<PAGE> 1
SCHEDULE 14A
(RULE 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
<TABLE>
<S> <C>
[ ] Preliminary Proxy Statement [ ] Confidential, for Use of the
Commission Only (as permitted by
Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
</TABLE>
Local Financial Corporation
- --------------------------------------------------------------------------------
(Name of Registrant as Specified in Its Charter)
The Board of Directors of Registratnt
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if Other Than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
(1) Title of each class of securities to which transaction applies:
-----------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
-----------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
-----------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
-----------------------------------------------------------------------
(5) Total fee paid:
-----------------------------------------------------------------------
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the form or Schedule and the date of its filing.
(1) Amount Previously Paid:
-----------------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
-----------------------------------------------------------------------
(3) Filing Party:
-----------------------------------------------------------------------
(4) Date Filed:
-----------------------------------------------------------------------
<PAGE> 2
<TABLE>
<S> <C>
[LOCAL FINANCIAL CORPORATION LOGO] 3601 N.W. 63(rd) Street
Oklahoma City, Oklahoma
73116
Telephone: 405-841-2100
Fax: 405-841-2289
</TABLE>
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
APRIL 27, 2000
To the Stockholders:
Local Financial Corporation ("We" or the "Company") will hold an Annual
Meeting of Stockholders (the "Annual Meeting") on Thursday, April 27, 2000, at
11:00 a.m., CT, Waterford Marriott Hotel, 6300 Waterford Blvd., Oklahoma City,
Oklahoma. The Stockholders will meet to consider:
(1) Electing two directors, each to serve for a term of three years;
(2) Ratifying the selection of KPMG, LLP, as independent auditors of the
Company for the year ending December 31, 2000; and
(3) Transacting other business incident to the Annual Meeting.
The record date for the Annual Meeting is March 15, 2000. Only
Stockholders of record at the close of business on that date can vote at the
Annual Meeting.
We hope you will attend the Annual Meeting. IF YOU DO NOT PLAN TO ATTEND,
PLEASE SIGN AND RETURN THE ENCLOSED PROXY. TO ENCOURAGE THE USE OF PROXIES, WE
HAVE ENCLOSED A SELF-ADDRESSED, POSTAGE-PAID ENVELOPE FOR YOUR USE.
Sincerely,
/s/ ALAN L POLLOCK
Alan L. Pollock
Secretary
March 20, 2000
<PAGE> 3
PROXY STATEMENT
ANNUAL MEETING OF STOCKHOLDERS
>APRIL 27, 2000
Local Financial Corporation ("Local Financial", the "Company" or "We")
furnishes this Proxy Statement to inform its Stockholders about the upcoming
Annual Meeting. To encourage Stockholder participation, we are soliciting
proxies to be used at the Annual Meeting.
We are mailing this Proxy Statement and the accompanying proxy card to
Stockholders beginning March 20, 2000.
GENERAL INFORMATION
Who Votes. If you hold shares as of the Record Date, March 15, 2000, you
may vote at the Annual Meeting. On March 15, 2000, the Company had 20,537,209
shares of common stock outstanding. Each share is entitled to one vote.
How To Vote. We will vote your shares for you if you send us a signed
proxy before the Annual Meeting. You can tell us to vote for all, either, or
none of the nominees for director. You can tell us to approve, disapprove, or
abstain from voting on the independent auditors or from transacting incidental
business at the Annual Meeting. We have provided information about the director
nominees and the independent auditors in the following pages of this proxy
statement.
IF YOU RETURN A SIGNED PROXY, BUT DO NOT TELL US HOW YOU WANT TO VOTE, WE
SHALL VOTE YOUR SHARES "FOR" ALL DIRECTOR NOMINEES AND THE INDEPENDENT AUDITORS.
Canceling Your Proxy. You can cancel your proxy at any time before we
vote your shares in any of three ways:
(1) by giving the Secretary a written cancellation;
(2) by giving a later signed proxy; or
(3) by voting in person at the Annual Meeting.
Counting the Necessary Votes. Directors are elected by a plurality of
votes, which means that the two director nominees (the number of positions to be
filled) receiving the highest number of votes will be elected. To ratify the
independent auditors, this item must receive a majority of the votes that could
be cast at the Annual Meeting. If any incidental business is transacted at the
Annual Meeting, the incidental business must receive a majority of the votes
that could be cast at the Annual Meeting.
The votes that could be cast are the votes actually cast plus
abstentions. Abstentions are counted as "shares present" at the Annual Meeting
for purposes of determining whether a quorum exists and have the effect of a
vote "against" any proposal. Proxies submitted by brokers that do not indicate a
vote for the proposal (usually because the brokers don't have discretionary
voting authority and haven't received instructions as to how to vote) are not
considered "shares present" and will not affect the outcome of the vote. These
broker proxies are referred to as "broker non-votes".
Incidental Business. Proxies customarily ask for authority to transact
other business that may come before the Annual Meeting. Much of this business is
procedural, such as a vote on adjournment. Except for the election of directors
and ratification of the independent auditors,
<PAGE> 4
we do not know of any substantive business to be presented or acted upon at the
Annual Meeting. Under our Bylaws, no substantive business besides that stated in
the meeting notice may be transacted at any meeting of Stockholders. If any
matter is presented at the Annual Meeting on which a vote may properly be taken,
the designated proxies will vote your shares as they think best unless you
otherwise direct.
ITEM 1
ELECTION OF DIRECTORS
Two directors will be elected at this year's Annual Meeting. Each
director will serve for a three-year term ending at the 2003 annual meeting or
until he is succeeded by another qualified director who has been elected.
We shall vote your shares as you tell us on the enclosed proxy form. If
you sign, date, and return the proxy form, but don't tell us how you want your
shares voted, we shall vote your shares for the election of the following
nominees. If unforeseen circumstances (such as death or disability) make it
necessary for the Board of Directors to substitute another person for any of the
nominees, we will vote your shares for that other person.
The two nominees for director are presently members of the Board of
Directors and also serve as directors Local Oklahoma Bank, National Association,
the Company's subsidiary bank ("Local Oklahoma").
THE COMPANY RECOMMENDS VOTING "FOR" THE NOMINEES.
BIOGRAPHICAL INFORMATION
The following table sets forth the name and age of each director and
director nominee, the year he became a director, and the year his term of
service will end.
<TABLE>
<CAPTION>
DIRECTOR TERM
NAME AGE SINCE EXPIRES POSITION
- ---- --- -------- ------- --------
<S> <C> <C> <C> <C>
Edward A. Townsend 58 1997 2001 Chairman of the Board
Jan A. Norton 53 1997 2000 Director
Robert A. Kotecki 35 1997 2001 Director
George P. Nigh 72 1997 2002 Director
Kenneth W. Townsend 57 1997 2002 Director
Joseph A. Leone 66 1973 2000 Director
J. David Rosenberg 51 1998 2001 Director
Andrew M. Coats 65 1999 2002 Director
</TABLE>
The Director Nominees. The Board of Directors has nominated two
candidates for election. If elected, these nominees will serve three-year terms.
A brief summary of each director nominee's principal occupation, business
affiliations and other information follows.
Jan A. Norton. Mr. Norton was elected as a director of the Company and
Local Oklahoma in 1997. At the same time, Mr. Norton became President of
the Company and Local Oklahoma. Mr. Norton served as President of Green
Country Bank, FSB, from May 1994 to February 1998.
Joseph A. Leone. Mr. Leone has served as a director of Local Oklahoma
since 1973 and a director of the Company since 1997. Since 1987, Mr. Leone
has served as managing partner with MBI, Inc., a limited partnership which
owns several commercial real estate properties located within Oklahoma.
From 1978 through 1987, Mr. Leone served as
2
<PAGE> 5
Executive Vice Chancellor and Chancellor of the Oklahoma State System of
Higher Education.
The Continuing Directors. Since the Company's directors serve staggered,
three year terms, a majority of the directors continue their service each year.
The continuing directors and their respective principal occupations, business
affiliations and other information are as follows.
Andrew M. Coats. Mr. Coats was elected as a director of the Company in
1999 and a director of Local Oklahoma in 1997. He served as the District
Attorney of Oklahoma County from 1976 to 1980. He won the Democratic
nomination for U.S. Senate from Oklahoma in 1980. In 1983, Mr. Coats was
elected Mayor of Oklahoma City where he served until April 1987. Mr. Coats
served as President of the law firm of Crowe & Dunlevy in 1987 and 1988 and
served as President of the Oklahoma Bar Association in 1992. He is the
immediate past President of the American College of Trial Lawyers. On July
1, 1996, Mr. Coats became the Dean of the University of Oklahoma College of
Law.
Robert A. Kotecki. Mr. Kotecki was elected as a director of the Company in
1997. From 1997 until May 1999, Mr. Kotecki also served as a director of
the predecessor of Local Oklahoma, Local Federal Bank, FSB. Mr. Kotecki
currently serves as a Managing Director of Friedman, Billings, Ramsey &
Co., Inc. ("FBR") in Chicago, Illinois. Since March 1993, he has served in
various capacities with FBR, a full-service investment banking firm based
in Arlington, Virginia, which specializes in internet technology, financial
services and other selected industries. From November 1988 through March
1993, Mr. Kotecki served as an Associate with Trident Financial Corp., an
investment banking firm located in Raleigh, North Carolina. Mr. Kotecki is
a Chartered Financial Analyst.
George P. Nigh. Governor Nigh was elected as a director of the Company and
Local Oklahoma in 1997. From July 1992 through June 1997, Governor Nigh
served as President of the University of Central Oklahoma, where he had
served as Distinguished Statesman in Residence for the previous six years.
From January 1979 through 1987, Governor Nigh served as Governor of the
State of Oklahoma. Prior to 1979, Governor Nigh served 16 years as
Lieutenant Governor and eight years in the House of Representatives of the
State of Oklahoma. Governor Nigh currently serves as a consultant for the
Company in the area of community relations.
J. David Rosenberg. Mr. Rosenberg is a practicing attorney and has been a
partner of Keating, Muething & Klekamp, a Cincinnati, Ohio law firm, since
prior to 1992. Mr. Rosenberg was elected as a director of the Company in
February 1998.
Edward A. Townsend. Mr. Townsend was elected as a director of the Company
and Local Oklahoma in 1997. At the same time, Mr. Townsend became Chairman
and Chief Executive Officer of the Company and Local Oklahoma. From April
1994 to February 1998, Mr. Townsend served as Chairman and Chief Executive
Officer of Green Country Bank, FSB, and Chief Executive Officer of its
parent corporation, Green Country Banking Corporation. From January 1993
through March 1994, he served as Senior Vice President of Stifel, Nicolaus
& Company, an investment banking firm located in St. Louis, Missouri. From
October 1988 through September 1992, Mr. Townsend served as Chairman and
President of Local Federal Bank, FSB (the predecessor of Local Oklahoma).
From 1967 to 1987, Mr. Townsend was employed in various positions at First
National Bank and later InterFirst Corporation, both in Dallas, Texas.
Kenneth W. Townsend. Mr. Townsend was elected as a director of the Company
and Local Oklahoma in 1997. Mr. Townsend has served as Executive Director
of the National
3
<PAGE> 6
Cowboy Hall of Fame, Oklahoma City, Oklahoma, since January 1997. From
August 1991 through June 1997, Mr. Townsend served as President of
Boatmen's First National Bank of Oklahoma, Oklahoma City, Oklahoma.
SERVICE ON THE BOARD
Board Meetings and Committees. The Board of Directors held nine meetings
in 1999. Management also periodically conferred with directors between meetings
regarding Company affairs. During 1999, all directors attended 75% or more of
the total aggregate number of meetings of the Board of Directors and meetings of
the committees of the Board on which they served.
The Audit and Compliance Committee is currently composed of Mr. Kenneth
W. Townsend (Chairman), Mr. Andrew M. Coats and Dr. Joseph A. Leone. It met five
times in 1999 with all members attending 75% or more of these meetings. The
Audit and Compliance Committee is primarily concerned with the effectiveness of
the Company's financial audits by its internal audit staff and by the
independent auditors. Its duties include: (i) recommending the selection of
independent auditors; (ii) reviewing the scope of the audit to be conducted by
them, as well as the results of their audit; (iii) reviewing the organization
and scope of the Company's internal system of audit and financial controls; (iv)
reviewing the Company's financial reporting and the accounting standards and
principles followed; and (v) examining other reports relating to the Company's
compliance with financial institution laws and regulations. The Audit and
Compliance Committee's report is set forth below under "Item 2: Ratification of
Auditors".
The Compensation and Retirement Committee is currently composed of Dr.
Joseph A. Leone, Chairman, Mr. Andrew M. Coats and Mr. Gene C. Howard. It met
five times in 1999 with all members participating. It sets the compensation
levels of the Chief Executive Officer and the President, establishes a general
framework for the short-term incentive program and administers Local Oklahoma's
employee stock ownership plan. The Compensation and Retirement Committee's
report is set forth below.
The Board has not delegated its functions to any other standing
committees, and thus has not created executive, nominating or other similar
committees.
Director Compensation. The Company pays its non-employee directors a
quarterly retainer of $2,500. Those directors who are also a director of Local
Oklahoma receive a per meeting fee of $500 (which includes telephonic board
meetings) and a $2,000 quarterly retainer for service as a Local Oklahoma
director. The Company reimburses all ordinary and necessary expenses incurred in
the conduct of the its business. Non-employee committee members receive $300 per
committee meeting. Mr. George P. Nigh also serves as public relations consultant
to Local Oklahoma, for which he receives $48,000 per year, an office and an
automobile.
Liability of Directors and Officers and Indemnification. As permitted by
the Delaware General Corporation Law (the "DGCL"), the Company's Certificate of
Incorporation eliminates in certain circumstances the monetary liability of the
directors for a breach of their fiduciary duty. These provisions do not
eliminate the liability of a director for (i) a breach of the director's duty of
loyalty to the Company or its Stockholders, (ii) acts or omissions by a director
not in good faith or which involve intentional misconduct or a knowing violation
of law, (iii) liability arising under Section 174 of the DGCL (relating to the
declaration of dividends and purchase or redemption of shares in violation of
the DGCL) or (iv) any transaction from which the director derived an improper
personal benefit. In addition, these provisions do not eliminate the liability
of a director for violations of Federal securities laws,
4
<PAGE> 7
nor do they limit the rights of the Company or its Stockholders, in appropriate
circumstances, to seek equitable remedies such as injunctive or other forms of
non-monetary relief. Such remedies may not be effective in all cases.
The Bylaws provide that the Company shall indemnify its directors and
officers to the fullest extent permitted by the DGCL. Under such provisions, any
director or officer, who in his capacity as such, is made or threatened to be
made, a party to any suit or proceeding, may be indemnified if the Board of
Directors determines such director or officer acted in good faith and in a
manner he reasonably believed to be in or not opposed to the best interest of
the Company. The Bylaws and the DGCL further provide that such indemnification
is not exclusive of any other rights to which such individuals may be entitled
under the Certificate of Incorporation, the Bylaws, any agreement, vote of
Stockholders or disinterested directors or otherwise.
5
<PAGE> 8
OTHER INFORMATION ABOUT DIRECTORS, OFFICERS
AND CERTAIN STOCKHOLDERS
BENEFICIAL OWNERSHIP OF DIRECTORS, OFFICERS AND CERTAIN STOCKHOLDERS
The following table sets forth certain information regarding the
beneficial ownership of the Company's Common Stock as of February 28, 2000, by
(i) each director of the Company, (ii) each named executive officer in the
Summary Compensation Table, (iii) each person known or believed by the Company
to own beneficially five percent or more of the Common Stock and (iv) all
directors and executive officers as a group. Unless indicated otherwise, each
person has sole voting and dispositive power with respect to such shares.
<TABLE>
<CAPTION>
BENEFICIAL OWNERSHIP(1)
NAME OF DIRECTOR, EXECUTIVE OFFICER --------------------------
OR STOCKHOLDERS HOLDING 5% OR MORE, NUMBER OF SHARES PERCENT
- ----------------------------------- ---------------- -------
<S> <C> <C>
Financial Stocks Inc. 1,557,300 7.6
5070 Carew Tower
441 Vine St
Cincinnati, Ohio 45202
Thomson Hortstmann & Bryant, Inc. 1,353,800 6.6
Park 80 West Plaza Two
Saddle Brook, New Jersey 07663
Edward A. Townsend(3) 856,094 4.2
Jan A. Norton(3) 227,910 1.1
Robert A. Kotecki(2) 181,200 --*
J. David Rosenberg(3) 109,000 --*
Robert L. Vanden(3) 12,000 --*
Joseph A. Leone(3) 9,000 --*
James N. Young(3) 9,000 --*
Kenneth W. Townsend(3) 6,500 --*
George P. Nigh(3) 6,500 --*
Harold A. Bowers(3) 6,500 --*
Andrew M. Coats(3) 5,880 --*
All directors and named executive officers as a group
(11 persons) 1,429,584 7.0
</TABLE>
- ---------------
* Less than one percent.
(1) Shares of Common Stock that are not outstanding but that can be acquired by
a person upon exercise of an option within 60 days are included in computing
the percentage for such person, but are not included in computing the
percentage for any other person.
(2) The number of shares for Mr. Kotecki includes 125,000 shares under a
presently exercisable stock warrant. Mr. Kotecki received the stock warrants
as a Managing Director of Friedman Billings, Ramsey & Co., Inc., which
received the stock warrants from the Company for acting as its placement
agent in 1997.
6
<PAGE> 9
(3) The number of shares for the following persons includes presently
exercisable stock options in the amounts shown below.
<TABLE>
<CAPTION>
NAME OPTION SHARES
- ---- -------------
<S> <C>
Edward A. Townsend 541,094
Jan A. Norton 202,910
Robert L. Vanden 10,000
James N. Young 9,000
Andrew M. Coats 4,000
Joseph A. Leone 4,000
George P. Nigh 4,000
J. David Rosenberg 4,000
Kenneth W. Townsend 4,000
Harold A. Bowers 4,000
</TABLE>
EXECUTIVE COMPENSATION
The following table sets forth the compensation paid or accrued to the
Chief Executive Officer and each of the four other most highly compensated
executive officers of the Company, including officers of Local Oklahoma (the
five are sometimes called the "named executive officers") for services performed
in 1999, 1998 and 1997.
Summary Compensation Table
<TABLE>
<CAPTION>
LONG TERM
COMPENSATION
ANNUAL COMPENSATION AWARDS
-------------------------------------- ------------ ALL OTHER
NAME AND OTHER ANNUAL OPTIONS COMPENSATION
PRINCIPAL POSITION YEAR SALARY($) BONUS($) COMPENSATION(1) (#) ($)(2)
- ------------------ ---- --------- -------- --------------- ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
Edward A. Townsend 1999 320,000 225,000 -- -- --
Chief Executive 1998 320,000 175,000 -- 811,640 --
Officer(3) 1997 100,711 -- -- -- 100,000
Jan A. Norton 1999 240,000 175,000 -- -- --
President(3) 1998 240,000 160,000 -- 304,365 --
1997 75,533 -- -- -- 50,000
Robert L. Vanden 1999 225,000 150,000 -- 10,000 --
Executive Vice 1998 225,000 175,000 -- 25,000 --
President 1997 212,502 175,000 -- -- --
James N. Young 1999 175,000 125,000 -- 10,000 --
Executive Vice 1998 136,347 100,000 -- 25,000 25,858
President(3)
Harold A. Bowers 1999 150,000 125,000 -- 25,000 --
Executive Vice 1998 73,156 70,000 -- 10,000 --
President(3)
</TABLE>
- ---------------
(1) The Company provides various perquisites to certain employees including the
named executive officers. In each case, the aggregate value of the
perquisites provided to the named executive officers did not exceed the
lesser of $50,000 or 10% of such named executive officers' annual salary and
bonus.
(2) Amounts under this column reflect moving expense/housing allowance paid when
these named executive offers began their service with the Company. See
"Employment Agreements" below.
(3) Mr. Townsend and Mr. Norton became executive officers of the Company in
September 1997. Mr. Young and Mr. Bowers became executive officers of the
Company in February and May 1998, respectively.
7
<PAGE> 10
STOCK OPTIONS GRANTED IN 1999
The following table sets forth information concerning the grant of stock
options during 1999 to the named executive officers.
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS POTENTIAL REALIZABLE
-------------------------------------------------- VALUE AT ASSUMED
NUMBER OF % OF TOTAL ANNUAL RATES OF STOCK
SECURITIES OPTIONS PRICE APPRECIATION FOR
UNDERLYING GRANTED OPTION TERMS(1)
OPTIONS EMPLOYEES EXERCISE EXPIRATION ----------------------
NAME GRANTED(#) IN 1999 PRICE($/SH) DATE(2) 5%($) 10%($)
- ---- ---------- ---------- ----------- ---------- --------- ---------
<S> <C> <C> <C> <C> <C> <C>
Harold A. Bowers 20,000 7.2 10.00 11/17/09 127,779 318,748
Harold A. Bowers 5,000 1.8 10.00 06/23/09 31,445 70,687
Robert L. Vanden 10,000 3.6 10.00 11/17/09 62,889 159,374
James N. Young 10,000 3.6 10.00 11/17/09 62,889 159,374
James N. Young 5,000 1.8 10.00 03/24/09 31,445 70,687
</TABLE>
- ---------------
(1) The assumed annual rates of increase are based on an annually compounded
increase of the exercise price through the ten year option term.
STOCK OPTION HOLDINGS
The following table sets forth the number of unexercised options held by
named executive officers as of December 31, 1999.
<TABLE>
<CAPTION>
NUMBER OF UNEXERCISED
OPTIONS AT 12/31/99(1)
------------------------------
NAME EXERCISABLE UNEXERCISABLE
- ---- ----------- -------------
<S> <C> <C>
Edward A. Townsend 541,094 270,547
Jan A. Norton 202,910 101,455
Robert L. Vanden 10,000 25,000
James N. Young 8,000 27,000
Harold A. Bowers 2,000 33,000
</TABLE>
- ---------------
(1) These options are exercisable at $10.00 per share.
COMPENSATION AND RETIREMENT COMMITTEE REPORT
Composition. The Company formed the Compensation and Retirement
Committee (the "Committee") and delegated to it certain matters regarding
executive compensation. The Committee is composed of two directors of the
Company, Dr. Joseph A. Leone (chair) and Mr. Andrew M. Coats, and one director
of the Company's subsidiary bank, Mr. Gene C. Howard. Each of these Committee
members is independent, defined as a person who is not an officer of the Company
and who does not have a relationship with the Company that would interfere with
the Committee member's exercise of independent judgment.
Compensation Approach. The Committee sets the compensation levels of the
Chief Executive Officer and the President (subject to the terms of existing
employment agreements), establishes a general framework for the short-term
incentive program and administers the long-term incentive programs. It uses a
set of guiding principles, which are designed to align executive compensation
with management's execution of business strategies and initiatives as well as
the achievement of long-term financial performance and growth in stockholder
values. The principles are as follows:
- The Company's salaries must be competitive with comparable banking
institutions with which the Company competes for highly qualified and
experienced executive and senior
8
<PAGE> 11
officers. The Committee relies on its members' knowledge of other
comparable banking institutions and independent surveys of executive
compensation in such institutions, and may retain outside consultants
for advice, to ensure executive salaries are competitive.
- The Company maintains annual incentive programs sufficient to provide
motivation to achieve specific operating goals and to generate rewards
that bring total compensation to competitive levels.
- The Company provides significant equity-based incentives for executive
and senior officers and other key employees to ensure that they are
motivated over the long term to respond to the Company's business
challenges and opportunities as stockholders as well as employees.
Future compensation will be closely tied to performance and its impact on
the growth in stockholder value. The primary components of executive
compensation are base salary, short-term cash incentives and long-term equity
incentives.
Base Salary. The Company understands that base salaries must remain in a
competitive range to retain capable management. Minimum base salaries for the
Chief Executive Officer and the President are fixed by agreements. The Committee
reviews these salary levels annually based on a subjective mix of the Company's
performance, the executive's experience and contributions, and the levels of
compensation received by similarly situated executives at comparable companies,
and may increase (but not decrease) the base salaries if the Committee deems an
increase is warranted. The salaries of the other executive and senior officers
are established by the CEO, who evaluates these salaries in relationship to the
base salaries of the CEO and President and to their respective levels of
responsibility and contributions to the Company and based on the other criteria
described by the Committee in this report. The beliefs of the CEO and the
Committee regarding base salary levels are based on their collective knowledge
and on formal compensation surveys. Annual adjustments are made to maintain base
salaries at levels competitive with comparable companies and to maintain an
equitable relationship between the base salaries of executive and senior
officers and overall merit increases for the Company's other employees. In the
case of an executive or senior officer joining the Company, base salaries are
also determined as one component of a total compensation package that is
competitive with compensation granted by that officer's prior employer and/or
other opportunities available to that officer.
Annual Incentive Compensation. The Company provides annual incentive
compensation in the form of bonuses. For bonuses paid to the CEO and the
President, the Committee assesses incentives accorded comparable positions in
other companies, the reporting of pre-tax profits for the year, a comparison of
financial returns on equity and assets at comparable banking institutions, and
limitations on the size of the bonus in relationship to the executive's base
salary. It analyzes the bonus amount in relationship to the Company's broader
corporate performance, its targeted growth objectives, and its results of
operations. It also analyzes the bonus amount for the CEO and the President in
relationship to the individual officer's responsibilities and his importance to
the Company's operating strategy. For bonuses other than those paid to the CEO
and the President, the CEO applies similar criteria to establish bonus amounts
for the other executive and senior officers.
Long-Term Incentive Compensation. The Company provides long-term
incentive compensation primarily in the form of stock options under its 1998
Stock Option Plan. The 1998 Plan provides for awards of up to 1,720,370 shares
of the Company's common stock. Options covering 1,677,005 are presently
outstanding and exercisable at an exercise price of $10.00 per share. Initial
stock option awards for executive and senior officers are individually
determined
9
<PAGE> 12
at or prior to employment at levels that are designed to attract qualified
executive and senior officers and in certain cases to be competitive with
options granted by their prior employers. Although the Company may make annual
grants of options, it has chosen to concentrate the grants at the inception of
employment and annual grants have not been a significant component of its
compensation plan.
Management receives value from option grants only if the common stock
appreciates over the long term. The amount of individual option grants is
determined based in part on competitive practices at comparable companies and on
the Company's philosophy of significantly linking executive compensation with
stockholder interests. In determining the size of individual grants, the
Committee also considers the number of shares subject to options previously
granted to each executive or senior officer, including the number of shares that
have vested and that remain unvested. The Committee believes that option grants
by the Company to its management are comparable to the average range for
similarly situated companies.
Section 162(m) of the Code limits the Company to a deduction for Federal
income tax purposes of no more than $1 million of compensation paid to certain
officers in a taxable year. Compensation above $1 million may be deducted if it
is "performance-based compensation" within the meaning of the Code. Gains
recognized upon exercise of non-qualified options are treated as compensation
under the Code, and may be subject to this limitation. The stock options granted
to the CEO and the President under the Company's 1998 Plan could result in
compensation of more than $1 million (depending on the market performance of the
common stock). The Company is uncertain whether compensation resulting from such
options will be treated as "performance-based" under the Treasury regulations
promulgated under Section 162(m) of the Code.
For additional information regarding options awards, see the compensation
tables preceding this report.
Corporate Performance and Chief Executive Officer Compensation. Edward
A. Townsend became Chief Executive Officer in September 1997. Under his
employment agreement, Mr. Townsend's annual base salary is $320,000 through
September 8, 2001. In addition, Mr. Townsend holds options covering 811,640
shares of the Company's common stock exercisable at $10.00 per share. The
agreement provides that the Company may increase, but not decrease, his base
salary during the term of the agreement and also provides for bonuses in amounts
to be determined by the Board of Directors (or the Committee). The agreement was
approved by the disinterested members of the Board of Directors. While the
Committee may increase Mr. Townsend's base salary, the Committee chose to
increase Mr. Townsend's compensation through a bonus award of $225,000 (versus
$175,000 in 1998) and made no increase in his base salary. The Company granted
no additional options to Mr. Townsend.
In determining the amounts of cash compensation and stock options, the
Committee considered Mr. Townsend's experience as an executive officer in the
banking industry, his structuring and implementation of the Company's private
placement, redemption and recapitalization, and his efforts in revamping the
Company's operating strategy and the success of that strategy to date, as
reflected in the Company's steadily increasing earnings. In addition, the
Committee compared Mr. Townsend's cash compensation (base salary and bonus) to
the cash compensation of other chief executive officers of comparable banking
institutions, as indicated by an independently prepared, compensation survey.
Based on this survey and other available information, the Committee believes the
amount of the cash compensation is comparable to or less than the compensation
packages of similarly situated chief executive officers in the banking industry.
This somewhat lower cash compensation level, the greater emphasis upon the bonus
portion, and reliance upon stock options as a substantial portion of
10
<PAGE> 13
executive compensation reflects the Committee's emphasis upon incentive
compensation and its belief that incentive compensation better aligns executive
compensation with Company performance and, ultimately, the interests of the
stockholders.
The Company remains committed to a philosophy of pay for performance.
Dated: February 16, 2000
The Compensation and
Retirement Committee of
Local Financial Corporation
Mr. Joseph A. Leone, Chairman
Mr. Andrew M. Coats
Mr. Gene C. Howard
As permitted by SEC rules, the foregoing reporting is not deemed "filed"
with the SEC and is not incorporated by reference into the Company's Annual
Report on Form 10-K.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
No executive officer or employee of the Company participated in Board
decisions about executive compensation. No member of the Board and no employee
of the Company serves or has served on the compensation committee (or board of
directors of a corporation lacking a compensation committee) of a corporation
employing a member of the Board.
EMPLOYMENT AGREEMENTS
The Company and Local Oklahoma (the "Employers") have entered into
employment agreements with Mr. Edward A. Townsend and Mr. Jan A. Norton (the
"Executives"). Under such employment agreements, the Employers will employ the
Executives for a term of three years, which term shall be extended each year
beginning at the end of the first anniversary of the effective date for a
successive additional one-year period upon approval of the Employers' Board of
Directors, unless either party elects, not less than 60 days prior to the annual
anniversary date, not to extend the employment term. In addition, the annual
base salaries for Messrs. Townsend and Norton will be $320,000 and $240,000,
respectively, which is to be paid in monthly installments. The employment
agreements further provide each of the Executives with the same employee
benefits that are provided by Local Oklahoma to executive employees generally,
provide for vacation and participation in Local Oklahoma's benefit plans,
membership in a golf and country club in Oklahoma City, an automobile of a type
and kind comparable to that which Local Oklahoma provides to its other executive
officers, and a one time moving/ housing allowance of $100,000 and $50,000 to
Messrs. Townsend and Norton, respectively.
Each of the foregoing employment agreements are terminable with or
without cause by the Employers. The Executives will have no right to
compensation or other benefits pursuant to the employment agreements for any
period after voluntary termination or termination by the Employers for cause.
The employment agreements provide for benefits comparable to those of the
severance agreements described below if the employment agreements are terminated
by the Employers other than for cause or as a result of the Executive's death or
disability.
SEVERANCE AGREEMENTS
Local Oklahoma has entered into severance agreements with Mr. Robert L.
Vanden, Mr. James N. Young and Mr. Harold A. Bowers to encourage their continued
employment.
11
<PAGE> 14
Local Oklahoma also has entered into severance agreements with three other
executive officers and amended the employment agreements of Mr. Edward A.
Townsend and Mr. Jan A. Norton to add comparable severance provisions. These
agreements provide for certain severance benefits if the executive's employment
is terminated by Local Oklahoma without "cause" or by the executive for "good
reason" (as those terms are defined in the severance agreements). Upon such
termination of employment, the executive will be entitled to receive a lump sum
severance payment equal to the executive's annual base salary. In addition, any
vesting or other restrictions on the executive's stock options or other equity
compensation benefit shall lapse and the option shall become immediately
exercisable. Each severance agreement has a three-year term, which can be
extended for up to two years after a change of control.
CERTAIN TRANSACTIONS
Local Oklahoma provides loans to its directors and officers in the
ordinary course of business, on substantially the same terms, including interest
rates and collateral, as those prevailing at the time for comparable
transactions with other persons. Such loans do not involve more than the normal
risk of collectibility or present other unfavorable features. As of December 31,
1999, and combining all loans to directors and executive officers in excess of
$60,000, Local Oklahoma had an amount outstanding of $2,625,402. This amount
represented 2.1% of the Company's consolidated stockholders' equity as of that
date.
COMPLIANCE WITH SECTION 16(a) OF THE SECURITIES EXCHANGE ACT OF 1934
Section 16(a) of the Exchange Act requires the Company's directors and
executive officers, and persons who own more than ten percent of a registered
class of the Company's equity securities, to file with the Securities and
Exchange Commission initial reports of ownership and reports of changes in
ownership of Common Stock and other equity securities of the Company. Officers,
directors and greater than ten percent stockholders are required by SEC
regulation to furnish the Company with copies of all Section 16(a) forms they
file.
The Company is aware of the following filings and transactions that were
not reported timely in 1999:
<TABLE>
<CAPTION>
NUMBER OF NUMBER OF
NAME LATE REPORTS TRANSACTIONS AFFECTED
- ---- ------------ ---------------------
<S> <C> <C>
Harold L. Bowers 1 1
Robert A. Kotecki 1 2
</TABLE>
In addition to the above transactions, Harold A. Bowers, William C. Lee, Richard
L. Park, Christopher C. Turner, Robert L. Vanden and James N. Young received
stock options in November 1999, which were reported on late Form 5's filed March
7, 2000.
12
<PAGE> 15
ITEM 2
RATIFICATION OF AUDITORS
VOTE ON THE INDEPENDENT AUDITORS
On the recommendation of the Audit and Compliance Committee, the Board of
Directors appointed KPMG, LLP, independent certified public accountants, to
audit the consolidated financial statements of the Company for the year ended
December 31, 2000. The Company is advised that no member of KPMG, LLP, has any
direct or material indirect financial interest in the Company or, during the
past three years, has had any connection with the Company in the capacity of
promoter, underwriter, voting trustee, director, officer or employee.
Ratification of the Board's appointment shall be effective upon receiving the
affirmative vote of the holders of a majority of the common stock present or
represented by proxy and entitled to vote at the Annual Meeting.
THE BOARD OF DIRECTORS RECOMMENDS VOTING "FOR" THIS PROPOSAL.
If the appointment is not ratified, the Board of Directors will consider
the appointment of other independent auditors. A representative from KPMG, LLP,
is expected to be present at the Annual Meeting, will be offered the opportunity
to make a statement, and will be available to respond to appropriate questions.
AUDIT AND COMPLIANCE COMMITTEE REPORT
Composition. The Audit and Compliance Committee was formed in 1998 and
is presently composed of Mr. Kenneth W. Townsend (chair), Dr. Joseph A. Leone
and Mr. Andrew M. Coats. Each of these members is an "independent director" and
"financially literate", as defined under the recently adopted Nasdaq listing
standards. The Nasdaq listing standards define an independent director generally
as a person, other than an officer of the company, who does not have a
relationship with the Company that would interfere with the director's exercise
of independent judgment. The Nasdaq listing standards define "financially
literate" as being able to read and understand fundamental financial statements
(including the Company's balance sheet, income statement and cash flow
statement). In particular, Mr. Townsend has significant financial management
expertise from having served as President of Boatmen's First National Bank of
Oklahoma, Oklahoma City, Oklahoma, from August 1991 through June 1997.
Functions. The Audit and Compliance Committee operates under a written
charter, which is attached to this Proxy Statement as Addendum I (the
"Charter"). The Charter describes the Audit and Compliance Committee's
composition, its mission statement and principal functions, its responsibilities
for review of financial statements and internal financial procedures and
controls, and its relationships with the Board of Directors, the independent
accountants and the Company's financial staff. The Audit and Compliance
Committee's responsibilities include the prior review of the Company's annual
financial statements and substantiating the auditor's independence and their
accountability to the Board of Directors and the Audit and Compliance Committee.
The Audit and Compliance Committee believes that its Charter meets or exceeds
the charter standards recently adopted by the Nasdaq.
Actions Relating to the 1999 Financial Statements. The Audit and
Compliance Committee has taken the following actions with respect to the
Company's audited financial statements as of and for the year ended December 31,
1999 (the "Financial Statements"):
- the Audit and Compliance Committee has reviewed and discussed the
Financial Statements with management;
13
<PAGE> 16
- the Audit and Compliance Committee has discussed with the independent
auditors the matters required to be discussed by SAS 61 and SAS 90
(Communication with Audit Committees and Audit Committee
Communications, respectively);
- the Audit and Compliance Committee has received written disclosures and
the letter from the independent auditors required by Independence
Standards Board Standard No. 1 (Independence Discussions with Audit
Committees) and has discussed with the auditors the auditors'
independence; and
- the Audit and Compliance Committee has recommended to the Board of
Directors that the Financial Statements be included in the Company's
annual report on Form 10-K, based upon its review and discussions with
the independent auditors.
Dated: February 16, 2000
The Audit and Compliance Compensation of
Local Financial Corporation
Mr. Kenneth W. Townsend, Chairman
Mr. Joseph A. Leone
Mr. Andrew M. Coats
As permitted by SEC rules, the foregoing reporting is not deemed "filed"
with the SEC and is not incorporated by reference into the Company's Annual
Report on Form 10-K.
14
<PAGE> 17
PERFORMANCE GRAPH
The following graph compares the market values of the Company's Common
Stock to the Nasdaq -- Total US Index and the SNL $1B-$5B Bank Asset-Size Index.
The graph assumes an investment of $100 on April 22, 1997 (the date the Common
Stock began trading), and that all dividends were reinvested and are weighted on
a market capitalization basis.
[Performance Graph]
<TABLE>
<CAPTION>
GRAPH DOLLAR VALUES 4/22/97 6/30/98 12/31/98 6/30/99 12/31/99
- ------------------- ------- ------- -------- ------- --------
<S> <C> <C> <C> <C> <C>
Local Financial Corporation 100 94.6 65.5 71.8 75.9
Amex US Index 100 102.9 94.7 N/A N/A
SNL Amex Thrift Index 100 90.8 70.6 N/A N/A
Nasdaq -- Total US N/A N/A N/A 141.2 208.5
SNL $1B-$5B Bank Asset Size Index N/A N/A N/A 89.3 82.1
</TABLE>
As permitted by SEC rules, the "Performance Graph" section is not deemed
"filed" with the SEC and is not incorporated by reference into the Company's
Annual Report on Form 10-K.
Effective May 11, 1999, the Company converted the Bank from a savings
bank to a national banking association and the Company was registered as a bank
holding company on that same day. Subsequently, effective July 15, 1999, the
Company delisted its common shares from the American Stock Exchange and listed
them with the Nasdaq National Market System, trading as LFIN.
15
<PAGE> 18
OTHER INFORMATION ABOUT THE ANNUAL MEETING
OTHER MATTERS COMING BEFORE THE MEETING
As of the date of this Proxy Statement, the Company knows of no business
to come before the Annual Meeting other than that referred to above. The
Company's rules of conduct for the Annual Meeting prohibit the introduction of
substantive matters not previously presented to the Stockholders in a proxy
statement. As to other business, such as procedural matters, that may come
before the meeting, the person or persons holding proxies will vote those
proxies in the manner they believe to be in the best interests of the Company
and its Stockholders.
STOCKHOLDER PROPOSALS FOR THE NEXT ANNUAL MEETING
Any Stockholder who wishes to present a proposal at the Company's 2000
Annual Meeting of Stockholders must deliver such proposal to the Secretary of
the Company by January 31, 2001, for inclusion in the Company's proxy, notice of
meeting, and proxy statement for the 2000 Annual Meeting.
ADDITIONAL INFORMATION
The Company will bear the cost of soliciting proxies. Officers and
regular employees of the Company may solicit proxies by further mailings,
personal conversations, or by telephone, facsimile or other electronic
transmission. They will do so without compensation other than their regular
compensation. The Company will, upon request, reimburse brokerage firms and
others for their reasonable expenses in forwarding solicitation material to the
beneficial owners of stock.
THE COMPANY'S ANNUAL REPORT ON FORM 10-K, INCLUDING THE FINANCIAL
STATEMENTS AND SCHEDULES THERETO, FOR THE YEAR ENDED DECEMBER 31, 1999, WHEN
FILED WITH THE SECURITIES AND EXCHANGE COMMISSION, WILL BE FURNISHED WITHOUT
CHARGE TO ANY STOCKHOLDER UPON REQUEST TO MR. RICHARD L. PARK, CHIEF FINANCIAL
OFFICER, LOCAL FINANCIAL CORPORATION, 3601 N.W. 63RD STREET, OKLAHOMA CITY,
OKLAHOMA 73116. STOCKHOLDERS REQUESTING EXHIBITS TO THE FORM 10-K WILL BE
PROVIDED THE SAME UPON PAYMENT OF REPRODUCTION EXPENSES.
By Order of the Board of Directors
/s/ ALAN L POLLOCK
Alan L. Pollock
Secretary
March 20, 2000
16
<PAGE> 19
ADDENDUM I
LOCAL FINANCIAL CORPORATION
AUDIT AND COMPLIANCE COMMITTEE
CHARTER
The Board of Directors of Local Financial Corporation (the "Company") has
constituted and established an Audit and Compliance Committee (the "Committee")
with authority, responsibility, and specific duties as described in this Audit
and Compliance Committee Charter.
A. COMPOSITION
The Committee shall consist of three or more directors, each of whom is
independent of management and free from any relationship to that, in the opinion
of the Board of Directors, as evidenced by its annual selection of such
Committee members, would interfere with the exercise of independent judgment as
a Committee member. Each Committee member must also be able to read and
understand fundamental financial statements (including the company's balance
sheet, income statement and cash flow statement), or become able to do so within
a reasonable time after being appointed to the Committee. Furthermore, at least
one Committee member must have past employment experience in finance or
accounting, requisite professional certification in accounting, or other
comparable experience resulting in financial sophistication (including having
been a chief executive officer, chief financial officer or other senior officer
with financial oversight responsibilities). These requirements are intended to
satisfy the Nasdaq listing requirements relating to the composition of audit
committees, and shall be construed accordingly.
B. MISSION STATEMENT AND PRINCIPAL FUNCTIONS
The Committee shall have access to all records of the Company, shall
perform the following functions, and shall have and may exercise such powers as
are appropriate to its purpose. The Committee shall:
(1) Understand the accounting policies used by the Company for
financial reporting and tax purposes and approve their application; it
shall also consider any significant changes in accounting policies that are
proposed by management or required by regulatory or professional
authorities.
(2) Review the Company's audited financial statements and related
footnotes and the "Management's Discussion and Analysis" portion of the
annual report on Form 10-K prior to the filing of such report, and
recommend to the Board of Directors whether such financial statements shall
be included in the Company's annual report on Form 10-K, based upon the
Committee's review and discussions with the outside auditors.
(3) Ensure that the outside auditors review the Company's interim
financial statements before the Company files its quarterly report on Form
10-Q with the SEC.
(4) Study the format and timeliness of financial reports presented to
the public or used internally and, when indicated, recommend changes for
appropriate consideration by management.
(5) Meet with the Company's legal counsels to review legal matters
that may have a significant impact on the Company or its financial reports.
<PAGE> 20
(6) Insure that management has been diligent and prudent in
establishing accounting provisions for probable losses or doubtful values
and in making appropriate disclosures of significant financial conditions
or events.
(7) Review press releases submitted by management in connection with
the release of quarterly, annual, or special financial statements. In
respect thereto to recommend to the Chairman of the Board any changes that
appear necessary to conform releases with appropriate professional
practice.
(8) Review and reassess the adequacy of this Charter annually.
Independent Accountants
(9) Affirm an understanding with the outside auditors that they are
ultimately accountable to the Board of Directors and to the Committee and
that the Board of Directors and the Committee have the ultimate authority
and responsibility to select, evaluate and, where appropriate, replace the
outside auditors (or to nominate the outside auditors to be proposed for
shareholder approval in any proxy statement).
(10) Ensure that the outside auditors submit to the Committee written
disclosures and the letter from the auditors required by Independence
Standards Board Standard No. 1 (Independence Discussions with Audit
Committees), and discuss with the auditors the auditors' independence.
(11) Maintain an active dialogue with the outside auditors regarding
any disclosed relationships or services that could affect the objectivity
and independence of the outside auditors, and be responsible for taking, or
recommending that the Board of Directors take, appropriate action to
oversee the outside auditors' independence.
(12) Discuss with the outside auditors the matters required to be
discussed by SAS 61 (Communication with Audit Committees) and SAS 90 (Audit
Committee Communications).
(13) Review management's recommendation on the outside auditors to be
selected each year and make a final proposal to the Board of Directors in
respect to such appointment.
(14) With the Chief Financial Officer, review the general scope of the
annual outside audit, approve the extent and nature of such activity, and
agree upon the general level of the related fees.
(15) Consider any significant non-audit assignments given to the
outside auditors and judge their impact upon the general independence of
the outside auditors as they perform the annual audit.
(16) Maintain independent contact with the senior personnel of the
outside auditors and communicate freely and openly with them regarding
financial developments.
Internal Audit Department
(17) Cause to be maintained an appropriate internal audit program
covering the Bank and all its subsidiaries by internal auditors who report
to the Committee and the Board of Directors.
(18) Review and approve the audit plan and budget of the Internal
Audit Department which shall report at least annually to the Committee
regarding the staffing plans, financial budget and audit schedules and the
adequacy thereof.
2
<PAGE> 21
(19) Act upon management's recommendation in regard to the selection
of and/or the dismissal of the Director of Internal Audit.
(20) Review the scope and coordination efforts of the joint
internal/external audit program with both internal and external auditors.
(21) Review reports of any material defalcations and other reportable
incidents related to the Company's financial statement or financial
reporting and supervise and direct any special projects or investigations
considered necessary by the Committee.
(22) Review reports of the internal auditors and reports of financial
examinations made by regulatory agencies and management's response to them,
evaluate the reports in regard to control and/or compliance implications
and determine whether appropriate corrective action has been implemented.
Regulatory Compliance
(23) Cause to be maintained an appropriate regulatory compliance
program covering the Bank and its subsidiaries to aid compliance with the
laws and regulations applicable to financial institutions.
(24) Review reports of the compliance officer covering the scope and
adequacy of the compliance program, the degree of compliance and
cooperation, and the implementation of corrective actions (if necessary or
appropriate).
(25) Receive reports on the Bank's compliance with Section 112 of the
Federal Deposit Insurance Corporation Improvement Act and review the basis
for the reports issued under the rule with management, the Internal Audit
Department and the Bank's independent public accountant.
Internal Controls and Procedures
(26) Review periodically the scope and implications of the Company's
internal financial controls and procedures and consider their adequacy.
(27) Maintain direct access to the senior Bank staff. If useful,
require that studies be initiated on subjects of special interest to the
Committee.
(28) Review the comments on internal control submitted by the outside
and internal auditors and insure that appropriate suggestions for
improvement are promptly considered for inclusion into the Company's
internal financial procedures.
Special Duties
(29) If requested by the Chairman of the Board, make special studies
of matters related to the financial operations of the Company or to
allegations of managerial misconduct by its executives.
C. MEETINGS
Meetings of the Committee will be held annually after completion of the
financial audit and prior to the filing of the annual report on Form 10-K .
Meetings shall also be held at such other times as shall be required by
the Chairman of the Board or the Committee. Meetings may be called by the
Chairman of the Committee and/or management of the Company. All meetings of the
Committee shall be held pursuant to the Bylaws of the Company with regard to
notice and waiver thereof. Written minutes
3
<PAGE> 22
pertaining to each meeting shall be filed with the Secretary and an oral report
shall be presented by the Committee at each Board meeting.
At the invitation of the Chairman of the Committee, the meetings shall be
attended by the Chief Executive Officer, the Chief Financial Officer, the
representatives of the independent accounting firm, and such other persons whose
attendance is appropriate to the matters under consideration.
Adopted by Committee
as of February 16, 2000
Approved by Board
as of February 23, 2000
4
<PAGE> 23
LOCAL FINANCIAL CORPORATION
3601 N.W. 63rd Street
Oklahoma City, Oklahoma 73116
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
P The undersigned hereby appoints Edward A. Townsend and Richard L. Park
as Proxies, each with the power to appoint his substitute, and hereby
R authorizes them to represent and to vote, as designated below, all the
shares of common stock of Local Financial Corporation held of record by
O the undersigned on March 15, 2000, at the Annual Meeting of Stockholders
to be held on April 27, 2000, or any adjournment thereof.
X
Y
<TABLE>
<S> <C>
1. ELECTION OF DIRECTORS
[ ] FOR all nominees listed below [ ] WITHHOLD AUTHORITY to
(except as marked to the contrary below) vote for all nominees listed below
(INSTRUCTION: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE
STRIKE THROUGH THE NOMINEE'S NAME BELOW.)
Jan A. Norton Joseph A. Leone
2. RATIFICATION OF KPMG, LLP, AS INDEPENDENT AUDITORS FOR 2000
[ ] FOR [ ] AGAINST [ ] ABSTAIN
</TABLE>
(OVER)
[page break]
P THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED
HEREIN BY THE UNDERSIGNED STOCKHOLDER. IF NO DIRECTION IS MADE, THIS
PROXY WILL BE VOTED FOR EACH OF THE DIRECTOR NOMINEES AND FOR
R RATIFICATION OF THE INDEPENDENT AUDITORS.
Please sign exactly as name appears below. When shares are held by
O joint tenants, both should sign. When signing as attorney, executor,
administrator, trustee or guardian, please give full title as such. If a
corporation, please sign in full corporate name by President or other
X authorized officer. If a partnership, please sign in partnership name by
authorized person.
Y Dated: ___________________, 2000
---------------------------------------
(Signature)
---------------------------------------
(Signature if held jointly)
------------------------------------------------------------------------------
PLEASE MARK, SIGN, DATE AND RETURN THIS PROXY
CARD PROMPTLY USING THE ENCLOSED ENVELOPE.
------------------------------------------------------------------------------
