Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of
1934
Filed by the registrant [x]
Filed by a party other than the registrant [ ]
Check the appropriate box:
[ ] Preliminary proxy statement
[x] Definitive proxy statement
[ ] Definitive additional materials
[ ] Soliciting material pursuant to Rule 14a-11(c) or Rule 14a-12
ALASKA PACIFIC BANCSHARES, INC.
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(Name of Registrant as Specified in Its Charter)
ALASKA PACIFIC BANCSHARES, INC.
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(Name of Person(s) Filing Proxy Statement)
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:
N/A
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(2) Aggregate number of securities to which transactions applies:
N/A
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(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11:
N/A
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(4) Proposed maximum aggregate value of transaction:
N/A
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[ ] Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11 (a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration
statement number, or the form or schedule and the date of its filing.
(1) Amount previously paid:
N/A
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(2) Form, schedule or registration statement no.:
N/A
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(3) Filing party:
N/A
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(4) Date filed:
N/A
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<PAGE>
May 5, 2000
Dear Stockholder:
You are cordially invited to attend the First Annual Meeting of
Stockholders of Alaska Pacific Bancshares, Inc. ("Company"), the holding
company for Alaska Pacific Bank. The meeting will be held in the A-J Room of
the Westmark Baranof Hotel located at 127 N. Franklin Street, Juneau, Alaska,
on Thursday, June 15, 2000, at 1:00 p.m., local time. This will be the first
Annual Meeting of Stockholders since the Company became a public company on
July 1, 1999 in connection with the conversion of Alaska Pacific Bank from
mutual to stock form.
The Notice of First Annual Meeting of Stockholders and Proxy Statement
appearing on the following pages describe the formal business to be transacted
at the meeting. During the meeting, we will also report on the operations of
the Company. Directors and officers of the Company, as well as a
representative of Deloitte & Touche LLP, the Company's independent auditors,
will be present to respond to appropriate questions of stockholders.
It is important that your shares are represented at this meeting, whether
or not you attend the meeting in person and regardless of the number of shares
you own. To ensure that your shares are represented, we urge you to complete
and mail the enclosed proxy card. If you attend the meeting, you may vote in
person even if you have previously mailed a proxy card.
We look forward to seeing you at the meeting.
Sincerely,
/s/Craig E. Dahl
Craig E. Dahl
President and Chief Executive Officer
<PAGE>
ALASKA PACIFIC BANCSHARES, INC.
2094 JORDAN AVENUE
JUNEAU, ALASKA 99801
(907) 789-4844
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NOTICE OF FIRST ANNUAL MEETING OF STOCKHOLDERS
To Be Held On June 15, 2000
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NOTICE IS HEREBY GIVEN that the First Annual Meeting of Stockholders of
Alaska Pacific Bancshares, Inc. ("Company") will be held in the A-J Room of
the Westmark Baranof Hotel located at 127 N. Franklin Street, Juneau, Alaska,
on Thursday, June 15, 2000, at 1:00 p.m., local time, for the following
purposes:
1. To elect seven directors;
2. The approval of the appointment of Deloitte & Touche LLP as the
Company's independent auditors for the fiscal year ending
December 31, 2000;
3. To vote upon a proposal to adopt the Alaska Pacific Bancshares,
Inc. 2000 Stock Option Plan;
4. To vote upon a proposal to adopt the Alaska Pacific Bancshares,
Inc. 2000 Management Recognition Plan; and
5. To act upon such other matters as may properly come before the
meeting or any adjournments thereof.
NOTE: The Board of Directors is not aware of any other business to come
before the meeting.
Any action may be taken on the foregoing proposals at the meeting on the
date specified above or on any date(s) to which, by original or later
adjournment, the meeting may be adjourned. Only stockholders of record at the
close of business on April 27, 2000 are entitled to notice of and to vote at
the meeting and any adjournments or postponements thereof.
You are requested to complete and sign the enclosed form of proxy, which
is solicited by the Board of Directors, and to mail it promptly in the
enclosed envelope. The proxy will not be used if you attend the meeting and
vote in person.
BY ORDER OF THE BOARD OF DIRECTORS
/S/ROGER K. WHITE
ROGER K. WHITE
SECRETARY
Juneau, Alaska
May 5, 2000
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IMPORTANT: THE PROMPT RETURN OF PROXIES WILL SAVE THE COMPANY THE EXPENSE OF
FURTHER REQUESTS FOR PROXIES IN ORDER TO ENSURE A QUORUM. A SELF-ADDRESSED
ENVELOPE IS ENCLOSED FOR YOUR CONVENIENCE. NO POSTAGE IS REQUIRED IF MAILED
IN THE UNITED STATES.
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<PAGE>
PROXY STATEMENT
OF
ALASKA PACIFIC BANCSHARES, INC.
2094 JORDAN AVENUE
JUNEAU, ALASKA 99801
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FIRST ANNUAL MEETING OF STOCKHOLDERS
JUNE 15, 2000
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This Proxy Statement is furnished in connection with the solicitation of
proxies by the Board of Directors of Alaska Pacific Bancshares, Inc.
("Company"), the holding company for Alaska Pacific Bank ("Savings Bank"), to
be used at the First Annual Meeting of Stockholders ("Meeting") of the
Company. The Meeting will be held in the A-J Room of the Westmark Baranof
Hotel located at 127 N. Franklin Street, Juneau, Alaska, on Thursday, June 15,
2000, at 1:00 p.m., local time. This Proxy Statement and the enclosed proxy
card are being first mailed to stockholders on or about May 5, 2000.
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VOTING AND PROXY PROCEDURE
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Stockholders Entitled to Vote at Meeting. Only stockholders of record at
the close of business on April 27, 2000 ("Voting Record Date") are entitled to
vote at the Meeting and are entitled to one vote for each share of common
stock ("Common Stock") of the Company then held. As of the close of business
on the Voting Record Date, the Company had 655,415 shares of Common Stock
issued and outstanding. The Common Stock is the only outstanding class of
securities of the Company.
Quorum Requirement. The presence, in person or by proxy, of at least a
majority of the total number of outstanding shares of Common Stock entitled to
vote is necessary to constitute a quorum at the Meeting. Abstentions will be
counted as shares present and entitled to vote at the Meeting for purposes of
determining the existence of a quorum. Broker non-votes will not be
considered shares present and will not be included in determining whether a
quorum is present.
Proxies; Proxy Revocation Procedures. The Board of Directors solicits
proxies so that each stockholder has the opportunity to vote on the proposals
to be considered at the Meeting. When a proxy card is returned properly
signed and dated, the shares represented thereby will be voted in accordance
with the instructions on the proxy card. Where a proxy card is properly
signed and dated but no instructions are indicated, proxies will be voted FOR
the nominees for directors set forth in the following pages, FOR the approval
of the appointment of independent auditors, FOR adoption of the Alaska Pacific
Bancshares, Inc. 2000 Stock Option Plan and FOR adoption of the Alaska Pacific
Bancshares, Inc. 2000 Management Recognition Plan. If a stockholder attends
the Meeting, he or she may vote by ballot.
Stockholders who execute proxies retain the right to revoke them at any
time. Proxies may be revoked by written notice delivered in person or mailed
to the Secretary of the Company or by filing a later dated proxy before a vote
being taken on a particular proposal at the Meeting. Attendance at the
Meeting will not automatically revoke a proxy, but a stockholder in attendance
may request a ballot and vote in person, thereby revoking a prior granted
proxy.
Participants in the Alaska Pacific Bancshares, Inc. ESOP. If a
stockholder is a participant in the Alaska Pacific Bancshares, Inc. Employee
Stock Ownership Plan ("ESOP"), the proxy card represents a voting instruction
to the trustees of the ESOP as to the number of shares in the participant's
plan account. Each participant in the ESOP may direct the trustees as to the
manner in which shares of Common Stock allocated to the participant's plan
account are to be voted. Unallocated shares of Common Stock held by the ESOP
and allocated shares for which no voting instructions are received will be
voted by the trustees in the same proportion as shares for which the trustees
have received voting instructions.
<PAGE>
Vote Required. The seven directors to be elected at the Meeting will be
elected by a plurality of the votes cast by stockholders present in person or
by proxy and entitled to vote. Stockholders are not permitted to cumulate
their votes for the election of directors. Votes may be cast for or withheld
from each nominee for election as directors. Votes that are withheld and
broker non-votes will have no effect on the outcome of the election because
directors will be elected by a plurality of votes cast.
With respect to the other proposals to be voted upon at the Meeting,
stockholders may vote for or against a proposal or may abstain from voting.
Approval of the appointment of independent auditors and adoption of the 2000
Stock Option Plan and the Management Recognition Plan will each require the
affirmative vote of a majority of the outstanding shares of Common Stock
present in person or by proxy at the Meeting and entitled to vote.
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SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
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Persons and groups who beneficially own in excess of 5% of the Company's
Common Stock are required to file certain reports with the Securities and
Exchange Commission ("SEC"), and provide a copy to the Company, disclosing
such ownership pursuant to the Securities Exchange Act of 1934, as amended
("Exchange Act"). Based on such reports, the following table sets forth, as
of the close of business on the Voting Record Date, certain information as to
those persons who were beneficial owners of more than 5% of the outstanding
shares of Common Stock. Management knows of no persons other than those set
forth below who beneficially owned more than 5% of the outstanding shares of
Common Stock at the close of business on the Voting Record Date. The table
also sets forth, as of the close of business on the Voting Record Date,
certain information as to shares of Common Stock beneficially owned by the
Company's directors and "named executive officers" and all directors and
executive officers as a group.
Number of Shares Percent of Shares
Name Beneficially Owned(1) Outstanding
- ---- --------------------- -----------
Beneficial Owners of More Than 5%
Alaska Pacific Bancshares, Inc. 52,433 8.0%
Employee Stock Ownership Plan Trust
Wellington Management Company, LLP(2) 52,500 8.0
75 State Street
Boston, Massachusetts 02109
Directors
Avrum M. Gross 10,000 1.5
Roger Grummett 10,000 1.5
Hugh N. Grant 11,000 1.7
Deborah E. Marshall 5,000 0.8
D. Eric McDowell 8,802 1.3
William J. Schmitz 10,000 1.5
Named Executive Officer(3)
Craig E. Dahl(4) 9,480 1.4
All Executive Officers and
Directors as a Group (nine persons) 86,285 11.6%
(footnotes on following page)
2
<PAGE>
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(1) In accordance with Rule 13d-3 under the Exchange Act, a person is
deemed to be the beneficial owner, for purposes of this table, of any
shares of Common Stock if he or she has voting or investment power with
respect to such security. The table includes shares owned by spouses,
other immediate family members in trust, shares held in retirement
accounts or funds for the benefit of the named individuals, and other
forms of ownership, over which shares the persons named in the table
may possess voting and/or investment power.
(2) Based on information disclosed in a Schedule 13G, dated December 31,
1999, filed with the SEC.
(3) SEC regulations define the term "named executive officer" to include
the chief executive officer, regardless of compensation level, and the
four most highly compensated executive officers, other than the chief
executive officer, whose total annual salary and bonus for the last
completed fiscal year exceeded $100,000. Mr. Craig E. Dahl, President
and Chief Executive Officer of the Company, is the Company's only
"named executive officer" for the fiscal year ended December 31, 1999.
(4) Mr. Dahl is also a director of the Company.
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PROPOSAL I -- ELECTION OF DIRECTORS
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The Company's Board of Directors consists of seven members as required by
the Company's Bylaws. The seven members of the Board are the initial
directors of the Company each of whose term as initial director expires at the
Meeting in accordance with Alaska law. In accordance with the Company's
Articles of Incorporation, the Board of Directors is divided into three
classes with three-year staggered terms, with approximately one-third of the
directors elected each year. Seven directors will be elected at the Meeting
to serve for the respective term set forth in the following table, or until
their respective successors have been elected and qualified. The nominees for
election this year are Craig E. Dahl, Avrum M. Gross, Roger Grummett, Hugh N.
Grant, Deborah E. Marshall, D. Eric McDowell and William J. Schmitz, each of
whom is a current member of the Board of Directors of the Company and of the
Savings Bank.
It is intended that the proxies solicited by the Company's Board of
Directors will be voted for the election of the above named nominees. If any
nominee is unable to serve, the shares represented by all valid proxies will
be voted for the election of such substitute nominee as the Board of Directors
may recommend, or the Board of Directors may adopt a resolution to amend the
Bylaws and reduce the size of the Board. At this time the Board of Directors
knows of no reason why any nominee might be unavailable to serve.
The Board of Directors recommends a vote "FOR" the election of all
nominees for election as directors.
The following table sets forth certain information regarding the nominees
for election at the Meeting.
Year First Elected or
Name Age (1) Appointed Director (2) Term to Expire
- ---- ------- ---------------------- --------------
BOARD NOMINEES
Deborah E. Marshall 47 1992 2001(3)
Roger Grummett 57 1987 2001(3)
Craig E. Dahl 50 1996 2002(3)
Hugh N. Grant 64 1990 2002(3)
D. Eric McDowell 57 1989 2002(3)
Avrum M. Gross 63 1982 2003(3)
William J. Schmitz 69 1987 2003(3)
______________
(1) As of December 31, 1999.
(2) Includes prior service on the Board of Directors of the Savings Bank.
(3) Assuming the individual is elected.
3
<PAGE>
The present principal occupation and other business experience during the
last five years of each nominee for election is set forth below:
Deborah E. Marshall owned and operated The Fiddlehead Restaurant and
Bakery in Juneau, Alaska for 21 years. Currently, Ms. Marshall is the
director of Alaska InvestNet, a statewide capital-matching network, a
state-wide service of the Juneau Economic Development Council.
Roger Grummett is Vice-Chairman of the Board, a position he has held
since 1996. Prior to his retirement in 1997, he was a Partner at Shattuck &
Grummett Insurance Agency in Juneau, Alaska for 32 years.
Craig E. Dahl is President and Chief Executive Officer of the Company and
the Savings Bank. He has been employed by the Savings Bank since 1992, and is
the former President of the B.M. Behrends Bank in Juneau, Alaska.
Hugh N. Grant has been self-employed as a contractor and real estate
developer in Juneau, Alaska since 1961. He is also the owner of the local
Western Auto store and other business establishments in Juneau.
D. Eric McDowell is President and Treasurer and a majority stockholder of
McDowell Group, Inc., an economic, market and business research and consulting
group, located in Juneau, Alaska and established in 1972.
Avrum M. Gross is Chairman of the Board, a position he has held since
1996. Mr. Gross was the former Attorney General for the State of Alaska from
1974 to 1980. He is currently an attorney and partner in the law firm of
Gross & Burke located in Juneau, Alaska.
William J. Schmitz is a Certified Public Accountant and a partner in the
accounting firm of Schmitz & Buck in Juneau, Alaska, which has been in
existence since 1961.
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MEETINGS AND COMMITTEES OF THE BOARD OF DIRECTORS
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The Boards of Directors of the Company and the Savings Bank conduct their
business through meetings of the Boards and through their committees. During
the fiscal year ended December 31, 1999, the Board of Directors of the Company
held one meeting in connection with its initial organization and three
subsequent meetings, and the Board of Directors of the Savings Bank held 16
meetings. No director of the Company or the Savings Bank attended fewer than
75% of the total meetings of the Boards and committees on which such person
served during the 1999 fiscal year.
Committees of the Company's Board. The Company's Board of Directors has
established Audit and Nominating Committees, among others.
The Company's Audit Committee, consisting of Directors Grant (Chairman),
Grummett and Marshall, is responsible for reviewing the internal auditors'
reports and results of their examination prior to review by and with the
entire Board of Directors and retains and establishes the scope of engagement
of the Company's independent auditors. This Committee met three times during
the 1999 fiscal year.
The Company's Nominating Committee, consisting of the full Board of
Directors, is responsible for the annual selection of nominees for election as
directors of the Company. The full Board of Directors met once in its
capacity as Nominating Committee during the 1999 fiscal year.
Committees of the Savings Bank's Board. The Savings Bank's Board of
Directors has established Human Resources and Nominating Committees, among
others. These committees were in existence and met during the 1999 fiscal
year.
4
<PAGE>
The Human Resources Committee (which also serves as a Compensation
Committee) consists of Messrs. McDowell (Chairman), Gross and Schmitz and Ms.
Marshall. This Committee meets on an as-needed basis and is responsible for
reviewing the Savings Bank's human resource management policies, the salary
and wage administration, training and benefits programs, and the employment
practices of the Savings Bank. This Committee met four times during fiscal
1999.
The full Board of Directors appoints a Nominating Committee consisting of
members of the Savings Bank for the annual selection of management's nominees
for election as directors. The Nominating Committee met once during the year
ended December 31, 1999.
The Board of Directors also has a standing Audit Committee, Board Asset
and Liability Committee, and a Strategic Planning and Marketing Committee.
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DIRECTORS' COMPENSATION
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All directors, other than the Chairman of the Board, receive a monthly
fee of $875 per Board meeting attended and $100 per committee meeting
attended. The Chairman of the Board receives a monthly fee of $1,000 and
$100 per committee meeting attended. Total fees paid to directors, including
health insurance benefits paid by the Savings Bank, during the year ended
December 31, 1999 were $86,021. No separate fees are paid for service on the
Company's Board of Directors.
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EXECUTIVE COMPENSATION
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Summary Compensation Table
The following information is furnished for Mr. Dahl. No other executive
officer of the Company received salary and bonus in excess of $100,000 during
the year ended December 31, 1999.
Annual Compensation(1)
-------------------------------
Other All
Annual Other
Compen- Compen-
Name and Position Year Salary Bonus sation(2) sation(3)
- ----------------- ---- ------ ----- --------- ---------
Craig E. Dahl 1999 $110,000 $ -- $ -- $6,320
President and Chief Executive 1998 110,000 22,000 -- 6,887
Officer of the Company and
the Savings Bank
- -------------------------------
(1) Compensation information for the fiscal year ended December 31, 1997
has been omitted as the Company was not a public company at such time.
(2) The aggregate amount of perquisites and other personal benefits was
less than 10% of the total annual salary and bonus reported.
(3) For fiscal 1999, consists of 401(k) contributions, automobile allowance
and racquet club dues.
Employment and Severance Agreements
Employment Agreement. The Company and the Savings Bank (collectively,
the "Employers") have entered into a three-year employment agreement
("Employment Agreement" or "Agreement") with Mr. Dahl. Under the Employment
Agreement, the current base salary for Mr. Dahl is $110,000, which is paid by
the Company and the Savings Bank and may be increased at the discretion of the
Board of Directors or an authorized committee of the Board
5
<PAGE>
of Directors of the Savings Bank. On the anniversary of the commencement date
of the Agreement, the term of the Agreement may be extended by the Board of
Directors for an additional year unless a termination notice is given by Mr.
Dahl. The Agreement is terminable by the Employers for just cause at any time
or in certain events specified by federal regulations.
The Agreement provides for a severance payment and other benefits if
employment is terminated following a change in control. This severance
payment and benefits, which will be made promptly after any change in control,
will have a value equal to 2.99 times the "base amount," as defined in Section
280G of the Internal Revenue Code of 1986, as amended ("Code"), paid to Mr.
Dahl during the five years immediately preceding the change in control. Under
the Agreement, a "change in control" is deemed to occur if, at anytime during
the term of the Agreement, a person other than the Company purchases shares of
Common Stock pursuant to a tender or exchange offer for such shares, any
person (as such term is used in Sections 13(d) and 14(d)(2) of the Exchange
Act) is or becomes the beneficial owner, directly or indirectly, of securities
of the Company representing 25% or more of the combined voting power of the
Company's then outstanding securities, the membership of the Board of
Directors changes as the result of a contested election, or stockholders of
the Company approve a merger, consolidation, sale or disposition of all or
substantially all of the Company's assets, or a plan of partial or complete
liquidation has occurred. Assuming that a change in control had occurred at
December 31, 1999, Mr. Dahl would be entitled to a severance payment and
benefits with a value of approximately $358,000.
The Employers have also entered into employment and severance agreements
with other executive officers of the Company and the Savings Bank on
substantially similar terms.
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COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT
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Section 16(a) of the Exchange Act requires the Company's executive
officers and directors, and persons who own more than 10% of any registered
class of the Company's equity securities, to file reports of ownership and
changes in ownership with the SEC. Executive officers, directors and greater
than 10% stockholders are required by regulation to furnish the Company with
copies of all Section 16(a) forms they file.
Based solely on its review of the copies of such forms it has received
and written representations provided to the Company by the above referenced
persons, the Company believes that, during the fiscal year ended December 31,
1999, all filing requirements applicable to its reporting officers, directors
and greater than 10% stockholders were properly and timely complied with.
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TRANSACTIONS WITH MANAGEMENT
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Federal regulations require that all loans or extensions of credit to
executive officers and directors must generally be made on substantially the
same terms, including interest rates and collateral, as those prevailing at
the time for comparable transactions with other persons, unless the loan or
extension of credit is made under a benefit program generally available to all
employees and does not give preference to any insider over any other employee,
and must not involve more than the normal risk of repayment or present other
unfavorable features. The Savings Bank has adopted a policy to this effect.
In addition, loans made to a director or executive officer in an amount that,
when aggregated with the amount of all other loans to such director or
executive officer and his or her related interests are in excess of the
greater of $25,000, or 5% of the Savings Bank's capital and surplus, up to a
maximum of $500,000, must be approved in advance by a majority of the
disinterested members of the Board of Directors. The aggregate amount of
loans by the Savings Bank to its executive officers and directors and their
affiliates was $1.3 million at December 31, 1999. Such loans (i) were made
in the ordinary course of business, (ii) were made on substantially the same
terms and conditions, including interest rates and collateral, as those
prevailing at the time for comparable transactions with the Savings Bank's
other customers, and (iii) did not involve more than the normal risk of
collectibility or present other unfavorable features when made.
6
<PAGE>
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PROPOSAL II -- APPROVAL OF APPOINTMENT OF INDEPENDENT AUDITORS
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Deloitte & Touche LLP was the Company's independent auditors for the
fiscal year ended December 31, 1999. The Board of Directors has appointed
Deloitte & Touche LLP as independent auditors for the fiscal year ending
December 31, 2000, subject to approval by stockholders. A representative of
Deloitte & Touche LLP is expected to be present at the Meeting to respond to
stockholders' questions and will have the opportunity to make a statement if
he so desires.
THE BOARD OF DIRECTORS RECOMMENDS THAT STOCKHOLDERS VOTE "FOR" THE
APPROVAL OF THE APPOINTMENT OF DELOITTE & TOUCHE LLP AS INDEPENDENT AUDITORS
OF THE COMPANY FOR THE FISCAL YEAR ENDING DECEMBER 31, 2000.
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PROPOSAL III -- RATIFICATION OF 2000 STOCK OPTION PLAN
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General
The Company's Board of Directors adopted the Alaska Pacific Bancshares,
Inc. 2000 Stock Option Plan ("Plan") on February 17, 2000 subject to approval
by the Company's stockholders.
The objective of the Plan is to reward performance and build the
participant's equity interest in the Company by providing long-term incentives
and rewards to officers, key employees and other persons who provide services
to the Company and the Savings Bank and who contribute to the success of the
Company by their innovation, ability, industry, loyalty and exceptional
service.
The following summary is a brief description of the material features of
the Plan. This summary is qualified in its entirety by reference to the Plan,
a copy of which is attached as Exhibit A.
Summary of the Plan
Type of Stock Option Grants. The Plan provides for the grant of
incentive stock options ("ISOs"), within the meaning of Section 422(b) of the
Code, and Non-Qualified Stock Options ("NQSOs"), which do not satisfy the
requirements for ISO treatment, and stock appreciation rights.
Administration. The Plan is administered by the Compensation Committee.
Subject to the terms of the Plan and resolutions of the Board, the
Compensation Committee interprets the Plan and is authorized to make all
determinations and decisions thereunder. The Compensation Committee also
determines the individuals to whom stock options and other awards will be
granted, the type and amount of awards that will be granted, and the terms and
conditions applicable to such grants.
Participants. All officers, directors, directors emeriti, and employees
of the Company and its subsidiaries are eligible to participate in the Plan.
Number of Shares of Common Stock Available. The Company has reserved
65,542 shares of Common Stock for issuance under the Plan in connection with
the exercise of awards. Shares of Common Stock to be issued under the Plan
will be authorized but unissued shares. To the extent the Company utilizes
authorized but unissued shares to fund the Plan, the interests of current
stockholders will be diluted. Since all options are granted through the use
of authorized but unissued Common Stock, current stockholders would be diluted
by approximately 4.3%. Any shares subject to an award which expires or is
terminated unexercised will again be available for issuance under the Plan.
7
<PAGE>
Adjustments Upon Changes in Capitalization. Shares awarded under the Plan
will be adjusted by the Compensation Committee in the event of a
reorganization, recapitalization, stock split, stock dividend, combination or
exchange of shares, merger, consolidation or other change in corporate
structure or the Common Stock of the Company.
Stock Option Grants. The exercise price of each ISO or NQSO will be at
least equal to the fair market value of a share of Common Stock on the date of
grant.
The exercise price of an option may be paid in cash, Common Stock or
other property, by the surrender of all or part of the option being exercised,
by the immediate sale through a broker of the number of shares being acquired
sufficient to pay the purchase price, or by a combination of these methods, as
and to the extent permitted by the Compensation Committee.
Under the Plan, no ISO is transferable other than by will or the laws of
descent and distribution. Any other option shall be transferable by will, the
laws of descent and distribution, a "domestic relations order," as defined in
the Code, or a gift to any member of the participant's immediate family or to
a trust for the benefit of one or more of such immediate family members.
Options may become exercisable in full at the time of grant or at such other
times and in such installments as the Compensation Committee determines or as
may be specified in the Plan. It is anticipated that initial option grants
under the Plan will become exercisable in equal installments over a five-year
period following the date of grant. Options may be exercised during periods
before and after the participant terminates employment, as the case may be, to
the extent authorized by the Compensation Committee or specified in the Plan.
However, no ISO may be exercised after the tenth anniversary of the date the
option was granted.
Effect of a Change in Control. In the event of a tender offer, exchange
offer for shares, or a change in control (as defined in the Plan) of the
Company, each outstanding stock option grant will become fully vested and
immediately exercisable for a period of sixty days following the date of such
change in control, after which any unexercised portion of the option shall
revert to being vested as though no change in control had occurred. In
addition, in the event of a merger or other corporate event in which the
Company is not the surviving entity, the Plan provides that the participant
may elect to receive the excess of the fair market value of the Common Stock
underlying the option over the option's exercise price in cash or property, as
determined in the Compensation Committee's direction.
Term of the Plan. The Plan will be effective on July 2, 2000 but only
if, before that date, the Plan is approved by the stockholders of the Company.
By postponing the effective date of the Plan, options granted under the Plan
will not be subject to certain restrictions (including a limitation on the
acceleration of vesting in the event of a change in control) otherwise
applicable to stock compensation plans implemented prior to the first
anniversary of the Savings Bank's mutual-to-stock conversion. The Plan will
expire on the tenth anniversary of the effective date, unless terminated
sooner by the Board.
Amendment of the Plan. The Plan allows the Board to amend, suspend or
terminate the Plan without stockholder approval unless such approval is
required to comply with a tax law or regulatory requirement.
Certain Federal Income Tax Consequences. The following brief description
of the tax consequences of stock option grants under the Plan is based on
federal income tax laws currently in effect and does not purport to be a
complete description of such federal income tax consequences.
There are no federal income tax consequences either to the optionee or to
the Company upon the grant of an ISO or an NQSO. On the exercise of an ISO
during employment or within three months thereafter, the optionee will not
recognize any income and the Company will not be entitled to a deduction,
although the excess of the fair market value of the shares on the date of
exercise over the option price is includible in the optionee's alternative
minimum taxable income, which may give rise to alternative minimum tax
liability for the optionee. Generally, if the optionee disposes of shares
acquired upon exercise of an ISO within two years of the date of grant or one
year of the date of exercise, the optionee will recognize ordinary income, and
the Company will be entitled to a deduction, equal to the
8
<PAGE>
excess of the fair market value of the shares on the date of exercise over the
option price (limited generally to the gain on the sale). The balance of any
gain or loss will be treated as a capital gain or loss to the optionee. If
the shares are disposed of after the two year and one year periods mentioned
above, the Company will not be entitled to any deduction, and the entire gain
or loss for the optionee will be treated as a long-term capital gain or loss.
On exercise of an NQSO, the excess of the date-of-exercise fair market
value of the shares acquired over the option price will generally be taxable
to the optionee as ordinary income and deductible by the Company, provided the
Company properly reports the income in respect of the exercise. The
disposition of shares acquired upon the exercise of a NQSO will generally
result in a capital gain or loss for the optionee, but will have no tax
consequences for the Company.
New Plan Benefits
No determination has been made at this time regarding the number of
options anticipated to be granted, and the recipients of such options, under
the Plan following its effective date.
Board of Directors Recommendation
The Board of Directors recommends a vote "FOR" the adoption of the Plan
attached as Exhibit A.
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PROPOSAL IV -- RATIFICATION OF THE
2000 MANAGEMENT RECOGNITION PLAN
- -----------------------------------------------------------------------------
General
Subject to approval by the Company's stockholders, the Board of Directors
of the Company adopted the Alaska Pacific Bancshares, Inc. 2000 Management
Recognition Plan ("MRP") on February 17, 2000 for the benefit of officers,
employees and non-employee directors of the Company and the Savings Bank.
The objective of the MRP is to reward performance and build the
participant's equity interest in the Company by providing long-term incentives
and rewards to officers, key employees and other persons who provide services
to the Company and the Savings Bank and who contribute to the success of the
Company by their innovation, ability, industry, loyalty and exceptional
service. In addition, the Company believes that the MRP will provide an
important retention incentive for key personnel.
The following summary is a brief description of the material features of
the MRP. This summary is qualified in its entirety by reference to the MRP, a
copy of which is attached as Exhibit B.
Summary of the MRP
Type of Stock Awards. The MRP provides for the award of Common Stock in
the form of restricted stock awards which are subject to the restrictions
specified in the MRP or as determined by a committee of the Company's Board of
Directors.
Administration. The MRP is administered by the Compensation Committee.
Subject to the terms of the MRP and resolutions of the Board, the Compensation
Committee interprets the MRP and is authorized to make all determinations and
decisions thereunder. The Compensation Committee also determines the
individuals to whom restricted stock awards will be made, the number of shares
of Common Stock covered by each award and the terms and conditions applicable
to such award.
9
<PAGE>
Participants. All officers, employees, directors and directors emeriti
of the Company and its subsidiaries, as well as other persons who render
services to the Company, are eligible to participate in the MRP. In addition,
non-employee directors of the Company are eligible to participate in the MRP.
Number of Shares of Common Stock Available. The Company has reserved
26,217 shares of Common Stock for issuance under the MRP in the form of
restricted stock. Shares of Common Stock to be issued under the MRP will be
authorized but unissued shares. Since all MRP shares are awarded through the
use of authorized but unissued Common Stock, current stockholders would be
diluted by approximately 3.8%. Any shares subject to an award which is
forfeited or is terminated will again be available for issuance under the MRP.
Adjustments Upon Changes in Capitalization. Shares awarded under the MRP
will be adjusted by the Compensation Committee in the event of a
reorganization, recapitalization, stock split, stock dividend, combination or
exchange of shares, merger, consolidation or other change in corporate
structure or the Common Stock of the Company.
Restricted Stock Awards. Awards under the MRP will be made in the form
of restricted shares of Common Stock that are subject to restrictions on
transfer of ownership. It is anticipated that the initial awards under the
MRP will vest in equal installments over a five-year period beginning on the
first anniversary of the date of grant. Compensation expense in the amount of
the fair market value of the Common Stock at the date of the grant to the
recipient will be recognized during the period over which the shares vest. If
a recipient terminates service with the Company or its subsidiaries for
reasons other than death or disability, or normal retirement after attainment
of age 65, the recipient forfeits all rights to shares under restriction. If
such termination is caused by death, disability, or normal retirement after
attainment of age 65, all restrictions expire and all shares allocated become
unrestricted. A recipient will be entitled to voting, dividends and other
stockholder rights with respect to the shares while restricted.
Effect of a Change in Control. In the event of a tender offer, exchange
offer for shares, or a change in control (as defined in the MRP) of the
Company, each outstanding award under the MRP will become fully vested at the
election of the participant that is made within 60 days following such event.
If the participant does not make such election within the 60 day period, the
restricted shares will continue to vest as though no such event had occurred.
Term of the MRP. The MRP will be effective on July 2, 2000 but only if,
before that date, the MRP is approved by the stockholders of the Company. By
postponing the effective date of the MRP, awards under the MRP will not be
subject to certain restrictions (including a limitation on the acceleration
of vesting in the event of a change in control) otherwise applicable to stock
compensation plans implemented prior to the first anniversary of the Savings
Bank's mutual-to-stock conversion. The MRP will expire on the tenth
anniversary of the effective date, unless sooner terminated by the Board.
Amendment of the MRP. The MRP allows the Board to amend, alter, suspend
or terminate the MRP without stockholder approval unless such approval is
required to comply with a tax law or regulatory requirement, provided,
however, that no such amendment, suspension or termination shall impair the
rights of any participant, without his or her consent, in any award
theretofore made pursuant to the MRP.
Certain Federal Income Tax Consequences. The following brief description
of the tax consequences of awards of restricted stock under the MRP is based
on federal income tax laws currently in effect and does not purport to be a
complete description of such federal income tax consequences.
A participant who has been awarded restricted stock under the MRP and
does not make an election under Section 83(b) of the Code will not recognize
taxable income at the time of the award. At the time any transfer or
forfeiture restrictions applicable to the restricted stock award lapse, the
recipient will recognize ordinary income and the Company will be entitled to a
corresponding deduction equal to the excess of the fair market value of such
stock at such time over the amount, if any, paid therefor. Any dividend paid
to the recipient on the restricted stock at or prior to such time will be
ordinary income to the recipient and deductible as such by the Company.
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<PAGE>
A recipient of a restricted stock award who makes an election under
Section 83(b) of the Code will recognize ordinary income at the time of the
award and the Company will be entitled to a corresponding deduction equal to
the fair market value of such stock at such time over the amount, if any, paid
therefor. Any dividends subsequently paid to the recipient on the restricted
stock will be dividend income to the recipient and not deductible by the
Company. If the recipient makes a Section 83(b) election, there are no federal
income tax consequences either to the recipient or the Company at the time any
transfer or forfeiture restrictions applicable to the restricted stock award
lapse.
New Plan Benefits
No determination has been made at this time regarding the number of
restricted shares anticipated to be awarded, and the recipients of such
awards, under the MRP following its effective date.
Recommendation of the Board of Directors
The Board of Directors recommends a vote "FOR" the ratification of the
MRP attached as Exhibit B.
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OTHER MATTERS
- -----------------------------------------------------------------------------
The Board of Directors is not aware of any business to come before the
Meeting other than those matters described above in this Proxy Statement.
However, if any other matters should properly come before the Meeting, it is
intended that proxies in the accompanying form, that are properly executed and
dated, will be voted in respect thereof in accordance with the judgment of the
person or persons voting the proxies.
- -----------------------------------------------------------------------------
MISCELLANEOUS
- -----------------------------------------------------------------------------
The cost of solicitation of proxies will be borne by the Company. The
Company will reimburse brokerage firms and other custodians, nominees and
fiduciaries for reasonable expenses incurred by them in mailing proxy
solicitation materials to beneficial owners of the Common Stock. In addition
to solicitations by mail, directors, officers and regular employees of the
Company may solicit proxies personally or by telecopier or telephone without
additional compensation. The Company has retained Regan & Associates, Inc.,
New York, New York, to assist in soliciting proxies for a fee of $4,500,
including reimbursable expenses.
The Company's 1999 Annual Report to Stockholders, including consolidated
financial statements, has been mailed to all stockholders of record at the
close of business on the Voting Record Date. Any stockholder who has not
received a copy of such annual report may obtain a copy by writing to the
Company. The Annual Report is not to be treated as part of the proxy
solicitation material or having been incorporated herein by reference.
A copy of the Company's Form 10-KSB for the fiscal year ended December
31, 1999, as filed with the SEC, will be furnished without charge to
stockholders of record as of the close of business on the Voting Record Date
upon written request to Roger K. White, Corporate Secretary, Alaska Pacific
Bancshares, Inc., 2094 Jordan Avenue, Juneau, Alaska 99801.
- -----------------------------------------------------------------------------
STOCKHOLDER PROPOSALS
- -----------------------------------------------------------------------------
Proposals of stockholders intended to be presented at the Company's
annual meeting next year must be received by the Company no later than
December 22, 2000 to be considered for inclusion in the proxy solicitation
materials and form of proxy relating to such meeting. Any such proposals
shall be subject to the requirements of the proxy solicitation rules adopted
under the Exchange Act.
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<PAGE>
The Company's Articles of Incorporation provides that in order for a
stockholder to make nominations for the election of directors or proposals for
business to be brought before a meeting of stockholders, a stockholder must
deliver written notice of such nominations and/or proposals to the Secretary
not less than 30 nor more than 60 days prior to the date of the meeting;
provided that if less than 31 days' notice of the meeting is given to
stockholders, such written notice must be delivered or mailed not later than
the close of the tenth day following the day on which notice of the meeting
was mailed to stockholders. As specified in the Articles of Incorporation,
the written notice with respect to nominations for election of directors must
set forth certain information regarding each nominee for election as a
director, including such person's written consent to being named in the proxy
statement as a nominee and to serving as a director, if elected, and certain
information regarding the stockholder giving such notice. The notice with
respect to business proposals to be brought before the Meeting must state the
stockholder's name, address and number of shares of Common Stock held, and
briefly discuss the business to be brought before the Meeting, the reasons for
conducting such business at the Meeting and any interest of the stockholder in
the proposal.
BY ORDER OF THE BOARD OF DIRECTORS
/S/ROGER K. WHITE
ROGER K. WHITE
SECRETARY
Juneau, Alaska
May 5, 2000
12
<PAGE>
EXHIBIT A
ALASKA PACIFIC BANCSHARES, INC.
2000 STOCK OPTION PLAN
1. Plan Purpose. The purpose of the Plan is to promote the long-term
interests of the Corporation and its stockholders by providing a means for
attracting and retaining directors, emeritus directors and employees of the
Corporation and its Affiliates.
2. Definitions. The following definitions are applicable to the Plan:
"Affiliate" -- means any "parent corporation" or "subsidiary corporation"
of the Corporation, as such terms are defined in Section 424(e) and (f),
respectively, of the Code.
"Award" -- means the grant by the Committee of an Incentive Stock Option,
a Non-Qualified Stock Option, a Right, or any combination thereof, as provided
in the Plan.
"Award Agreement" -- means the agreement evidencing the grant of an Award
made under the Plan.
"Board" -- means the board of directors of the Corporation.
"Cause" -- means Termination of Service by reason of personal dishonesty,
incompetence, willful misconduct, breach of fiduciary duty involving personal
profit, intentional failure to perform stated duties or gross negligence.
"Code" -- means the Internal Revenue Code of 1986, as amended.
"Committee" -- means the Committee referred to in Section 3 hereof.
"Corporation" -- means Alaska Pacific Bancshares, Inc., an Alaska
corporation, and any successor thereto.
"Incentive Stock Option" -- means an option to purchase Shares granted by
the Committee which is intended to qualify as an incentive stock option under
Section 422(b) of the Code. Unless otherwise set forth in the Award
Agreement, any Option which does not qualify as an Incentive Stock Option for
any reason shall be deemed ab initio to be a Non-Qualified Stock Option.
"Market Value" -- means the average of the high and low quoted sales
price on the date in question (or, if there is no reported sale on such date,
on the last preceding date on which any reported sale occurred) of a Share on
the Composite Tape for New York Stock Exchange-Listed Stocks, or, if on such
date the Shares are not quoted on the Composite Tape, on the New York Stock
Exchange, or if the Shares are not listed or admitted to trading on such
Exchange, on the principal United States securities exchange registered under
the Securities Exchange Act of 1934 (the "Exchange Act") on which the Shares
are listed or admitted to trading, or, if the Shares are not listed or
admitted to trading on any such exchange, the mean between the closing high
bid and low asked quotations with respect to a Share on such date on the
Nasdaq Stock Market, or any similar system then in use, or, if no such
quotations are available, the fair market value on such date of a Share as the
Committee shall determine.
"Non-Qualified Stock Option" -- means an option to purchase Shares
granted by the Committee which does not qualify, for any reason, as an
Incentive Stock Option.
"Option" -- means an Incentive Stock Option or a Non-Qualified Stock
Option.
"Participant" -- means any director, emeritus director or employee of the
Corporation or any Affiliate who is selected by the Committee to receive an
Award.
<PAGE>
"Plan" -- means this Alaska Pacific Bancshares, Inc. 2000 Stock Option
Plan.
"Related" -- means (i) in the case of a Right, a Right which is granted
in connection with, and to the extent exercisable, in whole or in part, in
lieu of, an Option or another Right and (ii) in the case of an Option, an
Option with respect to which and to the extent a Right is exercisable, in
whole or in part, in lieu thereof.
"Right" -- means a stock appreciation right with respect to Shares
granted by the Committee pursuant to the Plan.
"Shares" -- means the shares of common stock of the Corporation.
"Termination of Service" -- means cessation of service, for any reason,
whether voluntary or involuntary, so that the affected individual is not
either (i) an employee of the Corporation or any Affiliate for purposes of an
Incentive Stock Option, or (ii) a director, emeritus director or employee of
the Corporation or any Affiliate for purposes of any other Award.
3. Administration. The Plan shall be administered by a Committee
consisting of two or more members of the Board, each of whom (i) shall be an
"outside director," as defined under Section 162(m) of the Code and the
Treasury regulations thereunder, and (ii) shall be a "non-employee director,"
as defined under Rule 16(b) of the Securities Exchange Act of 1934 or any
similar or successor provision. The members of the Committee shall be
appointed by the Board. Except as limited by the express provisions of the
Plan or by resolutions adopted by the Board, the Committee shall have sole and
complete authority and discretion to (i) select Participants and grant Awards;
(ii) determine the number of Shares to be subject to types of Awards
generally, as well as to individual Awards granted under the Plan; (iii)
determine the terms and conditions upon which Awards shall be granted under
the Plan; (iv) prescribe the form and terms of Award Agreements; (v) establish
from time to time regulations for the administration of the Plan; and (vi)
interpret the Plan and make all determinations deemed necessary or advisable
for the administration of the Plan.
A majority of the Committee shall constitute a quorum, and the acts of a
majority of the members present at any meeting at which a quorum is present,
or acts approved in writing by a majority of the Committee without a meeting,
shall be acts of the Committee.
4. Shares Subject to Plan.
(a) Subject to adjustment by the operation of Section 6, the
maximum number of Shares with respect to which Awards may be made under the
Plan is 65,542 plus (i) the number of Shares repurchased by the Corporation in
the open market or otherwise with an aggregate price no greater than the cash
proceeds received by the Corporation from the exercise of Options granted
under the Plan; plus (ii) any Shares surrendered to the Corporation in payment
of the exercise price of Options granted under the Plan. The Shares with
respect to which Awards may be made under the Plan may be either authorized
and unissued Shares or previously issued Shares reacquired and held as
treasury Shares. Shares which are subject to Related Rights and Related
Options shall be counted only once in determining whether the maximum number
of Shares with respect to which Awards may be granted under the Plan has been
exceeded. An Award shall not be considered to have been made under the Plan
with respect to any Option or Right which terminates, and new Awards may be
granted under the Plan with respect to the number of Shares as to which such
termination has occurred.
(b) During any calendar year, no Participant may be granted Awards
under the Plan with respect to more than 20,000 Shares, subject to adjustment
as provided in Section 6.
A-2
<PAGE>
5. Awards.
(a) Options. The Committee is hereby authorized to grant Options
to Participants with the following terms and conditions and with such
additional terms and conditions not inconsistent with the provisions of the
Plan and the requirements of applicable law as the Committee shall determine,
including the granting of Options in tandem with other Awards under the Plan:
(i) Exercise Price. The exercise price per Share for an
Option shall be determined by the Committee; provided, however, that such
exercise price shall not be less than 100% of the Market Value of a Share on
the date of grant of such Option.
(ii) Option Term. The term of each Option shall be fixed by
the Committee, but shall be no greater than 10 years in the case of an
Incentive Stock Option or 15 years in the case of a Non-Qualified Stock
Option.
(iii) Time and Method of Exercise. The Committee shall
determine the time or times at which an Option may be exercised in whole or in
part and the method or methods by which, and the form or forms (including,
without limitation, cash, Shares, other Awards or any combination thereof,
having a fair market value on the exercise date equal to the relevant exercise
price) in which, payment of the exercise price with respect thereto may be
made or deemed to have been made.
(iv) Incentive Stock Options. Incentive Stock Options may be
granted by the Committee only to employees of the Corporation or its
Affiliates.
(v) Termination of Service. Unless otherwise determined by
the Committee and set forth in the Award Agreement evidencing the grant of the
Option, upon Termination of Service of the Participant for any reason other
than for Cause, all Options then currently exercisable shall remain
exercisable for the lesser of (A) two years following such Termination of
Service or (B) until the expiration of the Option by its terms. Upon
Termination of Service for Cause, all Options not previously exercised shall
immediately be forfeited.
(b) Rights. A Right shall, upon its exercise, entitle the
Participant to whom such Right was granted to receive a number of Shares or
cash or combination thereof, as the Committee in its discretion shall
determine, the aggregate value of which (i.e., the sum of the amount of cash
and/or Market Value of such Shares on date of exercise) shall equal (as nearly
as possible, it being understood that the Corporation shall not issue any
fractional Shares) the amount by which the Market Value per Share on the date
of such exercise shall exceed the exercise price of such Right, multiplied by
the number of Shares with respect to which such Right shall have been
exercised. A Right may be Related to an Option or may be granted
independently of any Option as the Committee shall from time to time in each
case determine. In the case of a Related Option, such Related Option shall
cease to be exercisable to the extent of the Shares with respect to which the
Related Right was exercised. Upon the exercise or termination of a Related
Option, any Related Right shall terminate to the extent of the Shares with
respect to which the Related Option was exercised or terminated.
6. Adjustments Upon Changes in Capitalization. In the event of any
change in the outstanding Shares subsequent to the effective date of the Plan
by reason of any reorganization, recapitalization, stock split, stock
dividend, combination or exchange of shares, merger, consolidation or any
change in the corporate structure or Shares of the Corporation, the maximum
aggregate number and class of shares and exercise price of the Award, if any,
as to which Awards may be granted under the Plan and the number and class of
shares and exercise price of the Award, if any, with respect to which Awards
have been granted under the Plan shall be appropriately adjusted by the
Committee, whose determination shall be conclusive. Except as otherwise
provided herein, any Award which is adjusted as a result of this Section 6
shall be subject to the same terms and conditions as the original Award.
7. Effect of Merger on Options or Rights. In the case of any merger,
consolidation or combination of the Corporation (other than a merger,
consolidation or combination in which the Corporation is the continuing
corporation
A-3
<PAGE>
and which does not result in the outstanding Shares being converted into or
exchanged for different securities, cash or other property, or any combination
thereof), any Participant to whom an Option or Right has been granted shall
have the additional right (subject to the provisions of the Plan and any
limitation applicable to such Option or Right), thereafter and during the term
of each such Option or Right, to receive upon exercise of any such Option or
Right an amount equal to the excess of the fair market value on the date of
such exercise of the securities, cash or other property, or combination
thereof, receivable upon such merger, consolidation or combination in respect
of a Share over the exercise price of such Right or Option, multiplied by the
number of Shares with respect to which such Option or Right shall have been
exercised. Such amount may be payable fully in cash, fully in one or more of
the kind or kinds of property payable in such merger, consolidation or
combination, or partly in cash and partly in one or more of such kind or kinds
of property, all in the discretion of the Committee.
8. Effect of Change in Control. Each of the events specified in the
following clauses (i) through (iii) of this Section 8 shall be deemed a
"change in control": (i) any third person, including a "group" as defined in
Section 13(d)(3) of the Securities Exchange Act of 1934, shall become the
beneficial owner of shares of the Corporation with respect to which 25% or
more of the total number of votes for the election of the Board may be cast,
(ii) as a result of, or in connection with, any cash tender offer, merger or
other business combination, sale of assets or contested election, or
combination of the foregoing, the persons who were directors of the
Corporation shall cease to constitute a majority of the Board, or (iii) the
stockholders of the Corporation shall approve an agreement providing either
for a transaction in which the Corporation will cease to be an independent
publicly-owned corporation or for a sale or other disposition of all or
substantially all the assets of the Corporation. If a tender offer or
exchange offer for Shares (other than such an offer by the Corporation) is
commenced, or if a change in control shall occur, unless the Committee shall
have otherwise provided in the Award Agreement, all Options and Rights granted
and not fully exercisable shall become exercisable in full upon the happening
of such event and shall remain so exercisable for a period of 60 days
following such date, after which each such Option and Right shall revert to
being exercisable in accordance with the other provisions of such Option or
Right; provided, however, that no Option or Right which has previously been
exercised or otherwise terminated shall become exercisable.
9. Assignments and Transfers. No Incentive Stock Option granted under
the Plan shall be transferable other than by will or the laws of descent and
distribution. Any other Award shall be transferable by will, the laws of
descent and distribution, a "domestic relations order," as defined in Section
414(p)(1)(B) of the Code, or a gift to any member of the Participant's
immediate family or to a trust for the benefit of one or more of such
immediate family members. During the lifetime of an Award recipient, an Award
shall be exercisable only by the Award recipient unless it has been
transferred as permitted hereby, in which case it shall be exercisable only by
such transferee. For the purpose of this Section 9, a Participant's
"immediate family" shall mean the Participant's spouse, children and
grandchildren.
10. Employee Rights Under the Plan. No person shall have a right to be
selected as a Participant nor, having been so selected, to be selected again
as a Participant, and no employee or other person shall have any claim or
right to be granted an Award under the Plan or under any other incentive or
similar plan of the Corporation or any Affiliate. Neither the Plan nor any
action taken thereunder shall be construed as giving any employee any right to
be retained in the employ of the Corporation or any Affiliate.
11. Delivery and Registration of Stock. The Corporation's obligation to
deliver Shares with respect to an Award shall, if the Committee so requests,
be conditioned upon the receipt of a representation as to the investment
intention of the Participant to whom such Shares are to be delivered, in such
form as the Committee shall determine to be necessary or advisable to comply
with the provisions of the Securities Act of 1933 or any other federal, state
or local securities legislation. It may be provided that any representation
requirement shall become inoperative upon a registration of the Shares or
other action eliminating the necessity of such representation under such
Securities Act or other securities legislation. The Corporation shall not be
required to deliver any Shares under the Plan prior to (i) the admission of
such Shares to listing on any stock exchange on which Shares may then be
listed and (ii) the completion of such registration or other qualification of
such Shares under any state or federal law, rule or regulation, as the
Committee shall determine to be necessary or advisable.
A-4
<PAGE>
12. Withholding Tax. The Corporation shall have the right to deduct
from all amounts paid in cash with respect to the exercise of a Right under
the Plan any taxes required by law to be withheld with respect to such cash
payments. Where a Participant or other person is entitled to receive Shares
pursuant to the exercise of an Option or Right pursuant to the Plan, the
Corporation shall have the right to require the Participant or such other
person to pay the Corporation the amount of any taxes which the Corporation is
required to withhold with respect to such Shares, or, in lieu thereof, to
retain, or sell without notice, a number of such Shares sufficient to cover
the amount required to be withheld. All withholding decisions pursuant to
this Section 12 shall be at the sole discretion of the Committee or the
Corporation.
13. Amendment or Termination.
(a) The Board may amend, alter, suspend, discontinue, or
terminate the Plan without the consent of shareholders or Participants, except
that any such action will be subject to the approval of the Corporation's
shareholders if, when and to the extent such shareholder approval is necessary
or required for purposes of any applicable federal or state law or regulation
or the rules of any stock exchange or automated quotation system on which the
Shares may then be listed or quoted, or if the Board, in its discretion,
determines to seek such shareholder approval.
(b) The Committee may waive any conditions of or rights of the
Corporation or modify or amend the terms of any outstanding Award. The
Committee may not, however, amend, alter, suspend, discontinue or terminate
any outstanding Award without the consent of the Participant or holder
thereof, except as otherwise provided herein.
14. Effective Date and Term of Plan. The Plan shall be effective on
July 2, 2000, but only if, prior to such date, the Plan is approved by the
Corporation's shareholders. The Plan shall continue in effect for a term of
ten years thereafter unless sooner terminated under Section 13 hereof.
* * * * *
A-5
<PAGE>
EXHIBIT B
ALASKA PACIFIC BANCSHARES, INC.
2000 MANAGEMENT RECOGNITION PLAN
1. Plan Purpose. The purpose of the Plan is to promote the long-term
interests of the Corporation and its stockholders by providing a means for
attracting and retaining directors, emeritus directors and employees of the
Corporation and its Affiliates.
2. Definitions. The following definitions are applicable to the Plan:
"Affiliate" -- means any "parent corporation" or "subsidiary corporation"
of the Corporation, as such terms are defined in Section 424(e) and (f),
respectively, of the Code.
"Award" -- means the grant by the Committee of Restricted Stock, as
provided in the Plan.
"Award Agreement" -- means the agreement evidencing the grant of an Award
made under the Plan.
"Board" -- means the board of directors of the Corporation.
"Code" -- means the Internal Revenue Code of 1986, as amended.
"Committee" -- means the Committee referred to in Section 3 hereof.
"Corporation" -- means Alaska Pacific Bancshares, Inc., an Alaska
corporation, and any successor thereto.
"Participant" -- means any director, emeritus director or employee of the
Corporation or any Affiliate who is selected by the Committee to receive an
Award.
"Plan" -- means this Alaska Pacific Bancshares, Inc. 2000 Management
Recognition Plan.
"Restricted Period" -- means the period of time selected by the Committee
for the purpose of determining when restrictions are in effect under Section 5
hereof with respect to Restricted Stock awarded under the Plan.
"Restricted Stock" -- means Shares awarded to a Participant by the
Committee pursuant to Section 5 hereof.
"Shares" -- means the shares of common stock of the Corporation.
"Termination of Service" -- means cessation of service, for any reason,
whether voluntary or involuntary, so that the affected individual is not a
director, emeritus director or employee of the Corporation or any Affiliate.
Service shall not be considered to have ceased in the case of sick leave,
military leave or any other leave of absence approved by the Corporation or
any Affiliate or in the case of transfers between payroll locations of the
Corporation or between the Corporation, its subsidiaries or its successor.
3. Administration. The Plan shall be administered by a Committee
consisting of two or more members of the Board, each of whom (i) shall be an
"outside director," as defined under Section 162(m) of the Code and the
Treasury regulations thereunder, and (ii) shall be a "non-employee director,"
as defined under Rule 16(b) of the Securities Exchange Act of 1934 or any
similar or successor provision. The members of the Committee shall be
appointed by the Board. Except as limited by the express provisions of the
Plan or by resolutions adopted by the Board, the Committee shall have sole and
complete authority and discretion to (i) select Participants and grant Awards;
(ii) determine the number of Shares to be subject to types of Awards
generally, as well as to individual Awards granted under the Plan; (iii)
determine the terms and conditions upon which Awards shall be granted under
the Plan;
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(iv) prescribe the form and terms of Award Agreements; (v) establish from time
to time regulations for the administration of the Plan; and (vi) interpret the
Plan and make all determinations deemed necessary or advisable for the
administration of the Plan.
A majority of the Committee shall constitute a quorum, and the acts of a
majority of the members present at any meeting at which a quorum is present,
or acts approved in writing by a majority of the Committee without a meeting,
shall be acts of the Committee.
4. Shares Subject to Plan. Subject to adjustment by the operation of
Section 6, the maximum number of Shares with respect to which Awards may be
made under the Plan is 26,217 Shares. The Shares with respect to which Awards
may be made under the Plan may be either authorized and unissued Shares or
previously issued Shares reacquired and held as treasury Shares. An Award
shall not be considered to have been made under the Plan with respect to
Restricted Stock which is forfeited, and new Awards may be granted under the
Plan with respect to the number of Shares as to which such forfeiture has
occurred.
5. Terms and Conditions of Restricted Stock. The Committee is hereby
authorized to grant Awards of Restricted Stock to Participants with the
following terms and conditions and with such additional terms and conditions
as the Committee shall determine:
(a) At the time of an Award of Restricted Stock, the Committee
shall establish for each Participant a Restricted Period, during
which or at the expiration of which, as the Committee shall
determine and provide in the Award Agreement, the Shares awarded as
Restricted Stock shall no longer be subject to restriction. Subject
to any such other terms and conditions as the Committee shall
provide, Shares of Restricted Stock may not be sold, assigned,
transferred, pledged or otherwise encumbered by the Participant,
except as hereinafter provided, during the Restricted Period.
Except for such restrictions, and subject to paragraph (c) of this
Section 5 and Section 6 hereof, the Participant as owner of such
shares shall have all the rights of a stockholder, including the
right to vote the Restricted Stock and the right to receive
dividends with respect to the Restricted Stock.
The Committee shall have the authority, in its discretion, to
accelerate the time at which any or all of the restrictions shall
lapse with respect thereto, or to remove any or all of such
restrictions, whenever it may determine that such action is
appropriate by reason of changes in applicable tax or other laws or
other changes in circumstances occurring after the commencement of
such Restricted Period.
(b) If a Participant incurs a Termination of Service for any
reason (other than death, disability, or normal retirement after
attainment of age 65), all Shares of Restricted Stock awarded to
such Participant and which at the time of such Termination of
Service are subject to the restrictions imposed pursuant to
paragraph (a) of this Section 5 shall upon such Termination of
Service be forfeited and returned to the Corporation. If a
Participant incurs a Termination of Service by reason of death,
disability or normal retirement after attainment of age 65, the
Restricted Period with respect to the Participant's Restricted Stock
then still subject to restrictions shall thereupon lapse.
(c) Each certificate in respect of Shares of Restricted Stock
awarded under the Plan shall be registered in the name of the
Participant and deposited by the Participant, together with a stock
power endorsed in blank, with the Corporation and shall bear the
following (or a similar) legend:
The transferability of this certificate and the
Shares of stock represented hereby are subject to the terms
and conditions (including forfeiture) contained in the
Alaska Pacific Bancshares, Inc. Management Recognition Plan.
Copies of such Plan are on file in the office of the
Secretary of Alaska Pacific Bancshares, Inc., 2094 Avenue,
Juneau, Alaska 99801-8046.
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(d) At the time of any Award, the Participant shall enter into an
Award Agreement with the Corporation in a form specified by the
Committee, agreeing to the terms and conditions of the Award and
such other matters as the Committee, in its sole discretion, shall
determine.
(e) Upon the lapse of the Restricted Period, the Corporation
shall redeliver to the Participant (or where the relevant provision
of paragraph (b) of this Section 5 applies in the case of a deceased
Participant, to his legal representative, beneficiary or heir) the
certificate(s) and stock power deposited with it pursuant to
paragraph (c) of this Section 5, and the Shares represented by such
certificate(s) shall be free of the restrictions imposed pursuant to
paragraph (a) of this Section 5.
6. Adjustments Upon Changes in Capitalization. In the event of any
change in the outstanding Shares subsequent to the effective date of the Plan
by reason of any reorganization, recapitalization, stock split, stock
dividend, combination or exchange of shares, merger, consolidation or any
change in the corporate structure or Shares of the Corporation, the maximum
aggregate number and class of Shares as to which Awards may be granted under
the Plan and the number and class of Shares with respect to which Awards have
been granted under the Plan shall be appropriately adjusted by the Committee,
whose determination shall be conclusive. Any Award which is adjusted as a
result of this Section 6 shall be subject to the same restrictions as the
original Award, and the certificate[s] or other instruments representing or
evidencing such Restricted Stock shall be legended and deposited with the
Corporation in the manner provided in Section 5(c) hereof.
7. Effect of Change in Control. Each of the events specified in the
following clauses (i) through (iii) of this Section 7 shall be deemed a
"change in control": (i) any third person, including a "group" as defined in
Section 13(d)(3) of the Securities Exchange Act of 1934, shall become the
beneficial owner of shares of the Corporation with respect to which 25% or
more of the total number of votes for the election of the Board may be cast,
(ii) as a result of, or in connection with, any cash tender offer, merger or
other business combination, sale of assets or contested election, or
combination of the foregoing, the persons who were directors of the
Corporation shall cease to constitute a majority of the Board, or (iii) the
stockholders of the Corporation shall approve an agreement providing either
for a transaction in which the Corporation will cease to be an independent
publicly-owned corporation or for a sale or other disposition of all or
substantially all the assets of the Corporation. If a tender offer or
exchange offer for Shares (other than such an offer by the Corporation) is
commenced, or if a change in control shall occur, unless the Committee shall
have otherwise provided in the Award Agreement, at the election of a
Participant that is made within 60 days following such date, the Restricted
Period with respect to Restricted Stock theretofore awarded to such
Participant shall lapse and all Shares awarded hereunder as Restricted Stock
shall become fully vested in the Participant to whom such Shares were awarded.
If the Participant does not make such election within 60 days following such
tender offer, exchange offer, or change in control, such Shares shall continue
to be vested in accordance with the other provisions of such Award; provided,
however, that no Award which has previously been forfeited shall become
vested.
8. Assignments and Transfers. During the Restricted Period, no Award
nor any right or interest of a Participant in any instrument evidencing an
Award may be assigned, encumbered or transferred other than by will, the laws
of descent and distribution or pursuant to a "domestic relations order," as
defined in Section 414(p)(1)(B) of the Code.
9. Employee Rights Under the Plan. No person shall have a right to be
selected as a Participant nor, having been so selected, to be selected again
as a Participant, and no employee or other person shall have any claim or
right to be granted an Award under the Plan or under any other incentive or
similar plan of the Corporation or any Affiliate. Neither the Plan nor any
action taken thereunder shall be construed as giving any employee any right to
be retained in the employ of the Corporation or any Affiliate.
10. Delivery and Registration of Stock. The Corporation's obligation to
deliver Shares with respect to an Award shall, if the Committee so requests,
be conditioned upon the receipt of a representation as to the investment
intention of the Participant to whom such Shares are to be delivered, in such
form as the Committee shall determine to be necessary or advisable to comply
with the provisions of the Securities Act of 1933 or any other federal, state
or
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<PAGE>
local securities legislation. It may be provided that any representation
requirement shall become inoperative upon a registration of the Shares or
other action eliminating the necessity of such representation under such
Securities Act or other securities legislation. The Corporation shall not be
required to deliver any Shares under the Plan prior to (i) the admission of
such Shares to listing on any stock exchange on which Shares may then be
listed and (ii) the completion of such registration or other qualification of
such Shares under any state or federal law, rule or regulation, as the
Committee shall determine to be necessary or advisable.
11. Withholding Tax. Upon the termination of the Restricted Period with
respect to any Shares of Restricted Stock (or at any such earlier time, if
any, that an election is made by the Participant under Section 83(b) of the
Code, or any successor provision thereto, to include the value of such Shares
in taxable income), the Corporation shall have the right to require the
Participant or other person receiving such Shares to pay the Corporation the
amount of any taxes which the Corporation is required to withhold with respect
to such Shares, or, in lieu thereof, to retain or sell without notice, a
sufficient number of Shares held by it to cover the amount required to be
withheld. The Corporation shall have the right to deduct from all dividends
paid with respect to Shares of Restricted Stock the amount of any taxes which
the Corporation is required to withhold with respect to such dividend
payments.
12. Amendment or Termination.
(a) The Board may amend, alter, suspend, discontinue, or terminate
the Plan without the consent of shareholders or Participants, except that any
such action will be subject to the approval of the Corporation's shareholders
if, when and to the extent such shareholder approval is necessary or required
for purposes of any applicable federal or state law or regulation or the rules
of any stock exchange or automated quotation system on which the Shares may
then be listed or quoted, or if the Board, in its discretion, determines to
seek such shareholder approval.
(b) The Committee may waive any conditions of or rights of the
Corporation or modify or amend the terms of any outstanding Award. The
Committee may not, however, amend, alter, suspend, discontinue or terminate
any outstanding Award without the consent of the Participant or holder
thereof, except as otherwise provided herein.
13. Effective Date and Term of Plan. The Plan shall be effective on
July 2, 2000, but only if, prior to such date, the Plan is approved by the
Corporation's shareholders. The Plan shall continue in effect for a term of
ten years thereafter unless sooner terminated under Section 12 hereof.
* * * * *
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<PAGE>
REVOCABLE PROXY
ALASKA PACIFIC BANCSHARES, INC.
FIRST ANNUAL MEETING OF STOCKHOLDERS
JUNE 15, 2000
The undersigned hereby appoints the official Proxy Committee of the Board
of Directors of Alaska Pacific Bancshares, Inc. ("Company"), consisting of
Roger Grummett and Hugh N. Grant, with full powers of substitution to act as
attorneys and proxies for the undersigned, to vote all shares of Common Stock
of the Company which the undersigned is entitled to vote at the First Annual
Meeting of Stockholders, to be held in the A-J Room of the Westmark Baranof
Hotel located at 127 N. Franklin Street, Juneau, Alaska, on Thursday, June 15,
2000, at 1:00 p.m., local time, and at any and all adjournments thereof, as
follows:
VOTE VOTE
FOR WITHHELD
1. The election as director of the nominees [ ] [ ]
listed below (except as marked to the
contrary below).
Deborah E. Marshall (one-year term)
Roger Grummett (one-year term)
Craig E. Dahl (two-year term)
Hugh N. Grant (two-year term)
D. Eric McDowell (two-year term)
Avrum M. Gross (three-year term)
William J. Schmitz (three-year term)
INSTRUCTIONS: To withhold your vote
for any individual nominee, write the
nominee's(s') name(s) on the line below.
- ----------------------------------------------
FOR AGAINST ABSTAIN
--- ------- -------
2. The approval of the appointment of
Deloitte & Touche LLP as independent [ ] [ ] [ ]
auditors for the fiscal year
ending December 31, 2000.
3. The adoption of the Alaska Pacific
Bancshares, Inc. 2000 Stock Option [ ] [ ] [ ]
Plan.
4. The adoption of the Alaska Pacific
Bancshares, Inc. 2000 Management [ ] [ ] [ ]
Recognition Plan.
5. In their discretion, upon such other
matters as may properly come before
the meeting.
(continued and to be signed on reverse side)
<PAGE>
(continued from reverse side)
The Board of Directors recommends a vote "FOR" the listed proposals.
THIS PROXY, PROPERLY SIGNED AND DATED, WILL BE VOTED AS DIRECTED, BUT IF NO
INSTRUCTIONS ARE SPECIFIED THIS PROXY WILL BE VOTED FOR THE PROPOSALS STATED.
IF ANY OTHER BUSINESS IS PRESENTED AT SUCH MEETING, THIS PROXY WILL BE VOTED
BY THE BOARD OF DIRECTORS IN ITS BEST JUDGMENT. PRESENTLY, THE BOARD OF
DIRECTORS KNOWS OF NO OTHER BUSINESS TO BE PRESENTED AT THE MEETING. THIS
PROXY ALSO CONFERS DISCRETIONARY AUTHORITY ON THE BOARD OF DIRECTORS TO VOTE
WITH RESPECT TO THE ELECTION OF ANY PERSON AS DIRECTOR WHERE THE NOMINEES ARE
UNABLE TO SERVE OR FOR GOOD CAUSE WILL NOT SERVE AND MATTERS INCIDENT TO THE
CONDUCT OF THE MEETING.
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS
Should the undersigned be present and elect to vote in person at the Meeting
or at any adjournment thereof and after notification to the Secretary of the
Company at the Meeting of the stockholder's decision to terminate this proxy,
then the power of said attorneys and proxies shall be deemed terminated and of
no further force and effect.
The undersigned acknowledges receipt from the Company prior to the execution
of this proxy of the Notice of First Annual Meeting of Stockholders, a Proxy
Statement for the First Annual Meeting of Stockholders, and the 1999 Annual
Report to Stockholders.
Dated: , 2000
----------------------
-----------------------------------
PRINT NAME OF STOCKHOLDER
-----------------------------------
SIGNATURE OF STOCKHOLDER
-----------------------------------
PRINT NAME OF STOCKHOLDER
-----------------------------------
SIGNATURE OF STOCKHOLDER
Please sign exactly as your name appears on this card. When signing as
attorney, executor, administrator, trustee or guardian, indicate your full
title. If shares are held jointly, only one registered holder need sign but
both holders should sign, if possible.
PLEASE COMPLETE, DATE, SIGN AND MAIL THIS PROXY PROMPTLY IN THE ENCLOSED
POSTAGE-PREPAID ENVELOPE.
<PAGE>
