf of the Board of Directors and management of First Robinson
Financial Corporation (the "Company"), I cordially invite you to attend the
Annual Meeting of Stockholders. The meeting will be held at 10:00 a.m. on July
29, 1998 at the Bank's main office located at 501 East Main Street, Robinson,
Illinois.
In addition to the annual stockholder vote on corporate business items, the
meeting will include management's report to you on the Company's 1998 financial
and operating performance.
An important aspect of the meeting process is the stockholder vote on
corporate business items. I urge you to exercise your rights as a stockholder to
vote and participate in this process. This year stockholders are being asked to
vote on the election of three directors, ratification of the adoption of the
1998 Stock Option and Incentive Plan and the Recognition and Retention Plan and
the ratification of the appointment of independent auditors. The Board of
Directors unanimously recommends that you vote for each of the proposals.
I encourage you to attend the meeting in person. Whether or not you attend
the 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. This will save First Robinson Financial Corporation
additional expense in soliciting proxies and will ensure that your shares are
represented. Please note that you may vote in person at the meeting even if you
have previously returned the proxy.
Thank you for your attention to this important matter.
Sincerely,
/s/ Rick L. Catt
RICK L. CATT
President and Chief Executive Officer
<PAGE>
First Robinson Financial Corporation
501 East Main Street
Robinson, Illinois 62454
(618) 544-8621
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
To be Held on July 29, 1998
Notice is hereby given that the Annual Meeting of Stockholders (the
"Meeting") of First Robinson Financial Corporation (the "Company") will be held
at the Bank's offices located at 501 East Main Street, Robinson, Illinois at
10:00 a.m., Robinson, Illinois time, on July 29, 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 three directors of the Company;
2. The ratification of the adoption of the Company's 1998 Stock Option
and Incentive Plan;
3. The ratification of the adoption of the Company's Recognition and
Retention Plan; and
4. The ratification of the appointment of Larsson, Woodyard & Henson,
LLP, as auditors of the Company for the fiscal year ending March 31,
1999;
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 June 19, 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/ Rick L. Catt
Rick L. Catt
President and Chief Executive Officer
Robinson, Illinois
June 26, 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 Robinson Financial Corporation
501 East Main Street
Robinson, Illinois 62454
(618) 544-8621
ANNUAL MEETING OF STOCKHOLDERS
July 29, 1998
This Proxy Statement is furnished in connection with the solicitation on
behalf of the Board of Directors of First Robinson Financial Corporation (the
"Company"), the parent company of First Robinson Savings Bank, National
Association (the "Bank"), of proxies to be used at the Annual Meeting of
Stockholders of the Company (the "Meeting") which will be held at the Bank's
offices located at 501 East Main Street, Robinson, Illinois on July 29, 1998, at
10:00 a.m., Robinson, Illinois 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 June 26, 1998.
At the Meeting, stockholders of the Company are being asked to consider and
vote upon the election of three directors, ratification of the adoption of the
1998 Stock Option and Incentive Plan and the Recognition and Retention Plan and
the appointment of Larsson, Woodyard & Henson, LLP as auditors for the Company.
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 director nominee and
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.
The directors shall be elected by a plurality of the votes present in
person or represented by proxy at the Meeting and entitled to vote on the
election of directors. The affirmative vote by the holders of a majority of the
votes cast at the Meeting shall be the act of the stockholders on all other
proposals. Broker non-votes have no effect on the vote. 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 Secretary,
First Robinson Financial Corporation, 501 East Main Street, Robinson, Illinois
62454.
1
<PAGE>
Voting Securities and Certain Holders Thereof
Stockholders of record as of the close of business on June 19, 1998 will be
entitled to one vote for each share of Common Stock then held. As of that date,
the Company had 859,625 shares of Common Stock issued and outstanding. The
following table sets forth information regarding share ownership of those
persons or entities known by management to beneficially own more than five
percent of the Common Stock and all directors and executive officers of the
Company and the Bank as a group.
<TABLE>
<CAPTION>
Shares
Beneficially Percent
Beneficial Owner Owned of Class
--------------------------------------------------------------- ------------ --------
<S> <C> <C>
First Robinson Financial Corporation Employee Stock 68,770 8.0%
Ownership Plan
501 East Main Street
Robinson, Illinois 62454(1)
Jeffrey L. Gendell, 77,000 9.0
Tontine Financial Partners, L.P. and Tontine Management, L.L.C
200 Park Avenue, Suite 3900
New York, New York 10166(2)
Directors and executive officers of the Company and the Bank, 84,942(3) 9.9
as a group (10 persons)(3)
</TABLE>
- -----------------------
(1) The amount reported represents shares held by the Employee Stock Ownership
Plan ("ESOP"), 6,877 of which have been allocated to accounts of
participants. First Bankers Trust Co., N.A., the Trustee of the ESOP, may
be deemed beneficially to own the shares held by the ESOP which have not
been allocated to the participants.
(2) As reported on Schedule 13D, dated July 3, 1997.
(3) Amount includes shares held directly, as well as shares held jointly with
family members, shares held in retirement accounts, shares allocated to the
ESOP accounts of the group members, held in a fiduciary capacity or by
certain family members, with respect to which shares the group members may
be deemed to have sole voting and/or investment power.
2
<PAGE>
PROPOSAL I - ELECTION OF DIRECTOR
The Company's Board of Directors is presently composed of six members, each
of whom is also a director of the Bank. Directors of the Company are generally
elected to serve for a three-year term or until their respective successors
shall have been elected and shall qualify. Approximately one-third of the
directors are elected annually.
The following table sets forth certain information regarding the Company's
Board of Directors, including their terms of office and the nominees for
election as directors. It is intended that the proxies solicited on behalf of
the Board of Directors (other than proxies in which the vote is withheld as to
the nominees) will be voted at the Meeting for the election of the nominee
identified in the following table. If such nominee is unable to serve, the
shares represented by all such proxies will be voted for the election of such
substitutes 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.
<TABLE>
<CAPTION>
Shares of Common
Stock Beneficially Percent
Position(s) Director Term to Owned at of
Name Age Held Since(1) Expire June 19, 1998(2) Class
---- --- ---- -------- ------ ---------------- -----
NOMINEES
--------
<S> <C> <C> <C> <C> <C> <C>
Clell T. Keller 73 Director 1984 2000 10,113 1.2%
Scott F. Pulliam 41 Chairman of the Board 1985 2001 10,113 1.2
William K. Thomas 53 Director 1988 2001 10,113 1.2
DIRECTORS CONTINUING IN OFFICE
------------------------------
James D. Goodwine 36 Director 1993 2000 5,313 .6
Donald K. Inboden 65 Director 1990 1999 10,513 1.2
Rick L. Catt 45 Director, President and 1989 1999 10,894 1.3
Chief Executive
Officer
</TABLE>
- ----------
(1) Includes service as a director of the Bank.
(2) Includes shares held directly, as well as, shares held in retirement
accounts, shares allocated to the ESOP accounts of certain of the named
persons, held by certain members of the named individuals' families, or
held by trusts of which the named individual is a trustee or substantial
beneficiary, with respect to which shares the named individuals may be
deemed to have sole voting and/or investment power.
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.
Clell T. Keller. Mr. Keller is currently retired. From 1976 to his
retirement, Mr. Keller was the Clerk of the Circuit Court in Crawford County,
Illinois.
Scott F. Pulliam. Since 1983, Mr. Pulliam has practiced as a public
accountant in the Robinson, Illinois area.
William K. Thomas. Since 1976, Mr. Thomas has practiced as an attorney in
the Robinson, Illinois area.
James D. Goodwine. Mr. Goodwine is a funeral Director and Vice President of
Goodwine Funeral Homes, Inc., a position he has held since 1986.
Donald K. Inboden. Mr. Inboden is currently retired. From 1955 to his
retirement, Mr. Inboden was employed in the refinery at Marathon Oil Company.
Rick L. Catt. Mr. Catt is President and Chief Executive Officer of the
Bank, a position he has held since 1989.
3
<PAGE>
Executive Officers Who are not Directors
Officers are elected annually by the Board of Directors of the Bank. The
business experience of the executive officers who are not also directors is set
forth below.
Jamie E. McReynolds. Ms. McReynolds, age 34, currently serves as a Vice
President, Chief Financial Officer, and Secretary. Ms. McReynolds has been
employed by the Bank, in various capacities since 1986.
Leslie Trotter, III. Mr. Trotter, age 43, currently serves as a Vice
President and Treasurer. Mr. Trotter has been employed by the Bank since 1978.
W. E. Holt. Mr. Holt, age 51, currently serves as a Vice President and
Senior Loan Officer. From 1974 to 1998, he served as Senior Vice President and
cashier of a national bank located in Oblong, IL. Mr. Holt was also on the Board
of national bank from 1989 to 1998.
William D. Sandiford. Mr. Sandiford, age 41, currently serves as a Vice
President, a position he has held since 1995. From 1992 to 1995, Mr. Sandiford
served as a vice president/branch manager of a national bank located in
Robinson, Illinois.
Board of Directors' Meetings and Committees
Board and Committee Meetings of the Company. Meetings of the Company's
Board of Directors are generally held on a monthly basis. The Board of Directors
met six times during the five months ending March 31, 1998. During fiscal 1998,
no incumbent director of the Company, other than Director Keller, 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 Board of Directors of the Company has standing Audit, Nomination and
Compensation Committees. The Company does not have a standing executive
committee.
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 Directors Pulliam,
Keller, Thomas, Inboden and Goodwine. This Committee met one time during fiscal
1998.
The entire Board of Directors acts as the Nominating Committee to nominate
candidates for membership on the Board of Directors.
The Compensation Committee establishes the Company's compensation policies
and review compensation matters. The current members of this Committee are
Directors Pulliam, Keller and Thomas. This Committee did not meet during fiscal
1998.
Board and Committee Meetings of the Bank. The Bank's Board of Directors
meets at least monthly. During the fiscal year ended March 31, 1998, the Board
of Directors held six meetings. No director, other than Director Keller,
attended fewer than 75% of the total meetings of the Board of Directors and
committees on which such Board member served during this period.
The Bank has standing Loan, Building, Nominating, Audit, Personnel and
Investment Committees.
The Loan Committee is comprised of all directors. It meets on an as needed
basis to review loan requests in excess of $150,000. This committee met 10 times
during fiscal 1998.
4
<PAGE>
The Building Committee is responsible for overseeing the Bank's building,
grounds, maintenance, repairs and the like. It is composed of Directors Catt,
Inboden and Goodwine. This committee did not meet during fiscal 1998.
The entire Board of Directors acts as the Nominating Committee, to nominate
individuals for election to the Bank's Board of Directors.
The Audit Committee, composed of Directors Pulliam, Thomas, Inboden, Keller
and Goodwine, review and receive audit findings from the Bank's internal and
external auditors. This committee met five times in fiscal 1998.
The Personnel Committee, composed of Directors Keller, Pulliam and Catt,
review personnel evaluations and recommend salary adjustments to the entire
Board of Directors. This committee met two times in fiscal 1998.
The Investment Committee, composed of Director Catt and Vice Presidents
McReynolds, Sandiford and Holt, review the purchase and sale of investments.
This committee met two times in fiscal 1998.
Director Compensation
Each director is currently paid a fee of $375 for each regular meeting
attended, except for the Chairman of the Board who is paid $405 for each regular
meeting attended. Non-employee directors receive committee fees of $50 for each
meeting attended, except for the Loan Committee participants who receive a fee
of $300 per month reduced by $100 for each missed meeting. Employee directors do
not receive fees for participation on any committees.
Executive Compensation
The Company has not paid any compensation to its executive officers since
its formation. 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 Bank.
The following table sets forth information concerning the compensation paid
or accrued by the Bank for services rendered by the Bank's Chief Executive
Officer. No executive officer of the Bank had aggregate compensation (salary
plus bonus) in excess of $100,000 in fiscal 1998.
<TABLE>
<CAPTION>
====================================================================================================================================
Summary Compensation Table
- ------------------------------------------------------------------------------------------------------------------------------------
Long-Term Compensation
Annual Compensation Awards
- ------------------------------------------------------------------------------------------------------------------------------------
Other Annual Restricted All Other
Fiscal Salary Bonus Compensation Stock Options/ Compensation
Name and Principal Position Year ($)(2) ($) ($) Award ($) SARs (#) ($)
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Rick L. Catt, President, Chief 1998(1) $34,832 $ -- $ -- -- -- $ 3,688(3)
Executive Officer and Director 1997 $81,492 $ 4,000 $ -- -- -- $ 3,488(4)
1996 $80,102 $10,218 $ -- -- -- $20,146(5)
====================================================================================================================================
</TABLE>
(1) The Company changed its fiscal year from October 31st to March 31st. The
salary and compensation information provided for Mr. Catt for fiscal 1998
is for this five month period.
(2) Includes salary and board fees.
(3) Includes $936 of life, health and disability premiums paid by the Bank.
$2,000 in contributions by the Bank to Mr. Catt's Director Retirement Plan
account, $200 paid by the Bank in discretionary contributions pursuant to
the Bank's 401(k) Plan, and various membership fees of $552.
(4) Includes $2,162 of life, health and disability premiums and $1,326 of
various membership fees paid by the Bank.
(5) Includes $2,146 of life, health and disability premiums paid by the Bank,
$14,000 one-time contribution by the Bank to Mr. Catt's Director Retirement
Plan account, $2,731 paid by the Bank in discretionary contributions
pursuant to the Bank's 401(k) Plan, and various membership fees of $1,269.
5
<PAGE>
Certain Transactions
The Bank has followed a policy of granting loans to officers and directors.
Loans to directors and executive officers are made in the ordinary course of
business and on the same terms and conditions as those of comparable
transactions with the general public prevailing at the time, in accordance with
the Bank's underwriting guidelines, and do not involve more than the normal risk
of collectibility or present other unfavorable features.
All loans by the Bank to its directors and executive officers are subject
to OCC regulations restricting loan and other transactions with affiliated
persons of the Bank. Federal law currently requires that all loans to directors
and executive officers be made on terms and conditions comparable to those for
similar transactions with non-affiliates. Loans to all directors and executive
officers and their associates totaled $240,000 at March 31, 1998, which was 2.6%
of the Bank's equity capital 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 March
31, 1998. All loans to directors and officers were performing in accordance with
their terms at March 31, 1998.
PROPOSAL II - RATIFICATION OF THE 1998 STOCK OPTION AND INCENTIVE PLAN
General
Establishment and implementation of the Stock Option Plan is subject to
ratification by stockholders
The Stock Option Plan has been adopted by the Board of Directors of the
Company, subject to ratification by stockholders at the Meeting. Ratification by
stockholders of the adoption of the Stock Option Plan will ratify the awards
proposed thereunder and as described in "Awards Under the Stock Option Plan"
below, and will ratify the granting of additional awards pursuant to the
provisions of the Stock Option Plan. Pursuant to the Stock Option Plan, the
Company will reserve for issuance thereunder either from authorized but unissued
shares or from issued shares reacquired and held as treasury shares, 103,155
shares of the Common Stock (12.0% of the Company's current shares outstanding).
Management currently intends, to the extent practicable and feasible, to fund
the Stock Option Plan from issued shares reacquired by the Company in the open
market. To the extent the Company utilizes authorized but unissued Common Stock
to fund the Stock Option Plan, the exercise of stock options will have the
effect of diluting the holdings of persons who own Common Stock. Assuming all
options under the Stock Option Plan are awarded and exercised through the use of
authorized but unissued Common Stock, current stockholders would be diluted by
approximately 10.7%. Upon ratification of the Stock Option Plan by stockholders,
options to purchase an aggregate of 87,688 shares of Common Stock will be
awarded, which will leave available 15,467 shares for future awards.
The Board of Directors believes that it is appropriate for the Company to
adopt a flexible and comprehensive Stock Option 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 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 among
these provisions 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 stockholders for approval of certain business combinations, (iii)
establishing a staggered Board of Directors, (iv) permitting special meetings of
stockholders 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
the Company without prior approval of the Board of Governors of the Federal
Reserve System ("FRB"). These regulations could have the effect of discouraging
takeover attempts of the Company.
6
<PAGE>
Attached as Exhibit 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, as the committee administering the Stock Option Plan
may determine. Subject to certain exceptions described herein, awards made under
such plan vest at a rate of one-fifth of the initial award per year, subject to
the participant maintaining continuous service since the date of grant.
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 or any other plan of the Company or its subsidiaries.
Generally, no 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 the Compensation Committee of the
Board of Directors of the Company (the "Compensation Committee"), which is
comprised of non-employee directors of the Company. Directors Pulliam, Keller
and Thomas have been appointed as the present members of the Compensation
Committee. Pursuant to the terms of the 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, which currently includes
approximately 41 persons. In granting awards under the Stock Option Plan, the
Compensation Committee considers, among other things, position and years of
service, value of the participant's services to the Company and the Bank and the
added responsibilities of such individuals as employees, directors and officers
of a public company.
Stock Options
The term of stock options will not exceed ten years from the date of grant.
The 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").
In general, stock options will not be exercisable after the expiration of
their terms. Unless otherwise determined by the Committee, in the event a
participant ceases to maintain continuous service (as defined in the Stock
Option Plan) with the Company or one of its affiliates, for any reason
(including death or disability but excluding termination for cause), an
exercisable stock option will continue to be exercisable for three months
thereafter but in no event after the expiration date of the option. If a
participant to whom an option was granted ceases to maintain continuous service
by reason of death or disability, all options not then exercisable shall become
exercisable in full for the three-month and one-year periods described below. In
the event of the death of a participant during such service or within the
three-month period described above following termination, an exercisable option
will continue to be exercisable for one year, to the extent exercisable by the
participant immediately prior to his death, but in no event later than ten years
after grant. Following the death of any participant, the Committee may, as an
alternative means of settlement of an option, elect to pay to the holder thereof
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. A
stock option will automatically terminate and will no longer be exercisable as
of the date a participant is notified of termination for cause.
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 the date of grant of such stock options. The exercise
price must be paid in full in cash or shares of Common Stock, or a combination
of both.
The Stock Option Plan provides for the grant of a non-qualified stock
option to purchase 6,190 shares of Common Stock to each director who is not an
employee of the Company, as of the date of stockholder ratification of the Stock
Option Plan. Such options have a term of ten years, are not transferable and
vest at the rate of 20% per year commencing from the date of grant of the stock
option. The exercise price per share of the options shall be equal to the fair
market value of the Common Stock on the date of grant of such stock option.
7
<PAGE>
Stock Appreciation Rights
The 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 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.
Notwithstanding the foregoing, no SAR may be exercisable by a director, Senior
Officer or Ten Percent Beneficial owner of the Company within six months of the
date of its grant.
"Senior Officer" means the Company's president, principal financial officer
or principal accounting officer, any vice president of the Company in charge of
a principal business unit, division or function (such as sales, administration
or finance), any other officer who performs a policy-making function, or any
other person who performs similar policy-making functions for the Company.
Officers of the Company's affiliates shall be deemed Senior Officers of the
Company if they perform such policy-making functions for the Company. "Ten
Percent Beneficial Owner" means the beneficial owner of more than ten percent of
any class of the Company's equity securities registered pursuant to Section 12
of the Securities Exchange Act of 1934.
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 for a limited period in the event of
a tender or exchange offer for shares of the Company's Common Stock, other than
by the Company, where 25% or more of the outstanding shares are acquired in that
offer or any other offer which expires within 60 days of that offer. The amount
paid on exercise of a Limited SAR will be the excess of (a) the market value of
the shares on the date of exercise, or (b) the highest price paid pursuant to
the offer, over the exercise price. Payment upon exercise of a Limited SAR will
be in cash.
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. Subject to vesting, Limited SARs
will be exercisable only for the 45 days following the expiration of the tender
or exchange offer, during which period the related stock option or SAR will be
exercisable. However, no Limited SAR will be exercisable by a director, Senior
Officer or Ten Percent Beneficial Owner of the Company within six months of the
date of its grant.
Effect of Change in Control and Other Adjustments
The restricted period with respect to options granted pursuant to the Stock
Option Plan will lapse, and the stock options will be earned, in the event a
recipient is terminated at any time within 12 months of a change in control of
the Company or the Bank. A change in control will be deemed to occur when (i) a
person or group becomes the beneficial owner of the shares of the Company or the
Bank representing 25% or more of the total number of votes which may be cast for
the election of the Board of Directors of the Company or the Bank, (ii) in
connection with any tender or exchange offer (other than an offer by the Company
or the Bank), merger or other business combination, sale of assets or contested
election, or combination of the foregoing, the person who were directors of the
Company or the Bank cease to be a majority of the Board of Directors, or (iii)
stockholders of the Company or the Bank approve a transaction pursuant to which
substantially all of the assets of the Company or the Bank will be sold.
Shares as to which awards may be granted under the Stock Option Plan, and
shares then subject to awards, will be adjusted appropriately by the Committee
in the event of any merger, consolidation, reorganization, recapitalization,
stock dividend, stock split or other change in the corporate structure or Common
Stock of the Company.
8
<PAGE>
In the event of any merger, consolidation or combination of the Company
with or into another financial institution holding company or other entity,
whereby either the Company is not the continuing entity or its outstanding
shares of Common Stock are converted into or exchanged for different securities,
cash or property, or any combination thereof, pursuant to a plan or agreement
the terms of which are binding upon all stockholders, any participant to whom a
stock option, SAR or Limited SAR has been granted at least six months prior to
such event will have the right upon exercise of the option, SAR or Limited SAR
(subject to the terms of the Stock Option Plan and any other applicable
limitation) 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, SAR or Limited
SAR 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 but may not, without the
prior ratification of the stockholders, make any amendment which shall (i)
increase the aggregate number of securities which may be issued under the Stock
Option Plan (except as specifically set forth under the Stock Option Plan), (ii)
materially increase the benefits accruing to participants, (iii) materially
change the requirements as to eligibility for participation in the Stock Option
Plan or (iv) change the class of persons eligible to participate in the Stock
Option Plan, 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 Stock Option 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 will neither, by itself, 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% on the first $175,000 of "minimum taxable income"
above the exemption amount ($33,750 for single individual and $45,000 for
married individuals filing jointly), and 28% on minimum taxable income more than
$175,000 above the exemption amounts. If a taxpayer has alternative minimum
taxable income in excess of $150,000 (married individuals filing jointly) or
$112,500 (single individual), the $45,000 or $33,750 exemptions are reduced by
an amount equal to 25% of the amount by which the alternative minimum taxable
income of the taxpayer exceeds $150,000 or $112,500, respectively. The
participant will recognize long-term capital gain or loss upon resale of the
shares received upon such exercise, provided that the participant holds the
shares for more than one year following 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.
9
<PAGE>
(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 at June 19, 1998, with respect to
the number of awards of options which are intended to be granted under the Stock
Option Plan, subject to stockholder ratification of the Stock Option Plan, to
(i) Mr. Catt, (ii) all executive officers of the Company and the Bank as a
Group, (iii) directors who are not executive officers of the Company and the
Bank as a group, and (iv) all non-executive officer employees of the Company or
the Bank who have been granted awards as a group. On June 19, 1998, the average
of the closing bid and asked prices for the Common Stock as quoted on the OTC
Electronic Bulletin Board System was $17.00 per share.
<TABLE>
<CAPTION>
==================================================================================================
1998 STOCK OPTION AND INCENTIVE PLAN
- --------------------------------------------------------------------------------------------------
Dollar Number
Name and Position Value(1) of Shares
==================================================================================================
<S> <C> <C>
Rick L. Catt, Director, President and Chief Executive Officer.......... $ --- 25,788
Executive Group (5 persons)............................................ --- 47,788
Non-Executive Officer Director Group (5 persons)....................... --- 30,950
Non-Executive Officer Employee Group (8 persons)....................... --- 8,950
==================================================================================================
</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.
Subject to the conditions of the Stock Option Plan, the proposed awards
described in the preceding table will vest in five equal annual installments
with the first installment immediately vesting on the date of stockholder
ratification of the Stock Option Plan and the additional installments vesting
ratably on the four subsequent anniversaries of the date of stockholder
ratification of the Stock Option Plan. All options are required to be granted
with an exercise price equal to the fair market value of the shares on the date
of grant of such stock option.
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 Recognition and Retention Plan
("RRP") is subject to ratification by stockholders
The RRP has been adopted by the Board of Directors of the Company, subject
to stockholder ratification. The RRP is designed to provide directors, officers
and employees with a proprietary interest in the Company in a manner designed to
encourage such individuals to remain with the Company and the Bank. Ratification
by stockholders of the adoption of the RRP will ratify the awards proposed
thereunder and as described in "Awards under the RRP" below, and will ratify the
granting of additional restricted stock awards pursuant to the provisions of the
RRP. Pursuant to the RRP, 42,981 shares of Common Stock (or 5.0% of the current
outstanding shares of the Company), funded from either authorized but unissued
shares or issued shares subsequently reacquired and held as treasury shares,
will be available for awards. Management currently intends, to the extent
practicable and feasible, to fund the RRP from issued shares reacquired by the
Company in the open market. To the extent the Company utilizes authorized but
unissued shares to fund the RRP the interests of current stockholders will be
diluted. Assuming all RRP Shares are awarded through the use of authorized but
unissued common Stock, current stockholders would be diluted by approximately
4.8%. Upon
10
<PAGE>
ratification of the RRP by stockholders, an aggregate of 35,460 shares of Common
Stock will be awarded to directors, officers and employees of the Company and
the Bank, which will leave 7,521 shares available for future awards.
Attached as Exhibit B to this Proxy Statement is the complete text of the
form of the RRP. The principal features of the RRP are summarized below.
Principle 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 Compensation
Committee shall determine.
The RRP is administered by the Company's Compensation Committee. The
Compensation Committee will select the recipients and terms of awards pursuant
to the RRP. See "Proposal I - Ratification of the 1998 Stock Option and
Incentive Plan." In determining to whom and in what amount to grant awards, the
Compensation Committee considers the position and responsibilities of eligible
individuals, the value of their services to the Company and the Bank 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 Compensation Committee to participate in the RRP, which
currently includes eligible participants of approximately 41 persons.
The RRP provides that RRP Shares used to fund awards under the RRP may be
either authorized but unissued shares or reacquired shares held by the Company
in its treasury. Any RRP Shares which are forfeited will again be available for
issuance under the RRP or any other plan of the Company or its subsidiaries.
RRP award recipients earn (i.e., become vested in) awards, over a period of
time as determined by the Compensation Committee, at the time of grant. RRP
Shares to be awarded in 1998 to directors, officers and employees will vest in
five equal annual installments, with the first installment vesting immediately
upon the date of ratification of the RRP by the Company's stockholders, 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 or director (including advisory directors) of the Company
or the Bank for a stipulated period (the "restricted period"). Vested shares are
distributed to recipients as soon as practicable following the date on which
they are earned.
The Compensation 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 Bank by reason of death or disability, 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 shares will be
forfeited and returned to the Company.
Holders of RRP Shares may not vote or sell, assign, transfer, pledge or
otherwise encumber any of the RRP Shares during the restricted period. All
dividends declared or paid on RRP shares, including those RRP shares still
subject to restrictions, will be paid to the participant.
Finally, the RRP provides for an award of 2,579 RRP Shares to each director
who is not an employee of the Company, as of the date of stockholder
ratification of the RRP.
Adjustments Upon Changes in Capitalization
The restricted period with respect to shares granted pursuant to the RRP
will lapse, and the stock will be earned, in the event a recipient is terminated
at any time within 12 months of a change in control of the Company or the Bank.
A change in control will be deemed to occur when (i) a person or group becomes
the beneficial owner of the shares of the Company or the Bank representing 25%
or more of the total number of votes which may be cast for the election of the
Board of Directors of the Company or the Bank, (ii) in connection with any
tender or exchange offer (other than an offer by the Company or the Bank),
merger or other business combination, sale of assets or contested election, or
combination of the foregoing, the person who were directors of the Company or
the Bank cease to be a majority of the
11
<PAGE>
Board of Directors, or (iii) stockholders of the Company or the Bank approve a
transaction pursuant to which substantially all of the assets of the Company or
the Bank will be sold.
RRP Shares awarded under the RRP will be adjusted by the Compensation
Committee in the event of a reorganization, recapitalization, stock split, stock
dividend, combination or exchange of shares, merger or other change in corporate
structure or the Common Stock of the Company.
Federal Income Tax Consequences
Holders of RRP Shares will recognize ordinary income on the date that the
RRP Shares 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 RRP Shares will also recognize ordinary income equal to their dividend or
dividend equivalent payments when such payments are received.
Amendment to the RRP
The Board of Directors of the Company may amend, suspend or terminate the
RRP or any portion thereof at any time, provided however, that no such
amendment, suspension or termination shall materially impair the rights of any
participant, without his or her consent, in any award made pursuant to the RRP.
Notwithstanding anything in the RRP to the contrary, such provisions may not be
amended more than once every six months, other than to comport with changes in
the Code, ERISA or the rules thereunder.
Awards Under the RRP
The following table presents information at June 19, 1998, with respect to
the number of shares of restricted stock which are intended to be granted under
the RRP, subject to stockholder ratification of the RRP, to (i) Mr. Catt, (ii)
all executive officers of the Company and the Bank as a group, (iii) directors
who are not executive officers of the Company or the Bank as a group, and (iv)
all non-executive officer employees of the Company or the Bank who have been
granted awards as a group.
<TABLE>
<CAPTION>
====================================================================================================
RECOGNITION AND RETENTION PLAN
- ----------------------------------------------------------------------------------------------------
Shares of
Restricted
Name and Position Dollar value(1) Stock
- ----------------------------------------------------------------------------------------------------
<S> <C> <C>
Rick L. Catt, Director, President and Chief Executive Officer...... $182,665 10,745
Executive Group (5 persons)........................................ 342,397 20,141
Non-Executive Officer Director Group (5 persons)................... 219,215 12,895
Non-Executive Officer Employee Group (2 persons)................... 41,208 2,424
==================================================================================================
</TABLE>
(1) Assumes an aggregate market value of the shares of restricted stock
based on the average of the closing bid and asked prices of the Common
Stock of $17.00 as quoted on the OTC Electronic Bulletin Board System
on June 19, 1998.
THE BOARD OF DIRECTORS RECOMMENDS THAT STOCKHOLDERS VOTE "FOR" THE
RATIFICATION OF THE ADOPTION OF THE RECOGNITION AND RETENTION PLAN.
12
<PAGE>
PROPOSAL IV - RATIFICATION OF APPOINTMENT OF AUDITORS
The Board of Directors of the Company has appointed Larsson, Woodyard &
Henson, LLP, independent accountants, to be the Company's auditors for the
fiscal year ending March 31, 1999. Representatives of Larsson, Woodyard &
Henson, LLP, are expected to attend the Meeting to respond to appropriate
questions and to make a statement if they so desire.
THE BOARD OF DIRECTORS RECOMMENDS THAT STOCKHOLDERS VOTE "FOR" THE
RATIFICATION OF THE APPOINTMENT OF LARSSON, WOODYARD & HENSON, LLP, AS THE
COMPANY'S AUDITORS FOR THE FISCAL YEAR ENDING MARCH 31, 1999.
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 501 East
Main Street, Robinson, Illinois 62454, no later than February 26, 1999. Any such
proposal shall be subject to the requirements of the proxy rules adopted under
the Exchange Act.
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/or the Bank may
solicit proxies personally or by telegraph or telephone without additional
compensation.
Robinson, Illinois
June 26, 1998
13
<PAGE>
EXHIBIT A
FIRST ROBINSON FINANCIAL CORPORATION
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, offi cers 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
of Restricted Stock, or any combination thereof, as provided in the Plan.
"Bank" - means First Robinson Savings Bank, National Association.
"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, officer or employee of the
Corporation or an Affiliate, except that when used with respect to persons
granted an Incentive Stock 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 suc cessor. With respect to any
advisory director, Continuous Service shall mean availability to perform such
functions as may be required of the Corporation's or Affiliate's advisory
directors.
"Corporation" - means First Robinson Financial Corporation, a Delaware
corporation.
"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.
<PAGE>
"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 13 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 Stock Market 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 determine.
"Non-Employee Director" - means a director who a) is not currently an
officer or employee of the Corporation; b) is not a former employee of the
Corporation who receives compensation for prior services (other than from a
tax-qualified retirement plan); c) has not been an officer of the Corporation;
d) does not receive remuneration from the Corporation in any capacity other than
as a director; and e) does not possess an interest in any other transactions or
is not engaged in a business relationship for which disclosure would be required
under Item 404(a) or (b) of Regulation S-K.
"Non-Qualified Stock Option" - means an option to purchase Shares granted
by the Committee pursuant to Section 6 hereof, which option is not intended to
qualify under Section 422(b) of the Code.
"Option" - means an Incentive Stock Option or a Non-Qualified Stock Option.
"Participant" - means any director, officer or Employee of the Corporation
or any Affiliate who is selected by the Committee to receive an Award and any
director or advisory director of the Corporation who is granted an Award
pursuant to Section 21 hereof.
"Plan" - means the 1998 Stock Option and Incentive Plan of the Corporation.
A-2
<PAGE>
"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.
"Restricted Period" - means the period of time selected by the Committee
for the purpose of determining when restrictions are in effect under Section 11
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
11 hereof, so long as such restrictions are in effect.
"Right" - means a Limited Stock Appreciation Right or a Stock Appreciation
Right.
"Shares" - means the common stock, par value $0.01 per share, 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.
3. Administration. The Plan shall be administered by a Committee consisting
of two or more members, each of whom shall be a Non-Employee Director. The
members of the Committee shall be appointed by the Board of Directors 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.
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.
4. Participation in Committee Awards. The Committee may select from time to
time Participants in the Plan from those directors (including advisory
directors), 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 12 hereof, the maximum number of Shares with respect to which Awards may
be made under the Plan is 12% of the total issued and outstanding Shares of the
Corporation on the date of ratification of the Plan by the Corporation's
stockholders. 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
A-3
<PAGE>
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 or 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 termination or
forfeiture 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. The Committee may, as
a condition of granting any Option or Right, require that a Participant agree
not to thereafter exercise one or more Options or Rights previously granted to
such Participant.
7. Exercise of Options or Rights.
(a) Except as provided herein, an Option or Right granted under the Plan
shall be exercisable during the lifetime of the Participant to whom such Option
or Right was granted only by such Participant and, except as provided in
paragraphs (c) and (d) of this Section 7, no such 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, by delivering (A) 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, or (B) a combination of cash
and such Shares.
(c) If a Participant to whom an Option or Right was granted shall cease to
maintain Continuous Service for any reason, other than termination for cause,
such Participant
A-4
<PAGE>
may, but only within the period of three years 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 after cessation of
Continuous Service 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 or retirement then, unless the Committee shall have otherwise
provided 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 event and shall remain so exercisable (i) in the
event of death for the period described in paragraph (d) of this Section 7 and
(ii) in the event of disability or retirement for a period of three years
following such date. If the Continuous Service of a Participant to whom an
Option or Right was granted by the Corporation is terminated for cause, all
rights under any Option or Right of such Participant shall expire immediately
upon the giving to the Participant of notice 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 three 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, or in the case of an Award other than an
Incentive Stock Option, pursuant to a qualified domestic relations order, as
defined in the Code or Title I of ERISA or the rules thereunder may, but only to
the extent such Participant was entitled to exercise such Option or Right as set
forth in paragraph (c) of this Section 7, 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, or in the case of an Option other than an Incentive Stock Option,
pursuant to a qualified domestic relations order, as defined in the Code or
Title I of ERISA or the rules thereunder, 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.
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 of grant of such Option, and (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
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<PAGE>
descent and distribution, and shall be exercisable during such Participant's
lifetime only by such Participant.
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 exer cise 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. Not withstanding any other provision
of the Plan, a Limited Stock Appreciation Right shall be exercis able only
during the period beginning on the first day following the date of expiration of
any "offer" (as such term is hereinafter defined) and ending on the forty-fifth
day following such date.
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 "Offer Price per Share" (as
such term is hereinafter defined) or 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
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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.
For the purposes of this Section 10, the term "Offer" shall mean any tender
offer or exchange offer for Shares other than one made by the Corporation,
provided that the corporation, person or other entity making the offer acquires
pursuant to such offer either (i) 25% of the Shares outstanding immediately
prior to the commencement of such offer or (ii) a number of Shares which,
together with all other Shares acquired in any tender offer or exchange offer
(other than one made by the Corporation) which expired within sixty days of the
expiration date of the offer in question, equals 25% of the Shares outstanding
immediately prior to the commencement of the offer in question. The term "Offer
Price per Share" as used in this Section 10 shall mean the highest price per
Share paid in any Offer which Offer is in effect any time during the period
beginning on the sixtieth day prior to the date on which a Limited Stock
Appreciation Right is exercised and ending on the date on which such Limited
Stock Appreciation Right is exercised. Any securities or property which are part
or all of the consideration paid for Shares in the Offer shall be valued in
determining the Offer Price per Share at the higher of (A) the valuation placed
on such securities or property by the corporation, person or other entity making
such Offer or (B) the valuation placed on such securities or property by the
Committee.
11. 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 11, 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 and provide in
the agreement referred to in paragraph (d) of this Section 11.
(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 11, the Shares awarded as
Restricted Stock shall vest. Subject to any such other terms and conditions as
the Committee shall provide, Shares of Restricted Stock may not be sold,
assigned, transferred, pledged or otherwise encumbered by the Participant,
except as hereinafter provided, during the Restricted Period. Except for such
restrictions, and subject to paragraphs (c), (d) and (e) of this Section 11 and
Section 12 hereof, the Participant as owner of such Shares shall have all the
rights of a stockholder, including but not limited to the right to receive all
dividends paid on such Shares and the right to vote such Shares. 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 to any Shares of Restricted
Stock prior to the expiration of the Restricted Period 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) Except as provided in Section 14 hereof, if a Participant ceases to
maintain Continuous Service for any reason (other than death, total or partial
disability or normal or early
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retirement), unless the Committee shall otherwise determine, all Shares of
Restricted Stock theretofore 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 11 shall upon such termination of
Continuous Service be forfeited and returned to the Corporation. Unless the
Committee shall have provided in the agreement referred to in paragraph (d) of
this Section 11 for a ratable lapse of restrictions with respect to an Award of
Shares of Restricted Stock during the Restricted Period, if a Participant ceases
to maintain Continuous Service by reason of death, disability or retirement,
such portion of such Shares of Restricted Stock awarded to such Participant
which at the time of such termination of Continuous Service are subject to the
restric tions imposed by paragraph (a) of this Section 11 as shall be equal to
the portion of the Restricted Period with respect to such Shares which shall
have elapsed at the time of such termination of Continuous Service shall be free
of restrictions and shall not be forfeited.
(c) Each certificate in respect of Shares of Restricted Stock awarded under
the Plan shall be registered in the name 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 First Robinson Financial Corporation 1998
Stock Option and Incentive Plan and an Agreement entered into between the
registered owner and First Robinson Financial Corporation. Copies of such
Plan and Agreement are on file in the offices of the Secretary of First
Robinson Financial Corporation, 501 East Main Street, Robinson, Illinois
62454.
(d) At the time of an Award of Shares of Restricted Stock, 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 shall in its sole discretion determine.
(e) At the time of an Award of Shares of Restricted Stock, the Committee
may, in its discretion, determine that the payment to the Participant of
dividends declared or paid on such Shares, or specified portion thereof, by the
Corporation shall be deferred until the earlier to occur of (i) the lapse of the
restrictions imposed under paragraph (a) of this Section 11 or (ii) the
forfeiture of such Shares under paragraph (b) of this Section 11, and shall be
held by the Corporation for the account of the Participant until such time. In
the event of such deferral, there shall be credited at the end of each year (or
portion thereof) interest on the amount of the account at the beginning of the
year at a rate per annum as the Committee, in its discretion, may determine.
Payment of deferred dividends, together with interest accrued thereon as
aforesaid, shall be made upon the earlier to occur of the events specified in
(i) and (ii) of the immediately preceding sentence.
(f) At the expiration or lapse of the restrictions imposed by paragraph (a)
of this Section 11, the Corporation shall redeliver to the Participant (or where
the relevant provision of paragraph (b) of this Section 11 applies in the case
of a deceased Participant, to his legal
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representative, beneficiary or heir) the certificate(s) and stock power
deposited with it pursuant to paragraph (c) of this Section 11 and the Shares
represented by such certificate(s) shall be free of the restrictions referred to
in paragraph (a) of this Section 11.
12. 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, merger, consolidation or any change in the
corporate structure or Shares of the Corporation, the maximum aggregate number,
class and Exercise Price 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 11 hereof.
13. 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 shall have the right
(subject to the provisions of the Plan and any limitation 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.
Unless the Committee shall have provided otherwise in the agreement referred to
in paragraph (d) of Section 11 hereof, in the event of any such merger,
consolidation or combination, any Restricted Period shall lapse with respect to
Shares of Restricted Stock awarded at least six months prior to such event, all
such Shares shall be fully vested in the Participants to whom such Shares were
awarded, and the holders of such Shares shall be eligible to receive in respect
thereof the full amount receivable per Share in such merger, consolidation or
combination; provided, however, that the acceleration of vesting of Shares of
Restricted Stock under this Section 13 shall not be applicable if it is intended
that the transaction constituting such merger, consolidation or combination be
accounted for as a pooling of interests under Accounting Principles Board
Opinion No. 16 (or any successor thereto), and operation of this Section 13
would otherwise violate Paragraph 47(c) thereof.
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14. Effect of Change in Control. Each of the events specified in the
following clauses (i) through (iii) of this Section 14 shall be deemed a "change
in control": (i) any third person, including a "group" as defined in Section
13(d)(3) of the Securities Exchange Act of 1934, shall become the beneficial
owner of shares of the Corporation with respect to which 25% or more of the
total number of votes for the election of the Board of Directors of the
Corporation may be cast, (ii) as a result of, or in connection with, any cash
tender offer, exchange offer, merger or other business combination, sale of
assets or contested election, or combination of the foregoing, the persons who
were directors of the Corporation shall cease to constitute a majority of the
Board of Directors of the Corporation or (iii) the shareholders of the
Corporation shall approve an agreement providing either for a transaction in
which the Corporation will cease to be an independent publicly owned entity or
for a sale or other disposition of all or substantially all the assets of the
Corporation. If the Continuous Service of any Participant of the Corporation or
any Affiliate is involuntarily terminated for whatever reason, at any time
within eighteen months after a change in control, unless the Committee shall
have otherwise provided in the agreement referred to in paragraph (d) of Section
11 hereof, any Restricted Period with respect to Restricted Stock theretofore
awarded to such Participant shall lapse upon such termination and all Shares
awarded as Restricted Stock shall become fully vested in the Participant to whom
such Shares were awarded. If a tender offer or exchange offer for Shares (other
than such an offer by the Corporation) is commenced, or if the event specified
in clause (iii) above shall occur, unless the Committee shall have otherwise
provided in the instrument evidencing the grant of an Option or Stock
Appreciation Right, all Options and Stock Appreciation Rights theretofore
granted and not fully exercisable shall become exercisable in full upon the
happening of such event and shall remain so exercisable for a period of sixty
days following such date, after which they shall revert to being exercisable in
accordance with their terms; provided, however, that the acceleration of vesting
or exercisability of an Award under this Section 14 shall not be applicable if
it is intended that the transaction constituting such change in control be
accounted for as a pooling of interests under Accounting Principles Board
Opinion No. 16 (or any successor thereto), and operation of this Section 14
would otherwise violate Paragraph 47(c) thereof; and provided further, that no
Option or Stock Appreciation Right which has previously been exercised or
otherwise terminated shall become exercisable.
15. 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 in the case of
Awards other than Incentive Stock Options pursuant to a qualified domestic
relations order, as defined in the Code or Title I of ERISA or the rules
thereunder.
16. 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 Partici pant 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.
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17. 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 on which Shares may then be listed, and (ii) the
completion of such regis tration 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.
18. 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, in its sole discretion, retain a sufficient number
of Shares held by it to cover the amount required to be withheld. The
Corporation may, in its sole discretion, 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.
The Corporation may, in its sole discretion, 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, in its sole discretion, 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.
19. Amendment or Termination. The Board of Directors of the Corporation may
amend, suspend or terminate the Plan or any portion thereof at any time, but
(except as provided in Section 12 hereof) no amendment shall be made without
approval of the stockholders of the Corporation which shall (i) materially
increase the aggregate number of Shares with respect to which Awards may be made
under the Plan, (ii) materially increase the aggregate number of Shares which
may be subject to Awards to Participants who are not Employees or (iii) change
the class of persons eligible to participate in the Plan; 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.
20. Effective Date and Term of Plan. The Plan shall become effective upon
its ratification by the Corporation's stockholders. It shall continue in effect
for a term of ten years unless sooner terminated under Section 19 hereof.
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21. Initial Grant. By, and simultaneously with, the adoption of this Plan,
each member of the Board of Directors of the Corporation at the time of the
stockholders ratification of the Plan who is not an Employee, is hereby granted
a ten year, Non-Qualified Stock Option to purchase 6,189 Shares of the
Corporation's common stock at an Exercise Price per Share equal to the Market
Value of the Corporation's common stock on the date of grant of the Option. Each
such Option shall be evidenced by a Non-Qualified Stock Option agreement in a
form approved by the Board of Directors of the Corporation and shall be subject
in all respects to the terms and conditions of this Plan, which are controlling.
All Options granted pursuant to this Section 21 shall be rounded down to the
nearest whole Share to the extent necessary to ensure that no Options to
purchase stock representing fractional Shares are granted.
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EXHIBIT B
FIRST ROBINSON FINANCIAL CORPORATION
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 executive officers of the Corporation and its
Affiliates.
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 by the Committee of Restricted Stock, as provided
in the Plan.
"Bank" - means First Robinson Savings Bank, National Association.
"Code" - means the Internal Revenue Code of 1986, as amended.
"Committee" - means the Committee referred to in Section 7 hereof.
"Continuous Service" - means the absence of any interruption or termination
of service as a director, advisory director, 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.
"Corporation" - means First Robinson Financial Corporation, a Delaware
corporation.
"ERISA" - means the Employee Retirement Income Security Act of 1974, as
amended.
"Non-Employee Director" - means a director who a) is not currently an
officer or employee of the Corporation; b) is not a former employee of the
Corporation who receives compensation for prior services (other than from a
tax-qualified retirement plan); c) has not been an officer of the Corporation;
d) does not receive remuneration from the Corporation in any capacity other than
as a director; and e) does not possess an interest in any other transactions or
is not engaged in a business relationship for which disclosure would be required
under Item 404(a) or (b) of Regulation S-K.
"Participant" - means any director, advisory director, officer or employee
of the Corporation or any Affiliate who is selected by the Committee to receive
an Award and any director or advisory director of the Corporation who is granted
an Award pursuant to Section 13 hereof.
<PAGE>
"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.
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 or otherwise encumbered by the Participant,
except as hereinafter provided, during the Restricted Period. Except for such
restrictions, and subject to paragraphs (d) 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, including but not limited to the right to receive all
dividends paid on such Shares and the right to vote such Shares. 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) Except as provided in Section 5 hereof, if a Participant ceases to
maintain Continuous Service for any reason (other than death, disability or
retirement), unless the Committee shall otherwise determine, all Shares of
Restricted Stock theretofore 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
or retirement, the Restricted Stock then still subject to restrictions imposed
by paragraph (a) of this Section 3 will be free of those restrictions as of the
day prior to such death, disability or retirement.
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(c) Each certificate in respect of Shares of Restricted Stock awarded under
the Plan shall be registered in the name 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 First Robinson Financial Corporation
Recognition and Retention Plan. Copies of such Plan are on file in the
offices of the Secretary of First Robinson Financial Corporation, 501 East
Main Street, Robinson, Illinois 62454.
(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) At the time of an award of Shares of Restricted Stock, the Committee
may, in its discretion, determine that the payment to the Participant of
dividends declared or paid on such Shares, or specified portions thereof, by the
Corporation shall be deferred until the earlier to occur of (i) the lapsing of
the restrictions imposed under paragraph (a) of this Section 3 or (ii) the
forfeiture of such Shares under paragraph (b) of this Section 3, and shall be
held by the Corporation for the account of the Participant until such time. In
the event of such deferral, there shall be credited at the end of each year (or
portion thereof) interest on the amount of the account at the beginning of the
year at a rate per annum as the Committee, in its discretion, may determine.
Payment of deferred dividends, together with interest accrued thereon, shall be
made upon the earlier to occur of the events specified in (i) and (ii) of the
immediately preceding sentence.
(f) 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, merger, consolidation or any change in the
corporate structure or shares 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
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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. Effect of Change in Control. Each of the events specified in the
following clauses (i) through (iii) of this Section 5 shall be deemed a "change
in control": (i) any third person, including a "group" as defined in Section
13(d)(3) of the Securities Exchange Act of 1934, shall become the beneficial
owner of shares of the Corporation or the Bank with respect to which 25% or more
of the total number of votes which may be cast for the election of the Board of
Directors of the Corporation, (ii) as a result of, or in connection with, any
cash tender offer, merger or other business combination, sale of assets or
contested election, or combination of the foregoing, the persons who were
directors of the Corporation or the Bank shall cease to constitute a majority of
the Board of Directors of the Corporation or the Bank, or (iii) the shareholders
of the Corporation shall approve an agreement providing for a sale or other
disposition of all or substantially all the assets of the Corporation or the
Bank. If the Continuous Service of any Participant of the Corporation is
involuntarily terminated for whatever reason, at any time within twelve months
after a change in control, unless the Committee shall have otherwise provided,
any Restricted Period with respect to Restricted Stock theretofore awarded to
such Participant shall lapse upon such termination and all Shares awarded as
Restricted Stock shall become fully vested in the Participant to whom such
Shares were awarded; provided, however, that the acceleration of vesting of an
Award under this Section 5 shall not be applicable if it is intended that the
transaction constituting such change in control be accounted for as a pooling of
interests under Accounting Principles Board Opinion No. 16 (or any successor
thereto), and operation of this Section 5 would otherwise violate Paragraph
47(c) thereof.
6. 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
qualified domestic relations order as defined in the Code or Title I of ERISA or
the rules thereunder.
7. Administration. The Plan shall be administered by a Committee consisting
of two or more members, each of whom shall be a Non-Employee Director. The
members of the Committee shall be appointed by the Board of Directors 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.
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.
B-4
<PAGE>
8. 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 5% of the total Shares of the Corporation outstanding
on the date of the ratification of the Plan by the Corporation's stockholders.
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. 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.
9. 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 Partici pant 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.
10. 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 the
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.
11. 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.
12. Term of Plan. The Plan shall become effective upon its ratification by
the stockholders of the Corporation. It shall continue in effect for a term of
ten years unless sooner terminated under Section 11 hereof.
13. Initial Grants. By, and simultaneously with, the ratification of the
Plan by the Corporation's stockholders, each member of the Board of Directors of
the Corporation who is not a full-time Employee, is hereby granted an Award
equal to 2,579 Shares of the Corporation's common stock. Each such Award shall
be evidenced by a Restricted Stock Agreement in a form approved by the Committee
administering this Plan and shall be subject in all respects to the terms and
conditions of this Plan, which are controlling. All Awards of Restricted Stock
granted pursuant to this Section 13 shall be rounded down to the nearest whole
Share to the extent necessary to ensure that no Shares of Restricted Stock
representing fractional Shares are issued. The Awards will vest in five equal
installments, with the first installment vesting immediately upon the
ratification of the Plan by the Corporation's stockholders and each additional
installment vesting after the end of the subsequent calendar years, as long as
the director maintains Continuous Service with the Bank.
B-5
<PAGE>
REVOCABLE PROXY
FIRST ROBINSON FINANCIAL CORPORATION
[X] PLEASE MARK VOTES
AS IN THIS EXAMPLE
ANNUAL MEETING OF STOCKHOLDERS
JULY 29, 1998
The undersigned hereby appoints the Board of Directors of First Robinson
Financial Corporation (the "Company"), with full powers of substitution, to act
as attorneys and proxies for the undersigned to vote all shares of capital stock
of the Company which the undersigned is entitled to vote at the Annual Meeting
of Stockholders (the "Meeting"), to be held at the Company's office located at
501 East Main Street, Robinson, Illinois, on July 29, 1998 at 10:00 a.m. and at
any and all adjournments and postponements thereof.
I. The election as director of the nominees listed For Withhold
(except as marked to the contrary below): [ ] [ ]
Scott F. Pulliam Cleil T. Keller William K. Thomas
INSTRUCTION: To withhold your vote for the individual nominee, strike a line in
the nominee's name.
FOR AGAINST ABSTAIN
II. The ratification of the adoption of the [ ] [ ] [ ]
Company's 1998 Stock Option and
Incentive Plan.
III. The ratification of the adoption of the [ ] [ ] [ ]
Company's Recognition and Retention Plan
IV. The ratification of the appointment of [ ] [ ] [ ]
Larsson, Woodyard & Henson, LLP
as auditors of the Company for the
fiscal year ending March 31, 1989.
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 PROPOSALS AND 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 proposals
and the election of the nominees listed above.
- --------------------------------------------------------------------------------
Please be sure to sign and date Date
this Proxy in the box below.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Stockholder sign above Co-holder (if any) sign above
Detach above card, sign, date and mail in postage paid envelope provided.
FIRST ROBINSON FINANCIAL CORPORATION
- --------------------------------------------------------------------------------
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
Should the above signed 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 stockholders 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 be revoked
by filing a written notice of revocation with the Company or by duly executing a
proxy bearing a later data.
The above signed acknowledges receipt from the Company, prior to the
execution of this proxy, of a notice of the Meeting, Proxy Statement and an
Annual Report to Stockholders.
Please sign exactly as your name(s) on this card. When signing as attorney,
executor, administrator, trustee or guardian, please give 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
- --------------------------------------------------------------------------------
<PAGE>
REVOCABLE PROXY
FIRST ROBINSON FINANCIAL CORPORATION
[X] PLEASE MARK VOTES
AS IN THIS EXAMPLE
ANNUAL MEETING OF STOCKHOLDERS
JULY 29, 1998
The undersigned hereby appoints the Board of Directors of First Robinson
Financial Corporation (the "Company"), with full powers of substitution, to act
as attorneys and proxies for the undersigned to vote all shares of capital stock
of the Company which the undersigned is entitled to vote at the Annual Meeting
of Stockholders (the "Meeting"), to be held at the Company's office located at
501 East Main Street, Robinson, Illinois, on July 29, 1998 at 10:00 a.m. and at
any and all adjournments and postponements thereof.
I. The election as director of the nominees listed For Withhold
(except as marked to the contrary below): [ ] [ ]
Scott F. Pulliam Cleil T. Keller William K. Thomas
INSTRUCTION: To withhold your vote for the individual nominee, strike a line in
the nominee's name.
FOR AGAINST ABSTAIN
II. The ratification of the adoption of the [ ] [ ] [ ]
Company's 1998 Stock Option and
Incentive Plan.
III. The ratification of the adoption of the [ ] [ ] [ ]
Company's Recognition and Retention Plan
IV. The ratification of the appointment of [ ] [ ] [ ]
Larsson, Woodyard & Henson, LLP
as auditors of the Company for the
fiscal year ending March 31, 1989.
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 PROPOSALS AND 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 proposals
and the election of the nominees listed above.
- --------------------------------------------------------------------------------
Please be sure to sign and date Date
this Proxy in the box below.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Stockholder sign above Co-holder (if any) sign above
Detach above card, sign, date and mail in postage paid envelope provided.
FIRST ROBINSON FINANCIAL CORPORATION
- --------------------------------------------------------------------------------
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
Should the above signed 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 stockholders 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 be revoked
by filing a written notice of revocation with the Company or by duly executing a
proxy bearing a later data.
The above signed acknowledges receipt from the Company, prior to the
execution of this proxy, of a notice of the Meeting, Proxy Statement and an
Annual Report to Stockholders.
Please sign exactly as your name(s) on this card. When signing as attorney,
executor, administrator, trustee or guardian, please give 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
- --------------------------------------------------------------------------------
