SCHEDULE 14A
(RULE 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE
SECURITIES EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the registrant [X]
Filed by a party other than the registrant [ ]
Check the appropriate box:
[ ] Preliminary proxy statement
[X] Definitive proxy statement
[ ] Definitive additional materials
[ ] Soliciting material pursuant to Rule 14a-11(c) or Rule 14a-12
[ ] Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
CGB&L FINANCIAL GROUP, INC.
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(Name of Registrant as Specified in Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
(2) Aggregate number of securities to which transactions applies:
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11. (Set forth the amount on which the
filing fee is calculated and state how it was determined.)
(4) Proposed maximum aggregate value of transaction:
(5) Total fee paid:
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount previously paid:
(2) Form, Schedule or Registration Statement No.:
(3) Filing party:
(4) Date filed:
<PAGE>
CGB&L FINANCIAL GROUP, INC.
229 E. SOUTH STREET, P. O. BOX 680
CERRO GORDO, ILLINOIS 61818-0680
July 6, 1999
Dear Shareholder:
I am pleased to invite you to attend the first annual meeting of
shareholders of CGB&L Financial Group, Inc. (the "Company"). This annual meeting
will be held in the meeting room of the Hope Welty Public Library, 100 South
Madison Street, Cerro Gordo, Illinois on August 11, 1999 at 7:00 p.m. local
time.
On the page following this letter, you will find the Notice of Meeting,
which lists the matters to be considered at the meeting. Following the Notice is
the Proxy Statement, which describes these matters and provides other
information concerning the management of our Company. Also enclosed is your
Proxy Card which allows you to vote on the matters and the Company's Annual
Report. Your vote and participation is important. Please complete and mail in
your Proxy Card promptly, even if you plan to attend the meeting.
The Board of Directors recommends that shareholders vote FOR each of
the nominees and FOR each of the proposals. I look forward to seeing you at the
meeting.
Sincerely,
/S/ MARALYN HECKMAN
MARALYN HECKMAN
PRESIDENT AND CHIEF EXECUTIVE OFFICER
<PAGE>
CGB&L FINANCIAL GROUP, INC.
229 E. SOUTH STREET, P. O. BOX 680
CERRO GORDO, ILLINOIS 61818-0680
- --------------------------------------------------------------------------------
NOTICE OF ANNUAL MEETING
BY ORDER OF THE BOARD OF DIRECTORS
- --------------------------------------------------------------------------------
TIME.............. 7:00 p.m. on Wednesday, August 11, 1999.
PLACE............. The meeting room of Hope Welty Public Library, 100 South
Madison Street, Cerro Gordo, Illinois
ITEMS OF
BUSINESS.......... (1) To elect two directors for three year terms.
(2) To approve the Company's Stock Option Plan.
(3) To approve the Company's Management Development
and Recognition Plan and Trust Agreement.
(4) To transact such other business
as may properly come before the
Meeting and any adjournment or
postponement thereof.
RECORD DATE....... You can vote if you were a shareholder of record on June 18,
1999.
PROXY VOTING...... (1) Attend the Meeting and cast your ballot; or
(2) MARK, SIGN, DATE and PROMPTLY
RETURN the enclosed Proxy Card in
the prepaid postage envelope.
July 6, 1999.
/s/ Maralyn Heckman
----------------------------------
Maralyn Heckman, Secretary
<PAGE>
CGB&L FINANCIAL GROUP, INC.
PROXY STATEMENT
TABLE OF CONTENTS
Attendance and Voting Matters................................................1
Management...................................................................4
Security Ownership of Directors, Nominees For Directors
and Most Highly Compensated Executive Officers......................8
Persons Owning More Than Five Percent of the Company's Stock.................8
Compensation Tables and Compensation Matters.................................9
Proposal One: Election of Directors.........................................12
Proposal Two: Approval of Stock Option Plan.................................12
Proposal Three: Approval of the CGB&L Management Development
and Recognition Plan and Trust Agreement...........................17
Selection of Independent Auditors...........................................20
Section 16(a) Beneficial Ownership Reporting Compliance.....................20
Requirements, Including Deadlines for Submission, Proxy Proposals,
Nominations of Directors and Other Business of Shareholders........20
i
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CGB&L FINANCIAL GROUP, INC.
PROXY STATEMENT
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ATTENDANCE AND VOTING MATTERS
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WHY DID YOU SEND ME THIS PROXY STATEMENT?
We sent you this Proxy Statement and the enclosed proxy card because
the Board of Directors (the "Board") of CGB&L Financial Group, Inc. ("we," "us,"
or our "Company") is soliciting your proxy to vote at the 1999 Annual Meeting of
Shareholders (this "Annual Meeting"). This Proxy Statement summarizes
information concerning the nominees and proposals and provides you information
concerning management of the Company and the compensation of its officers and
directors. This information will assist you to make an informed vote at the
Annual Meeting.
We began sending this Proxy Statement, the attached Notice of Annual
Meeting and the enclosed proxy card on July 6, 1999.
WHO IS ENTITLED TO VOTE?
Shareholders of record of the Company's common stock, par value $.01
(the "Common Stock") at the close of business on June 18, 1999 (the "record
date") are entitled to vote for the nominees for election to three-year terms
and on the proposals to approve the Stock Option Plan and to approve the
Management Development and Recognition Plan and Agreement. Except as described
below, a holder of Common Stock will be entitled to one vote for each of the
nominees to the Board for a three-year term and one vote regarding each of the
other proposals. There is no cumulative voting.
The Company's Certificate of Incorporation provides that for the
five-year period after the conversion of Cerro Gordo Building & Loan, s.b.,
which occurred on September 28, 1998, any person (which includes individuals, a
group acting in concert, corporation, partnership, trust or other entities) who
acquires, directly or indirectly, beneficial ownership (as defined in Rule 13d-3
of the Securities Exchange Act of 1934) of more than 10% of any class of equity
security shall not be entitled to vote those shares owned in excess of 10%. Such
restriction, however, does not apply to an acquisition of more than 10% approved
by a majority of disinterested directors of the Company or to the acquisition of
shares by any qualified employee plan.
At this time, the Company is not aware of any person that owns,
directly or indirectly, mores than 10% of the Company's Common Stock.
On June 18, 1999, a total of 99,000 shares of Common Stock were
outstanding.
A list of shareholders entitled to vote at the Annual Meeting will be
available at the Annual Meeting. For the ten days prior to the Annual Meeting,
such list will be available at the Company's corporate offices during normal
business hours.
1
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HOW DO I VOTE?
Unless you hold your shares in the Employee Stock Ownership Plan, you
can vote on matters to come before the meeting in one of two ways:
* You can come to the Annual Meeting and cast your vote there; or
* You can vote by marking, signing and returning the enclosed proxy
card. If you do so, the individuals named as proxies on the card will
vote your shares in the manner you indicate.
If you vote by proxy, you may choose to vote for all of the nominees
for directors and the two proposals by simply signing, dating and returning the
enclosed proxy card without further direction. All signed and returned proxies
that contain no direction as to vote will be voted FOR each of the nominees for
directors and FOR each of the proposals.
The Board has selected Maralyn Heckman and John A. Sochor, DDS, the
persons named on the proxy card accompanying this Proxy Statement, to serve as
proxies for the Annual Meeting. Mrs. Heckman is the President of the Company and
a member of the Board. Dr. Sochor is the Chairman of the Board.
If you plan to attend the Annual Meeting and vote in person, you should
request a ballot when you arrive. HOWEVER, IF YOUR SHARES ARE HELD IN THE NAME
OF YOUR BROKER, BANK OR OTHER NOMINEE, THE INSPECTORS OF ELECTION WILL REQUIRE
YOU TO PRESENT A POWER OF ATTORNEY FROM SUCH BROKER, BANK OR OTHER NOMINEE FOR
YOU TO VOTE SUCH SHARES AT THE ANNUAL MEETING. Please contact your broker, bank
or nominee.
HOW DO EMPLOYEES IN THE EMPLOYEE STOCK OWNERSHIP PLAN VOTE?
If you participate in the Employee Stock Ownership Plan (the "ESOP"),
an employee benefit plan of the Company, please return your proxy in the
envelope provided by August 9, 1999. Illinois Stock Register, the tabulator,
will calculate the votes returned by all holders in the ESOP. Cerro Gordo
Building and Loan, s.b., the Trustee for the ESOP, will act in accordance with
your instructions for voting your shares of Common Stock held in your ESOP
account. If your voting instructions for your ESOP are not received by August 9,
1999, the Trustee will vote your shares in its absolute discretion. Holders of
shares in the ESOP will not be permitted to vote in person at the Annual
Meeting.
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MAY I REVOKE MY PROXY?
If you give a proxy, you may revoke it at any time before it is
exercised. You may revoke your proxy in any one of three ways:
* You may send in another proxy with a later date;
* You may notify the Company's Secretary in writing at P. O. Box
680, Cerro Gordo, Illinois 61818-0680
* You may vote in person at the Annual Meeting.
If you chose to revoke your proxy by attending the Annual Meeting, you must vote
at such meeting in accordance with the rules for voting at the Annual Meeting.
Attending the Annual Meeting will not, by itself, constitute revocation of a
proxy.
MUST A MINIMUM NUMBER OF SHAREHOLDERS VOTE OR BE PRESENT AT THE MEETING?
A quorum of shareholders is necessary to hold a valid meeting. The
By-Laws of the Company state that the presence, in person or by proxy, of
holders of a majority of the shares entitled to vote shall constitute a quorum.
If the number of shares present at the meeting is insufficient to constitute a
quorum, the Annual Meeting may be adjourned by the vote of a majority of shares
present to a later date. No notice, other than as given at the Annual Meeting
itself, is required with respect to the time and place for the reconvening of
the Annual Meeting.
WHAT VOTE IS REQUIRED TO APPROVE EACH PROPOSAL?
The By-Laws of the Company provide that if a quorum is present, the
affirmative vote of a majority of the shares represented at the meeting may
decide any question before the meeting.
HOW ARE ABSTENTIONS AND BROKER NON-VOTES COUNTED?
The inspector of election will treat shares represented by proxies that
reflect abstentions as shares that are present and entitled to vote for purposes
of determining a quorum. As the proposals require the affirmative majority of
the shares present, an abstention will have the same effect as a vote "against"
the proposals.
Broker non-votes occur where a broker holding stock in street name
votes the shares on some matters but not others. The missing votes are deemed to
be "broker non-votes." The inspectors will treat broker non-votes as shares that
are present and entitled to vote for purposes of determining a quorum. However,
for purposes of determining the outcome of any matter as to which the broker or
nominee has indicated on the proxy that it does not have discretionary authority
to vote, those shares will be treated as not present and not entitled to vote
with respect to that matter (even though those shares are
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<PAGE>
considered entitled to vote for quorum purposes and may be entitled to vote on
other matters).
WHAT ARE THE COSTS OF SOLICITING THESE PROXIES?
The Company will pay all costs of soliciting these proxies. In addition
to mailing proxy soliciting materials, we may also solicit proxies by telephone,
telegram or otherwise. We also ask banks, brokers and other institutions,
nominees and fiduciaries to forward proxy material to the beneficial owners or
principals and to obtain authority to execute proxies. We will reimburse them
for their expenses.
WHAT MATTERS MAY BE RAISED AT THE MEETING?
The Board is aware of three items for action at this Annual Meeting:
(1) the election of two directors for three-year terms; (2) the approval of
Stock Option Plan; and (3) the approval of the CGB&L Management Development and
Recognition Plan and Trust Agreement ("MRP").
Shareholders desiring to bring matters before the meeting generally
have to notify the Company in writing no later than the 60th day prior to the
first anniversary of the proceeding year's annual meeting. This provision is not
applicable to this year's meeting as this is the first annual meeting of the
Company.
For a first meeting of shareholders, under the proxy rules promulgated
by the SEC, a proxy may confer discretionary authority to vote on any matter for
which the Company did not have notice a reasonable time before mailing its proxy
statement. At the time of mailing this proxy statement, the Company has not
received any notice of any other matters to be raised at the meeting. Therefore,
if any other matter is presented at the meeting and you have signed and returned
a proxy card, the holder of your proxy will vote upon such matter in his or her
discretion.
In addition, under the rules of the SEC, the holders of your proxy may
also vote in their discretion with respect to matters incident to the conduct of
the meeting or, in the case of a nominee for election as director who is unable
to serve, for a substitute nominee.
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MANAGEMENT
- --------------------------------------------------------------------------------
HOW DO WE MANAGE OUR COMPANY?
Except for certain matters which require the consent of shareholders
under our Certificate of Incorporation, the Board of Directors (the "Board") is
the ultimate decision making body of our Company. The Board also selects the
officers of the Company who are then responsible for the day-to-day management
of the Company.
4
<PAGE>
Members of the Board also serve as directors on the Board of Directors
of Cerro Gordo Building and Loan, s.b. (the "Savings Bank") which is a
wholly-owned subsidiary of the Company. The Savings Bank is the principal asset
of the Company. Management of the Savings Bank is therefore vital to the success
of the Company. Therefore, most meetings of the directors occurred as meetings
of the Board of Directors of the Savings Bank (the "Bank Board").
WHO ARE OUR DIRECTORS?
The Board has seven members. Under the Certificate of Incorporation,
these seven members are divided into three classes. One class will be elected at
this year's annual meeting, one at next year's annual meeting, and one class at
the meeting to be held in 2001. Each class' directors, when elected, will serve
a three-year term.
By designating classes in this manner, the Company has created a
staggered Board which fosters continuity of management. Listed below are brief
biographies of the members of the Board by Class.
CLASS I: DIRECTORS FOR ELECTION AT THIS ANNUAL MEETING
Lester W. Crandall (Age: 41). Mr. Crandall is the meat manager at
Wal-Mart in Mt. Zion, and prior to June 1, 1999 he was the meat manager of Eagle
Food Center in Decatur, Illinois for the past five years. Mr. Crandall also
became a director of the Savings Bank in 1998.
C. Russell York (Age: 57). Mr. York has had a long association with the
Savings Bank, first becoming a director of the Savings Bank in 1983. He holds
the title of Vice President of the Bank Board. Since October of 1994, he has
held the position of service technician for Phil Flaugher Electric Corporation
Decatur, Illinois. Prior to that, Mr. York was employed with the A. E. Staley
Manufacturing Company in Decatur, Illinois for thirty-five years.
CLASS II: DIRECTORS WHOSE TERMS EXPIRE IN 2000
Noel R. Buckley (Age: 64). Mr. Buckley became a director of the Savings
Bank in 1995. He retired from his position as floor supervisor with Firestone
Tire and Rubber Company in 1994.
Larry D. Gaitros (Age: 39). Mr. Gaitros became a director of the
Savings Bank in 1997. He is, and has been for more than the past five years, a
millwright for Archer Daniels Midland in Decatur, Illinois.
John A. Sochor (Age: 57). Dr. Sochor is the President of the Bank Board
and has been a director of the Savings Bank since 1981. He is, and has been for
more than the past five years, a licensed, self-employed dentist in Cerro Gordo,
Illinois.
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CLASS III: DIRECTORS WHOSE TERMS EXPIRE IN 2001
Dale C. Born (Age: 67). Mr. Born has been a director of the Savings
Bank since 1993. He has been retired from the A. E. Staley Manufacturing Company
since 1987. For more than the past five years, Mr. Born has been engaged in
family farming.
Maralyn F. Heckman (Age: 58). Mrs. Heckman has held various positions
with the Savings Bank since 1976. She became Chief Executive Officer of the
Savings Bank in 1977. She is, and has been since the creation of the Company,
the Chief Executive Officer and the Chief Financial Officer of the Company.
HOW MANY MEETINGS MUST DIRECTORS ATTEND?
The Board met once as the Board of the Company this past fiscal year.
The directors met as the Bank Board for 12 monthly meetings (the regular
meetings), one annual meeting and one special meeting for a total of 14 Bank
Board Meetings. In addition, the Bank Board has five standing committees which
various members must attend.
AUDIT COMMITTEE. The Audit Committee is principally responsible for
recommending the accounting firm to be engaged as the Company's external
auditor. Although the entire Board meets with outside auditors to review the
Company's annual financial statements, if any matter needs additional attention,
the audit committee meets with auditors without management present.
LOAN COMMITTEE. The Loan Committee is principally responsible for
insuring that the lending policies of the Savings Bank are observed. They also
review recommendations of the Appraisal Committee and approve loan applications
within the limits set forth in the Savings Bank's lending policies.
APPRAISAL COMMITTEE. The Appraisal Committee is principally responsible
for insuring that the appraisal policy of the Savings Bank is implemented and
observed. Three members of this committee visually inspect each property being
appraised. All members sign a written recommendation to the Loan Committee
regarding each loan application and appraisal.
NOMINATING COMMITTEE. The Nominating Committee is principally
responsible for recommending to the Bank Board the slate of nominees of
directors to be elected by the Company.
COMPENSATION COMMITTEE. The Compensation Committee is principally
responsible for reviewing and establishing the salaries and benefits for
employees.
Below is a chart showing the membership of each director in the various
committees. Also shown is the number of meetings of each committee.
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- ------------------- ------- ------ ----------- ------------ --------------
Name Audit Loan Appraisal Nominating Compensation
- ------------------- ------- ------ ----------- ------------ --------------
Mr. Born X X X
- ------------------- ------- ------ ----------- ------------ --------------
Mr. Buckley X X X X
- ------------------- ------- ------ ----------- ------------ --------------
Mr. Crandall X X
- ------------------- ------- ------ ----------- ------------ --------------
Mr. Gaitros X X X
- ------------------- ------- ------ ----------- ------------ --------------
Mrs. Heckman X X
- ------------------- ------- ------ ----------- ------------ --------------
Dr. Sochor X X
- ------------------- ------- ------ ----------- ------------ --------------
Mr. York X X X X
- ------------------- ------- ------ ----------- ------------ --------------
Number of Meetings 1 27 27 1 1
- ------------------- ------- ------ ----------- ------------ --------------
No director of the Company attended fewer than 75% of the aggregate
number of Board meetings, Bank Board meetings and committee meetings.
HOW ARE OUR DIRECTORS COMPENSATED?
Directors received no fees for their services on the Board during this
past fiscal year. Directors did receive $125 for each Bank Board meeting (14)
attended and for attending the meeting of the Compensation Committee. The
highest fee paid to any one director was $1,875 and the lowest was $1,625.
In addition, each of the directors serve as appraisers of real property
constituting security for loans. Three directors act as appraisers for any one
loan application. The borrower pays a fee of $120 for such appraisal which is
split by the three directors. During the fiscal year ending March 31, 1999, no
director earned more than $1,420 with regard to this appraisal function.
If adopted, the Stock Option Plan will permit the Company to grant
options to directors for their services to the Company and the Savings Bank. The
Company may so grant such options to reward directors for the considerable
amount of time and skill each has given to the Company and the Savings Bank.
WHAT OTHER TRANSACTION DO WE HAVE WITH MANAGEMENT?
The Savings Bank makes loans to executive officers and directors of the
Company and its affiliates in the ordinary course of business. Such loans are
made on substantially the same terms, including interest rates and collateral,
as those prevailing at the time the transaction is originated for comparable
transaction not with affiliates. In the opinion of the Savings Bank's
management, such loans to executive officers and directors do not involve more
than the normal risk of collectibility or present any other unfavorable
features.
As of March 31, 1999, approximately $229,439 of loans were outstanding
from the Savings Bank to executive officers and directors, which equals
approximately 13.76% of the Company's equity on March 31, 1999 and approximately
25.21% of its retained earnings. Of the total loans outstanding from the Savings
Bank to officers and directors, only Dr. Sochor has loans outstanding in excess
of $60,000. The amount of such loan
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was $106,581. Under our Certificate of Incorporation, the Company also
indemnifies directors and officers to the fullest extent permitted by the law of
the State of Delaware.
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SECURITY OWNERSHIP OF DIRECTORS, NOMINEES FOR DIRECTORS
AND MOST HIGHLY COMPENSATED EXECUTIVE OFFICERS
- --------------------------------------------------------------------------------
The following table contains information as to the beneficial ownership
under Regulation 13D of the Securities Exchange Act of 1934 (the "Exchange Act")
of the Company's Common Stock as of June 18, 1999 with respect to (i) each of
the current directors and nominees for director (ii) the chief executive officer
of the Company and (iii) all directors and the chief executive officers as a
group.
- ---------------------------- ------------------------ ------------------------
Name of Beneficial Owner Number of Shares Percent of Class
- ---------------------------- ------------------------ ------------------------
Dale C. Born 1,500(a) 1.5%
- ---------------------------- ------------------------ ------------------------
Noel R. Buckley 6,325 6.39%
- ---------------------------- ------------------------ ------------------------
Lester Crandall 500 *
- ---------------------------- ------------------------ ------------------------
Larry D. Gaitros 500 *
- ---------------------------- ------------------------ ------------------------
Maralyn Heckman 6,632.5(b) 6.70%
- ---------------------------- ------------------------ ------------------------
John A. Sochor, D.D.S. 1,000 1.5%
- ---------------------------- ------------------------ ------------------------
C. Russell York 6,325 6.39%
- ---------------------------- ------------------------ ------------------------
All as a Group (7 persons) 22,785.5 23%
- ---------------------------- ------------------------ ------------------------
*Less than 1%.
(a) Excludes 1,000 held by wife as trustee for grandchildren.
(b) Includes 400 shares held by husband.
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PERSONS OWNING MORE THAN FIVE PERCENT
OF THE COMPANY'S STOCK
- --------------------------------------------------------------------------------
The following table sets forth information with respect to persons
known by the Company to be the beneficial owner as defined by Rule 13D of the
Exchange Act of more than 5% of the outstanding Common Stock on June 18, 1999.
Such information has been obtained from filings made with the Securities
Exchange Commission and the records of the Company. The Company is not aware of
any other persons owning more than 5% of the Common Stock.
- ------------------------------------- -------------------- ---------------------
Name Number of Shares Percent of Class
Beneficially Owned
- ------------------------------------- -------------------- ---------------------
Julie & Robert Werking
3931 East Garrett Court 6,325 6.39%
Highlands Ranch, Colorado
- ------------------------------------- -------------------- ---------------------
Beverly & Dave White
R. R. #2, Box 161 5,000 5.05%
Sullivan, Illinois 61951
- ------------------------------------- -------------------- ---------------------
Cerro Gordo Building and Loan, s.b. 7,919 8%
as Trustee for the Company ESOP
- ------------------------------------- -------------------- ---------------------
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- ------------------------------------- -------------------- ---------------------
Gregory A. Heckman
3333 North 140th Street 7,525 7.6%
Omaha, Nebraska 68164
- ------------------------------------- -------------------- ---------------------
Philip R. Flaugher
540 East Eldorado 5,825 5.88%
Decatur, Illinois
- ------------------------------------- -------------------- ---------------------
Maralyn F. Heckman
201 East 600 North Road, P.O. Box 463 6,632.5(a) 6.70%
Cerro Gordo, Illinois
- ------------------------------------- -------------------- ---------------------
C. Russell York
435 West Abraham, P.O. Box 134 6,325 6.39%
Cerro Gordo, Illinois
- ------------------------------------- -------------------- ---------------------
Noel R. Buckley
702 South Madison, P.O. Box 464 6,325(b) 6.39%
Cerro Gordo, Illinois
- ------------------------------------- -------------------- ---------------------
Tracy A. Norcross
786 North State, Highway 32 6,325 6.39%
Cerro Gordo, Illinois
- ------------------------------------- -------------------- ---------------------
A. Charles Taylor Family Trust
793 North State, Highway 32 6,325 6.39%
Cerro Gordo, Illinois
- ------------------------------------- -------------------- ---------------------
(a) Includes 400 shares owned by her husband. Mrs. Heckman has disclaimed
beneficial ownership of those 400 shares. The fractional share is due
to the allocation in the ESOP, and reflects her beneficial interest.
(b) Includes 3,000 shares owned by his wife. Mr. Buckley has disclaimed
beneficial ownership of those 3,000 shares.
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COMPENSATION TABLES AND COMPENSATION MATTERS
- --------------------------------------------------------------------------------
The rules of the Securities Exchange Act of 1934 require the Company to
disclose to you in connection with any solicitation of proxies for an annual
meeting, the compensation paid to the chief executive officer of the Company and
the next four highly compensated officers if such officers received salary and
bonus in excess of $100,000. No officers of the Company and its subsidiaries
have received a salary and bonus in excess of $100,000. As a result, the Company
is only disclosing the compensation of its Chief Executive Officer, Maralyn
Heckman.
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SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
ANNUAL COMPENSATION LONG-TERM COMPENSATION
------------------- ----------------------
AWARDS
------
NAME AND FISCAL OTHER ANNUAL RESTRICTED SECURITIES ALL OTHER
PRINCIPAL YEAR COMPENSATION STOCK AWARDS UNDERLYING COMPENSATION
POSITION(*) ENDING SALARY($) BONUS($) ($) ($) OPTIONS(#) ($)(a)
<S> <C> <C> <C> <C> <C> <C> <C>
Maralyn Heckman 1999 40,040 1,300 -0- -0- -0- 6,516
President and Chief 1998 35,100 1,000 -0- -0- -0- 5,775
Executive Officer 1997 31,230 1,700 -0- -0- -0- 5,195
- -------------------------------------------------------------------------------------------------------------------
</TABLE>
(a) The amounts in this column represent premiums for disability insurance in
the amount of $510 for each year. The remaining amount represents contributions
under the Simplified Employee Pension Plan in the amounts of $6,006 for 1999,
$5,265 for 1998 and $4,685 for 1997.
The Company does not currently grant stock options or any other form of
stock awards. The Savings Bank and the Company does have certain other benefits
available to all employees including Mrs. Heckman.
SIMPLIFIED EMPLOYEE PENSION PLAN. The Savings Bank currently maintains
a simplified employee pension plan (the "SEP") to provide retirement benefits
for employees eligible to participate therein. The SEP provides that the Savings
Bank shall make monthly contribution of not more than 15% of each eligible
employee's compensation to an Individual Retirement Account established for that
employee. Employees who have reached age 21 and who have worked for the Savings
Bank two out of the five preceding years are eligible for SEP contributions.
Employees who are covered under a collective bargaining agreement and employees
who have compensation during the year of less than $300 are not eligible to
participate in such year.
EMPLOYEE STOCK OWNERSHIP PLAN. In connection with the conversion, the
Company and Savings Bank have adopted the ESOP. Employees age 21 and over who
have completed at least 1,000 hours of service in the 12-month period of
employment with the Savings Bank are eligible to participate in the ESOP.
Participants' benefits vested at a rate of 20% for each year of service and are
100% vested at the end of five years of service. Vesting will be accelerated
upon early or normal retirement, death, disability, or upon termination of the
ESOP, provided the participant is employed at such time. Contributions and
forfeitures will be allocated pro rata, based on the ratio each participant's
compensation bears to the compensation of all participants entitled to share in
such allocation.
In addition to being eligible to receive benefits under the above
plans, Mrs. Heckman has entered into two employment agreements, one with the
Company and one with the Savings Bank.
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The Employment Agreements provide for three-year terms for Mrs.
Heckman's employment. The term of the Employment Agreements will be
automatically extended on a daily basis unless written notice of non-renewal is
given by the Board of Directors or Mrs. Heckman. Therefore, on any day that Mrs.
Heckman is employed by the Savings Bank and the Holding Company, and assuming
that neither the Board of Directors nor Mrs. Heckman have provided prior notice
of non-renewal, the remaining term in Mrs. Heckman's employment agreements will
be three years. The Employment Agreements provide that Mrs. Heckman's base
salary will be reviewed annually. The base salary which will be effective for
such Employment Agreements for Mrs. Heckman will be her current salary at the
time such agreement is triggered. In addition to the base salary, the Employment
Agreements provide for, among other things, participation in stock benefits
plans and other fringe benefits applicable to the executive personnel. The
Employment Agreements provide for termination by the Savings Bank or the Holding
Company for cause, as defined in the Employment Agreements, at any time. In the
event the Savings Bank or the Holding Company chooses to terminate Mrs.
Heckman's employment for reasons other than for cause, or in the event of Mrs.
Heckman's resignation from the Savings Bank and the Holding Company upon: (1)
failure to re-elect Mrs. Heckman to her current offices; (ii) a material change
in Mrs. Heckman's functions, duties or responsibilities; (iii) a relocation of
Mrs. Heckman's principal place of employment by more than 25 miles; (iv) a
reduction in the benefits and perquisites being provided to Mrs. Heckman in the
Employment Agreements; (v) liquidation or dissolution of the Savings Bank or the
Holding Company; or (vi) a breach of the Employment Agreement by the Savings
Bank or the Holding Company, Mrs. Heckman or, in the event of death, her
beneficiary would be entitled to receive an amount equal to the remaining base
salary payments due to Mrs. Heckman for the remaining term of the Employment
Agreement and the contributions that would have been made on Mrs. Heckman's
behalf to any employee benefits plans of the Savings Bank and the Holding
Company during the remaining term of the Employment Agreements. The Savings Bank
and the Holding Company would also continue to pay for Mrs. Heckman's life and
disability coverage for the remaining term of the Employment Agreements. Upon
termination of Mrs. Heckman's employment, except upon a change in control, Mrs.
Heckman is subject to a one-year non-competition clause.
Under the Employment Agreements, if voluntary or involuntary
termination follows a change in control of the Savings Bank or the Holding
Company, Mrs. Heckman or, in the event of Mrs. Heckman's death, her beneficiary
would be entitled to a severance payment equal to the greater of: (i) the
payments due for the remaining terms of the Employment Agreements; or (ii) three
times the average of the five preceding taxable years' annual compensation. The
Savings Bank and the Holding Company would also continue Mrs. Heckman's life,
health and disability coverage for thirty-six months. Notwithstanding that both
Employment Agreements provide for a severance payment in the event of a change
in control, Mrs. Heckman would only be entitled to receive a severance payment
under one agreement.
Payments to Mrs. Heckman under the Savings Bank's Employment Agreement
will be guaranteed by the Holding Company in the event that payments or benefits
are
11
<PAGE>
not paid by the Savings Bank. Payment under the Holding Company's Employment
Agreement would be made by the Holding Company but are reduced to the extent
Mrs. Heckman receives payment under the Savings Bank's employment agreement. All
reasonable costs and legal fees paid or incurred by Mrs. Heckman pursuant to any
dispute or question of interpretation relating to the Employment Agreements
shall be paid by the Savings Bank or Holding Company, respectively, if Mrs.
Heckman is successful on the merits pursuant to a legal judgment, arbitration or
settlement. The Employment Agreements also provide that the Savings Bank and
Holding Company shall indemnify Mrs. Heckman to the fullest extent allowable
under Illinois and Delaware law, respectively. In the event of a change in
control of the Savings Bank or the Holding Company, the total amount of payments
due under the Employment Agreements, based solely on current base salary for
such Employment Agreements and excluding any benefits under any employee benefit
plan which may be payable, would be approximately $120,000.
- --------------------------------------------------------------------------------
PROPOSAL ONE: ELECTION OF DIRECTORS
- --------------------------------------------------------------------------------
As previously discussed, the Board's membership is divided into three
classes. Class I directors are to be elected at this year's Annual Meeting. We
are asking you to vote for two directors to be placed into Class I.
The Board has nominated Lester W. Crandall and C. Russell York. Their
credentials were given in the discussion under "Management" on pages 4 and 5 of
this Proxy Statement. These individuals have consented to stand for election. If
elected, their term will expire at our Annual Meeting in 2002. Each will serve
until his successor has been elected and duly qualified, or until his death,
resignation or retirement.
The persons named in the enclosed proxy card intend to vote the proxy
for the election of the two nominees unless you indicate on the proxy card that
your vote should be withheld from either or both nominees. Should either nominee
be unable to serve by the time of the Annual Meeting, your signed proxy card
will grant authority to the persons named therein to vote for a substitute
nominee unless you withhold such authority.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE NOMINEES, LESTER W.
CRANDALL AND C. RUSSELL YORK FOR ELECTION AS DIRECTORS.
- --------------------------------------------------------------------------------
PROPOSAL TWO: APPROVAL OF STOCK OPTION PLAN
- --------------------------------------------------------------------------------
As of June 18, 1999, the Board approved the CGB&L Financial Group,
Inc.'s 1999 Stock Option and Incentive Plan ("Stock Option Plan"), subject to
approval of shareholders. The text of the Option Plan is set forth in the
Appendix attached to this Proxy Statement. The following is intended to be a
summary of the Option Plan and does not purport to be a complete statement of
its terms. It is subject to, and qualified in its entirety by reference to the
Option Plan set forth in the Appendix.
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<PAGE>
WHAT IS THE PURPOSE OF THE OPTION PLAN?
The purposes of the Stock Option Plan are manifold and include the
following:
* To recognize the contributions of key employees and directors;
* To provide key employees with additional incentive to devote
themselves to the future success of the Company;
* To improve the ability of the Company to attract, retain and motivate
individuals; and
* To provide additional incentive to members of the Board of Directors
who are not employees to serve on the Board and to devote themselves
to the future success of the Company.
WHO IS ELIGIBLE TO PARTICIPATE UNDER THE OPTION PLAN?
Any person who is currently an employee of the Company or its
subsidiaries are eligible to participate in the Stock Option Plan. Any director
who is not an employee is also eligible to participate. At the time of mailing
this Proxy Statement, 10 persons would be eligible to participate in the Stock
Option Plan.
WHAT ARE THE AWARDS THAT MAY BE MADE UNDER THE STOCK OPTION PLAN?
The Stock Option Plan permits the granting of a variety of awards as
follows:
INCENTIVE STOCK OPTIONS. These are options to purchase Common Stock
that qualify under Section 422 of the Internal Revenue Code of 1986, as amended
(the "Code"). These options are commonly referred to as ISOs.
NON QUALIFIED STOCK OPTIONS ("NSOs"). These are options that do not
qualify for the tax treatment set forth under Section 422 of the Code.
Awards to employees, including those that serve as directors, are in
the complete discretion of the Committee which will administer the Stock Option
Plan. Directors who are not employees will automatically be granted options to
purchase 750 shares of Common Stock on the effective date of the Plan. The
exercise price for such options shall be the Fair Market Value on the date the
option is granted. The vesting period for such options shall be in the
discretion of the Committee. Vesting shall accelerate upon death, disability or
a change of control of the company. The options shall expire in ten years.
WHAT IS FAIR MARKET VALUE?
The Stock Option Plan defines Fair Market Value in one of two
alternative ways:
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1. If the Common Stock is traded on a national exchange or the
NASDAQ National Market System, then the Fair Market Value per
shall not be less than the average of the highest and lowest
selling price on such exchange or system on such date. If there
were no sales on such date, then the Fair Market Value per shall
be equal to the average between the bid and the asked price on
such date.
2. If the Common Stock is traded otherwise than as set forth in 1
above, the Fair Market Value per share shall be equal to the
average between the bid and asked price on such date, or, if
there is no bid and asked price on such date, then on the next
prior date business day on which there was a bid and asked price,
or in the discretion of the Committee, as such Fair Market Value
shall be determined by the Committee in its sole and absolute
discretion.
WHAT PRINCIPAL TERMS MUST BE IN AWARDS?
As discussed below, most terms of any option grant to key employees are
subject to the discretion of the Committee. However, the Stock Option Plan does
require the following terms in the awards:
* All options must have exercise prices set at least at Fair Market
Value of the shares on the date of grant. ISO granted to individuals
who own stock possessing more than 10% of the combined voting power of
the Company shall be at not less than 110% of the Fair Market Value.
* All ISOs shall expire 10 years after the grant and no ISO shall be
granted after September 30, 2009.
* NSOs shall expire 10 years after the date of the grant.
* The aggregate Fair Market Value of ISO shares that become exercisable
in any one year with respect to any one individual shall not exceed
$100,000.
WHO WILL ADMINISTER THE OPTION PLAN?
A committee (the "Option Plan Committee") comprised of two or more
members of the Board of Directors will administer the Option Plan. A member of
the Option Plan Committee must be a Non-Employee Director as defined in Rule
16b-3 of the Exchange Act. As Mrs. Heckman has resigned from the Compensation
Committee, the Board has appointed the Compensation Committee to act as the
Option Plan Committee. In lieu of such members, the Committee may also be the
entire Board of Directors, including employee directors.
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<PAGE>
WHAT POWERS WILL THE OPTION PLAN COMMITTEE HAVE?
The Option Plan Committee will have the following powers:
* To select the employees and outside directors to whom the options may
be granted.
* To determine the terms of each option.
* To interpret the provisions of the Option Plan.
* To make all other determinations that it may deem necessary or
advisable for the administration of the Option Plan.
HOW MANY SHARES ARE AVAILABLE FOR ISSUANCE UNDER THE OPTION PLAN?
Under the Stock Option Plan, the Company will be able to issue up to
9,900 shares of Common Stock. The number of shares available at any time is
subject to adjustment in the event of stock splits, stock dividends and other
situations.
This number of shares represents 10% of the outstanding shares on June
18, 1999. The Option Plan will dilute current shareholders by approximately 8%.
WHAT ARE THE PRINCIPAL FEDERAL TAX CONSEQUENCES?
The following discussion summarizes the Federal income tax consequences
to participants and the Company arising from awards made under the Stock Option
Plan.
INCENTIVE STOCK OPTIONS. A participant will not realize taxable income
upon the grant or exercise (except for purposes of the alternative minimum tax)
of an ISO. If the participant holds the shares acquired on the exercise of an
ISO for two years from the date of grant and one year after the transfer of such
shares to the participant, he or she will recognize a long-term capital gain or
loss upon their subsequent sale or exchange. In such case, the Company will not
be entitled to a tax deduction. If a participant does not hold the shares
acquired on the exercise of an ISO for that holding period, he or she will
recognize ordinary income in the year of such disposition of such shares equal
to the excess of (a) the lesser of (i) the amount realized upon such disposition
and (ii) the fair market value of such shares on the date of exercise over (b)
the exercise price. To the extent that the amount realized on such sale or
exchange exceeds the market value of such shares on the date of the exercise,
the participant will recognize capital gains. The Company will be entitled to a
tax deduction in the amount of the ordinary income reportable by the
participant. The excess of the fair market value on the date of exercise of an
ISO of the shares over the exercise price may in certain circumstances
constitute a preference item for purposes of calculating the participant's
alternative minimum tax.
NONQUALIFIED STOCK OPTIONS. Upon the grant of NSOs, a participant will
not be in receipt of ordinary income. Upon the exercise of an NSO, a participant
will be in receipt
15
<PAGE>
of ordinary income in an amount equal to the excess of the fair market value of
the acquired shares over their exercise price. The Company will be entitled to a
tax deduction in the year of such exercise, equal to the amount of such ordinary
income.
MAY THE OPTION PLAN BE AMENDED WITHOUT SHAREHOLDER APPROVAL?
The Board or the Option Plan Committee has the authority to terminate,
suspend or amend the Option Plan, in whole or in part, from time to time,
without the approval of stockholders to the extent permitted by law, except that
the Board's right to make amendments are limited in the following cases:
(i) No amendment will be effective until approved by shareholders if
such approval is required in order for the Stock Option Plan to
satisfy the requirements of Rule 16b-3 under the Exchange Act.
(ii) The provisions applicable to nonemployee directors may not be
amended more than once very six months, except to comply with the
changes in the Code or the rules and regulations thereunder.
WHAT BENEFITS WILL PARTICIPANTS RECEIVE UNDER THE STOCK OPTION PLAN?
Currently, the Board proposes to grant NSOs to non-employee directors
in a set amount as described herein. In addition, the Board intends to grant
ISOs to purchase 4,650 shares to Maralyn Heckman and ISOs to purchase 750 shares
to Michelle M. Shively.
When granted, the stock options will have an exercise price equal to
the fair market value of the date of grant, if exercised. While the Company
cannot predict the fair market value of the stock on October 1, 1999, which the
Company believes will be the grant date, the Company has assumed an exercise
price of $9.00 (which is the price at which the Common Stock last traded prior
to June 18, 1999) in preparing the table below. The valuation presented is based
upon the Black-Scholes model.
- --------------------------------------------------------------------------------
NEW PLAN BENEFITS TABLE
-----------------------
- --------------------------------------------------------------------------------
NAME AND POSITION DOLLAR VALUE($)(a) NUMBER OF SHARES
- ----------------------------------- ----------------------- --------------------
Maralyn Heckman (Executive Group) $16,647 4,650
- ----------------------------------- ----------------------- --------------------
Non Executive Director Group $16,110 4,500
- ----------------------------------- ----------------------- --------------------
Non Executive Officer Group $2,685 750
- ----------------------------------- ----------------------- --------------------
(a) The Black-Scholes Model utilized the following assumptions: 2.22%
dividend yield, 30% expected volatility, 6.00% interest rate and a ten
year expiration.
Therefore, awards are at the discretion of the Committee acting within
the requirements of the Stock Option Plan. The value of future awards is not
determinable. Moreover, the value of any awards, including those set forth in
the table above, is dependent upon market volatility and other factors that
cannot be predicted at this time.
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<PAGE>
WHEN WILL THE STOCK OPTION PLAN TAKE EFFECT?
If approved by shareholders, the Stock Option Plan will take effect on
October 1, 1999. No options will be granted before such date.
WHEN WILL THE STOCK OPTION PLAN TERMINATE?
The Stock Option Plan will terminate only if the Board or the Option
Plan Committee choose to terminate the Stock Option Plan. However, the right to
grant ISO's under the Stock Option Plan will terminate on September 30, 2009.
Thereafter, only NSOs may be granted.
THE BOARD RECOMMENDS A VOTE FOR THE STOCK OPTION PLAN.
- --------------------------------------------------------------------------------
PROPOSAL THREE: APPROVAL OF THE CGB&L MANAGEMENT DEVELOPMENT AND
RECOGNITION PLAN AND TRUST AGREEMENT
- --------------------------------------------------------------------------------
As of June 18, 1999, the Board approved the CGB&L Financial Group, Inc.
Management Development and Recognition Plan and Trust Agreement (the "MRP"),
subject to the approval of shareholders. The text of the MRP is set forth in the
Appendix attached to this Proxy Statement. The following is intended to be a
summary of the MRP and does not purport to be a complete statement of its terms.
It is subject to, and qualified in its entirety by reference to the MRP set
forth in the Appendix.
WHAT IS THE PURPOSE OF THE MRP?
The purpose of the MRP is to retain personnel with experience and
ability in key positions by providing such persons with a proprietary interest
in the Company as compensation for their contributions to the Company and its
subsidiaries.
WHO IS ELIGIBLE TO PARTICIPATE IN THE MRP?
Officers and key management employees of the Company are eligible to
participate in the plan. Directors who are not employees may also participate,
but only on a limited basis.
WHAT ARE THE AWARDS AVAILABLE UNDER THE PLAN?
The Company shall make contributions from time to time to a trust. The
amount (or the method of computing the amounts) of such contributions shall be
determined by the Board. The Trustee will invest amounts contributed in shares
of the Company's Common Stock, provided, however, that the Trustee will not
purchase more than 4% of the total shares of Common Stock issued or 3,960
shares. The MRP, if adopted, will cause a dilution of existing shares by a
little less than 4%.
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<PAGE>
A Committee will determine which of the eligible employees will be
entitled to receive "Plan Share Awards." Plan Share Awards are rights granted to
a recipient to earn shares of Common Stock placed in the trust. In granting Plan
Share Awards the Committee may not grant more Plan Share Awards than there are
shares of Common Stock in the trust. No Plan Share Awards may result in a
violation of the Company's Certificate of Incorporation, the Bylaws of the
Company, the State Charter or the Plan of Conversion for the Savings Bank.
The Committee shall determine the conditions under each Plan Share
Award with respect to how the shares of Common Stock are to be earned by the
recipient. Unless the Committee shall state otherwise, however, Common Stock
will be earned by a recipient of a Plan Award in five equal installments over
the first five years after the date of grant of the Plan Award. Death,
disability or a change in control of the Company will accelerate such schedules
resulting in the immediate vesting of the entire award. Until the recipient has
earned the shares, the recipient shall not have any voting or dividend rights.
Once earned, however, dividends received upon shares shall be allocated to the
recipient and distributed to him or her when the earned shares are distributed.
Earnings on Common Stock held by the plan shall be for the benefit of
the Plan. Earnings on Common Stock held for a recipient (earned shares) shall be
held in an interest bearing account for the benefit of the recipient.
WHO WILL ADMINISTER THE MRP?
The Board may designate a "Committee" to administer the MRP. At this
time, the Board intends to designate the Compensation Committee as the
Committee.
WHAT AUTHORITY DOES THE COMMITTEE HAVE?
The Committee, which shall be appointed by the Board, shall administer
and interpret the MRP. All of its interpretations are final and binding. The
Committee shall act by the majority vote of its members.
The Committee may adopt such rules, regulations and procedures as its
deems appropriate. In the event the Committee does not constitute the entire
Board, it shall report to the Board with respect to its actions at appropriate
times but no less than one time per calendar year.
The Committee also shall appoint one or more of its members as trustees
under the MRP.
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<PAGE>
WHAT AUTHORITY DO THE TRUSTEES HAVE?
The trustees will hold, administer, invest and make all distributions
and disbursements under the MRP. They will have complete authority and
discretion with respect to the management, control and investment of the trust.
However, the trustees are to invest all assets of the trust in Common Stock to
the fullest extent possible except to the extent cash or cash equivalents are
necessary to fulfill the obligations of the trust. The broad powers granted the
trustees are set forth in Section 8.2 of the MRP attached in the Appendix.
WHAT BENEFITS WILL THE RECIPIENTS RECEIVE?
The benefits available to eligible participants cannot be predicted at
this time. The value of any benefits is dependent on being selected to receive
an award, the value of the Common Stock when shares are earned (which cannot be
predicted at this time) and the amount of contributions the Company decides to
make. At the time of mailing this Proxy Statement, the Company anticipates that
it will award each non-employee director 220 shares of Common Stock. The Company
also intends to grant 1,760 shares of Common Stock to Maralyn Heckman and 880
shares to Michelle M. Shively.
The table below sets forth the anticipated awards and the dollar value
thereof. In determining the dollar value thereof, the Company has utilized the
last trading price of a share of the Company stock prior to June 18, 1999.
- ------------------------------------------------------------------------------
NEW PLAN BENEFITS TABLE
-----------------------
- ------------------------------------------------------------------------------
NAME AND POSITION DOLLAR VALUE NUMBER OF SHARES
- ----------------------------------- ------------------ -----------------------
Maralyn Heckman (Executive Group) $15,840 1,760
- ----------------------------------- ------------------ -----------------------
Non-Executive Director Group $11,880 1,320
- ----------------------------------- ------------------ -----------------------
Non-Executive Officer Group $7,920 880
- ----------------------------------- ------------------ -----------------------
WHAT ARE THE PRINCIPAL TAX CONSEQUENCES OF THE MRP?
Plan Awards are not taxable until they are earned by the participant. A
participant shall recognize ordinary income to the extent he or she earns a Plan
Award. The ordinary income will equal the fair market value of the stock and any
other trust assets earned. At that time, the Company shall be entitled to a tax
deduction equal to the amount of income recognized by the participant.
Until Plan Awards are earned by a participant, the Company, as grantor
of the trust, shall recognize taxable income on any earnings of the trust. Such
income will include any dividends paid upon shares of Common Stock owned by the
trust which have not been earned by participants and investment earnings on such
dividends. Participants shall not recognize earnings on dividends paid on Common
Stock owned by the trust, until the participant earns the Common Stock to which
such dividends relate.
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<PAGE>
MAY THE MRP BE AMENDED WITHOUT SHAREHOLDER APPROVAL?
Yes, the Board may amend the MRP or terminate it at any time.
THE BOARD RECOMMENDS A VOTE FOR THE MRP.
- --------------------------------------------------------------------------------
SELECTION OF INDEPENDENT AUDITORS
- --------------------------------------------------------------------------------
The Board has selected Olive L.L.P. as independent auditors of the
Company and its subsidiaries for the fiscal year ending March 31, 2000.
Representatives of Olive L.L.P. are expected to be present at the Annual Meeting
and will be given an opportunity to make a statement and answer appropriate
shareholder questions. Shareholders may submit questions concerning the
financial statements of the Company either orally at the Annual Meeting or in
writing before the Annual Meeting.
- --------------------------------------------------------------------------------
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
- --------------------------------------------------------------------------------
Except for initial statements of beneficial ownership and one amendment
to a Form 4, all reports required to be filed pursuant to Section 16(a) of the
Exchange Act were filed on a timely basis. Under the rules of the Exchange Act,
reports of initial beneficial ownership were due at the time of filing of the
registration under such Exchange Act even though at such time the conversion had
not been approved and it was unknown if any shares would be issued. The
directors and officers did not file at such time but instead filed such reports
on September 21, 1998. These reports were 27 days late.
In addition, Mr. Born was unaware of interpretations of the rules which
required the reporting of 1,000 shares held in trust by his wife for the benefit
of his grandchildren. Upon discovery, he amended his October report to include
such purchase on May 27, 1999.
- --------------------------------------------------------------------------------
REQUIREMENTS, INCLUDING DEADLINES FOR SUBMISSION, PROXY PROPOSALS,
NOMINATIONS OF DIRECTORS AND OTHER BUSINESS OF SHAREHOLDERS
- --------------------------------------------------------------------------------
If you wish to submit proposals to be included in our Proxy Statement
for our Annual Meeting in 2000, we must receive them on or before March 8, 2000.
Please address your proposals to: Maralyn Heckman, Secretary, CGB&L Financial
Group, Inc., 229 East South Street, Cerro Gordo, Illinois 61818.
Under our Certificate of Incorporation, if you wish to nominate
directors or bring other business before the stockholders:
* You must notify the Secretary in writing no earlier than May 13,
2000 (90 days before the anniversary of this year's meeting) and
no later than June 12, 2000 (60 days before the anniversary date
of this year's meeting).
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<PAGE>
* Your notice must contain the specific information required by our
Certificate.
Please note that these requirements pertain only to matters you wish to bring
before your fellow shareholders at next year's annual meeting. They are separate
from the deadline first mentioned above with respect to having a proposal
included in our Proxy Statement.
If you would like a copy of the provisions of our Certificate of
Incorporation for nominating directors or bringing other matters before the
shareholders, we will send you copies without charge. Please write to the
Secretary of the Company. The Certificate of Incorporation has also been filed
as an exhibit to our registration statement and can be accessed through EDGAR on
www.sec.gov.
BY ORDER OF THE BOARD OF DIRECTORS.
Secretary
/s/ Maralyn Heckman
July 6, 1999
21
<PAGE>
APPENDIX TO PROXY STATEMENT
CGB&L FINANCIAL GROUP, INC.,
1999 STOCK OPTION AND INCENTIVE PLAN
SECTION 1. PURPOSE.
The purpose of the CGB&L Financial Group, Inc., 1999 Stock Option and
Incentive Plan (the "Plan") is to benefit CGB&L Financial Group, Inc., (the
"Company") and its Subsidiaries (as defined in Section 2) by recognizing the
contributions made to the Company by officers and other key employees (including
Directors of the Company who are also employees) of the Company and its
Subsidiaries, to provide such persons with additional incentive to devote
themselves to the future success of the Company, and to improve the ability of
the Company to attract, retain and motivate individuals, by providing such
persons with a favorable opportunity to acquire or increase their proprietary
interest in the Company over a period of years through receipt of options to
acquire common stock of the Company. In addition, the Plan is intended as an
additional incentive to members of the Board of Directors of the Company who are
not employees of the Company ("Outside Directors") to serve on the Board of
Directors of the Company (the "Board") and to devote themselves to the future
success of the Company by providing them with a favorable opportunity to acquire
or increase their proprietary interest in the Company through receipt of options
to acquire common stock of the Company.
The Company may grant stock options that constitute "incentive stock
options" ("ISOs") within the meaning of Section 422 of the Internal Revenue Code
of 1986, as amended (the "Code"), or stock options which do not constitute ISOs
("NSOs") (ISOs and NSOs being hereinafter collectively referred to as
"Options").
SECTION 2. ELIGIBILITY.
Outside Directors shall participate in the Plan only in accordance with
the provisions of Section 5 of the Plan. The Committee (as defined in Section 3)
shall initially, and from time to time thereafter, select those officers and
other key employees (including Directors of the Company who are also employees)
(collectively referred to herein as "Key Employees") of the Company or any other
entity of which the Company is the direct or indirect beneficial owner of not
less than fifty percent (50%) of all issued and outstanding equity interests
("Subsidiaries"), to participate in the Plan on the basis of the special
importance of their services in the management, development and operations of
the Company or its Subsidiaries (each such Director and Key Employee receiving
Options granted under the Plan is referred to herein as an "Optionee").
SECTION 3. ADMINISTRATION.
3.1 THE COMMITTEE. The Plan shall be administered by the Compensation
Committee of the Board (the "Committee"). The Committee shall be comprised of
two (2) or more members of the Board. All members of the Committee shall be
Non-Employee Directors, which for purposes of this Plan is any director who:
(a) is not currently an officer of the Company or its
Subsidiaries, or otherwise currently employed by the Company
or its Subsidiaries;
(b) does not receive compensation, either directly or indirectly,
from the Company or its Subsidiaries, for services rendered as
a consultant or in any capacity other than as a director,
except for an amount that does not exceed the dollar amount
for which disclosure would be required in the Company's proxy
statement;
(c) does not possess an interest in any other transaction for
which disclosure would be required in the Company's proxy
statement; and
<PAGE>
(d) is not engaged in a business relationship for which disclosure
would be required in the Company's proxy statement.
In the alternative, the Committee may consist of the entire Board, including
members of the Board who may not qualify as Non-Employee Director.
3.2 AUTHORITY OF THE COMMITTEE. No person, other than members of the
Committee, shall have any authority concerning decisions regarding the Plan.
Subject to the express provisions of this Plan, including but not limited to
Section 5, the Committee shall have sole discretion concerning all matters
relating to the Plan and Options granted hereunder. The Committee, in its sole
discretion, shall determine the Key Employees of the Company and its
Subsidiaries to whom, and the time or times at which Options will be granted,
the number of shares to be subject to each Option, the expiration date of each
Option, the time or times within which the Option may be exercised, the
cancellation of the Option (with the consent of the holder thereof) and the
other terms and conditions of the grant of the Option. The terms and conditions
of the Options need not be the same with respect to each Optionee or with
respect to each Option.
The Committee may, subject to the provisions of the Plan, establish
such rules and regulations as it deems necessary or advisable for the proper
administration of the Plan, and may make determinations and may take such other
action in connection with or in relation to the Plan as it deems necessary or
advisable. Each determination or other action made or taken pursuant to the
Plan, including interpretation of the Plan and the specific terms and conditions
of the Options granted hereunder by the Committee shall be final and conclusive
for all purposes and upon all persons including, but without limitation, the
Company, its Subsidiaries, the Committee, the Board, officers and the affected
employees of the Company and/or its Subsidiaries and their respective successors
in interest.
No member of the Committee shall, in the absence of bad faith, be
liable for any act or omission with respect to service on the Committee. Service
on the Committee shall constitute service as a Director of the Company so that
members of the Committee shall be entitled to indemnification pursuant to the
Company's Certificate of Incorporation and By-Laws.
SECTION 4. SHARES OF COMMON STOCK SUBJECT TO PLAN.
4.1 INITIAL SHARES SUBJECT TO PLAN. The total number of shares of
common stock of the Company, no par value (the "Common Stock"), that may be
issued and sold under the Plan initially shall be 9,900 (the "Option Pool"). The
total number of shares of Common Stock that may be available for Options under
the Plan shall be adjusted in accordance with Section 4.2 hereof. Awards to any
single participant will exceed 9,900 shares. Shares of Option Stock withheld as
payment of an Option Price as described in Section 8.2 by the Company may be
added back into the Option Pool and reissued. Shares of Option Stock that would
have been issuable pursuant to Options, but that are no longer issuable because
all or part of those Options have terminated or expired may also be added back
into the Option Pool to be available for issuance.
4.2 ADJUSTMENTS TO SHARES SUBJECT TO PLAN. The number of shares of
Common Stock subject to the Plan and to Options granted under the Plan shall be
adjusted as follows: (a) in the event that the number of outstanding shares of
Common Stock is changed by any stock dividend, stock split or combination of
shares, the number of shares subject to the Plan and to Options previously
granted thereunder shall be proportionately adjusted; (b) in the event of any
merger, consolidation or reorganization of the Company with any other
corporation or corporations, there shall be substituted on an equitable basis as
determined by the Board of Directors, in its sole discretion, for each share of
Common Stock then subject to the Plan and for each share of Common Stock then
subject to an Option granted under the Plan, the number and kind of shares of
stock, other securities, cash or other property to which the holders of Common
Stock of the Company are entitled pursuant to the transaction; and (c) in the
event of any other change in the capitalization of the Company, the Committee,
in its sole discretion, shall provide for an equitable adjustment in the number
of shares of Common Stock then subject to the Plan and to each share of Common
Stock then subject to an Option granted under the Plan. In the event of any such
adjustment, the exercise price per share shall be proportionately adjusted.
<PAGE>
SECTION 5. GRANT OF OPTIONS TO OUTSIDE DIRECTORS.
5.1 GRANTS. All grants of Options to Outside Directors shall be
automatic and non-discretionary. Each individual who is a Outside Director on
the effective date of the Plan shall be granted automatically a NSO to purchase
750 shares of Common Stock on the effective date on the Plan.
5.2 EXERCISE PRICE AND PERIOD. The per share Option exercise price of
each such NSO granted to a Outside Director shall be the "Fair Market Value," on
the date on which the Option is granted, of the Common Stock subject to the
Option. If the Common Stock is listed on a national securities exchange
(including the NASDAQ National Market System) on the date in question, then the
Fair Market Value per share shall be not less than 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 the Fair Market Value per share shall be equal to the average
between the bid and asked price on such date. If the Common Stock is traded
otherwise than on a national securities exchange on the date in question, then
the Fair Market Value per share shall be equal to the average between the bid
and asked price on such date, or, if there is no bid and asked price on such
date, then on the next prior business day on which there was a bid and asked
price. If no such bid and asked price is available, then the Fair Market Value
per share shall be its value as determined by the Committee, in its sole and
absolute discretion. The Committee shall maintain a written record of its method
of determining such value.
Each such NSO shall become exercisable at such times as may be
determined by the Committee and reflected in the Option Agreement between the
Company and the Option recipient. Except the extent otherwise provided in or
pursuant to Section 7, each NSO shall expire on the date ten years after the
date of grant.
SECTION 6. GRANTS OF OPTIONS TO EMPLOYEES.
6.1 GRANT. Subject to the terms of the Plan, the Committee may from
time to time grant Options, which may be ISOs or NSOs, to Key Employees of the
Company or any of its Subsidiaries. Unless otherwise expressly provided at the
time of the grant, Options granted under the Plan to Key Employees will be ISOs.
6.2 OPTION AGREEMENT. Each Option shall be evidenced by a written
Option Agreement specifying the type of Option granted, the Option exercise
price, the terms for payment of the exercise price, the expiration date of the
Option, the number of shares of Common Stock to be subject to each Option and
such other terms and conditions established by the Committee, in its sole
discretion, not inconsistent with the Plan.
6.3 EXPIRATION. Except to the extent otherwise provided in or pursuant
to Section 7, each Option shall expire, and all rights to purchase shares of
Common Stock shall expire, on the tenth anniversary of the date on which the
Option was granted.
6.4 EXERCISE PERIOD. Except to the extent otherwise provided in or
pursuant to Section 7 or in the proviso to this sentence, Options shall become
exercisable pursuant to the following schedule: with respect to one-fifth of the
total number of shares of Common Stock subject to Option on the date twelve
months after the date of its grant and with respect to an additional one-fifth
of the total number of shares of Common Stock subject to the Option at the end
of each twelve-month period thereafter during the succeeding four years;
provided, however, that the Committee, in its sole discretion, shall have the
authority to shorten or lengthen the exercise schedule with respect to any or
all Options, or any part thereof, granted to Key Employees under the Plan.
6.5 REQUIRED TERMS AND CONDITIONS OF ISOs. Each ISO granted to a Key
Employee shall be in such form and subject to such restrictions and other terms
and conditions as the Committee may determine, in its sole discretion, at the
time of grant, subject to the general provisions of the Plan, the applicable
Option Agreement, and the following specific rules:
(a) Except as provided in Section 6.5(d), the per share
exercise price of each ISO shall not be less than the Fair Market Value of the
shares of Common Stock on the date such ISO is granted.
<PAGE>
(b) The aggregate Fair Market Value (determined with respect
to each ISO at the time such Option is granted) of the shares of Common Stock
with respect to which ISOs are exercisable for the first time by an individual
during any calendar year (under all incentive stock option plans of the Company
and its parent and subsidiary corporations) shall not exceed $100,000. If the
aggregate Fair Market Value (determined at the time of grant) of the Common
Stock subject to an Option, which first becomes exercisable in any calendar year
exceeds the limitation of this Section 6.5(d), so much of the Option that does
not exceed the applicable dollar limit shall be an ISO and the remainder shall
be a NSO; but in all other respects, the original Option Agreement shall remain
in full force and effect.
(c) As used in this Section 6.5, the words "parent" and
"subsidiary" shall have the meanings given to them in Section 424(e) and 424(f)
of the Code.
(d) Notwithstanding anything herein to the contrary, if an ISO
is granted to an individual who owns stock possessing more than ten percent
(10%) of the total combined voting power of all classes of stock of the Company
or of its parent or subsidiary corporations, within the meaning of Section
422(b)(6) of the Code, (i) the purchase price of each share of Common Stock
subject to the ISO shall be not less than one hundred ten percent (110%) of the
Fair Market Value of the Common Stock on the date the ISO is granted, and (ii)
the ISO shall expire and all rights to purchase shares thereunder shall cease no
later than the fifth anniversary of the date the ISO was granted.
(e) No ISOs may be granted under the Plan after September 30,
2009.
(f) For purposes of this Section 6.5, the term "Fair Market
Value" shall have the same meaning as is set forth in Section 5.2.
6.6 REQUIRED TERMS AND CONDITIONS OF NSOs. Each NSO granted to Key
Employees shall be in such form and subject to such restrictions and other terms
and conditions as the Committee may determine, in its sole discretion, at the
time of grant, subject to the general provisions of the Plan and the applicable
Option Agreement, but in no event shall the per share exercise price of each NSO
be less than the Fair Market Value of the shares of Common Stock on the date the
NSO is granted. Except to the extent otherwise provided in or pursuant to
Section 7, each NSO shall expire on the date ten years after the date of grant.
6.7 VESTING OF OPTIONS. Notwithstanding any other provision of this
Plan to the contrary, upon a Change in Control of the Company, all Options
outstanding shall become fully and immediately exercisable. For purposes of this
Plan, a Change in Control of the Company shall be deemed to have occurred:
(a) on the scheduled expiration date of a tender offer by, or
exchange offer by any corporation, person, other entity or
group (other than the Company or any of its wholly owned
Subsidiaries), to acquire Voting Stock of the Company if:
(1) after giving effect to such offer such corporation,
person, other entity or group would own more than 20%
of the Voting Stock of the Company;
(2) there shall have been filed documents with the
Securities and Exchange Commission in connection
therewith (or, if no such filing is required, public
evidence that the offer has already commenced); and
(3) such corporation, person, other entity or group has
secured all required regulatory approvals to own or
control more than 20% of the Voting Stock of the
Company;
(b) if the shareholders of the Company approve a definitive
agreement to merge or consolidate the Company with or into
another corporation in a transaction in which neither the
Company nor any of its wholly owned Subsidiaries will be the
surviving corporation, or to sell or otherwise dispose
<PAGE>
of all or substantially all of the Company's assets to any
corporation, person, other entity or group (other than the
Company or any of its wholly owned Subsidiaries), and such
definitive agreement is consummated;
(c) if any corporation, person, other entity or group (other than
the Company or any of its wholly owned Subsidiaries) becomes
the beneficial owner of Stock representing more than 20% of
the Voting Stock of the Company; or
(d) if during any period of two consecutive years Continuing
Directors cease to comprise a majority of the Company's Board
of Directors.
"Continuing Director" means:
(e) any member of the Board of Directors of the Company at the
beginning of any period of two consecutive years; and
(f) any person who subsequently becomes a member of the Board of
Directors of the Company; if
(g) such person's nomination for election or election to the Board
of Directors of the Company is recommended or approved by
resolution of a majority of the Continuing Directors; or
(h) such person is included as a nominee in a proxy statement of
the Company distributed when a majority of the Board of
Directors of the Company consists of Continuing Directors.
"Voting Stock" means those shares of the Company Stock entitled to vote
generally in the election of directors.
SECTION 7. EFFECT OF TERMINATION OF EMPLOYMENT.
7.1 TERMINATION GENERALLY. Except as provided in Sections 7.2 and 7.3,
or by the Committee, in its sole discretion, any Option shall terminate on the
date of the Optionee's termination of employment with the Company and its
Subsidiaries or termination of service on the Board for any reason. An
Optionee's transfer of employment from the Company to a Subsidiary, or from a
Subsidiary to the Company, or from a Subsidiary to another Subsidiary, shall not
constitute a termination of employment for purposes of the Plan. Options granted
under the Plan shall not be affected by any change of duties in connection with
the employment of the Optionee or by leave of absence authorized by the Company
or a Subsidiary.
7.2 DEATH AND DISABILITY. In the event of an Optionee's death or
Disability (as defined below) during employment with the Company or any of its
Subsidiaries or during service on the Board, all Options held by the Optionee
shall become fully exercisable on such date of death or Disability. Each of the
Options held by such an Optionee shall expire on the earlier of: (a) the first
anniversary of the date of the Optionee's death or Disability; and (b) the date
that such Option expires in accordance with its terms. For purposes of this
Section 7.2, "Disability" shall mean the inability of an individual to engage in
any substantial gainful activity by reason of any medical determinable physical
or mental impairment which is expected to result in death or which has lasted or
can be expected to last for a continuous period of not less than twelve (12)
months. The Committee, in its sole discretion, shall determine the date of any
Disability.
7.3 RETIREMENT OF EMPLOYEES.
(a) OUTSIDE DIRECTORS. In the event the service of a Outside
Director on the Board shall be terminated by reason of the retirement of such
Outside Director of the Company in accordance with the Company's retirement
policy for Directors, any Options granted to such Outside Director shall
continue to vest and remain exercisable pursuant to Section 5, in the same
manner and to the same extent as if such Director had continued his or her
service on the Board during such period.
<PAGE>
(b) KEY EMPLOYEES. A Key Employee, who is also a Director, and
who terminates employment, shall continue to become vested in any Options,
provided that the service of such Key Employee on the Board continues after such
termination, and Section 7.3(a) shall be applicable to such Key Employee upon
the subsequent termination of service as a Director. A Key Employee, who
terminates employment due to Retirement shall be continue to become vested in
any Options in the same manner and to the same extent as if such Key Employee
had continued his or her employment with the Company. For purposes of this
subsection, the term "Retirement" shall mean the termination of employment on or
after the attainment of the Key Employee's Normal or Early Retirement Date, as
defined in the Company's Employee Stock Ownership Plan. Any ISO granted to a Key
Employee shall convert to an NSO if exercised more than three months after
Retirement.
SECTION 8. EXERCISE OF OPTIONS.
8.1 NOTICE. A person entitled to exercise an Option may do so by
delivery of a written notice to that effect specifying the number of shares of
Common Stock with respect to which the Option is being exercised and any other
information the Committee may prescribe. The notice shall be accompanied by
payment as described in Section 8.2. The notice of exercise shall be accompanied
by the Optionee's copy of the writing or writings evidencing the grant of the
Option. All notices or requests provided for herein shall be delivered to the
Secretary of the Company.
8.2 EXERCISE PRICE. Except as otherwise provided in the Plan or in any
Option Agreement, the Optionee shall pay the purchase price of the shares of
Common Stock upon exercise of any Option: (a) in cash; (b) in cash received from
a broker-dealer to whom the Optionee has submitted an exercise notice consisting
of a fully endorsed Option (however, in the case of an Optionee subject to
Section 16 of the Securities Exchange Act of 1934 (the "1934 Act"), this payment
option shall only be available to the extent such insider complies with
Regulation T issued by the Federal Reserve Board); (c) by delivering shares of
Common Stock having an aggregate Fair Market Value on the date of exercise equal
to the Option exercise price; (d) by directing the Company to withhold such
number of shares of Common Stock otherwise issuable upon exercise of such Option
having an aggregate Fair Market Value on the date of exercise equal to the
Option exercise price, provided that the Optionee supplies such attestation of
previously acquired shares as the Committee may, in its discretion, require; (e)
in the case of a Key Employee, by such other medium of payment as the Committee,
in its discretion, shall authorize at the time of grant; or (f) by any
combination of (a), (b), (c), (d) and (e). In the case of an election pursuant
to (a) or (b) above, cash shall mean cash or a check issued by a federally
insured bank or savings and loan, and made payable to the Company. In the case
of payment pursuant to (b), (c) or (d) above, the Optionee's election must be
made on or prior to the date of exercise and shall be irrevocable. In the case
of an Optionee who is subject to Section 16 of the 1934 Act and who elects
payment pursuant to (d) above, the election must be made in writing either: (i)
within the ten (10) business days beginning on the third business day following
release of the Company's quarterly or annual summary of earnings and ending on
the twelfth business day following such day; or (ii) at least six (6) months
prior to the date of exercise of such Option. In lieu of a separate election
governing each exercise of an Option, an Optionee may file a blanket election
with the Committee which shall govern all future exercises of Options until
revoked by the Optionee. The Company shall issue, in the name of the Optionee,
stock certificates representing the total number of shares of Common Stock
issuable pursuant to the exercise of any Option as soon as reasonably
practicable after such exercise, provided that any shares of Common Stock
purchased by an Optionee through a broker-dealer pursuant to clause (b) above
shall be delivered to such broker-dealer in accordance with 12 C.F.R. ss.
220.3(e)(4) or other applicable provision of law.
8.3 TAXES GENERALLY. At the time of the exercise of any Option, as a
condition of the exercise of such Option, the Company may require the Optionee
to pay the Company an amount equal to the amount of the tax the Company or any
Subsidiary may be required to withhold to obtain a deduction for federal and
state income tax purposes as a result of the exercise of such Option by the
Optionee or to comply with applicable law.
8.4 PAYMENT OF TAXES. At any time when an Optionee is required to pay
an amount required to be withheld under applicable income tax or other laws in
connection with the exercise of an Option, the Optionee may satisfy this
obligation in whole or in part by: (a) directing the Company to withhold such
number of shares of
<PAGE>
Common Stock otherwise issuable upon exercise of such Option having an aggregate
Fair Market Value on the date of exercise equal to the amount of tax required to
be withheld; or (b) delivering shares of Common Stock of the Company having an
aggregate Fair Market Value equal to the amount required to be withheld. In the
case of payment of taxes pursuant to (a) or (b) above, the Optionee's election
must be made on or prior to the date of exercise and shall be irrevocable. The
Committee may disapprove any election or delivery or may suspend or terminate
the right to make elections or deliveries. In the case of an Optionee who is
subject to Section 16 of the 1934 Act, an election to withhold shares of Common
Stock must be made in writing either: (a) six months prior to the exercise date;
(b) during a period beginning on the third business day following the date of
release for publication of the Company's quarterly or annual summary
consolidated statements of revenue and income and ending on the twelfth business
day following such date; or (c) more than six months and one day from the later
of the date of the grant of the Option hereunder to such person or the date of
the most recent transaction by such person which is treated as a purchase of the
Common Stock of the Company pursuant to the 1934 Act and the rules and
regulations thereunder, and which is not exempt from Section 16(b) of the 1934
Act. In lieu of a separate election governing each exercise of an Option, an
Optionee may file a blanket election with the Committee which shall govern all
future exercises of Options until revoked by the Optionee.
SECTION 9. TRANSFERABILITY OF OPTIONS.
No Option granted pursuant to the Plan shall be transferable otherwise
than by will or by the laws of descent and distribution or pursuant to a
qualified domestic relations order as defined by the Code. Notwithstanding the
preceding sentence, an Option Agreement for NSOs may provide that the Optionee,
at any time prior to his death, may assign all or any portion of an Option
granted to him to (i) his spouse or lineal descendant, (ii) the trustee of a
trust for the primary benefit of his spouse or lineal descendant, (iii) a
partnership of which his spouse and lineal descendants are the only partners, or
(iv) a tax exempt organization as described in Code Section 501(c)(3). In such
event, the spouse, lineal descendant, trustee, partnership or tax exempt
organization will be entitled to all of the rights of the Optionee with respect
to the assigned portion of such Option, and such portion of the Option will
continue to be subject to all of the terms, conditions and restrictions
applicable to the Option, as set forth herein and in the related Option
Agreement immediately prior to the effective date of the assignment. Any such
assignment will be permitted only if: (i) the Optionee does not receive any
consideration therefore; and (ii) the assignment is expressly permitted by the
applicable Agreement as approved by the Committee. Any such assignment shall be
evidenced by an appropriate written document executed by the Optionee, and a
copy thereof shall be delivered to the Company on or prior to the effective date
of the assignment.
SECTION 10. RIGHTS AS STOCKHOLDER.
An Optionee or a transferee of an Optionee pursuant to Section 9 shall
have no rights as a stockholder with respect to any Common Stock covered by an
Option or receivable upon the exercise of an Option until the Optionee or
transferee shall have become the holder of record of such Common Stock, and no
adjustments shall be made for dividends in cash or other property or other
distributions or rights in respect to such Common Stock for which the record
date is prior to the date on which the Optionee shall have in fact become the
holder of record of the shares of Common Stock acquired pursuant to the Option.
SECTION 11. POSTPONEMENT OF EXERCISE.
The Committee may postpone any exercise of an Option for such time as
the Committee in its sole discretion may deem necessary in order to permit the
Company (a) to effect, amend or maintain any necessary registration of the Plan
or the shares of Common Stock issuable upon the exercise of an Option under the
Securities Act of 1933, as amended, or the securities laws of any applicable
jurisdiction, (b) to permit any action to be taken in order to (i) list such
shares of Common Stock on a stock exchange if shares of Common Stock are then
listed on such exchange or (ii) comply with restrictions or regulations incident
to the maintenance of a public market for its shares of Common Stock, including
any rules or regulations of any stock exchange on which the shares of Common
Stock are listed, or (c) to determine that such shares of Common Stock and the
Plan are exempt from such registration or that no action of the kind referred to
in (b)(ii) above needs to be taken; and the Company shall not be obligated by
virtue of any terms and conditions of any Option or any provision of the Plan to
recognize the
<PAGE>
exercise of an Option or to sell or issue shares of Common Stock in violation of
the Securities Act of 1933 or the law of any government having jurisdiction
thereof. Any such postponement shall not extend the term of an Option and
neither the Company nor its directors or officers shall have any obligation or
liability to an Optionee, to the Optionee's successor or to any other person
with respect to any shares of Common Stock as to which the Option shall lapse
because of such postponement.
SECTION 12. TERMINATION OR AMENDMENT OF PLAN.
The Board or the Committee may terminate, suspend, or amend the Plan,
in whole or in part, from time to time, without the approval of the stockholders
of the Company to the extent allowed by law, provided, however, that (a) no Plan
amendment shall be effective until approved by the stockholders of the Company
insofar as stockholder approval thereof is required in order for the Plan to
continue to satisfy the requirements of Rule 16b-3 under the 1934 Act, and (b)
the provisions of the Plan applicable to Outside Directors may not be amended
more than once every six (6) months, except to comply with changes in the 1934
Act, or the rules and regulations promulgated thereunder.
The Committee may correct any defect or supply an omission or reconcile
any inconsistency in the Plan or in any Option granted hereunder in the manner
and to the extent it shall deem desirable, in its sole discretion, to effectuate
the Plan.
No amendment or termination of the Plan shall in any manner affect any
Option theretofore granted without the consent of the Optionee, except that the
Committee may amend the Plan in a manner that does affect Options theretofore
granted upon a finding by the Committee that such amendment is in the best
interest of holders of outstanding Options affected thereby.
This Plan is intended to comply with all applicable requirements of
Rule 16b-3 or its successors under the 1934 Act, insofar as participants subject
to Section 16 of the 1934 Act are concerned. To the extent any provision of the
Plan does not so comply, the provision shall, to the extent permitted by law and
deemed advisable by the Committee, be deemed null and void with respect to such
participants.
SECTION 13. EFFECTIVE DATE.
The Plan shall be effective October 1, 1999, subject to the approval of
the Plan by an affirmative vote of a majority of the shares of the voting stock
of the Company entitled to be voted by the holders of stock represented at a
duly held stockholders' meeting, within 12 months before or after the date of
adoption.
<PAGE>
CGB&L FINANCIAL GROUP, INC.
MANAGEMENT DEVELOPMENT AND RECOGNITION
PLAN AND TRUST AGREEMENT
ARTICLE I
ESTABLISHMENT OF THE PLAN AND TRUST
1.1 CGB&L Financial Group, Inc., (the "Company") hereby establishes the
Management Development and Recognition Plan (the "Plan") and Trust (the "Trust")
upon the terms and conditions hereinafter stated in this Management Development
and Recognition Plan and Trust Agreement (the "Agreement").
1.2 The Trustees hereby accept this Trust and agree to hold the Trust
assets existing on the date of this Agreement and all additions and accretions
thereto upon the terms and conditions hereinafter stated.
ARTICLE II
PURPOSE OF THE PLAN
2.1 The purpose of the Plan is to retain personnel of experience and
ability in key positions by providing such key employees with a proprietary
interest in the Company as compensation for their contributions to the Company
and its Subsidiaries and as an incentive to make such contributions in the
future.
ARTICLE III
DEFINITIONS
The following words and phrases, when used in this Plan with an initial
capital letter, unless the context clearly indicates otherwise, shall have the
meanings set forth below. Whenever appropriate, the masculine pronoun shall
include the feminine pronoun and the singular shall include the plural.
3.1 "Bank" means Cerro Gordo Building and Loan, s.b., an Illinois
state-chartered savings bank, and its successors and assigns. The Bank, with the
consent of the Board, has agreed to participate in this Plan.
3.2 "Beneficiary" means the person or persons designated by a
Recipient to receive any benefits payable under the Plan in the event of such
Recipient's death. Such person or persons shall be designated in writing on
forms provided for this purpose by the Committee and may be changed from time to
time by similar written notice to the Committee. In the absence of a written
designation, the Beneficiary shall be the Recipient's surviving spouse, if any,
or if none, the Recipient's estate.
3.3 "Board" means the Board of Directors of the Company.
3.4 A "Change in Control" of the Company shall have occurred:
(a) on the scheduled expiration date of a tender offer
by, or exchange offer by any corporation, person,
other entity or group (other than the Company or any
of its wholly owned Subsidiaries), to acquire Voting
Stock of the Company if:
(1) after giving effect to such offer such
corporation, person, other entity or group
would own more than 20% of the Voting Stock
of the Company;
<PAGE>
(2) there shall have been filed documents with
the Securities and Exchange Commission in
connection therewith (or, if no such filing
is required, public evidence that the offer
has already commenced); and
(3) such corporation, person, other entity or
group has secured all required regulatory
approvals to own or control more than 20% of
the Voting Stock of the Company;
(b) if the shareholders of the Company approve a
definitive agreement to merge or consolidate the
Company with or into another corporation in a
transaction in which neither the Company nor any of
its wholly owned Subsidiaries will be the surviving
corporation, or to sell or otherwise dispose of all
or substantially all of the Company's assets to any
corporation, person, other entity or group (other
than the Company or any of its wholly owned
Subsidiaries), and such definitive agreement is
consummated;
(c) if any corporation, person, other entity or group
(other than the Company or any of its wholly owned
Subsidiaries) becomes the beneficial owner of Stock
representing more than 20% of the Voting Stock of the
Company; or
(d) if during any period of two consecutive years
Continuing Directors cease to comprise a majority of
the Company's Board of Directors.
3.5 "Committee" means the Committee appointed by the Board pursuant
to Article IV hereof.
3.6 "Common Stock" means shares of the common stock, $.01 par value per
share, of the Company.
3.7 "Company" means CGB&L Financial Group, Inc., a Bank Holding
Company registered under Section 3(a)(1) of the Bank Holding Company Act of
1956, as amended, that owns 100% of the Capital Stock of Cerro Gordo Building
and Loan, s.b.
3.8 "Continuing Director" means:
(a) any member of the Board of Directors of the Company
at the beginning of any period of two consecutive
years; and
(b) any person who subsequently becomes a member of the
Board of Directors of the Company; if
(c) such person's nomination for election or election to
the Board of Directors of the Company is recommended
or approved by resolution of a majority of the
Continuing Directors; or
(d) such person is included as a nominee in a proxy
statement of the Company distributed when a majority
of the Board of Directors of the Company consists of
Continuing Directors.
3.9 "Director" means a member of the Board of Directors of the
Company or the Bank.
3.10 "Disability" means the permanent and total inability by reason
of mental or physical infirmity, or both, of a Recipient to perform the work
customarily assigned to him. A medical doctor selected or approved by the Board
must advise the Committee that it is either not possible to determine when such
Disability will terminate or that it appears probable that such Disability will
be permanent during the remainder of the Recipient's lifetime.
<PAGE>
3.11 "Effective Date" means October 1, 1999, subject to the approval
of the Plan by an affirmative vote of a majority of the shares of the voting
stock of the Company entitled to be voted by the holders of stock represented at
a duly held stockholders' meeting, within 12 months before or after the date of
adoption.
3.12 "Employee" means any person who is currently employed by the
Company, the Bank or a Subsidiary, including officers.
3.13 "Plan Shares" means shares of Common Stock held in the Trust and
issued or issuable to a Recipient pursuant to the Plan.
3.14 "Plan Share Award" means a right granted under this Plan to earn
Plan Shares.
3.15 "Recipient" means an Employee who receives a Plan Share Award
under the Plan.
3.16 "Retirement" means retirement at the Normal or Early Retirement
Date as set forth in the Cerro Gordo Building and Loan, s.b., Employee Stock
Ownership Plan.
3.17 "Subsidiary" means any other entity of which the Company is the
direct or indirect beneficial owner of not less than fifty percent (50%) of all
issued and outstanding equity interests. A Subsidiary may, with the consent of
the Board, agree to participate in this Plan.
3.18 "Trustee" means those persons (normally members of the
Committee) nominated by the Committee and approved by the Board pursuant to
Sections 4.1 and 4.2 to hold legal title to the Plan assets for the purposes set
forth herein.
3.19 "Voting Stock" shall mean those shares of the Company Stock
entitled to vote generally in the election of directors.
ARTICLE IV
ADMINISTRATION OF THE PLAN
4.1 ROLE OF THE COMMITTEE. The Plan shall be administered and
interpreted by the Committee, which shall have all of the powers allocated to it
in this and other Sections of the Plan. Members of the Committee shall not be
eligible to receive a Plan Share Award. The Committee shall have the power to
interpret and construe the terms and provisions of the Plan or of any Plan Share
Award granted hereunder, and all such interpretations and constructions by the
Committee shall be final and binding. The Committee shall act by vote or written
consent of a majority of its members. Subject to the express provisions and
limitations of the Plan, the Committee may adopt such rules, regulations and
procedures as it deems appropriate for the conduct of its affairs. The Committee
shall report its actions and decisions with respect to the Plan to the Board at
appropriate times, but in no event less than one time per calendar year. The
Committee shall appoint one or more individuals (normally from among its
members) to act as Trustees in accordance with the provisions of this Plan and
Trust and the terms of Article VIII hereof.
4.2 ROLE OF THE BOARD. The members of the Committee and the Trustee or
the Trustees shall be appointed or approved by the Board. The Board may, in its
discretion, from time to time, remove members from or add members to the
Committee and may remove, replace or add Trustees. The Board may not revoke any
Plan Share Award already made. Members of the Board who are eligible for, or who
have been granted, Plan Share Awards may not vote on any matters affecting the
administration of the Plan or the grant of Plan Shares or Plan Share Awards
(although such members may be counted in determining the existence of the quorum
at any meeting of the Board during which actions with regard thereto are taken).
<PAGE>
4.3 LIMITATION ON LIABILITY. No member of the Board or the Committee
shall be liable for any determination made in good faith with respect to the
Plan or any Plan Shares or Plan Share Awards it grants. If a member of the Board
or the Committee is a party or is threatened to be made a party to any
threatened, pending or completed action, suit or proceeding, whether civil,
criminal, administrative or investigative, by reason of anything done or not
done by him in such capacity under or with respect to the Plan, the Company and
its Subsidiaries shall indemnify such member against expense (including
attorney's fees), judgments, fines and amounts paid in settlement actually and
reasonably incurred by such member in connection with such action, suit or
proceeding if the member acted in good faith and in the manner he reasonably
believed to be in the best interests of the Company and its Subsidiaries and,
with respect to any criminal action or proceeding, had no reasonable cause to
believe his conduct was unlawful.
ARTICLE V
CONTRIBUTIONS
5.1 AMOUNT AND TIMING OF CONTRIBUTIONS. The Board shall determine the
amounts (or the method of computing the amounts) to be contributed by the
Company and its Subsidiaries to the Trust established under this Plan. Such
amounts shall be paid to the Trust at the time of contribution. No contributions
by Employees or Recipients shall be permitted.
5.2 INVESTMENT OF TRUST ASSETS AFTER CONVERSION. The Trustee shall
invest the Trust's assets exclusively in the Company's Common Stock provided,
however, that the Trust shall not purchase more than 4% of the total shares of
Common Stock issued. Any earnings received with respect to Common Stock held by
the Plan shall be held in an interest bearing account. Any earnings received
with respect to Common Stock subject to a Plan Share Award shall be held in an
interest bearing account on behalf of the individual Recipient.
ARTICLE VI
ELIGIBILITY AND ALLOCATIONS
6.1 ELIGIBILITY. Officers and key management Employees of the Company,
the Bank and its Subsidiaries are eligible to receive Plan Share Awards.
Non-employee Directors may receive Plan Share Awards only pursuant to Article XI
hereof.
6.2 ALLOCATIONS. The Committee shall determine which of the Employees
referenced in 6.1 above will be granted Plan Share Awards and the number of
Shares covered by each Award, provided, however, that the number of Shares
covered by such Awards may not exceed the number of shares purchased by the
Trustee prior to the grant of such Awards, and provided further that in no event
shall any Awards be made which will violate the Certificate of Incorporation or
Bylaws of the Company, the Federal Stock Charter or Bylaws or Plan of Conversion
of the Bank, or any applicable federal or state law or regulation. In the event
Plan Shares are forfeited for any reason, the Committee may determine which of
the Employees will be granted additional Plan Shares to be awarded from
forfeited Plan Shares. In selecting those Employees to whom Plan Share Awards
will be granted and the number of Shares covered by such Awards, the Committee
shall consider the position and responsibilities of the eligible Employees, the
value of their services to the Company and the Bank and its Subsidiaries, and
any other factors the Committee may deem relevant, including the recommendations
of the Chairman of the Board.
6.3 FORM OF ALLOCATION. As promptly as practicable after a
determination is made pursuant to Section 6.2 that a Plan Share Award is to be
issued, the Committee shall notify the Recipient in writing of the grant of the
Award, the number of Plan Shares covered by the Award and the terms upon which
the Plan Shares subject to the Award may be earned. The date on which the
Committee so notifies the Recipient shall be considered the date of grant of the
Plan Share Award. The Committee shall maintain records as to all grants of Plan
Share Awards under the Plan.
<PAGE>
6.4 ALLOCATIONS NOT REQUIRED. Notwithstanding anything to the contrary
in Sections 6.1 and 6.2, no Employee shall have any right or entitlement to
receive a Plan Share Award hereunder, such Awards being at the total discretion
of the Committee, nor shall the salaried Employees as a group have such a right.
ARTICLE VII
EARNING AND DISTRIBUTION OF PLAN SHARES
VOTING RIGHTS
7.1 EARNING PLAN SHARES; FORFEITURES. Unless the Committee shall
specifically state to the contrary at the time a Plan Share Award is granted,
Plan Shares subject to an Award shall be earned by a Recipient in five equal
annual installments over the first five years after the date of grant, if the
Employee remains employed with the Company or a Subsidiary continuously
throughout such period, provided, however, that the Committee may provide for a
less rapid earnings rate than that set forth herein for all Awards or for any
given Award. If the employment of a Recipient is terminated prior to the fifth
anniversary (or such later date as the Committee shall determine) of the date of
grant of an Award for any reason (except as specifically provided in subsections
7.1(a) and 7.1(c) below), the Recipient shall forfeit the right to earn any
shares subject to the Award which have not theretofore been earned. No
fractional shares shall be issued.
(a) EXCEPTION FOR TERMINATIONS DUE TO DEATH OR DISABILITY.
Notwithstanding the general rule contained in this Section, Plan Shares subject
to a Plan Share Award held by a Recipient whose employment with the Company or a
Subsidiary terminates due to Death or Disability, or any part of such Award that
has not theretofore been earned, shall be deemed earned as of the Recipient's
last day of employment with the Company or a Subsidiary.
(b) EXCEPTION FOR CHANGE IN CONTROL. Notwithstanding anything
herein to the contrary, all Awards shall become fully earned upon the date of a
Change in Control of the Company, provided the Recipient is employed by the
Company or a Subsidiary on such date.
(c) REVOCATION FOR MISCONDUCT. Notwithstanding anything herein
to the contrary, the Board may, by resolution, immediately revoke, rescind and
terminate any Plan Share Award, or portion thereof, previously awarded under
this Plan, to the extent Plan Shares have not been delivered thereunder to the
Recipient, whether or not yet earned, in the case of an Employee or Director who
is discharged from the Company or a Subsidiary for cause (as hereinafter
defined), or who is discovered after termination of employment to have engaged
in conduct that would have justified termination for cause. "Cause" is defined
as personal dishonesty, willful misconduct, any breach of fiduciary duty
involving personal profit, intentional failure to perform stated duties, or the
willful violation of any law, rule or regulation (other than traffic violations
or similar offenses) which results in a material loss to the Company or its
Subsidiaries, or final cease and desist order.
7.2 DISTRIBUTION OF PLAN SHARES. Plan Shares shall be distributed to
the Recipient or his Beneficiary, as the case may be, as soon as is practicable
after a Plan Share Award is earned pursuant to Section 7.1. All Plan Shares
shall be distributed in the form of Common Stock. One share of Common Stock
shall be given for each Plan Share earned and payable.
7.3 VOTING AND DIVIDEND RIGHTS. No Recipient shall have any voting or
dividend rights or other rights of a stockholder with respect to any Plan Shares
covered by a Plan Share Award prior to the time said Plan Shares are actually
distributed to him. When cash dividends are paid with respect to Plan Shares
allocated to a Recipient, such Recipient shall be entitled to receive an amount
equal to such cash dividend. Stock dividends with respect to shares allocated to
a Recipient shall be distributed when the Plan Shares with respect to which they
are declared are so distributable.
<PAGE>
ARTICLE VIII
TRUST
8.1 TRUST. The Trustees shall receive, hold, administer, invest and
make distributions and disbursements from the Trust in accordance with the
provisions of the Plan and Trust and the applicable directions, rules,
regulations, procedures and policies established by the Committee pursuant to
the Plan.
8.2 MANAGEMENT OF TRUST. It is the intent of this Plan and Trust
that the Trustees shall have complete authority and discretion with respect to
the management, control and investment of the Trust, and that the Trustee shall
invest all assets of the Trust in Common Stock to the fullest extent
practicable, except to the extent that the Trustees determined that the holding
of monies in cash or cash equivalents is necessary to meet the obligations of
the Trust. In performing their duties, the Trustees shall have the power to do
all things and execute such instruments as may be deemed necessary or proper,
including the following powers:
(a) To invest up to 100% of all Trust assets in Common Stock
of the Company without regard to any law now or hereafter in force limiting
investments for trustees or other fiduciaries. The investment authorized herein
may constitute the only investment of the Trust and Common Stock shall be newly
issued shares, Treasury shares or shares purchased by the Plan in the open
market.
(b) To invest any Trust assets not otherwise invested in
accordance with (a) above in such savings accounts, deposits and certificates of
deposit (including those issued by the Company or a Subsidiary), obligations of
the United States government or its agencies or such other investments as shall
be considered the equivalent of cash.
(c) To sell, exchange or otherwise dispose of any property at
any time held or acquired by the Trust.
(d) To cause stocks, bonds or other securities to be
registered in the name of a nominee, without the addition of words indicating
that such security is an asset of the Trust (but accurate records shall be
maintained showing that such security is an asset of the Trust).
(e) To hold cash without interest in such amounts as may be,
in the opinion of the Trustees, reasonable for the proper operation of the Plan
and Trust.
(f) To employ brokers, agents, custodians, consultants and
accountants.
(g) To hire counsel to render advice with respect to their
rights, duties and obligations hereunder, and such other legal services or
representations as they may deem desirable.
(h) To hold funds and securities representing the amounts to
be distributed, to a Recipient or his Beneficiary as a consequence of a dispute
as to the disposition thereof, whether in a segregated account or held in common
with other assets of the Trust.
Notwithstanding anything herein contained to the contrary, the Trustees
shall not be required to make any inventory, appraisal or settlement or report
to any court, or to secure any order of court for the exercise of any power
herein contained, or give bond.
8.3 RECORDS AND ACCOUNTS. The Trustees shall maintain accurate and
detailed records and accounts of all transactions of the Trust, which shall be
available at all reasonable times for inspection by any legally entitled person
or entity to the extent required by applicable law, or any other person
determined by the Committee.
8.4 EARNINGS. All earnings, gains and losses with respect to Trust
assets shall be allocated, in accordance with a reasonable procedure adopted by
the Committee, to bookkeeping accounts for Recipients or to
<PAGE>
the general account of the Trust, depending on the nature and allocation of the
assets generating such earnings, gains and losses. In particular, any earnings
on cash dividends received with respect to shares of Common Stock shall be
allocated to accounts for Recipients, if such shares are the subject of
outstanding Plan Share Awards, or, otherwise to a reserve established by the
Plan.
8.5 EXPENSES. All costs and expenses incurred in the operation and
administration of this Plan shall be borne by the Company and its Subsidiaries.
8.6 INDEMNIFICATION. The Company and its Subsidiaries shall
indemnify, defend and hold the Trustees harmless against all claims, expenses
and liabilities arising out of or related to the exercise of the Trustees'
powers and the discharge of their duties hereunder, unless the same shall be due
to their gross negligence or willful misconduct.
ARTICLE IX
COMPANY INSOLVENCY
9.1 PAYMENT CESSATION. The Trustee shall cease payment of benefits to
Plan Recipients and their beneficiaries if the Company is Insolvent. The Company
shall be considered "Insolvent" for purposes of the Trust if: (i) the Company is
unable to pay its debts as they become due, or (ii) the Company is subject to a
pending proceeding as a debtor under the United States Bankruptcy Code.
9.2 GENERAL CREDITORS. At all times during the continuance of the
Trust, the principal and income of the Trust shall be subject to claims of
general creditors of the Holding Company under federal and state law as set
forth below.
(a) The Board shall have the duty to inform the Trustee in
writing of the Company's Insolvency. If a person claiming to be a creditor of
the Company alleges in writing to the Trustee that the Company has become
Insolvent, the Trustee shall determine whether the Company is Insolvent and,
pending such determination, the Trustee shall discontinue payment of benefits to
Plan Recipients or their beneficiaries.
(b) Unless the Trustee has actual knowledge of the Company's
Insolvency, or has received notice from the Company or a person claiming to be a
creditor alleging that the Company is Insolvent, the Trustee shall have no duty
to inquire whether the Company is Insolvent. The Trustee may in all events rely
on such evidence concerning the Company's solvency as may be furnished to the
Trustee and that provides the Trustee with a reasonable basis for making a
determination concerning the Company's solvency.
(c) If at any time the Trustee has determined that the Company
is Insolvent, the Trustee shall discontinue payments to Plan Recipients or their
beneficiaries and shall hold the assets of the Trust for the benefit of the
Company's general creditors. Nothing in this Trust shall in any way diminish any
rights of Plan Recipients or their beneficiaries to pursue their rights as
general creditors of the Company with respect to benefits due under the Plan or
otherwise.
(d) The Trustee shall resume the payment of benefits to Plan
Recipients or their beneficiaries only after the Trustee has determined that the
Company is not Insolvent (or is no longer Insolvent).
9.3 PAYMENT RESUMPTION. Provided that there are sufficient assets, if
the Trustee discontinues the payment of benefits from the Trust pursuant to
Section 9.1 and subsequently resumes such payments, the first payment following
the discontinuance shall include the aggregate amount of all payments due to
Plan Recipients or their beneficiaries under the terms of the Plans for the
period of the discontinuance, less the aggregate amount of any payments made to
Plan Recipients or their beneficiaries by the Company in lieu of the payments
provided for hereunder during the period of discontinuance.
<PAGE>
ARTICLE X
MISCELLANEOUS
10.1 AMENDMENT AND TERMINATION OF PLAN. The Board may, by resolution at
any time, amend or terminate the Plan. The power to amend or terminate shall
include the power to direct the Trustees to return to the Company or the Bank
all or any part of the assets of the Trust, as well as shares of Common Stock
and other assets subject to Plan Share Awards but not yet earned by the
Employees to whom they are allocated.
10.2 NONTRANSFERABLE. Plan Share Awards and rights to Plan Shares shall
not be transferable by a Recipient and, during the lifetime of the Recipient,
Plan Shares may only be earned by and paid to the Recipient who was notified in
writing of the Award by the Committee pursuant to Section 6.3. No Recipient or
Beneficiary shall have any right in or claim to any assets of the Plan or Trust,
nor shall the Company or any Subsidiary be subject to any claim for benefits
hereunder.
10.3 EMPLOYMENT RIGHTS. Neither the Plan nor any grant of a Plan Share
Award or Plan Shares hereunder nor any action taken by the Trustees, the
Committee or the Board in connection with the Plan shall create any right on the
part of any Employee to continue in the employ of the Company, the Bank or a
Subsidiary.
10.4 GOVERNING LAW. The Plan and Trust shall be governed by the laws of
the State of Illinois.
10.5 TERM OF PLAN. This Plan shall remain in effect until the earlier
of: (1) termination by the Board of Directors; (2) the distribution to
Recipients, Beneficiaries, the Company or the Bank of all assets of the Trust;
or (3) 21 years from the Effective Date. Termination of the Plan shall not,
unless expressly specified, affect any Plan Share Awards previously granted, and
such Awards shall remain valid and in effect until they have been paid, or by
their terms expire or are forfeited.
ARTICLE XI
OUTSIDE DIRECTOR AWARDS
Each non-Employee Director on the Effective Date shall be granted a
Plan Share Award equal to 220 shares, subject to availability, to vest in five
equal annual installments beginning with the first anniversary of the Effective
Date.
<PAGE>
CGB&L FINANCIAL GROUP, LTD.
---------------------------
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints Maralyn Heckman and John A. Socher, D.D.S., and
each of them, with or without the other, as the true and lawful proxies of the
undersigned, with full power of substitution, to vote as designated below, all
shares of Common Stock $.01 par value per share, of CGB&L Financial Group, Ltd.
(the "Company") that the undersigned is entitled to vote at the Annual Meeting
of Shareholders of the Company (the "Annual Meeting"), to be held at the Hope
Welty Public Library, 100 South Madison Street, Cerro Gordo, Illinois 61818 on
Wednesday, August 11, 1999 at 7:00 p.m., local time, and all adjournments
thereof, all in accordance with and as more fully described in the Notice and
accompanying Proxy Statement for such meeting, receipt of which is hereby
acknowledged.
THE SHARES REPRESENTED BY THIS PROXY, WHEN THIS PROXY IS PROPERLY EXECUTED, WILL
BE VOTED IN THE MANNER DIRECTED HEREIN BY THE UNDERSIGNED, AND IF NO DIRECTION
IS MADE, THE SHARES REPRESENTED BY THIS PROXY WILL BE VOTED "FOR" THE ELECTION
OF THE NOMINEES HEREIN LISTED AND FOR THE 1999 STOCK OPTION AND INCENTIVE PLAN
AND FOR THE MANAGEMENT DEVELOPMENT AND RECOGNITION PLAN AND TRUST AGREEMENT.
PLEASE MARK VOTES IN BOXES BELOW USING DARK INK ONLY.
The following have all been proposed by the Company:
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
For Withheld For All
All All Except For Against Abstain
1. Election of Directors [ ] [ ] [ ] 2. To approve the Company's [ ] [ ] [ ]
Director Nominees: 1999 Stock Option and
Lester W. Crandall and Incentive Plan
C. Russell York
3. To approve the Company's [ ] [ ] [ ]
Write in exception _____________________________ Management Development and
Recognition Plan and Trust
Agreement
4. In their discretion, the proxies are authorized to vote
on such other matters as may properly come before the
Annual Meeting or any adjournments thereof and, if a
nominee is unable to serve, to vote for a substitute.
Comments/ Date: , 1999
-----------------------------------------
[ ]
Change Signature(s):
---------------------------------------
of Signature(s):
---------------------------------------
Address Note: Please sign exactly as name appears on this
proxy. When shares are held by joint tenants, both
should sign. When signing as attorney, executor,
administrator, trustee, guardian, corporate officer
or partner, give full title as such. If a
corporation, please sign in corporate name by an
authorized officer. If a partnership, please sign in
partnership name by an authorized person.
</TABLE>
<PAGE>
NOTICE TO SEC
REGARDING REGISTRATION OF SECURITES UNDER PLANS
CGB&L Financial, Inc. intends to register the common stock underlying
the options and awards pursuant to the Stock Option and Incentive Plan and the
Management Recognition and Development Plan prior to October 1, 1999 if the
Plans receive shareholder approval.
