<PAGE> 1
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES EXCHANGE ACT OF 1934
Filed by the registrant /X /
Filed by a party other than the registrant /__/
Check the appropriate box:
/__/ Preliminary proxy statement
/X / Definitive proxy statement
/__/ Definitive additional materials
/__/ Soliciting material pursuant to Rule 14a-11(c) or Rule 14a-12
PCB HOLDING COMPANY
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(Name of Registrant as Specified in Its Charter)
PCB HOLDING COMPANY
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(Name of Person(s) Filing Proxy Statement)
Payment of filing fee (Check the appropriate box):
/X / No fee required.
/__/ $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
/__/ Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
N/A
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(2) Aggregate number of securities to which transactions applies:
N/A
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(3) Per unit price or other underlying value of transaction computed pursuant
to Exchange Act Rule 0-11:
N/A
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(4) Proposed maximum aggregate value of transaction:
N/A
- --------------------------------------------------------------------------------
/__/ Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11 (a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the form or schedule and the date of its filing.
(1) Amount previously paid:
N/A
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(2) Form, schedule or registration statement no.:
N/A
- --------------------------------------------------------------------------------
(3) Filing party:
N/A
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(4) Date filed:
N/A
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<PAGE> 2
PCB HOLDING COMPANY
March 19, 1999
Dear Stockholder:
You are cordially invited to attend the first annual meeting of
stockholders of PCB Holding Company. The meeting will be held at the Hoosier
Heights Country Club, Highway 237, Tell City, Indiana, on Thursday, April 22,
1999 at 10:00 a.m., local time.
The notice of annual meeting and proxy statement appearing on the
following pages describe the formal business to be transacted at the meeting.
During the meeting, we will also report on the operations of the Company.
Directors and officers of the Company, as well as a representative from the
Company's independent accounting firm, Monroe Shine & Co., Inc., will be present
to respond to appropriate questions of stockholders.
It is important that your shares are represented at this meeting, whether
or not you attend the meeting in person and regardless of the number of shares
you own. To make sure your shares are represented, we urge you to complete and
mail the enclosed proxy card. If you attend the meeting, you may vote in person
even if you have previously mailed a proxy card.
We look forward to seeing you at the meeting.
Sincerely,
/s/ Carl D. Smith
Carl D. Smith
PRESIDENT AND CHIEF EXECUTIVE OFFICER
<PAGE> 3
PCB HOLDING COMPANY
819 MAIN STREET
TELL CITY, INDIANA 47586
(812) 547-7094
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NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON APRIL 22, 1999
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NOTICE IS HEREBY GIVEN that the annual meeting of stockholders of PCB
Holding Company (the "Company") will be held at the Hoosier Heights Country
Club, Highway 237, Tell City, Indiana, on Thursday, April 22, 1999, at 10:00
a.m., local time, for the following purposes:
(1) To elect two directors to serve for a term of one year, two
directors to serve for a term of two years and two directors to
serve for a term of three years;
(2) To consider and vote upon a proposal to adopt the PCB Holding
Company 1999 Stock Option Plan;
(3) To consider and vote upon a proposal to adopt the PCB Holding
Company Management Recognition and Development Plan;
(4) To ratify the appointment of Monroe Shine & Co., Inc. as auditors
for the Company for the fiscal year ending December 31, 1999; and
(5) To consider and act upon such other matters as may properly come
before the meeting or any adjournments thereof.
NOTE: 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, by original or later
adjournment, the meeting may be adjourned. Stockholders of record at the close
of business on February 22, 1999 are entitled to notice of and to vote at the
meeting or any adjournment or postponement.
Please complete and sign the enclosed form of proxy, which is solicited by
the Board of Directors, and mail it promptly in the enclosed envelope. The proxy
will not be used if you attend the meeting and vote in person.
BY ORDER OF THE BOARD OF DIRECTORS
/s/ Clarke A. Blackford
Clarke A. Blackford
SECRETARY
Tell City, Indiana
March 19, 1999
IMPORTANT: THE PROMPT RETURN OF PROXIES WILL SAVE THE COMPANY THE EXPENSE OF
FURTHER REQUESTS FOR PROXIES IN ORDER TO ENSURE A QUORUM. A SELF-ADDRESSED
ENVELOPE IS ENCLOSED FOR YOUR CONVENIENCE. NO POSTAGE IS REQUIRED IF MAILED IN
THE UNITED STATES.
<PAGE> 4
- --------------------------------------------------------------------------------
PROXY STATEMENT
OF
PCB HOLDING COMPANY
819 MAIN STREET
TELL CITY, INDIANA 47586
(812) 547-7094
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ANNUAL MEETING OF STOCKHOLDERS
APRIL 22, 1999
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This proxy statement is furnished in connection with the solicitation of
proxies by the Board of Directors of PCB Holding Company ("Company") to be used
at the annual meeting of stockholders of the Company. The Company is the holding
company for Peoples Community Bank ("Bank"). The annual meeting will be held at
the Hoosier Heights Country Club, Highway 237, Tell City, Indiana on Thursday,
April 22, 1999, at 10:00 a.m., local time. This proxy statement and the enclosed
proxy card are being first mailed to stockholders on or about March 19, 1999.
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VOTING AND PROXY PROCEDURE
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STOCKHOLDERS ENTITLED TO VOTE. Stockholders of record as of the close of
business on February 22, 1999 are entitled to notice of and to vote at the
annual meeting. As of February 22, 1999, the Company had 396,750 shares of
common stock issued and outstanding. Each outstanding share entitles its holder
to cast one vote on each matter to be voted upon. As provided in the Company's
Articles of Incorporation, record holders of the Company's common stock who
beneficially own, either directly or indirectly, in excess of 10% of the
Company's outstanding shares are not entitled to any vote in respect of the
shares held in excess of the 10% limit.
QUORUM. The presence, in person or by proxy, of a majority of the
outstanding shares of common stock entitled to vote is necessary to constitute a
quorum at the annual meeting. Abstentions and broker non-votes will be counted
as shares present and entitled to vote at the annual meeting for purposes of
determining the existence of a quorum. A broker non-vote occurs when a nominee
holding shares for a beneficial owner does not vote on a particular proposal
because the nominee does not have discretionary voting power with respect to
that item and has not received voting instructions from the beneficial owner.
VOTING. The Board of Directors solicits proxies so that each stockholder
has the opportunity to vote on the proposals to be considered at the annual
meeting. When a proxy card is returned properly signed and dated, the shares
represented by that proxy will be voted in accordance with the instructions on
the proxy card. If no instructions are indicated on a properly completed proxy,
the shares represented by that proxy will be voted as recommended by the Board
of Directors. If a stockholder of record attends the annual meeting, he or she
may vote by ballot. "Street name" stockholders who wish to vote at the annual
meeting will need to obtain a proxy form from the institution that holds their
shares.
The Board recommends a vote:
/ / FOR the election of the nominees for director;
/ / FOR adoption of the PCB Holding Company 1999 Stock Option Plan;
/ / FOR adoption of the PCB Holding Company Management Recognition and
Development Plan; and
/ / FOR ratification of the appointment of Monroe Shine & Co., Inc.
1
<PAGE> 5
The affirmative vote of a plurality of the votes cast at the annual
meeting is required for the election of directors. Stockholders are not
permitted to cumulate their votes for the election of directors. Votes that are
withheld and broker non-votes will have no effect on the outcome of the election
because the nominees receiving the greatest number of votes will be elected.
All other matters to be voted on will be decided by the affirmative vote
of a majority of the votes cast at the annual meeting. On any such matter,
abstentions and broker non-votes will have no effect on the voting.
REVOCATION OF A PROXY. Stockholders who execute proxies retain the right
to revoke them at any time before they are voted. You may revoke your proxy by
delivering written notice in person or by mail to the Secretary of the Company
or by filing a later proxy prior to a vote being taken on a particular proposal
at the annual meeting. Attendance at the annual meeting will not automatically
revoke a proxy, but a stockholder of record in attendance may request a ballot
and vote in person, which will revoke a prior granted proxy.
PARTICIPANTS IN THE BANK'S 401(K) PLAN. If you hold shares of the
Company's common stock through the Bank's 401(k) plan, you will receive voting
instructions from the plan's administrator. Please complete and return those
instructions promptly to ensure that your shares are represented at the annual
meeting.
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STOCK OWNERSHIP
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The Company knows of no single person or group who beneficially owned more
than 5% of the outstanding shares of the Company's common stock at February 22,
1999.
The following table sets forth, as of February 22, 1999, information as to
shares of the Company's common stock beneficially owned by the Company's
directors, by the Chief Executive Officer and by all directors and executive
officers as a group.
<TABLE>
<CAPTION>
NUMBER OF SHARES PERCENT OF SHARES
NAME BENEFICIALLY OWNED(1) OUTSTANDING
- ----- ------------------------- -----------------------
<S> <C> <C>
James L. Wittmer 4,000(2) 1.0%
Howard L. Traphagen 6,500 1.6
James G. Tyler 4,500(3) 1.1
Daniel P. Lutgring 3,674 0.9
Marion L. Ress 7,500 1.9
Carl D. Smith(4) 4,500(5) 1.1
All Executive Officers and 31,674 8.0%
Directors as a Group (7 persons)
- ---------------------------
(1) In accordance with Rule 13d-3 under the Securities Exchange Act of 1934, a
person is deemed to be the beneficial owner, for purposes of this table,
of any shares of common stock if he or she has voting and/or investment
power with respect to such shares. The table includes shares owned by
spouses and other immediate family members, shares held in trust, shares
held in retirement accounts or funds for the benefit of the named
individuals, and other forms of ownership over which shares the persons
named in the table may possess voting and/or investment power.
(2) Includes 2,000 shares owned by Mr. Wittmer's spouse.
(3) Includes 500 shares owned by Mr. Tyler's spouse.
(4) Mr. Smith is also the President and Chief Executive Officer of the Company.
(5) Includes 500 shares owned by Mr. Smith's spouse.
</TABLE>
2
<PAGE> 6
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PROPOSAL 1 -- ELECTION OF DIRECTORS
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The Company's Board of Directors consists of six members. The Board is
divided into three classes with three-year staggered terms, with approximately
one-third of the directors elected each year. Pursuant to Indiana law, all six
directors will be elected at the annual meeting to serve for a one, two or
three-year term, or until their respective successors have been elected and
qualified. The nominees for election to serve for a one-year term, or until
their respective successors have been elected and qualified, are James L.
Wittmer and Howard L. Traphagen. The nominees for election to serve for a
two-year term, or until their respective successors have been elected and
qualified, are James G. Tyler and Daniel P. Lutgring. The nominees for election
to serve for a three-year term, or until their respective successors have been
elected and qualified, are Marion L. Ress and Carl D. Smith. All of the nominees
are current members of the Boards of Directors of the Company and the Bank.
It is intended that the proxies solicited by the Board of Directors will
be voted for the election of the above named nominees. If any nominee is unable
to serve, the shares represented by all valid proxies will be voted for the
election of such substitute as the Board of Directors may recommend or the Board
of Directors may adopt a resolution to reduce the size of the Board. At this
time the Board of Directors knows of no reason why any nominee might be unable
to serve.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE ELECTION OF ALL OF THE
NOMINEES.
The following table sets forth certain information regarding the nominees
for election at the annual meeting.
<TABLE>
<CAPTION>
YEAR FIRST
ELECTED TERM TO
NAME AGE(1) DIRECTOR(2) EXPIRE(3)
- ----- ---------- ---------- ---------
<S> <C> <C> <C>
James L. Wittmer 73 1976 2000
Howard L. Traphagen 68 1987 2000
James G. Tyler 49 1989 2001
Daniel P. Lutgring 45 1997 2001
Marion L. Ress 68 1980 2002
Carl D. Smith 52 1976 2002
- ---------------------------
(1) As of December 31, 1998.
(2) Includes prior service on the Board of Directors of the Bank.
(3) Assuming the individual is elected.
</TABLE>
3
<PAGE> 7
The present principal occupation and other business experience during the
last five years of each nominee for election is set forth below:
JAMES L. WITTMER is a retired businessman and investor. Mr. Wittmer serves
as Chairman of the Board of the Company and the Bank.
HOWARD L. TRAPHAGEN is the retired President and majority owner of Lauer
Floral Co., Tell City, Indiana.
JAMES G. TYLER has practiced as an attorney in Tell City, Indiana since
1982.
DANIEL P. LUTGRING is the co-owner of Lutgring Bros., Inc., a contractor
and earthmover in Tell City, Indiana.
MARION L. RESS is the retired president and majority owner of Frederick
Sheet Metal, Inc. in Tell City, Indiana.
CARL D. SMITH is the President and Chief Executive Officer of the Company,
positions he has held since its formation in 1998. Mr. Smith is also the
President and Chief Executive Officer of the Bank, positions he has held since
1976. Mr. Smith has been employed by the Bank since 1969.
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MEETINGS AND COMMITTEES OF THE BOARD OF DIRECTORS
- --------------------------------------------------------------------------------
The business of the Company and the Bank is conducted through meetings and
activities of their Boards of Directors and their committees. During the fiscal
year ended December 31, 1998, the Board of Directors of the Company held 10
regular meetings. No director attended fewer than 75% of the total meetings of
the Board of Directors and of committees on which such director served.
The entire Board of Directors of the Company serves as the Audit Committee
and receives and reviews all reports prepared by the Company's external auditor.
The Board of Directors met one time during 1998 in its capacity as the Audit
Committee.
The Board of Directors of the Company maintains a Compensation Committee,
consisting of Directors Wittmer, Tyler and Traphagen, which is responsible for
setting the compensation of all employees. The Compensation Committee did not
meet in 1998. The Board of Directors of the Bank also maintains a Compensation
Committee, consisting of the same members as the Company's Compensation
Committee. The Bank's Compensation Committee met one time in 1998.
The entire Board of Directors of the Company serves as the Nominating
Committee. The Nominating Committee met on January 22, 1999 to nominate persons
for election at the annual meeting.
The Board of Directors of the Bank maintains an Executive Committee,
consisting of Directors Wittmer, Smith, Traphagen and Ress, which acts on behalf
of the Board of Directors between meetings. The Executive Committee met 33 times
in 1998.
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DIRECTORS' COMPENSATION
- --------------------------------------------------------------------------------
Directors of the Bank receive an annual retainer of $3,800 plus $100 per
meeting attended. The Chairman of the Board receives an additional $1,000 per
year. Non-employee members of the Executive Committee receive $25 per meeting
attended. Directors' fees are paid by the Bank and no separate fees are paid for
service on the Company's Board of Directors.
4
<PAGE> 8
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EXECUTIVE COMPENSATION
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SUMMARY COMPENSATION TABLE
The following information is furnished for the Company's chief executive
officer. No other executive officer of the Company received salary and bonus of
more than $100,000 during the year ended December 31, 1998.
<TABLE>
<CAPTION>
ANNUAL COMPENSATION (1)
------------------------------
OTHER
ANNUAL ALL OTHER
NAME AND POSITION YEAR SALARY BONUS COMPENSATION(2) COMPENSATION
- ----------------- ---- ------- ----- -------------- ------------
<S> <C> <C> <C> <C> <C>
Carl D. Smith 1998 $59,794 $1,540 $6,500 $9,352(3)
President and Chief 1997 54,356 1,605 5,350 8,477
Executive Officer
- ---------------------------------
(1) Compensation information for the year ended December 31, 1996 has been
omitted as neither the Company nor the Bank was a public company or a
subsidiary thereof at such time.
(2) This total consists of fees for serving on the Bank's Board of Directors.
It does not include the aggregate amount of perquisites and other personal
benefits, which was less than 10% of the total annual salary and bonus
reported.
(3) This total consists of a $3,680 contribution to the Bank's 401(k) Plan and
a $5,672 contribution to a money purchase pension plan maintained by the
Bank.
</TABLE>
EMPLOYMENT AGREEMENTS
The Company and the Bank (collectively, the "Employers") have entered into
a three-year employment agreement with Mr. Smith. Under the employment
agreement, the initial salary level for Mr. Smith is $59,500, which amount will
be paid by the Bank and may be increased at the discretion of the Board of
Directors or an authorized committee of the Board. On each anniversary of the
commencement date of the employment agreement, the term of the agreement may be
extended for an additional year at the discretion of the Board. The agreement is
terminable by the Employers at any time, by Mr. Smith if he is assigned duties
inconsistent with his initial position, duties, responsibilities and status, or
upon the occurrence of certain events specified by federal regulations. In the
event that Mr. Smith's employment is terminated without cause or upon his
voluntary termination following the occurrence of an event described in the
preceding sentence, the Bank would be required to honor the terms of the
agreement through the expiration of the current term, including payment of
current cash compensation and continuation of employee benefits.
The employment agreement also provides for a severance payment and other
benefits in the event of involuntary termination of employment in connection
with any change in control of the Employers. A severance payment also will be
provided on a similar basis in connection with a voluntary termination of
employment where, subsequent to a change in control, Mr. Smith is assigned
duties inconsistent with his position, duties, responsibilities and status
immediately prior to such change in control. The term "change in control" is
defined in the agreement as having occurred when, among other things, (a) a
person other than the Company purchases shares of the Company's common stock
pursuant to a tender or exchange offer for such shares, (b) any person (as such
term is used in Sections 13(d) and 14(d)(2) of the Securities Exchange Act of
1934) is or becomes the beneficial owner, directly or indirectly, of securities
of the Company representing 25% or more of the combined voting power of the
Company's then outstanding securities, (c) the membership of the Board of
Directors changes as the result of a contested election, or (d) stockholders of
the Company
5
<PAGE> 9
approve a merger, consolidation, sale or disposition of all or substantially all
of the Company's assets, or a plan of partial or complete liquidation.
The maximum value of the severance benefits under the employment agreement
is 2.99 times Mr. Smith's average annual compensation during the five-year
period preceding the effective date of the change in control (the "base
amount"). The employment agreement provides that the value of the maximum
benefit may be distributed, at Mr. Smith's election, (i) in the form of a lump
sum cash payment equal to 2.99 times Mr. Smith's base amount or (ii) a
combination of a cash payment and continued coverage under the Employers'
health, life and disability programs for a 36-month period following the change
in control, the total value of which does not exceed 2.99 times Mr. Smith's base
amount. Assuming that a change in control had occurred at December 31, 1998 and
that Mr. Smith elected to receive a lump sum cash payment, he would have been
entitled to a payment of approximately $177,900. Section 280G of the Internal
Revenue Code of 1986, as amended, provides that severance payments that equal or
exceed three times the individual's base amount are deemed to be "excess
parachute payments" if they are contingent upon a change in control. Individuals
receiving excess parachute payments are subject to a 20% excise tax on the
amount of such excess payments, and the Employers would not be entitled to
deduct the amount of such excess payments.
The employment agreement restricts Mr. Smith's right to compete against
the Employers for a period of one year from the date of termination of the
agreement if he voluntarily terminates employment, except in the event of a
change in control.
- --------------------------------------------------------------------------------
COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT
- --------------------------------------------------------------------------------
Section 16(a) of the Securities Exchange Act of 1934 requires the
Company's executive officers and directors, and persons who own more than 10% of
any registered class of the Company's equity securities, to file reports of
ownership and changes in ownership with the Securities and Exchange Commission.
Executive officers, directors and greater than 10% stockholders are required by
regulation to furnish the Company with copies of all Section 16(a) forms they
file.
Based solely on its review of the copies of such forms it has received and
written representations provided to the Company by the above referenced persons,
the Company believes that during the fiscal year ended December 31, 1998 its
reporting officers, directors and greater than 10% stockholders properly and
timely complied with all applicable filing requirements.
- --------------------------------------------------------------------------------
TRANSACTION WITH MANAGEMENT
- --------------------------------------------------------------------------------
Federal regulations require that all loans or extensions of credit to
executive officers and directors of insured financial institutions must be made
on substantially the same terms, including interest rates and collateral, as
those prevailing at the time for comparable transactions with other persons,
except for loans made pursuant to programs generally available to all employees,
and must not involve more than the normal risk of repayment or present other
unfavorable features. The Bank's policy is not to make any new loans or
extensions of credit to the Bank's executive officers and directors at different
rates or terms than those offered to the general public. In addition, loans made
to a director or executive officer in an amount that, when aggregated with the
amount of all other loans to such person and his related interests, are in
excess of the greater of $25,000 or 5% of the Bank's capital and surplus (up to
a maximum of $500,000) must be approved in advance by a majority of the
disinterested members of the Board of Directors. The aggregate amount of loans
by the Bank to its executive officers and directors was $418,161 at December 31,
1998.
6
<PAGE> 10
- --------------------------------------------------------------------------------
PROPOSAL 2 -- RATIFICATION OF THE 1999 STOCK OPTION PLAN
- --------------------------------------------------------------------------------
GENERAL
The Company's Board of Directors adopted the PCB Holding Company 1999
Stock Option Plan on January 22, 1999, subject to approval by the Company's
stockholders. The objective of the Stock Option Plan is to reward performance
and build the participant's equity interest in the Company by providing
long-term incentives and rewards to officers, key employees and other persons
who provide services to the Company and its subsidiaries and who contribute to
the success of the Company by their innovation, ability, industry, loyalty and
exceptional service.
The following summary is a brief description of the material features of
the Stock Option Plan. THIS SUMMARY IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO
THE STOCK OPTION PLAN, A COPY OF WHICH IS ATTACHED AS EXHIBIT A.
SUMMARY OF THE PLAN
TYPE OF STOCK OPTION GRANTS. The Stock Option Plan provides for the grant
of incentive stock options ("ISOs"), within the meaning of Section 422 of the
Internal Revenue Code of 1986, as amended, and Non-Qualified Stock Options
("NQSOs"), which do not satisfy the requirements for ISO treatment.
ADMINISTRATION. The Stock Option Plan is administered by the Company's
Board of Directors. Subject to the terms of the Plan and resolutions of the
Board, the Board interprets the Stock Option Plan and is authorized to make all
determinations and decisions thereunder. The Board also determines the
participants to whom stock options will be granted, the type and amount of stock
options that will be granted and the terms and conditions applicable to such
grants.
PARTICIPANTS. All officers and employees of the Company and its
subsidiaries and non-employee directors of the Company are eligible to
participate in the Stock Option Plan.
NUMBER OF SHARES OF COMMON STOCK AVAILABLE. The Company has reserved
39,675 shares of common stock for issuance under the Stock Option Plan in
connection with the exercise of options. Shares of common stock to be issued
under the Plan 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 before being exercised or is forfeited for any reason
will again be available for issuance under the Stock Option Plan.
STOCK OPTION GRANTS. The exercise price of each ISO or NQSO will not be
less than the fair market value of the common stock on the date the ISO or NQSO
is granted. The aggregate fair market value of the shares for which ISOs granted
to any employee may be exercisable for the first time by such employee during
any calendar year (under all stock option plans of the Company and its
subsidiaries) may not exceed $100,000.
Under generally accepted accounting principles, compensation expense is
generally not recognized with respect to the award of options to officers and
employees of the Company and its subsidiaries. However, the Financial Accounting
Standards Board recently indicated that it would propose rules during 1999 that
would generally require recognition of compensation expense with respect to
awards made to non-employees, including non-employee directors of the Company,
and that the proposed changes would apply to awards made after December 15,
1998.
The exercise price of an option may be paid in cash, common stock or other
property, by the surrender of all or part of the option being exercised, by the
immediate sale through a broker of the number of shares being acquired
sufficient to pay the purchase price, or by a combination of these methods, as
and to the extent permitted by the Board.
7
<PAGE> 11
Under the Stock Option Plan, the Board may permit participants to transfer
NQSOs to members of a participant's immediate family (including trusts for the
benefit of such family members and partnerships in which such family members are
the only partners). No ISO granted under the Stock Option Plan is transferable
except by will or the laws of descent and distribution. Each option may be
exercised during the holder's lifetime, only by the holder or the holder's
guardian or legal representative, and after death only by the holder's
beneficiary or, absent a beneficiary, by the estate or by a person who acquired
the right to exercise the option by will or the laws of descent and
distribution. Options may become exercisable in full at the time of grant or at
such other times and in such installments as the Board determines or as may be
specified in the Stock Option Plan. Options may be exercised during periods
before and after the participant terminates employment, as the case may be, to
the extent authorized by the Board or specified in the Stock Option Plan.
However, no option may be exercised after the tenth anniversary of the date the
option was granted. The Board may, at any time and without additional
consideration, accelerate the date on which an option becomes exercisable.
EFFECT OF A CHANGE IN CONTROL. In the event of a change in control (as
defined in the Stock Option Plan) of the Company, each outstanding stock option
grant will become fully vested and immediately exercisable. In addition, in the
event of a change in control, the Stock Option Plan provides for the cash
settlement of any outstanding stock option if provision is not made for the
assumption of the options in connection with the change in control.
TERM OF THE PLAN. The Stock Option Plan will be effective on July 2, 1999
but only if, before that date, the Plan is approved by the stockholders of the
Company. By postponing the effective date of the Stock Option Plan, options
granted under the Plan will not be subject to certain restrictions under Office
of Thrift Supervision regulations (including a limitation on the acceleration of
vesting in the event of a change in control) otherwise applicable to stock
compensation plans implemented prior to the first anniversary of the Bank's
mutual-to-stock conversion. The Stock Option Plan will expire on the tenth
anniversary of the effective date, unless terminated sooner by the Board.
AMENDMENT OF THE PLAN. The Stock Option Plan allows the Board to amend the
Plan without stockholder approval unless such approval is required to comply
with a tax law or regulatory requirement.
CERTAIN FEDERAL INCOME TAX CONSEQUENCES. The following brief description
of the tax consequences of stock option grants under the Stock Option Plan is
based on federal income tax laws currently in effect and does not purport to be
a complete description of such federal income tax consequences.
There are no federal income tax consequences either to the optionee or to
the Company upon the grant of an ISO or and NQSO. On the exercise of an ISO
during employment or within three months thereafter, the optionee will not
recognize any income and the Company will not be entitled to a deduction,
although the excess of the fair market value of the shares on the date of
exercise over the option price is includible in the optionee's alternative
minimum taxable income, which may give rise to alternative minimum tax liability
for the optionee. Generally, if the optionee disposes of shares acquired upon
exercise of an ISO within two years of the date of grant or one year of the date
of exercise, the optionee will recognize ordinary income, and the Company will
be entitled to a deduction, equal to the excess of the fair market value of the
shares on the date of exercise over the option price (limited generally to the
gain on the sale). The balance of any gain or loss will be treated as a capital
gain or loss to the optionee. If the shares are disposed of after the two year
and one year periods mentioned above, the Company will not be entitled to any
deduction, and the entire gain or loss for the optionee will be treated as a
capital gain or loss.
On exercise of an NQSO, the excess of the date-of-exercise fair market
value of the shares acquired over the option price will generally be taxable to
the optionee as ordinary income and deductible by the Company, provided the
Company properly withholds taxes in respect of the exercise. This disposition of
shares acquired upon the exercise of a NQSO will generally result in a capital
gain or loss for the optionee, but will have no tax consequences for the
Company.
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NEW PLAN BENEFITS
The Company anticipates that option grants will be made to non-employee
directors, officers and employees on or after the effective date of the Stock
Option Plan at levels consistent with other recently converted thrift
institutions. However, the Board has not made specific determinations regarding
the size of individual awards.
BOARD OF DIRECTORS RECOMMENDATION
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE ADOPTION OF THE STOCK
OPTION PLAN ATTACHED AS EXHIBIT A.
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PROPOSAL 3 -- RATIFICATION OF THE
MANAGEMENT RECOGNITION AND DEVELOPMENT PLAN
- --------------------------------------------------------------------------------
GENERAL
Subject to approval by the Company's stockholders, the Board of Directors
of the Company adopted the PCB Holding Company Management Recognition and
Development Plan (the "MRDP") on January 22, 1999 for the benefit of officers,
employees and non-employee directors of the Company and its subsidiaries. The
objective of the MRDP is to reward performance and build the participant's
equity interest in the Company by providing long-term incentives and rewards to
key management personnel and, key employees who provide services to the Company
and its subsidiaries and who contribute to the success of the Company by their
innovation, ability, industry, loyalty and exceptional service. In addition, the
company believes that the MRDP will provide an important retention incentive for
key personnel.
The following summary is a brief description of the material features of
the MRDP. THIS SUMMARY IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO THE MRDP, A
COPY OF WHICH IS ATTACHED AS EXHIBIT B.
SUMMARY OF THE MRDP
TYPE OF STOCK AWARDS. The MRDP provides for the award of common stock in
the form of restricted stock awards which are subject to the restrictions
specified in the MRDP or as determined by the Company's Board of Directors.
ADMINISTRATION. The MRDP is administered by the Board. Subject to the
terms of the MRDP and resolutions of the Board, the Board interprets the MRDP
and is authorized to make all determinations and decisions thereunder. The Board
also determines the participants to whom restricted stock awards will be made,
the number of shares of common stock covered by each award and the terms and
conditions applicable to such award.
PARTICIPANTS. All officers and employees of the Company and its
subsidiaries and non-employee directors of the Company are eligible to
participate in the MRDP.
NUMBER OF SHARES OF COMMON STOCK AVAILABLE. The Company has reserved
15,870 shares of common stock for issuance under the MRDP in the form of
restricted stock. Shares of common stock to be issued under the MRDP may be
either authorized but unissued shares, or reacquired shares held by the Company
in its treasury. Any shares subject to an award which is forfeited or is
terminated will again be available for issuance under the MRDP.
RESTRICTED STOCK AWARDS. Awards under the MRDP will be made in the form of
restricted shares of common stock that are subject to restrictions on transfer
of ownership. It is anticipated that the initial awards under the MRDP will vest
in equal installments over a three- to five-year period beginning on the first
anniversary of the date of grant.
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<PAGE> 13
Compensation expense in the amount of the fair market value of the common stock
at the date of the grant to the officer, employee or non-employee director will
be recognized during the period over which the shares vest. If a recipient
terminates employment or service with the Company or its subsidiaries for
reasons other than death or disability, the recipient forfeits all rights to
shares under restriction. If such termination is caused by death or disability,
all restrictions expire and all shares allocated become unrestricted. A
recipient will be entitled to voting and other stockholder rights with respect
to the shares while restricted. Dividends paid during the period of restriction
will, at the Board's discretion, be distributed to the recipient when paid or
held in escrow for the benefit of the recipient until the shares to which the
dividends relate are vested.
EFFECT OF A CHANGE IN CONTROL. In the event of a change in control (as
defined in the MRDP) of the Company, each outstanding award under the MRDP will
become fully vested.
TERM OF THE MRDP. The MRDP will be effective on July 2, 1999 but only if,
before that date, the MRDP is approved by the stockholders of the Company. By
postponing the effective date of the MRDP, awards under the MRDP will not be
subject to certain restrictions under Office of Thrift Supervision regulations
(including a limitation on the acceleration of vesting in the event of a change
in control) otherwise applicable to stock compensation plans implemented prior
to the first anniversary of the Bank's mutual-to-stock conversion. The MRDP will
expire on the tenth anniversary of the effective date, unless sooner terminated
by the Board.
AMENDMENT OF THE MRDP. The MRDP allows the Board to amend the MRDP without
stockholder approval unless such approval is required to comply with a tax law
or regulatory requirement.
CERTAIN FEDERAL INCOME TAX CONSEQUENCES. The following brief description
of the tax consequences of awards of restricted stock under the MRDP is based on
federal income tax laws currently in effect and does not purport to be a
complete description of such federal income tax consequences.
A participant who has been awarded restricted stock under the MRDP and
does not make an election under Section 83(b) of the Internal Revenue Code will
not recognize taxable income at the time of the award. At the time any transfer
or forfeiture restrictions applicable to the restricted stock award lapse, the
recipient will recognize ordinary income and the Company will be entitled to a
corresponding deduction equal to the excess of the fair market value of such
stock at such time over the amount paid therefor. Any dividend paid to the
recipient on the restricted stock at or prior to such time will be ordinary
compensation income to the recipient and deductible as such by the Company.
A recipient of a restricted stock award who makes an election under
Section 83(b) of the Internal Revenue Code will recognize ordinary income at the
time of the award and the Company will be entitled to a corresponding deduction
equal to the fair market value of such stock at such time over the amount paid
therefor. Any dividends subsequently paid to the recipient on the restricted
stock will be dividend income to the recipient and not deductible by the
Company. If the recipient makes a Section 83(b) election, there are no federal
income tax consequences either to the recipient or the Company at the time any
transfer or forfeiture restrictions applicable to the restricted stock award
lapse.
NEW PLAN BENEFITS
The Company anticipates that stock awards will be made to non-employee
directors, officers and employees on or after the effective date of the MRDP at
levels consistent with other recently converted thrift institutions. However,
the Board has not made specific determinations regarding the size of individual
awards.
RECOMMENDATION OF THE BOARD OF DIRECTORS
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE ADOPTION OF THE MRDP
ATTACHED AS EXHIBIT B.
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PROPOSAL 4 -- RATIFICATION OF AUDITORS
- --------------------------------------------------------------------------------
The Board of Directors has appointed Monroe Shine & Co., Inc. to be its
auditors for the 1999 fiscal year, subject to ratification by stockholders. A
representative of Monroe Shine & Co., Inc. is expected to be present at the
annual meeting to respond to appropriate questions from stockholders and will
have the opportunity to make a statement should he or she desire to do so.
Prior to the fiscal year ended December 31, 1997, the Bank's consolidated
financial statements were audited by Umbach & Associates. The former accountant
was replaced by Monroe Shine & Co., Inc., which was engaged on January 28, 1998
and continues as the independent auditors of the Bank. The decision to change
auditors was approved by the Board of Directors on January 12, 1998. For the
fiscal years ended December 31, 1996 and 1995 and up to the date of the
replacement of the Bank's former accountant, there were no disagreements with
the former accountant on any matter of accounting principles or practices,
financial statement disclosure or auditing scope or procedure which, if not
resolved to the satisfaction of the former accountant, would have caused it to
make a reference to the subject matter of the disagreement in connection with
its reports. The independent auditors' report on the consolidated financial
statements for the fiscal years ended December 31, 1996 and 1995 did not contain
an adverse opinion or a disclaimer of opinion, and was not qualified or modified
as to uncertainty, audit scope, or accounting principles.
If the ratification of the appointment of the auditors is not approved by
a majority of the votes cast by stockholders at the annual meeting, other
independent public accountants will be considered by the Board of Directors. THE
BOARD OF DIRECTORS RECOMMENDS THAT STOCKHOLDERS VOTE "FOR" THE RATIFICATION OF
THE APPOINTMENT OF AUDITORS.
- --------------------------------------------------------------------------------
OTHER MATTERS
- --------------------------------------------------------------------------------
The Board of Directors is not aware of any business to come before the
annual meeting other than those matters described in this proxy statement.
However, if any other matters should properly come before the annual meeting, it
is intended that proxies in the accompanying form will be voted in respect
thereof in accordance with the judgment of the person or persons voting the
proxies.
- --------------------------------------------------------------------------------
MISCELLANEOUS
- --------------------------------------------------------------------------------
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 the Company's common stock. In addition to
solicitations by mail, directors, officers and regular employees of the Company
may solicit proxies personally or by telephone without additional compensation.
The Company has retained Regan & Associates to assist in soliciting proxies for
a fee of $2,250, plus reimbursable expenses.
The Company's Annual Report to Stockholders has been mailed to
stockholders as of the close of business on February 22, 1999. Any stockholder
who has not received a copy of the Annual Report may obtain a copy by writing to
the Secretary of the Company. The Annual Report is not to be treated as part of
the proxy solicitation material or as having been incorporated herein by
reference.
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<PAGE> 15
A COPY OF THE COMPANY'S FORM 10-KSB FOR THE FISCAL YEAR ENDED DECEMBER 31,
1998, AS FILED WITH THE SEC, WILL BE FURNISHED WITHOUT CHARGE TO STOCKHOLDERS AS
OF THE CLOSE OF BUSINESS ON FEBRUARY 22, 1999 UPON WRITTEN REQUEST TO CORPORATE
SECRETARY, PCB HOLDING COMPANY, 819 MAIN STREET, TELL CITY, INDIANA 47586.
- --------------------------------------------------------------------------------
STOCKHOLDER PROPOSALS
- --------------------------------------------------------------------------------
Proposals of stockholders intended to be presented at the Company's annual
meeting expected to be held in April 2000 must be received by the Company no
later than November 19, 1999 to be considered for inclusion in the proxy
materials and form of proxy relating to such meeting. Any such proposals shall
be subject to the requirements of the proxy rules adopted under the Exchange
Act.
The Company's Articles of Incorporation provides that in order for a
stockholder to make nominations for the election of directors or proposals for
business to be brought before the annual meeting, the stockholder must deliver
notice of such nominations and/or proposals to the Secretary of the Company not
less than 30 days nor more than 60 days prior to the date of the annual meeting;
provided, however, that if less than 31 days notice of the annual meeting is
given to stockholders, such notice must be delivered not later than the close of
the tenth day following the day on which notice of the annual meeting was mailed
to stockholders. Based on the date of the 1999 annual meeting, the Company
anticipates that, in order to be timely, stockholder nominations or proposals
intended to be made at the 2000 annual meeting must be made by March 22, 2000. A
copy of the Articles of Incorporation may be obtained from the Company.
BY ORDER OF THE BOARD OF DIRECTORS
Clarke A. Blackford
SECRETARY
Tell City, Indiana
March 19, 1999
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<PAGE> 16
EXHIBIT A
PCB HOLDING COMPANY
1999 STOCK OPTION PLAN
SECTION 1. PURPOSE
The PCB Holding Company 1999 Stock Option Plan (the "Plan") is hereby
established to foster and promote the long-term success of PCB Holding Company
and its shareholders by providing directors, officers and employees of the
Corporation and its subsidiaries with an equity interest in the Corporation. The
Plan will assist the Corporation in attracting and retaining the highest quality
of experienced persons as directors, officers and employees and in aligning the
interests of such persons more closely with the interests of the Corporation's
shareholders by encouraging such parties to maintain an equity interest in the
Corporation.
SECTION 2. DEFINITIONS
For purposes of this Plan, the capitalized terms set forth below shall
have the following meanings:
BOARD means the Board of Directors of the Corporation.
CHANGE IN CONTROL shall mean an event deemed to occur if and when (a)
there occurs a change in control of the BANK or the COMPANY within the meaning
of the Home Owners' Loan Act of 1933 and 12 C.F.R. Part 574, (b) any person (as
such term is used in Sections 13(d) and 14(d)(2) of the Exchange Act) is or
becomes the beneficial owner, directly or indirectly, of securities of the
Corporation representing twenty-five percent (25%) or more of the combined
voting power of the Corporation's then outstanding securities, (c) the
membership of the board of directors of the Corporation changes as the result of
a contested election, such that individuals who were directors at the beginning
of any twenty-four (24) month period (whether commencing before or after the
date of adoption of this Plan) do not constitute a majority of the Board at the
end of such period, or (d) there occurs a merger, consolidation, sale or
disposition of all or substantially all of the Corporation's assets, or a plan
of partial or complete liquidation in which the Corporation is not the resulting
entity. If any of the events enumerated in clauses (a) - (d) occur, the Board
shall determine the effective date of the change in control resulting therefrom,
for purposes of the Plan.
CODE means the Internal Revenue Code of 1986, as amended from time to
time, and the regulations promulgated thereunder.
CORPORATION means PCB Holding Company, an Indiana corporation.
DIRECTOR shall mean a director of the Corporation who is not also an
employee of the Corporation or its subsidiaries.
DISABILITY means any physical or mental injury or disease of a permanent
nature which renders a Participant incapable of meeting the requirements of the
employment or service performed by such Participant immediately prior to the
commencement of such disability. The determination of whether a Participant is
disabled shall be made by the Board in its sole and absolute discretion.
EXCHANGE ACT means the Securities Exchange Act of 1934, as amended from
time to time, and the rules and regulations promulgated thereunder.
FAIR MARKET VALUE shall be determined as follows:
(a) If the Stock is traded or quoted on the Nasdaq Stock Market or other
national securities exchange on any date, then the Fair Market Value shall be
the average of the highest and lowest selling price on such exchange on such
date or, if there were no sales on such date, then on the next prior business
day on which there was a sale.
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(b) If the Stock is not traded or quoted on the Nasdaq Stock Market or
other national securities exchange, then the Fair Market Value shall be a value
determined by the Board in good faith on such basis as it deems appropriate.
INCENTIVE STOCK OPTION means an option to purchase shares of Stock granted
to a Participant under the Plan which is intended to meet the requirements of
Section 422 of the Code.
NON-QUALIFIED STOCK OPTION means an option to purchase shares of Stock
granted to a Participant under the Plan which is not intended to be an Incentive
Stock Option.
OPTION means an Incentive Stock Option or a Non-Qualified Stock Option.
PARTICIPANT means a Director or employee of the Corporation or its
subsidiaries selected by the Board to receive an Option under the Plan.
PLAN means this PCB Holding Company 1999 Stock Option Plan.
STOCK means the common stock, $0.01 par value, of the Corporation.
TERMINATION FOR CAUSE shall mean termination because of a Participant's
personal dishonesty, incompetence, willful misconduct, breach of fiduciary duty
involving personal profit, intentional failure to perform stated duties, willful
violation of any law, rule or regulation (other than traffic violations or
similar offenses) or material breach of any provision of any employment
agreement between the Corporation and/or any subsidiary of the Corporation and a
Participant.
SECTION 3. ADMINISTRATION
(a) The Plan shall be administered by the Board. Among other things, the
Board shall have authority, subject to the terms of the Plan, to grant Options,
to determine the individuals to whom and the time or times at which Options may
be granted, to determine whether such Options are to be Incentive Stock Options
or Non-Qualified Stock Options (subject to the requirements of the Code), to
determine the terms and conditions of any Option granted hereunder, and the
exercise price thereof.
(b) Subject to the other provisions of the Plan, the Board shall have
authority to adopt, amend, alter and repeal such administrative rules,
guidelines and practices governing the operation of the Plan as it shall from
time to time consider advisable, to interpret the provisions of the Plan and any
Option and to decide all disputes arising in connection with the Plan. The Board
may correct any defect or supply any omission or reconcile any inconsistency in
the Plan or in any option agreement in the manner and to the extent it shall
deem appropriate to carry the Plan into effect, in its sole and absolute
discretion. The Board's decision and interpretations shall be final and binding.
Any action of the Board with respect to the administration of the Plan shall be
taken pursuant to a majority vote or by the unanimous written consent of its
members.
SECTION 4. ELIGIBILITY AND PARTICIPATION.
Officers and employees of the Corporation and its subsidiaries and
Directors shall be eligible to participate in the Plan. The Participants under
the Plan shall be selected from time to time by the Board, in its sole
discretion, from among those eligible, and the Board shall determine, in its
sole discretion, the numbers of shares to be covered by the Option or Options
granted to each Participant. Options intended to qualify as Incentive Stock
Options shall be granted only to persons who are eligible to receive such
options under Section 422 of the Code.
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<PAGE> 18
SECTION 5. SHARES OF STOCK AVAILABLE FOR OPTIONS
(a) The maximum number of shares of Stock which may be issued and
purchased pursuant to Options granted under the Plan is 39,675, subject to the
adjustment as provided in Section 5 and Section 9, to the extent applicable. If
an Option granted under this Plan expires or terminates before exercise or is
forfeited for any reason, the shares of Stock subject to such Option, to the
extent of such expiration, termination or forfeiture, shall again be available
for subsequent Option grants under Plan. Shares of Stock issued under the Plan
may consist in whole or in part of authorized but unissued shares or treasury
shares.
(b) In the event that the Board determines, in its sole discretion, that
any stock dividend, stock split, reverse stock split or combination,
extraordinary cash dividend, creation of a class of equity securities,
recapitalization, reclassification, reorganization, merger, consolidation,
split-up, spin-off, combination, exchange of shares, or other similar
transaction affects the Stock such that an adjustment is required in order to
preserve the benefits or potential benefits intended to be granted or made
available under the Plan to Participants, the Board shall have the right to
proportionately and appropriately adjust equitably any or all of (i) the maximum
number and kind of shares of Stock in respect of which Options may be granted
under the Plan to Participants, (ii) the number and kind of shares of Stock
subject to outstanding Options held by Participants, and (iii) the exercise
price with respect to any Options held by Participants, without changing the
aggregate purchase price as to which such Options remain exercisable, provided
that no adjustment shall be made pursuant to this Section if such adjustment
would cause the Plan to fail to comply with Section 422 of the Code with regard
to any Incentive Stock Options granted hereunder. No fractional Shares shall be
issued on account of any such adjustment.
(c) Any adjustments under this Section will be made by the Board, whose
determination as to what adjustments, if any, will be made and the extent
thereof will be final, binding and conclusive.
SECTION 6. NON-QUALIFIED STOCK OPTIONS
The Board may, from time to time, grant Non-Qualified Stock Options to
Participants upon such terms and conditions as the Board may determine.
Non-Qualified Stock Options granted under this Plan are subject to the following
terms and conditions:
(a) PRICE. The purchase price per share of Stock deliverable upon the
exercise of each Non-Qualified Stock Option shall be determined by the Board on
the date the option is granted. Such purchase price shall not be less than one
hundred percent (100%) of the Fair Market Value of the Stock on the date of
grant. Shares may be purchased only upon full payment of the purchase price.
Payment of the purchase price may be made, in whole or in part, through the
surrender of shares of the Stock at the Fair Market Value of such shares on the
date of surrender or through a "cashless exercise" involving a stock brokerage
firm.
(b) TERMS OF OPTIONS. The term during which each Non-Qualified Stock
Option may be exercised shall be determined by the Board, but in no event shall
a Non-Qualified Stock Option be exercisable in whole or in part more than ten
(10) years from the date of grant. Except as provided herein, no Non-Qualified
Stock Option granted under this Plan is transferable except by will or the laws
of descent and distribution. The Board shall have discretionary authority to
permit the transfer of any Non-Qualified Stock Option to members of a
Participant's immediate family, including trusts for the benefit of such family
members and partnerships in which such family members are the only partners;
provided, however, that a transferred Non-Qualified Stock Option may be
exercised by the transferee on any date only to the extent that the Participant
would have been entitled to exercise the Non-Qualified Stock Option on such date
had the Non-Qualified Stock Option not been transferred. Any transferred
Non-Qualified Stock Option shall remain subject to the terms and conditions of
the Participant's stock option agreement.
(c) TERMINATION OF SERVICE. Unless otherwise determined by the Board, upon
the termination of a Participant's employment (or, in the case of a Director,
service as a member of the Board) for any reason other than Disability, death or
Termination for Cause, the Participant's Non-Qualified Stock Options shall be
exercisable only as to those shares which were immediately exercisable by the
Participant at the date of termination and only for a period of one (1) year
following termination. Notwithstanding any provision set forth herein nor
contained in any Agreement
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relating to the award of an Option, in the event of Termination for Cause, all
rights under the Participant's Non-Qualified Stock Options shall expire upon
termination. In the event of death or termination as a result of Disability of
any Participant, all Non-Qualified Stock Options held by the Participant,
whether or not exercisable at such time, shall be exercisable by the Participant
or his legal representatives or beneficiaries of the Participant for two (2)
years or such longer period as determined by the Board following the date of the
Participant's death or termination of service due to Disability, provided that
in no event shall the period extend beyond the expiration of the Non-Qualified
Stock Option term.
SECTION 7. INCENTIVE STOCK OPTIONS
The Board may, from time to time, grant Incentive Stock Options to
eligible employees. Incentive Stock Options granted pursuant to the Plan shall
be subject to the following terms and conditions:
(a) PRICE. The purchase price per share of Stock deliverable upon the
exercise of each Incentive Stock Option shall be not less than one hundred
percent (100%) of the Fair Market Value of the Stock on the date of grant.
However, if a Participant owns (or, under Section 422(d) of the Code, is deemed
to own) stock possessing more than ten percent (10%) of the total combined
voting power of all classes of Stock, the purchase price per share of Stock
deliverable upon the exercise of each Incentive Stock Option shall not be less
than one hundred ten percent (110%) of the Fair Market Value of the Stock on the
date of grant. Shares may be purchased only upon payment of the full purchase
price. Payment of the purchase price may be made, in whole or in part, through
the surrender of shares of the Stock at the Fair Market Value of such shares on
the date of surrender or through a "cashless exercise" involving a stock
brokerage firm.
(b) AMOUNTS OF OPTIONS. Incentive Stock Options may be granted to any
eligible employee in such amounts as determined by the Board. In the case of an
option intended to qualify as an Incentive Stock Option, the aggregate Fair
Market Value (determined as of the time the option is granted) of the Stock with
respect to which Incentive Stock Options granted are exercisable for the first
time by the Participant during any calendar year shall not exceed $100,000. The
provisions of this Section 7(b) shall be construed and applied in accordance
with Section 422(d) of the Code and the regulations, if any, promulgated
thereunder. To the extent an award is in excess of such limit, it shall be
deemed a Non-Qualified Stock Option. The Board shall have discretion to
redesignate options granted as Incentive Stock Options as Non-Qualified Stock
Options.
(c) TERMS OF OPTIONS. The term during which each Incentive Stock Option
may be exercised shall be determined by the Board, but in no event shall an
Incentive Stock Option be exercisable in whole or in part more than ten (10)
years from the date of grant. If at the time an Incentive Stock Option is
granted to an employee, the employee owns Stock representing more than ten
percent (10%) of the total combined voting power of the Corporation (or, under
Section 422(d) of the Code, is deemed to own Stock representing more than ten
percent (10%) of the total combined voting power of all such classes of Stock,
by reason of the ownership of such classes of Stock, directly or indirectly, by
or for any brother, sister, spouse, ancestor or lineal descendent of such
employee, or by or for any corporation, partnership, estate or trust of which
such employee is a shareholder, partner or beneficiary), the Incentive Stock
Option granted to such employee shall not be exercisable after the expiration of
five (5) years from the date of grant. No Incentive Stock Option granted under
this Plan is transferable except by will or the laws of descent and
distribution.
(d) TERMINATION OF EMPLOYMENT. Upon the termination of a Participant's
service for any reason other than Disability, death or Termination for Cause,
the Participant's Incentive Stock Options which are then exercisable at the date
of termination may only be exercised by the Participant for a period of three
(3) months following termination, after which time they shall be void.
Notwithstanding any provisions set forth herein nor contained in any Agreement
relating to an award of an Option, in the event of Termination for Cause, all
rights under the Participant's Incentive Stock Options shall expire immediately
upon termination.
Unless otherwise determined by the Board, in the event of death or
termination of service as a result of the Disability of any Participant, all
Incentive Stock Options held by such Participant, whether or not exercisable at
such time, shall be exercisable by the Participant or the Participant's legal
representatives or the beneficiaries of the
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Participant for one (1) year following the date of the Participant's death or
termination of employment as a result of Disability. In no event shall the
exercise period extend beyond the expiration of the Incentive Stock Option term.
(e) COMPLIANCE WITH CODE. The options granted under this Section 7 of the
Plan are intended to qualify as incentive stock options within the meaning of
Section 422 of the Code, but the Corporation makes no warranty as to the
qualification of any option as an incentive stock option within the meaning of
Section 422 of the Code. A Participant shall notify the Board in writing in the
event that he disposes of Stock acquired upon exercise of an Incentive Stock
Option within the two-year period following the date the Incentive Stock Option
was granted or within the one-year period following the date he received Stock
upon the exercise of an Incentive Stock Option and shall comply with any other
requirements imposed by the Corporation in order to enable the Corporation to
secure the related income tax deduction to which it will be entitled in such
event under the Code.
SECTION 8. EXTENSION
The Board may, in its sole discretion, extend the dates during which all
or any particular Option or Options granted under the Plan may be exercised;
provided, however, that no such extension shall be permitted without the
Participant's consent if it would cause Incentive Stock Options issued under the
Plan to fail to comply with Section 422 of the Code.
SECTION 9. GENERAL PROVISIONS APPLICABLE TO OPTIONS
(a) Each Option under the Plan shall be evidenced by a writing delivered
to the Participant specifying the terms and conditions thereof and containing
such other terms and conditions not inconsistent with the provisions of the Plan
as the Board considers necessary or advisable to achieve the purposes of the
Plan or comply with applicable tax and regulatory laws and accounting
principles.
(b) Each Option may be granted alone, in addition to or in relation to any
other Option. The terms of each Option need not be identical, and the Board need
not treat Participants uniformly. Except as otherwise provided by the Plan or a
particular Option, any determination with respect to an Option may be made by
the Board at the time of grant or at any time thereafter.
(c) Notwithstanding anything in this Plan to the contrary, in the event of
a Change in Control, all then outstanding Options shall become one hundred
percent vested and exercisable as of the effective date of the Change in
Control. If, in connection with or as a consequence of a Change in Control, the
Corporation is merged into or consolidated with another corporation, if the
Corporation becomes a subsidiary of another corporation or if the Corporation
sells or otherwise disposes of substantially all of its assets to another
corporation, then unless provisions are made in connection with such
transactions for the continuance of the Plan and/or the assumption or
substitution of then outstanding Options with new options covering the stock of
the successor corporation, or parent or subsidiary thereof, with appropriate
adjustments as to the number and kind of shares and prices, such Options shall
be canceled as of the effective date of the merger, consolidation, or sale and
the Participant shall be paid in cash an amount equal to the difference between
the Fair Market Value of the Stock subject to the Options on the effective date
of such corporate event and the exercise price of the Options. Notwithstanding
anything in this Section 9(c) or any Option agreement to the contrary, in the
event that the consummation of a Change in Control is contingent on using
pooling of interests accounting methodology, the Board may, in its discretion,
take any action necessary to preserve the use of pooling of interests
accounting.
(d) The Corporation shall be entitled to withhold (or secure payment from
the Participant in lieu of withholding) the amount of any withholding or other
tax required by law to be withheld or paid by the Corporation with respect to
any Options exercised under this Plan, and the Corporation may defer issuance of
Stock hereunder until and unless indemnified to its satisfaction against any
liability for any such tax. The amount of such withholding or tax payment shall
be determined by the Board or its delegate and shall be payable by the
Participant at such time as the Board determines. To the extent authorized by
the Board, such withholding obligation may also be satisfied by the payment of
cash by the Participant to the Corporation, the tendering of previously acquired
shares of Stock of the Participant or the withholding, at the appropriate time,
of shares of Stock otherwise issuable to the Participant, in a
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<PAGE> 21
number sufficient, based upon the Fair Market Value of such Stock, to satisfy
such tax withholding requirements. The Board shall be authorized, in its sole
discretion, to establish such rules and procedures relating to any such
withholding methods as it deems necessary or appropriate, including, without
limitation, rules and procedures relating to elections by Participants who are
subject to the provisions of Section 16 of the Exchange Act.
(e) Subject to the terms of the Plan, the Board may at any time, and from
time to time, amend, modify or terminate the Plan or any outstanding Option held
by a Participant, including substituting therefor another Option of the same or
a different type or changing the date of exercise or realization, provided that
the Participant's consent to each action shall be required unless the Board
determines that the action, taking into account any related action, would not
materially and adversely affect the Participant.
SECTION 10. MISCELLANEOUS
(a) No person shall have any claim or right to be granted an Option, and
the grant of an Option shall not be construed as giving a Participant the right
to continued employment or service on the Board. The Corporation expressly
reserves the right at any time to dismiss a Participant free from any liability
or claim under the Plan, except as expressly provided in the Plan or the
applicable Option.
(b) Nothing contained in the Plan shall prevent the Corporation from
adopting other or additional compensation arrangements.
(c) Subject to the provisions of the applicable Option, no Participant
shall have any rights as a shareholder (including, without limitation, any
rights to receive dividends, or non cash distributions with respect to such
shares) with respect to any shares of Stock to be distributed under the Plan
until he or she becomes the holder thereof.
(d) Notwithstanding anything to the contrary expressed in this Plan, any
provisions hereof that vary from or conflict with any applicable Federal or
State securities laws (including any regulations promulgated thereunder) shall
be deemed to be modified to conform to and comply with such laws.
(e) No member of the Board shall be liable for any action or determination
taken or granted in good faith with respect to this Plan nor shall any member of
the Board be liable for any agreement issued pursuant to this Plan or any grants
under it. Each member of the Board shall be indemnified by the Corporation
against any losses incurred in such administration of the Plan, unless his
action constitutes serious and willful misconduct.
(f) The Plan shall be effective on July 2, 1999 but only if, prior to such
date, the Plan is approved by the Corporation's shareholders. The Plan will be
so approved if at an annual or special meeting of shareholders held prior to
such date a quorum is present and the votes of the holders of a majority of the
securities of the Corporation present or represented by proxy and entitled to
vote on such matter shall be cast in favor of its approval.
(g) The Board may amend, suspend or terminate the Plan or any portion
thereof at any time, provided that no amendment shall be made without
shareholder approval if such approval is necessary to comply with any applicable
tax laws or regulatory requirement.
(h) Options may not be granted under the Plan after the tenth anniversary
of the effective date of the Plan, but then outstanding Options may extend
beyond such date.
(i) To the extent that State laws shall not have been preempted by any
laws of the United States, the Plan shall be construed, regulated, interpreted
and administered according to the other laws of the State of Indiana.
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<PAGE> 22
EXHIBIT B
PCB HOLDING COMPANY
MANAGEMENT RECOGNITION AND DEVELOPMENT PLAN
SECTION 1. PURPOSE AND ADOPTION OF THE PLAN
(a) PURPOSE. The purpose of the PCB Holding Company Management Recognition
and Development Plan is to assist the Corporation and its subsidiaries in
attracting, retaining and motivating key management employees and non-employee
directors who will contribute to the Corporation's success. The Plan is intended
to recognize the contributions of key management personnel to the success of the
Corporation and its subsidiaries, to link the benefits paid to eligible
employees and directors who have substantial responsibility for the successful
operation, administration and management of the Corporation with the enhancement
of shareholder value and to provide eligible employees and directors with an
opportunity to acquire a greater proprietary interest in the Corporation through
the grant of restricted shares of Stock which, in accordance with the terms and
conditions set forth below, will vest only if the employees meet the vesting
criteria established by the Board and this Plan.
(b) ADOPTION AND EFFECTIVE DATE. The Plan shall be effective on July 2,
1999 but only if, prior to such date, the Plan is approved by the Corporation's
shareholders. The Plan will be so approved if at an annual or special meeting of
shareholders held prior to such date a quorum is present and the votes of the
holders of a majority of the securities of the Corporation present or
represented by proxy and entitled to vote on such a matter shall be cast in
favor of its approval.
SECTION 2. DEFINITIONS
For purposes of this Plan, the capitalized terms set forth below shall
have the following meanings:
AWARD AGREEMENT means a written agreement between the Corporation and a
Participant specifically setting forth the terms and conditions of an award of
Restricted Stock granted to a Participant pursuant to Section 5 of the Plan.
BOARD means the Board of Directors of the Corporation.
CHANGE IN CONTROL shall mean an event deemed to occur if and when (a)
there occurs a change in control of the BANK or the COMPANY within the meaning
of the Home Owners' Loan Act of 1933 and 12 C.F.R. Part 574, (b) any person (as
such term is used in Sections 13(d) and 14(d)(2) of the Exchange Act) is or
becomes the beneficial owner, directly or indirectly, of securities of the
Corporation representing twenty-five percent (25%) or more of the combined
voting power of the Corporation's then outstanding securities, (c) the
membership of the board of directors of the Corporation changes as the result of
a contested election, such that individuals who were directors at the beginning
of any twenty-four (24) month period (whether commencing before or after the
date of adoption of this Plan) do not constitute a majority of the Board at the
end of such period, or (d) there occurs a merger, consolidation, sale or
disposition of all or substantially all of the Corporation's assets or a plan of
partial or complete liquidation in which the Corporation is not the resulting
entity. If any of the events enumerated in clauses (a) - (d) occur, the Board
shall determine the effective date of the change in control resulting therefrom.
CORPORATION means PCB Holding Company, an Indiana corporation, and its
successors.
DATE OF GRANT means the date as of which an award of Restricted Stock is
granted in accordance with Section 5.
DIRECTOR means a member of the Board of Directors of the Corporation who
is not also an employee of the Corporation or its subsidiaries.
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<PAGE> 23
DISABILITY means any physical or mental injury or disease of a permanent
nature which renders a Participant incapable of meeting the requirements of the
employment or service performed by such Participant immediately prior to the
commencement of such disability. The determination of whether a Participant is
disabled shall be made by the Board in its sole and absolute discretion.
EFFECTIVE DATE means the date as of which the Plan shall become effective,
as determined in accordance with Section 1(b).
EXCHANGE ACT means the Securities Exchange Act of 1934, as amended.
FAIR MARKET VALUE shall be determined as follows:
(a) If the stock is traded or quoted on the Nasdaq Stock Market or other
national securities exchange on any date, then the Fair Market Value shall be
the average of the highest and lowest selling price on such exchange on such
date or, if there were no sales on such date, then on the next prior business
day on which there was a sale.
(b) If the stock is not traded or quoted on the Nasdaq Stock Market or
other national securities exchange, then the Fair Market Value shall be a value
determined by the Board in good faith on such basis as it deems appropriate.
PARTICIPANT means any person selected by the Board, pursuant to Section
3(b), to participate under the Plan.
PLAN means this PCB Holding Company Management Recognition and Development
Plan, as the same may be amended from time to time.
RESTRICTED STOCK means shares of Stock awarded to a Participant subject to
restrictions as described in Section 5.
STOCK means the common stock, par value $0.01 per share, of the
Corporation.
SECTION 3. ADMINISTRATION AND PARTICIPATION
(a) ADMINISTRATION. The Plan shall be administered by the Board which
shall have exclusive and final authority and discretion in each determination,
interpretation or other action affecting the Plan and its Participants. The
Board shall have the sole and absolute authority and discretion to interpret
the Plan, to establish and modify administrative rules for the Plan, to select,
in accordance with Section 3(b), the persons who will be Participants hereunder,
to impose, in accordance with Section 5(a), such conditions and restrictions as
it determines appropriate and to take such other actions and make such other
determinations in connection with the Plan as it may deem necessary or
advisable.
(b) DESIGNATION OF PARTICIPANTS. Participants in the Plan shall be such
employees of the Corporation an its subsidiaries or Directors as the Board,
in its sole discretion, may designate. The Board shall consider such factors
as it deems pertinent in selecting Participants.
SECTION 4. STOCK ISSUABLE UNDER THE PLAN
(a) NUMBER OF SHARES OF STOCK ISSUABLE. Subject to adjustments as provided
in Section 6(c), the maximum number of shares of Stock available for issuance
under the Plan shall be 15,870. The Stock to be offered under the Plan shall be
authorized and unissued Stock, Stock which shall have been reacquired by the
Corporation and held in its treasury, or Stock held in a trust established by
the Corporation for the purpose of funding awards under the Plan with shares
acquired on the open market with funds contributed by the Corporation or any
subsidiary.
B-2
<PAGE> 24
(b) SHARES SUBJECT TO TERMINATED AWARDS. Shares of Stock forfeited as
provided in Section 5(b) may again be issued under the Plan.
SECTION 5. RESTRICTED STOCK
Subject to the terms of this Plan, the Board may grant to any Participant
an award of Restricted Stock in respect of such number of shares of Stock, and
subject to such terms and conditions relating to forfeitability and restrictions
on delivery and transfer (whether based on performance standards, periods of
service or otherwise), as the Board shall determine in its sole discretion. The
terms of all such Restricted Stock awards shall be set forth in an Award
Agreement between the Corporation and the Participant which shall contain such
provisions, not inconsistent with this Plan, as shall be determined by the
Board.
(a) ISSUANCE OF RESTRICTED STOCK. As soon as practicable after the Date of
Grant of Restricted Stock, the Corporation shall cause to be transferred on the
books of the Corporation shares of Stock, registered on behalf of the
Participant, evidencing such Restricted Stock, but subject to forfeiture to the
Corporation retroactive to the Date of Grant if an Award Agreement delivered to
the Participant by the Corporation with respect to the Restricted Stock is not
duly executed by the Participant and timely returned to the Corporation. Unless
the Board determines otherwise, until the lapse or release of all restrictions
applicable to an award of Restricted Stock, the stock certificates representing
such Restricted Stock shall be held in custody by the Corporation or its
designee. Notwithstanding the foregoing, the Corporation may, in its sole
discretion, establish a trust for the purpose of holding Restricted Stock
awarded pursuant to this Plan. In the event that a trust is established, the
Corporation may elect to hold any or all shares of Stock subject to awards in
the name of the trust for the benefit of the Participant and subject to the
forfeiture conditions applicable to the award.
(b) SHAREHOLDER RIGHTS. Beginning on the Date of Grant of the Restricted
Stock and subject to execution of the Award Agreement as provided in Section
5(a), the Participant shall become a shareholder of the Corporation with respect
to all Stock subject to the Award Agreement and shall have all of the rights of
a shareholder, including, but not limited to, the right to vote such Stock and
the right to receive dividends and other distributions paid with respect to such
Stock; provided, however, that any Stock distributed as a dividend or otherwise
with respect to any Restricted Stock as to which the restrictions have not yet
lapsed shall be subject to the same restrictions as such Restricted Stock and
shall be held as prescribed in Section 5(a). Cash dividends paid with respect to
Restricted Stock may, at the Board's discretion, be held by the Corporation in
escrow until such time as the Participant vests in such shares or distributed to
the Participant during the forfeiture period. The Corporation may credit a
reasonable rate of interest to such cash dividends prior to distribution.
(c) RESTRICTION ON TRANSFERABILITY. None of the Restricted Stock may be
assigned, transferred (other than by will or the laws of descent and
distribution), pledged, sold or otherwise disposed of prior to lapse or release
of the restrictions applicable thereto.
(d) DELIVERY OF STOCK UPON RELEASE OF RESTRICTIONS. Upon expiration or
earlier termination of the forfeiture period without a forfeiture, and the
satisfaction of or release from any other conditions prescribed by the
Board, the restrictions applicable to the Restricted Stock shall lapse. As
promptly as administratively feasible thereafter, subject to the requirements
of Section 6(b), the Corporation shall deliver to the Participant or, in
case of the Participant's death, to the Participant's legal representatives,
one or more stock certificates for the appropriate number of shares of Stock,
free of all such restrictions, except for any restrictions that may be imposed
by law.
(e) TERMS OF RESTRICTED STOCK; FORFEITURE OF RESTRICTED STOCK. All
Restricted Stock shall be forfeited and returned to the Corporation and all
rights of the Participant with respect to such Restricted Stock shall cease
and terminate in their entirety if during the forfeiture period the employment
(or, in the case of a Director, service) of the Participant with the
Corporation and/or its subsidiaries terminates for any reason. Subject to the
terms of the Plan, the Board, in its sole discretion, shall establish the
forfeiture period for each grant of Restricted Stock, and may provide for the
forfeiture period to lapse in installments. Notwithstanding the foregoing,
upon the termination of a Participant's employment (or, in the case of a
Director, service) by reason of death or Disability, all forfeiture
B-3
<PAGE> 25
restrictions imposed on Restricted Stock shall immediately and fully lapse. In
addition, upon the effective date of a Change in Control, all forfeiture
restrictions imposed on outstanding Restricted Stock awards shall immediately
and fully lapse.
SECTION 6. MISCELLANEOUS
(a) LIMITATIONS ON TRANSFER. The rights and interest of a Participant
under the Plan may not be assigned or transferred other than by will or the laws
of descent and distribution. During the lifetime of a Participant, only the
Participant personally may exercise rights under the Plan.
(b) TAXES. The Corporation shall be entitled to withhold (or secure
payment from the Participant in lieu of withholding) the amount of any
withholding or other tax required by law to be withheld or paid by the
Corporation with respect to any Stock issuable under this Plan, or with respect
to any income recognized upon the lapse of restrictions applicable to Restricted
Stock and the Corporation may defer issuance of Stock hereunder until and unless
indemnified to its satisfaction against any liability for any such tax. The
amount of such withholding or tax payment shall be determined by the Board or
its delegate and shall be payable by the Participant at such time as the Board
determines. To the extent authorized by the Board, such withholding obligation
may be satisfied by the payment of cash by the Participant to the Corporation,
the tendering of previously acquired shares of Stock of the Participant or the
withholding, at the appropriate time, of shares of Stock otherwise issuable to
the Participant, in a number sufficient, based upon the Fair Market Value of
such Stock, to satisfy such tax withholding requirements. The Board shall be
authorized, in its sole discretion, to establish such rules and procedures
relating to any such withholding methods as it deems necessary or appropriate,
including, without limitation, rules and procedures relating to elections by
Participants who are subject to the provisions of Section 16 of the Exchange
Act.
(c) ADJUSTMENTS TO REFLECT CAPITAL CHANGES. The amount and kind of Stock
available for issuance under the Plan and subject to outstanding awards
shall be appropriately adjusted to reflect any stock dividend, stock split,
combination or exchange of shares, merger, consolidation or other change in
capitalization with a similar substantive effect upon the Plan. The Board shall
have the power and sole discretion to determine the nature and amount of the
adjustment, if any, to be made pursuant to this Section 6(c).
(d) NO RIGHT TO AWARD; NO RIGHT TO EMPLOYMENT. No employee or other
person shall have any claim of right to be permitted to participate or be
granted an award under this Plan. Neither the Plan nor any action taken
hereunder shall be construed as giving any employee any right to be retained in
the employ of the Corporation.
(e) GOVERNING LAW. The Plan and all determinations made and actions taken
pursuant to the Plan shall be governed by the laws of the State of Indiana other
than the conflict of laws provisions of such laws, and shall be construed in
accordance therewith.
(f) CAPTIONS. The captions (i.e., all Section and subsection headings)
used in the Plan are for convenience only, do not constitute a part of the Plan,
and shall not be deemed to limit, characterize or affect in any way any
provisions of the Plan, and all provisions of the Plan shall be construed as if
no captions had been used in the Plan.
(g) SEVERABILITY. Whenever possible, each provision in the Plan and every
Award Agreement shall be interpreted in such manner as to be effective and valid
under applicable law, but if any provision of the Plan or any Award Agreement
shall be held to be prohibited by or invalid under applicable law, then (x) such
provision shall be deemed amended to accomplish the objectives of the provision
as originally written to the fullest extent permitted by law and (y) all other
provisions of the Plan and every Award Agreement shall remain in full force and
effect.
(h) LEGENDS. All certificates for Stock delivered under the Plan shall be
subject to such transfer restrictions set forth in the Plan and such other
restrictions as the Board may deem advisable under the rules, regulations and
other requirements of the Securities and Exchange Commission, any stock exchange
upon which the Stock is then listed and any applicable federal or state
securities law, and the Board may cause a legend or legends to be endorsed on
any such certificates making appropriate references to such restrictions.
B-4
<PAGE> 26
(i) AMENDMENT AND TERMINATION.
(A) AMENDMENT. Subject to applicable law and regulations, the Board shall
have complete power and authority to amend the Plan at any time it is deemed
necessary or appropriate; provided, however, that no amendment shall be made
without shareholder approval if such approval is necessary for the Corporation
to comply with an applicable tax law or regulatory requirement. No termination
or amendment of the Plan may, without the consent of the Participant to whom any
award shall theretofore have been granted under the Plan, adversely affect the
right of such individual under such award.
(B) TERMINATION. The Board shall have the right and the power to terminate
the Plan at any time. Unless sooner terminated by action of the Board, the Plan
shall automatically terminate, without further action of the Board or the
Corporation's shareholders, on the tenth anniversary of the Effective Date. No
award shall be granted under the Plan after the termination of the Plan, but the
termination of the Plan shall not have any other effect and any award
outstanding at the time of the termination of the Plan shall continue in effect
in accordance with its terms as if the Plan has not terminated.
B-5
<PAGE> 27
REVOCABLE PROXY
PCB HOLDING COMPANY
- --------------------------------------------------------------------------------
ANNUAL MEETING OF STOCKHOLDERS
APRIL 22, 1999
- --------------------------------------------------------------------------------
The undersigned hereby appoints the Board of Directors of PCB Holding
Company, with full powers of substitution, as attorneys and proxies for the
undersigned, to vote all shares of common stock of PCB Holding Company (the
"Company") that the undersigned is entitled to vote at the annual meeting of
stockholders to be held at the Hoosier Heights Country Club, Highway 237, Tell
City, Indiana, on Thursday, April 22, 1999, at 10:00 a.m., local time, and at
any and all adjournments thereof, as indicated.
FOR ALL
FOR WITHHOLD EXCEPT
--- -------- -------
1. The election as director of the nominees [ ] [ ] [ ]
listed below (except as marked to the
contrary below).
James L. Wittmer Howard L. Traphagen
James G. Tyler Daniel D. Lutgring
Marion L. Ress Carl D. Smith
INSTRUCTIONS: TO WITHHOLD YOUR VOTE
FOR ANY INDIVIDUAL NOMINEE, MARK "FOR ALL
EXCEPT" AND WRITE THAT NOMINEE'S NAME IN
THE SPACE PROVIDED BELOW.
FOR AGAINST ABSTAIN
--- ------- -------
2. The ratification of the adoption of [ ] [ ] [ ]
PCB Holding Company 1999 Stock Option
Plan.
3. The ratification of the adoption of [ ] [ ] [ ]
PCB Holding Company Management
Recognition and Development Plan.
4. The ratification of the appointment of [ ] [ ] [ ]
Monroe Shine & Co. as auditors for
the year ending December 31, 1999.
5. In their discretion, upon such other matters as may properly come before
the meeting.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE ABOVE PROPOSALS.
- --------------------------------------------------------------------------------
THIS PROXY WILL BE VOTED AS DIRECTED, BUT IF NO INSTRUCTIONS ARE SPECIFIED, THIS
PROXY WILL BE VOTED FOR THE PROPOSITIONS STATED. IF ANY OTHER BUSINESS IS
PRESENTED AT THE ANNUAL 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 ANNUAL MEETING.
- --------------------------------------------------------------------------------
Please be sure to sign and date this Proxy in the box below.
Date
---------------------------
----------------------------- --------------------------------
stockholder sign above co-holder (if any) sign above
<PAGE> 28
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS
Should the above signed be present and elect to vote at the meeting or at
any adjournment thereof and after notification to the Secretary of the Company
at the meeting of the shareholder's decision to terminate this proxy, then the
power of said attorneys and proxies shall be deemed terminated and of no further
force and effect.
The above signed acknowledges receipt from the Company prior to the
execution of this proxy of the notice of the annual meeting of stockholders, a
proxy statement for the annual meeting of stockholders, and the 1998 annual
report to stockholders.
Please sign exactly as your name appears on this card. When signing as attorney,
executor, administrator, trustee or guardian, please give your full title. If
shares are held jointly, only one signature is required, but each holder should
sign, if possible.
PLEASE COMPLETE, DATE, SIGN AND MAIL THIS PROXY PROMPTLY IN THE ENCLOSED
POSTAGE-PREPAID ENVELOPE.
