UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 1O-K
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 1993
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from _________ to __________
Commission File Number 1-10602
MID-AMERICA BANCORP
(Exact name of registrant as specified in its charter)
Kentucky 61-1012933
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
500 West Broadway
Louisville, Kentucky 40202
(Address of Principal (Zip Code)
Executive Offices)
Registrant's telephone number, including area code: (502) 589-3351
Securities registered pursuant to Section 12(b) of the Act:
Name of each exchange
Title of each class on which registered
Common Stock AMEX
Securities registered pursuant to Section 12(g) of the Act: None
(continued)
<PAGE>
Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months (or
for such shorter period that the registrant was required to file
such reports), and (2) has been subject to such filing requirements
for the past 90 days. YES [X] NO [ ]
Indicate by check mark if the disclosure of delinquent filers
pursuant to Item 405 of Regulation S-K is not contained herein, and
will not be contained, to the best of registrant's knowledge, in
definitive proxy or information statements incorporated by
reference in Part III of this Form 10-K or any amendment to this
Form 10-K. [ ]
The aggregate market value of the voting stock held by non-
affiliates of the registrant as of February 17, 1994 was
approximately $106,198,000. .
The number of shares outstanding of the registrant's common stock
as of February 17, 1994 was 8,518,866.
DOCUMENTS INCORPORATED BY REFERENCE
Portions of Registrant's Annual Report to Shareholders for the year
ended December 31, 1993 are incorporated by reference into Parts I
and II.
Portions of Registrant's Proxy Statement for the Annual Meeting of
Shareholders to be held April 21, 1994 are incorporated by
reference into Part III.
<PAGE>
TABLE OF CONTENTS
PART I
Item No. Page
1. BUSINESS . . . . . . . . . . . . . . . . . . . 2
2. PROPERTIES . . . . . . . . . . . . . . . . . . 13
3. LEGAL PROCEEDINGS . . . . . . . . . . . . . . 13
4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY
HOLDERS . . . . . . . . . . . . . . . . . . . 13
EXECUTIVE OFFICERS OF REGISTRANT . . . . . . . 13
PART II
5. MARKET FOR REGISTRANT'S COMMON EQUITY AND
RELATED SECURITY HOLDER MATTERS . . . . . . . 15
6. SELECTED FINANCIAL DATA . . . . . . . . . . . 15
7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS. 15
8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA. . 15
9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS
ON ACCOUNTING AND FINANCIAL DISCLOSURE . . . . 16
PART III
10. DIRECTORS AND EXECUTIVE OFFICERS OF THE
REGISTRANT . . . . . . . . . . . . . . . . . . 17
11. EXECUTIVE COMPENSATION . . . . . . . . . . . . 17
12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL
OWNERS AND MANAGEMENT. . . . . . . . . . . . . 17
13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS 17
PART IV
14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND
REPORTS ON FORM 8-K. . . . . . . . . . . . . . 17
SIGNATURES . . . . . . . . . . . . . . . . . . 20
<PAGE>
PART I
ITEM 1. BUSINESS OF MID-AMERICA BANCORP
Mid-America Bancorp (the "Company") is a Kentucky corporation
registered as a bank holding company pursuant to the Bank Holding
Company Act of 1956, as amended, and as a savings and loan holding
company pursuant to the Home Owners' Loan Act. The Company is
registered with, and subject to, the supervision of the Board of
Governors of the Federal Reserve System (the "Federal Reserve
Board") and the Office of Thrift Supervision.
The Company's banking subsidiary, Mid-America Bank of Louisville
and Trust Company (the "Bank") represents the Company's primary
subsidiary. The Bank was established as a Kentucky banking
corporation on October 14, 1925, under the name "Morris Plan
Industrial Bank." On July 2, 1946 the Bank's name was changed to
"Bank of Louisville." The Bank merged with "Royal Bank and Trust
Company" in 1963 under the name Bank of Louisville-Royal Bank and
Trust Co. The Bank's name was changed to Bank of Louisville and
Trust Company on March 26, 1980. The present name of the Bank was
adopted on March 25, 1983.
The Bank is engaged in a wide range of commercial, trust, and
personal banking activities including the usual acceptance of
deposits for checking, savings and time deposit accounts; making of
real estate, construction, commercial, home improvement and
consumer loans; issuance of letters of credit; rental of safe
deposit boxes; providing financial counseling for institutions and
individuals; serving as executor of estates and as trustee under
trusts and under various pension and employee benefit plans;
serving as escrow agent on bond issues; serving as stock transfer
agent, exchange agent, dividend disbursing agent, and registrar
with respect to corporate securities; and participation in small
business loan and student loan programs.
The Company also operates a number of other subsidiaries, including
Mid-America Bank, FSB, a federal savings bank (Savings Bank), which
was organized and chartered during 1993. The Savings Bank is
located in Pewee Valley, Kentucky in Oldham County, and competes on
the local level with other commercial banks and financial
institutions in Oldham County, Kentucky for all types of deposits
and loans. Another subsidiary, Mid-America Money Order Company, is
engaged in the issuance and sale throughout the United States of
retail money orders and similar consumer-type payment instruments
having a face value of not more than $1,000. As of December 31,
1993, Mid-America Money Order Company was licensed to issue money
orders in 48 states and the District of Columbia.
<PAGE>
Competition
Competition for banking and related financial services is active in
Jefferson County, Kentucky and other geographic areas served by the
Company's subsidiaries. The Company's subsidiaries compete with
other financial institutions including savings and loan
associations, finance companies, mortgage banking companies, credit
unions, insurance companies, brokerage firms, mutual funds, and
other commercial banks. In addition, large money center banks
continue to increase competition in the Company's trade territories
through the acquisition of local financial institutions, the
establishment of loan production offices and the solicitation of
customers for credit cards and related services. At present, both
price and product range are critically important in maintaining and
expanding financial relationships.
On December 31, 1993, the Bank ranked fourth among banks and trust
companies in the City of Louisville and in Jefferson County,
Kentucky, in terms of total assets and in terms of total deposits.
On December 31, 1993 there were 8 commercial banks and trust
companies in Jefferson County, including the Bank.
Employees
As of December 31, 1993, the Company and subsidiaries employed 583
persons on a full-time equivalent basis and 132 on a part-time
basis.
Government Policies
As a financial institution, the earnings of the Company's various
operating subsidiaries are affected by state and federal laws and
by policies of various federal and state regulatory agencies.
These policies include, for example, statutory maximum legal
lending rates, domestic monetary policies of the Board of Governors
of the Federal Reserve System, United States fiscal policy, and
capital adequacy and liquidity constraints imposed by bank
regulatory agencies.
Supervision And Regulation
The Company is a registered bank holding company under the Bank
Holding Company Act of 1956, as amended ("BHC Act"), and is subject
to supervision, regulation and examination by the Board of
Governors of the Federal Reserve System. Under the BHC Act, a bank
holding company is, with limited exceptions, prohibited from (i)
acquiring direct or indirect ownership or control of any voting
shares of any company which is not a bank or (ii) engaging in any
activity other than managing or controlling banks. Notwithstanding
this prohibition, a bank holding company may engage in or own
shares of a company that engages solely in activities which the
Federal Reserve Board has determined to be so closely related to
banking, or managing or controlling banks, as to be a proper
incident thereto.
<PAGE>
As a registered bank holding company, the Company is required to
file with the Federal Reserve Board annual reports and other
information regarding its business operations and the business
operations of its subsidiaries. It is also subject to examination
by the Federal Reserve Board and is required to obtain Federal
Reserve Board approval prior to acquiring, directly or indirectly,
ownership or control of any voting shares of any bank, if, after
such acquisition, it would own or control, directly or indirectly,
more than five percent of the voting stock of such bank unless it
already owns a majority of the voting stock of such bank.
The Bank is subject to regulation and supervision, of which regular
bank examinations are a part, by the Kentucky Department of
Financial Institutions, Division of Banking. The Federal Deposit
Insurance Corporation ("FDIC") currently insures the deposits of
the Bank to a maximum of $100,000 per depositor. For this
protection, the Bank pays a semi-annual statutory assessment and is
subject to the rules and regulations of the FDIC pertaining to
deposit insurance. On July 13, 1989, the Bank became a member bank
in the Federal Reserve System. The Federal Reserve Board retains
direct supervision of state chartered member banks and their
affiliates through periodic examinations, the expense of which is
borne by the Bank.
The Savings Bank is subject to regulation and supervision, of which
regular examinations are a part, by the Office of Thrift
Supervision (OTS). The FDIC currently insures the deposits of the
Savings Bank to a maximum of $100,000 per depositor.
Eton Life Insurance Company, a wholly-owned subsidiary of the
Company, is regulated by the Kentucky Department of Insurance and
is subject to Kentucky statutes and regulations governing domestic
underwriters of credit life, accident, and health insurance.
The enactment in August 1989 of the Financial Reform, Recovery and
Enforcement Act of 1989 ("FIRREA") placed the savings and loan
insurance fund under the control of the FDIC, created the OTS in
the U.S. Treasury Department and created the Resolution Trust
Corporation to act as receiver to liquidate failed thrift
institutions. FIRREA further expanded the power of bank holding
companies to allow for the acquisition of savings associations and
to operate them as separate thrift subsidiaries. FIRREA enhanced
the ability of bank holding companies to expand through thrift
acquisitions beyond their present geographic interstate banking
region. The tandem restrictions placed upon thrift subsidiaries of
bank holding companies have been removed allowing linkage of
deposit-taking activities and solicitation of deposits and loans on
behalf of affiliate companies. FIRREA led to many structural
changes in competition for loans, deposits and other services,
affected collateral valuation methods, and the acquisition of
financial institutions.
<PAGE>
In addition to FIRREA, in December 1991 the Federal Deposit
Insurance Corporation Improvement Act of 1991 (the "FDIC
Improvement Act") was enacted. The FDIC Improvement Act deals with
the recapitalization of the Bank Insurance Fund, deposit insurance
reform, including requiring the FDIC to establish a risk-based
premium assessment system, and a number of other regulatory and
supervisory matters.
The following tables set forth selected statistical information with respect
to the Company and its subsidiaries and should be read in conjunction with the
Company's consolidated financial statements.
DISTRIBUTION OF ASSETS, LIABILITIES AND SHAREHOLDERS' EQUITY;
INTEREST RATES AND INTEREST DIFFERENTIAL
The schedule captioned "Average Balances and Yields/Rates Tax Equivalent
Basis" included on page 32 of the Company's annual report to shareholders for
the year ended December 31, 1993, which is incorporated herein by reference,
shows, for each major category of interest earning asset and interest bearing
liability, the average amount outstanding, the interest earned or expensed on
such amount and the average rate earned or expensed for each of the years in
the three-year period ended December 31, 1993. The schedule also shows the
average rate earned on all interest earning assets and the average rate
expensed on all interest bearing liabilities and the net interest margin (net
interest income divided by total average interest earning assets, where net
interest income equals the difference between interest earned and interest
expensed) for each of the years in the three-year period ended December 31,
1993. Nonaccrual loans outstanding were included in calculating the rate
earned on loans. Total interest income includes the effects of taxable
equivalent adjustments using a tax rate of 35% for 1993 and 34% for 1992 and
1991.
The changes in interest income and interest expense resulting from
changes in volume and changes in rates for the years ended December 31, 1993
and 1992 are shown in the schedule captioned "Interest Income and Interest
Expense Volume and Rate Changes for the Years 1993 and 1992 Tax Equivalent
Basis" included on page 33 of the Company's annual report to shareholders for
the year ended December 31, 1993, which is incorporated herein by reference.
Total interest income includes the effects of taxable equivalent adjustments
using a tax rate of 35% for 1993 and 34% for 1992 and 1991.
<PAGE>
SECURITIES PORTFOLIO
BOOK VALUE
<TABLE>
<CAPTION>
December 31
(In Thousands) --------------------------------------------
1993 1992 1991
------------ ------------ ------------
<S> <C> <C> <C>
U.S. Treasury and U.S. Government agencies $283,597 $114,048 $132,646
States and political subdivisions......... 2,956 4,700 9,448
Corporate obligations..................... 33,557 40,469 48,979
Other..................................... 14,188 7,549 2,331
------------ ------------ ------------
$334,298 $166,766 $193,404
============ ============ ============
</TABLE>
SECURITIES
MATURITY DISTRIBUTION AND WEIGHTED AVERAGE YIELDS
DECEMBER 31, 1993
<TABLE>
<CAPTION>
(Dollars In Thousands) Within After One But After Five But After
One Year Within Five Years Within Ten Years Ten Years
----------------- ------------------- ------------------- -------------------
Amount Yield Amount Yield Amount Yield Amount Yield
--------- ------- --------- --------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
U.S. Treasury and U.S.
Government agencies $58,657 3.41% $224,940 4.24%
States and political
subdivisions 1,700 10.36% 1,256 12.71%
Corporate obligations 6,177 8.54% 21,967 5.58% $3,328 6.19% $2,085 3.88%
Other 250 5.50% 13,938 4.68%
--------- --------- --------- ---------
$66,534 4.06% $248,163 4.40% $3,578 6.14% $16,023 4.58%
========= ========= ========= =========
</TABLE>
The calculation of the weighted average yield is based on the average tax
exempt yield, weighted by the respective costs of the securities.
The weighted average yields on states and political subdivisions securities are
computed on a tax equivalent basis using a marginal federal tax rate of 35%.
<PAGE>
LOAN PORTFOLIO
(In Thousands)
<TABLE>
<CAPTION>
December 31
-------------------------------------------------
1993 1992 1991 1990 1989
--------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C>
Commercial $258,889 $223,926 $175,522 $157,886 $147,504
Real estate - construction and development 59,581 52,214 42,770 31,219 23,755
Real estate - mortgage 320,007 296,277 262,951 267,449 244,270
Consumer 52,075 54,894 69,058 75,122 54,262
--------- --------- --------- --------- ---------
690,552 627,311 550,301 531,676 469,791
Unearned income (32,984) (44,044) (56,928) (57,713) (52,426)
--------- --------- --------- --------- ---------
Loans, net of unearned income $657,568 $583,267 $493,373 $473,963 $417,365
========= ========= ========= ========= =========
</TABLE>
Includes domestic loans only as the Company has no foreign loans. The Company
has no other category of loans whose concentration exceeds 10% of total loans.
SELECTED LOAN MATURITIES AND
SENSITIVITY TO INTEREST RATES
DECEMBER 31, 1993
(In Thousands)
<TABLE>
<CAPTION>
Loan Maturities
---------------------------------------------------
After One
Within But Within After
One Year Five Years Five Years Total
---------------------------------------------------
<S> <C> <C> <C> <C>
Commercial $51,750 $82,871 $116,260 $250,881
Real estate - construction and development 25,921 22,125 11,535 59,581
Real estate - mortgage 102,727 49,442 144,701 296,870
Consumer 21,123 14,057 15,056 50,236
------------ ------------ ------------ ------------
$201,521 $168,495 $287,552 $657,568
============ ============ ============ ============
Predetermined rates $36,551 $99,570 $167,849 $303,970
Floating rates 164,970 68,925 119,703 353,598
------------ ------------ ------------ ------------
$201,521 $168,495 $287,552 $657,568
============ ============ ============ ============
</TABLE>
<PAGE>
NON-PERFORMING LOANS
Information with respect to the Company's non-performing loans is included in
the schedule captioned "Non-Performing and Restructured Assets" and footnote C
to the consolidated financial statements included on pages 26 and 44,
respectively, of the Company's annual report to shareholders for the year
ended December 31, 1993, which is incorporated herein by reference.
SUMMARY OF LOAN LOSS EXPERIENCE
(Dollars In Thousands)
<TABLE>
<CAPTION>
1993 1992 1991 1990 1989
--------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C>
Balance, beginning of year..................... $6,020 $5,523 $5,220 $4,250 $4,060
Charge-offs:
Commercial................................... 48 88 156 711 12
Real estate - construction and development... 714 1,012
Real estate - mortgage....................... 546 323 432 1,681 590
Consumer..................................... 266 282 347 381 419
--------- --------- --------- --------- ---------
Total charge-offs.......................... 860 693 1,649 3,785 1,021
--------- --------- --------- --------- ---------
Recoveries:
Commercial................................... 7 8 208 7
Real estate - construction and development... 462 79
Real estate - mortgage....................... 383 386 746 44 118
Consumer..................................... 176 146 194 97 299
--------- --------- --------- --------- ---------
Total recoveries........................... 1,028 540 1,227 148 417
--------- --------- --------- --------- ---------
Net charge-offs (recoveries)................... (168) 153 422 3,637 604
--------- --------- --------- --------- ---------
Provision for loan losses...................... 390 650 725 4,607 794
--------- --------- --------- --------- ---------
Balance, end of year........................... $6,578 $6,020 $5,523 $5,220 $4,250
========= ========= ========= ========= =========
Average loans, net of unearned income.......... $615,070 $534,525 $479,667 $454,590 $368,161
========= ========= ========= ========= =========
Net charge-offs (recoveries)
to average loans, net of unearned income..... (0.03%) 0.03% 0.09% 0.80% 0.16%
========= ========= ========= ========= =========
</TABLE>
The allowance for loan losses is maintained at a level adequate to absorb
probable losses. Management determines the adequacy of the allowance based
upon reviews of individual credits, evaluation of the risk characteristics of
the loan portfolio, including the impact of current economic conditions on the
borrowers' ability to repay, past collection and loss experience and such
other factors, which, in Management's judgement, deserve current recognition.
The allowance for loan losses is increased by charges to operating earnings
and reduced by charge-offs, net of recoveries.
<PAGE>
ALLOCATION OF ALLOWANCE FOR LOAN LOSSES
(Dollars In Thousands)
<TABLE>
<CAPTION>
1993 1992 1991 1990 1989
---------------------- ---------------------- --------------------- ---------------------- ----------------------
% Of % Of % Of % Of % Of
Allocation Loans In Allocation Loans In Allocation Loans In Allocation Loans In Allocation Loans In
Of Each Of Each Of Each Of Each Of Each
Allowance Category Allowance Category Allowance Category Allowance Category Allowance Category
For Loan To Total For Loan To Total For Loan To Total For Loan To Total For Loan To Total
Losses Loans Losses Loans Losses Loans Losses Loans Losses Loans
---------- ---------- ---------- ---------- ----------- ---------- ----------- ---------- ----------- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Commercial...... $3,614 38.15% $2,598 35.70% $2,680 35.51% $1,840 29.70% $912 31.40%
Real estate -
construction
and development 1,235 9.06% 424 8.32% 450 8.67% 1,435 5.87% 198 5.06%
Real estate -
mortgage....... 378 45.15% 1,515 47.23% 1,085 44.07% 660 50.30% 1,373 52.00%
Consumer........ 1,351 7.64% 1,483 8.75% 1,308 11.75% 1,285 14.13% 1,767 11.54%
---------- ---------- --------- ---------- ----------- ------------ ----------- --------- ----------- ----------
$6,578 100.00% $6,020 100.00% $5,523 100.00% $5,220 100.00% $4,250 100.00%
========== ========== ========= ========== =========== ============ =========== ========= =========== ==========
</TABLE>
MATURITY SCHEDULE OF TIME DEPOSITS OF $100,000 AND OVER
DECEMBER 31, 1993
(In Thousands)
Certificate
Of Deposits Other Total
----------- ---------- ---------
Three months or less...................... $5,973 $5,135 $11,108
Over three through six months............. 2,555 -- 2,555
Over six through twelve months............ 5,568 -- 5,568
Over twelve months........................ 12,360 -- 12,360
---------- ---------- ---------
$26,456 $5,135 $31,591
========== ========== =========
RETURN ON EQUITY AND ASSETS
Incorporated by reference herein to page 4 of
the Company's annual report to shareholders.
<PAGE>
FEDERAL FUNDS PURCHASED AND SECURITIES SOLD UNDER AGREEMENTS TO REPURCHASE
(Dollars In Thousands)
Federal funds purchased and securities sold under agreements to repurchase
generally represent overnight borrowing transactions. Included in repurchase
agreements are balances of several institutional customers which are subject
to substantial fluctuations, with reductions occurring in the normal course of
business after year end. The detail of these short-term borrowings for the
years 1993, 1992 and 1991 follows:
<TABLE>
<CAPTION>
1993 1992 1991
--------------- --------------- ---------------
<S> <C> <C> <C>
Federal funds purchased:
Balance at year end.................................... $12,500 $10,975 $14,500
Average during the year................................ 7,962 12,771 21,426
Maximum amount outstanding at any month end............ 13,100 17,175 42,625
Weighted average rate during the year.................. 2.95% 3.50% 5.91%
Weighted average rate on December 31................... 3.02% 3.02% 4.39%
<CAPTION>
1993 1992 1991
--------------- --------------- ---------------
<S> <C> <C> <C>
Securities sold under agreements to repurchase:
Balance at year end.................................... $183,288 $162,077 $164,954
Average during the year................................ 94,772 61,176 80,099
Maximum amount outstanding at any month end............ 183,288 162,077 179,754
Weighted average rate during the year.................. 2.76% 3.36% 5.58%
Weighted average rate on December 31................... 3.20% 3.07% 5.16%
</TABLE>
<PAGE>
ITEM 2. PROPERTIES
The Bank maintains a main office, warehouse and 30 branches. The
Bank owns 18 branch offices, leases 11 branch offices and the main
office, and owns the buildings but leases the land with regard to
1 branch. The Bank also operates 43 automatic teller machines, at
various locations in its traditional customer base of Jefferson
County, Kentucky. See footnote E to the consolidated financial
statements on page 45 of the Company's annual report to
shareholders for the year ended December 31, 1993, which is
incorporated herein by reference, for additional information on
premises, equipment and lease commitments.
ITEM 3. LEGAL PROCEEDINGS
The information contained in footnote N to the Company's
consolidated financial statements included on page 50 of the
Company's annual report to shareholders for the year ended December
31, 1993, is incorporated herein by reference.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
None.
EXECUTIVE OFFICERS OF REGISTRANT.
Listed below are the names and ages of the Company's executive
officers, positions held, and the year from which held. The
Company's executive officers are elected annually by the Board of
Directors:
Year From
Name Age Position Held Which Held
Bertram W. Klein 63 Chairman of the Board, 1985
Chief Executive Officer
& member of the Executive
Committee
Orson Oliver 50 President, Director & 1985
member of the Executive
Committee
Thomas L. Weber 61 Executive Vice President 1984
& member of the Executive
Committee
Wallace A. Fudold 49 Executive Vice President 1985
& member of the Executive
Committee
Paul E. Henry 58 Executive Vice President 1989
& member of the Executive
Committee
<PAGE>
David N. Klein 38 Executive Vice President 1991
& member of the Executive
Committee
Richard B. Klein 35 Executive Vice President 1991
& member of the Executive
Committee
Gail W. Pohn 58 Executive Vice President 1993
& member of the Executive
Committee
Robert H. Sachs 54 Executive Vice President, 1993
General Counsel, & member
of the Executive Committee
Steven A. Small 40 Executive Vice President, 1993
Chief Financial Officer &
member of the Executive
Committee
Mr. Henry joined the Company's subsidiary bank in 1964. He was
elected to his current position in 1989, and last held the office
of Senior Vice President - Commercial Lending.
David N. Klein joined the Company's subsidiary bank in 1978. He
was elected to his current position in 1991 and from 1987 to 1991
held the office of Senior Vice President - Retail Banking. He is
the son of Bertram W. Klein and the brother of Richard B. Klein.
Richard B. Klein joined the Company's subsidiary bank in 1980.
He was elected to his current position in 1991 and from 1987 to
1991 held the office of Senior Vice President -Consumer Loans and
Credit. He is the son of Bertram W. Klein and the brother of David
N. Klein.
Mr. Pohn joined the Company and the Company's subsidiary bank in
1993. Prior to joining the Company, from 1981 to 1993, he was
Senior Vice President, Chief Counsel and Secretary for National
City Bank, Kentucky (and its predecessor), a non-affiliate of the
Company.
Mr. Sachs joined the Company and the Company's subsidiary bank in
1993. From 1990 to 1993, Mr. Sachs was the President of Legal
Services Management, Inc., a consultant to corporations and law
firms regarding the effective management and delivery of legal
services. From 1989 to 1990 he was Vice President of Law and
Corporate Secretary to BATUS Inc., a $13 billion management and
holding company for the U.S. interests of BAT Industries, plc, a
large publicly held UK conglomerate. Prior to that, Mr. Sachs was
Vice President and General Counsel, Product Litigation, to Brown &
Williamson Tobacco Corporation.
<PAGE>
Mr. Small, a CPA, joined the Company and the Company's subsidiary
bank in 1993. Prior to joining the Company, from 1986 to 1993, he
was a partner of KPMG Peat Marwick, Certified Public Accountants,
and worked primarily in serving financial institution clients of
that firm.
All other executive officers have served the Company or the Bank in
executive officer capacities for more than five years.
PART II
ITEM 5. MARKET FOR THE REGISTRANT'S COMMON EQUITY AND RELATED
SECURITY HOLDER MATTERS
The information captioned "Market for Mid-America Bancorp's Stock
and Related Security Holder Matters" included on page 36 of the
Company's annual report to shareholders for the year ended
December 31, 1993, is incorporated herein by reference.
ITEM 6. SELECTED FINANCIAL DATA
The information captioned "Summary of Financial Data" included on
page 34 of the Company's annual report to shareholders for the year
ended December 31, 1993 is incorporated herein by reference.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
The Management's Discussion and Analysis of Financial Condition and
Results of Operations included on pages 21 through 33 of the
Company's annual report to shareholders for the year ended December
31, 1993 is incorporated herein by reference.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
The following consolidated financial statements of the Company and
report of independent auditors included on pages 37 through 53 in
the Company's annual report to shareholders for the year ended
December 31, 1993 are incorporated herein by reference:
Independent Auditors' Report
Consolidated balance sheets - December 31, 1993 and 1992
Consolidated statements of income -
years ended December 31 1993, 1992, and 1991
Consolidated statements of changes in shareholders' equity -
years ended December 31, 1993, 1992 and 1991
Consolidated statements of cash flows -
years ended December 31, 1993, 1992 and 1991
Notes to consolidated financial statements
The information captioned "Quarterly Financial Data" included
on page 35 of the Company's annual report to shareholders for the
year ended December 31, 1993 is incorporated herein by reference.
<PAGE>
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
ACCOUNTING AND FINANCIAL DISCLOSURE
None
<PAGE>
PART III
ITEMS 10, 11, 12 AND 13. DIRECTORS AND EXECUTIVE OFFICERS OF THE
REGISTRANT; EXECUTIVE COMPENSATION; SECURITY OWNERSHIP OF CERTAIN
BENEFICIAL OWNERS AND MANAGEMENT; AND CERTAIN RELATIONSHIPS AND
RELATED TRANSACTIONS
The information required by these items, other than the information
set forth above under Item I, "Executive Officers of Registrant,"
is omitted because the Company is filing a definitive proxy
statement pursuant to Regulation 14A not later than 120 days after
the end of the fiscal year covered by this report which includes
the required information. The required information contained in
the Company's proxy statement is incorporated herein by reference.
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS
ON FORM 8-K
a-l Financial Statements
See Part II, Item 8 for a listing of all financial
statements and report of independent auditors.
a-2 Financial Statement Schedules
All schedules normally required by Form lO-K are
omitted since they are either not applicable or the
required information is shown in the financial
statements or the notes thereto.
a-3 Exhibits
3(a) Amended and Restated Articles of Incorporation
of Mid-America Bancorp filed with the
Secretary of State of Kentucky on May 4, 1989.
Exhibit 3(e) to the Company's annual report on
Form 10-K for the year ended December 31, 1989
is incorporated by reference herein.
(b) By-Laws of Mid-America Bancorp. Exhibit 3 (c)
to Registration Statement No. 2-80835 is
incorporated by reference herein.
4. Amended and Restated Articles of Incorporation
and By-Laws. See Exhibits 3(a) and 3(b).
<PAGE>
10. Material Contracts
(a) Employment Agreement between the Company
and Orson Oliver dated, April 5, 1993
(b) Employment Agreement between the Company
and Wallace A. Fudold dated, April 5, 1993
(c) Employment Agreement between the Company
and David N. Klein dated, April 5, 1993
(d) Employment Agreement between the Company
and Richard B. Klein dated, April 5, 1993
(e) Employment Agreement between the Company
and Robert Sachs dated, April 5, 1993
(f) Employment Agreement between the Company
and Gail Pohn dated, April 5, 1993
(g) Employment Agreement between the Company
and Steven Small. May 3, 1993
(h) Agreement and General Release between the
Company and Stanley L. Atlas dated,
October 26, 1993
(i) Amended and Restated Mid-America Bancorp
Incentive Stock Option Plan is incorporated
herein by reference to Post-Effective
Amendment Number 1 to Form S-8 Registration
Statement No. 2-92270.
(j) Mid-America Bancorp 1991 Incentive Stock
Option Plan. Exhibit 28 to Registration
Statement No. 33-42989 is incorporated by
reference herein.
(k) Mid-America Bancorp Incentive Compensation
Plan. Exhibit 10(d) to the Company's annual
report on Form 10-K for the year ended
December 31, 1990 is incorporated by reference
herein.
11. Statement re Computation of per share
earnings.
13. Selected portions of the annual report to
shareholders for the year ended December 31,
1993.
21. Subsidiaries of the Company.
23. Consent of independent auditors.
27. Financial Data Schedule.
<PAGE>
99. Additional Exhibits
Form 11-K
b Reports on Form 8-K
None
<PAGE>
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the
Securities Exchange Act of 1934, the Company has duly caused this
report to be signed on its behalf by the undersigned, thereunto
duly authorized.
MID-AMERICA BANCORP
March 21, 1994 BY: /s/ Bertram W. Klein
Bertram W. Klein
Chairman of the Board and
Chief Executive Officer
Pursuant to the requirements of the Securities Exchange Act of
1934, this report has been signed below by the following persons on
behalf of the registrant and in the capacities indicated.
/s/ Bertram W. Klein Chairman of the Board & Mar. 21, 1994
Bertram W. Klein Chief Executive Officer
/s/ Orson Oliver President & Director Mar. 21, 1994
Orson Oliver
/s/ Steven A. Small Executive Vice President Mar. 21, 1994
Steven A. Small & Chief Financial Officer
/s/ Stanley L. Atlas Director Mar. 21, 1994
Stanley L. Atlas
/s/ Leslie D. Aberson Director Mar. 21, 1994
Leslie D. Aberson
/s/ Robert P. Adelberg Director Mar. 21, 1994
Robert P. Adelberg
/s/ William C. Ballard, Jr. Director Mar. 21, 1994
William C. Ballard, Jr.
/s/ Henry D. Burns Director Mar. 21, 1994
Henry D. Burns
/s/ Martha Layne Collins Director Mar. 21, 1994
Martha Layne Collins
/s/ Harry S. Frazier, Jr. Director Mar. 21, 1994
Harry S. Frazier, Jr.
/s/ Peggy Ann Markstein Director Mar. 21, 1994
Peggy Ann Markstein
<PAGE>
/s/ Donald G. McClinton Director Mar. 21, 1994
Donald G.McClinton
/s/ John D. Palmore Director Mar. 21, 1994
John D. Palmore
/s/ Katherine G. Peden Director Mar. 21, 1994
Katherine G. Peden
Director Mar. 21, 1994
Woodford R. Porter, Sr.
/s/ Benjamin Richmond Director Mar. 21, 1994
Benjamin Richmond
/s/ Raymond L. Sales Director Mar. 21, 1994
Raymond L. Sales
/s/ Thomas E. Sandefur, Jr. Director Mar. 21, 1994
Thomas E. Sandefur, Jr.
Director Mar. 21, 1994
Al J. Schneider
/s/ Henry C. Wagner Director Mar. 21, 1994
Henry C. Wagner
<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
--------------------------
EXHIBITS
filed with
FORM 10-K
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 1993
Commission file number 1-10602
__________________________
MID-AMERICA BANCORP
<PAGE>
INDEX TO EXHIBITS
Exhibit Number Page
10. Material Contracts
(a) Employment Agreement between the Company and Orson
Oliver dated, April 5, 1993 1
(b) Employment Agreement between the Company and Wallace
A. Fudold dated, April 5, 1993 9
(c) Employment Agreement between the Company and David N.
Klein dated, April 5, 1993 17
(d) Employment Agreement between the Company and Richard B.
Klein dated, April 5, 1993 25
(e) Employment Agreement between the Company and Robert
Sachs dated, April 5, 1993 33
(f) Employment Agreement between the Company and Gail
Pohn dated, April 5, 1993 42
(g) Employment Agreement between the Company and Steven
Small dated, May 3, 1993 50
(h) Agreement and General Release between the Company
and Stanley L. Atlas dated, October 26, 1993 58
11. Statement re: Computation of per share earnings 62
13. Selected portions of the annual report to
shareholders for the year ended December 31, 1993. 63
21. Subsidiaries of the Registrant. 106
23. Consent of independent auditors. 107
27. Financial Data Schedule 108
99. Additional Exhibits
Form 11-K 109
<PAGE>
MATERIAL CONTRACTS Exhibit 10
----------
Exhibit 10(a)
AMENDED AND RESTATED AGREEMENT
THIS AMENDED AND RESTATED AGREEMENT (hereinafter the "First Amendment"),
is made and entered into as of the 5th day of April, 1993, by and between MID-
AMERICA BANCORP, and its wholly owned subsidiary, BANK OF LOUISVILLE AND TRUST
COMPANY, both Kentucky corporations with their principal places of business at
500 West Broadway, Louisville, Kentucky 40202 (hereinafter "Bancorp" and the
"Bank" respectively); and ORSON OLIVER, residing at 12 Muirfield Place,
Louisville, Kentucky, 40222 (hereinafter "Employee").
RECITALS
Employee is currently employed as President of both Bancorp and the Bank
and has substantial responsibilities in such capacity. He has performed his
duties as President well and faithfully and his unique talents and efforts
have contributed substantially to the success of the Bank and the
profitability of Bancorp. Bancorp and its Board of Directors (hereinafter the
"Board") recognize that the possibility exists of a Change in Control (as
hereinafter defined), and that the occurrence of a Change in Control could
result in an alteration of the terms and conditions of Employee's employment,
or otherwise create uncertainty and concern as to his employment status. The
Board has determined that it is in Bancorp's best interest to maintain
stability and continuity of management both at Bancorp and the Bank. In this
context, Bancorp particularly wishes to retain the services of Employee and to
ensure his continued dedication and efforts on behalf of Bancorp and the Bank
in the event of a Change in Control, and eliminate undue concern for his
personal employment and financial security. For this reason, Bancorp desires
to provide Employee with certain benefits and protections in his employment,
particularly in the event of a Change in Control.
Employee and the Bank entered into an agreement dated December
21, 1989 (the "Agreement"), to grant Employee the benefits and protection
sought with respect to his employment with the Bank. The parties hereto wish
to amend the Agreement as provided herein and restate it in its entirety.
NOW, THEREFORE, in consideration of the respective agreements of the
parties contained herein, the Agreement is hereby amended and effective as of
the date hereof and restated to provide as follows:
1. TERM OF AGREEMENT.
This Amended and Restated Agreement shall commence and be effective
as of April 5, 1993, and shall continue in effect through and including
December 31, 1994. Commencing on December 31, 1994, and on each December 31
thereafter (hereinafter the "Anniversary Date"), the term of this Agreement
shall be automatically extended for a period of one (1) year, and shall
continue in effect from year-to-year unless (i) not less than ninety (90) days
prior to an Anniversary Date, by written notice to Employee, Bancorp elects
not to extend, or (ii) otherwise terminated or extended as hereinafter
provided.
<PAGE>
2. EMPLOYMENT OF EMPLOYEE
A. Effective Date. Effective April 5, 1993, Bancorp
hereby agrees to continue to employ Employee, and Employee accepts such
employment as President, with such duties as are presently consistent with
such title and office, and such different or additional duties as may be
assigned to Employee from time to time by the Board including, without
limitation, acting as an officer of the Bank if elected by the Board of
Directors of the Bank; provided, however, that any additional duties assigned
to Employee shall be consistent with Employee's status, title, position and
responsibilities as in effect at the time of execution of this Agreement.
B. Employee's Obligations. Employee agrees to devote his full and
exclusive time, attention and energies to the business of Bancorp and as part
of such duties shall serve in such capacities for Bancorp and the Bank as may
be required of him during his employment pursuant to this Agreement. He shall
not engage in any other business activity, whether or not such business
activity is pursued for gain, profit or other pecuniary advantage, except that
Employee shall be entitled to engage in civic and eleemosynary activities or
in passive investment activities so long as such activities do not compete or
interfere with his employment hereunder.
C. Compensation. As compensation for his services hereunder,
Employee shall receive from Bancorp, the Bank or a combination thereof, an
aggregate annual salary of Two Hundred Thirty-Five Thousand Dollars
($235,000.00), payable in twenty-six (26) pay periods (hereinafter, as
adjusted from time to time as herein provided, the "Base Salary"). Employee's
Base Salary shall be reviewed annually for increases consistent with Bancorp's
and the Bank's executive compensation policies and Employee's duties and
contributions to Bancorp and the Bank. Notwithstanding anything herein to the
contrary, to the extent to which he shall qualify, Employee shall be entitled
to participate in any employee benefit programs which may from time to time be
in effect for Bancorp or the Bank.
D. Cessation of Obligations. The obligations of
Bancorp and Employee hereunder shall continue throughout the
initial or any subsequent term of this Agreement, unless this Agreement is
terminated as provided herein.
3. CHANGE IN CONTROL.
A. Definition. As used in this Agreement, a Change in Control of
Bancorp shall be deemed to have occurred if, and only if (i) Bertram W. Klein
(hereinafter "Klein"), the current Chief Executive Officer of Bancorp and the
Bank, ceases for any reason to hold the office of Chief Executive Officer of
Bancorp; (ii) Klein and/or members of his immediate family (including only
Klein and his spouse, children, parents, or any trusts established for the
benefit of any of them) cease to hold ten percent (10%) or more of all
outstanding voting shares of Bancorp.
<PAGE>
B. Effect of a Change in Control. In the event of a Change in
Control, if Bancorp's legal existence is terminated (i.e. is dissolved), the
Bank hereby assumes and becomes severally obligated for the obligations of
this Agreement to Employee. If Bancorp's legal existence is continued through
merger or other combination with or consolidation into any new or existing
entity, the Bank hereby assumes and becomes jointly and severally liable with
such successor entity to Employee for all the obligations of Bancorp
hereunder. Upon a Change in Control, the term of this Agreement shall be
immediately and automatically extended for a period of five (5) years from the
effective date of such Change in Control (hereinafter the "Five Year Term").
At the end of the Five Year Term, and upon each subsequent anniversary date of
the Change in Control, this Agreement shall be automatically extended for an
additional one-year period as provided in Paragraph 1 above, unless (i)
Bancorp chooses not to extend or (ii) this Agreement is otherwise terminated
in accordance with the provisions contained herein.
During the Five Year Term, Employee shall be retained in
bank's employ (and in Bancorp's employ unless Bancorp is dissolved after the
Change in Control), and be provided with compensation and benefits at least
equal in the aggregate to that received by Employee from Bancorp and the Bank
immediately prior to the effective date of the Change in Control, unless this
Agreement is otherwise terminated by Bancorp for Cause, or by reason of the
Death or Disability of Employee; provided, however, Employee shall continue to
fulfill his obligations pursuant to paragraph 2B of this Agreement.
For a period of two (2) years following the effective date of a Change in
Control, Employee may terminate this Agreement at any time by providing
written notice of such voluntary termination to Bancorp or to the Bank at
least ninety (90) days prior to the effective date of such voluntary
termination, and, in such event (i) all obligations of Bancorp and the Bank
under this Agreement shall immediately cease as of the effective date of such
voluntary termination; and (ii) Employee shall only be entitled to receive
payment of salary and benefits accrued as of the effective date of such
voluntary termination.
Should Employee continue in the employ of the Bank or Bancorp for a
period of at least two (2) years following the effective date of a Change in
Control, Employee may thereafter terminate this Agreement by providing written
notice of such voluntary termination to Bancorp or the Bank at least ninety
(90) days prior to the effective date of such voluntary termination and, in
such event, Bancorp shall pay to the Employee (i) upon the effective date of
termination or at the next regular pay period thereafter all salary and other
benefits accrued and unpaid as of the effective date of Employee's voluntary
termination; and (ii) thereafter, on a monthly basis, an amount equal to one-
twelfth (1/12) of Employee's then-current Base Salary from Bancorp and the
Bank, such payments to continue for the lesser of (a) three (3) years from the
effective date of Employee's voluntary termination; or (b) the greater of one
year or the remainder of the Five Year Term.
4. CHANGE IN CONTROL AND DIMINUTION IN DUTIES.
A. Definition. As used in this Agreement, a Diminution in Duties
shall mean any of the following events, occurring in conjunction with or
following a Change in Control:
<PAGE>
(i) a change in Employee's status, position or
responsibilities with Bancorp (unless Bancorp's separate
existence ceases as a result of the Change in Control) or
the Bank (including without being limited to a material
change in the number or positions of those employees or
officers to whom Employee reports and who report to
Employee) which, in Employee's reasonable judgement,
represents a significant and adverse change in Employee's
status, position or responsibilities as in effect
immediately prior to the effective date of a Change in
Control, or at any time thereafter;
(ii) the assignment to Employee of any duties or
responsibilities which, in Employee's reasonable
judgement, are inconsistent with Employee's status,
position or responsibilities as in effect immediately
prior to the effective date of the Change in Control or
at any time thereafter;
(iii) any removal of Employee from, or failure to
reappoint or reelect Employee to any of his positions
with the Bank, unless such positions have been abolished
as a result of a reorganization of the Bank (such as a
merger or consolidation) resulting from the Change in
Control, except in connection with the termination of
this Agreement (a) by Bancorp or the Bank for Cause, (b)
as a result of Employee's Death or Disability, or (c) by
Employee, other than as a result of a Diminution in
Duties as described hereunder. If Employee's position
with the Bank has been abolished as herein provided, the
appointment of Employee to such positions as have
responsibilities, duties, and status within the successor
organization equal to or greater than (in Employee's
reasonable judgment) those of the office or position
abolished will be deemed to be reelection or
reappointment as required herein.
(iv) a reduction in Employee's aggregate Base
Salary or any failure to pay Employee within thirty (30)
days of the date due any compensation or benefits to
which he is entitled;
(v) the failure by Bancorp or the Bank to (a)
continue in effect (without reduction in benefit levels
or reward opportunities) any material compensation or
benefit plan in which Employee was participating through
Bancorp or the Bank immediately prior to the effective
date of a Change in Control, unless a substitute or
replacement has been implemented which provides
substantially identical or greater compensation or
benefits to Employee, in Employee's reasonable judgment;
or (b) provide Employee with compensation and benefits
equal or superior in value to that received in the
aggregate from Bancorp and the Bank under each other
compensation or employee benefit plan, program and
practices in effect immediately prior to a Change in
Control or at any time thereafter.
<PAGE>
B. Effect of a Diminution in Duties. Should the Employee suffer a
Diminution in Duties in conjunction with or following a Change in Control
Employee may at any time thereafter, upon written notice to Bancorp or the
Bank at least ninety (90) days prior to the effective date, voluntarily
terminate this Agreement and his employment with Bancorp and the Bank. Upon
receipt of such notice of voluntary termination, Bancorp may, in its sole
discretion, waive the ninety (90) day notice requirement for Employee's
voluntary termination and consider such voluntary termination effective
immediately upon Bancorp or the Bank's receipt of Employee's written notice.
Under either of such circumstances, Bancorp shall pay to the Employee (i) upon
the effective date of termination, or at the next regular pay period
thereafter, the aggregate salary and other benefits accrued from Bancorp and
the Bank through the effective date of Employee's voluntary termination; and
(ii) thereafter on a monthly basis, an amount equal to one twelfth (1/12) of
Employee's then-current aggregate Base Salary from Bancorp and the Bank, such
payments to continue for the lesser of (a) three (3) years from the effective
date of Employee's voluntary termination or (b) the greater of one year or the
remainder of the Five Year Term.
5. TERMINATION OF AGREEMENT.
A. By Employee. Employee may terminate this Agreement and his
employment with Bancorp and the Bank at any time, by providing written notice
of his voluntary termination to Bancorp at least ninety (90) days prior to the
effective date of such voluntary termination. In such an event, other than in
connection with a Change in Control or Diminution in Duties (i) all
obligations of Bancorp and the Bank under this Agreement shall immediately
cease, as of the effective date of the voluntary termination and (ii) Employee
shall be entitled to receive only payment of the aggregate salary and benefits
accrued from Bancorp and the Bank through the effective date of such voluntary
termination.
B. By Bancorp or the Bank. Bancorp may terminate this Agreement
and, at its option, Employee's employment (i) immediately and at any time for
Cause, as that term is hereinafter defined, in which event all obligations of
Bancorp and the Bank under this Agreement shall cease immediately as of the
effective date of the termination, and Employee shall be entitled to receive
payment of only the aggregate salary and benefits accrued from Bancorp and the
Bank through the effective date of the termination; or (ii) at any time prior
to a Change in Control, without cause and upon written notice to Employee,
which notice shall at Bancorp's option be effective immediately or at some
future date not to exceed ninety (90) days following date of the notice of
termination, in which event Bancorp shall itself, or cause the Bank to, pay to
Employee all salary and benefits accrued from Bancorp or the Bank through the
effective date of the termination. In addition, Employee shall also be
entitled to receive a lump-sum payment in an amount equal to Employee's then-
current aggregate Base Salary from Bancorp and the Bank (exclusive of any
stock options, profit sharing, bonuses or other benefits). An election by
Bancorp not to renew or extend Employee's employment as provided in Section 1
hereof, other than for Cause, shall be deemed a termination of this Agreement
by Bancorp without Cause and shall give rise to rights to Employee under THIS
Subparagraph 5B.
<PAGE>
As used in this Agreement, "Cause" for termination shall be limited to
the following: (i) Employee's conviction of a felony; (ii) the issuance by
any state or federal bank regulatory agency of a request or demand for removal
of Employee from employment with Bancorp or the Bank or from any office which
Employee then holds with Bancorp or the Bank; (iii) Employee's material breach
of Paragraph 2B of this Agreement; (iv) Employee's gross negligence in the
performance of his duties hereunder; or (v) failure of Employee to
substantially perform his duties hereunder (other than failure resulting from
Employee's disability) after demand for substantial performance is delivered
to Employee by Bancorp or the Bank, identifying specifically the manner in
which Employee has not substantially performed his duties, and a 7 day period
to cure has elapsed without substantial improvement in performance to the
reasonable standards set by Bancorp or the Bank, respectively.
C. By Death or Disability. Notwithstanding anything herein to the
contrary, this Agreement shall terminate if (i) Employee dies during the term
of this Agreement or (ii) Bancorp terminates this Agreement after Employee
shall be absent from his employment with Bancorp or the Bank for a continuous
period of more than six (6) months by reason of incapacity or illness which
Employee's physician determines has resulted in Employee's permanent
disability. In either of such events, all obligations of Bancorp and the Bank
hereunder shall cease upon such termination except that from and after
Employee's death or date of termination as aforesaid Bancorp shall pay, or
cause the Bank to pay, on a monthly basis for a period of 6 months, an amount
equal to one-twelfth (1/12) of Employee's then-current aggregate Base Salary
from Bancorp and the Bank, such amount to be paid to Employee if he be then
living; if not, then to his surviving wife or his heirs or personal
representatives.
6. SUCCESSORS AND ASSIGNS.
The rights and obligations of Bancorp and the Bank under this
Agreement shall inure to the benefit of and be binding upon its successors and
assigns, but the rights of Employee hereunder are personal to him and may not
be assigned and shall not inure to the benefit of his heirs, personal
representatives or assigns, except as specifically provided for herein.
Bancorp will require any successor (whether direct or indirect, by
purchase, merger, consolidation or otherwise) to all or substantially all of
the business and/or assets of Bancorp or the Bank, expressly to assume and to
agree to perform this Agreement in the same manner and to the same extent that
Bancorp would have been required to perform if no such succession had taken
place.
7. CONFIDENTIALITY.
Employee agrees not to divulge to anyone, either during or after the
termination of his employment hereunder, any information acquired by him by
virtue of his employment with Bancorp or the Bank. Upon the termination of
his employment, Employee agrees to immediately deliver to Bancorp all books,
papers documents and other materials or property of any nature belonging to
Bancorp or the Bank, including but not limited to originals and all copies of
any graphic or recorded materials of any kind, whether handwritten,
typewritten, printed, electronically stored or recorded in any manner.
<PAGE>
8. ATTORNEYS' FEES.
Bancorp agrees to pay to Employee in full and as they are incurred
all legal fees and court costs incurred by Employee as a result of any
litigation arising from or in connection with this Agreement or the
enforcement of any rights or obligations created by this Agreement, whether
such litigation is initiated by Employee or Bancorp or the Bank and regardless
of the outcome of such litigation; provided, however that Bancorp will be
under no obligation to pay to Employee any costs, attorneys' fees or other
expenses incurred in connection with litigation initiated by Employee which is
subsequently determined by the Court in which such litigation is initiated, to
have been frivolous or filed in bad faith.
9. NOTICE.
Any notice required or permitted to be given under this Agreement
shall be in writing and shall be given or made by certified or registered
mail, postage pre-paid, or by hand delivery, via courier or otherwise, as
follows, or to such other person or address as shall be hereafter designated
by notice given in accordance with this section:
If to Bancorp or Mid-America Bancorp and
the Bank: Bank of Louisville and Trust Company
500 West Broadway
Louisville, Kentucky 40202
Attn: Chief Executive Officer
If to the Employee: Orson Oliver
12 Muirfield Place
Louisville, Kentucky 40222
Any notice or other communication hereunder shall be deemed to have been duly
given or made (i) if made by hand, when delivered or when attempted delivery
shall be rejected; or (ii) if made by letter, upon deposit thereof in the
mail, postage pre-paid, registered or certified, with return receipt
requested. Notwithstanding the foregoing, any notice or other communication
hereunder which is actually received by a party hereto shall be deemed to have
been duly given or made to such party.
10. ENTIRE AGREEMENT; MODIFICATION.
This Agreement contains the entire agreement of the parties. It may
not be changed, altered or modified in any manner except by subsequent written
agreement signed by Employee, Bancorp and the Bank.
11. SEVERABILITY.
The provisions of this Agreement shall be deemed entirely severable
and the illegality, invalidity or unenforceability of any provision shall not
affect the validity or enforceability of the other provisions hereof.
12. GOVERNING LAW
This Agreement shall be governed by and construed in accordance with
the laws of the Commonwealth of Kentucky.
<PAGE>
IN WITNESS WHEREOF, the parties have executed this Agreement the day and
year first above written.
MID-AMERICA BANCORP ("BANCORP")
By: /s/ Bertram W. Klein
Title: Chairman
BANK OF LOUISVILLE ("THE BANK")
By: /s/ Bertram W. Klein
Title: Chairman
ORSON OLIVER ("EMPLOYEE")
/s/ Orson Oliver
<PAGE>
Exhibit 10 (b)
AMENDED AND RESTATED AGREEMENT
THIS AMENDED AND RESTATED AGREEMENT (hereinafter the "First Amendment"),
is made and entered into as of the 5th day of April, 1993, by and between MID-
AMERICA BANCORP, and its wholly owned subsidiary, BANK OF LOUISVILLE AND TRUST
COMPANY, both Kentucky corporations with their principal places of business at
500 West Broadway, Louisville, Kentucky 40202 (hereinafter "Bancorp" and the
"Bank" respectively); and WALLACE A. FUDOLD, an individual resident of
Louisville, Kentucky (hereinafter "Employee").
RECITALS
Employee is currently employed as Executive Vice President of both
Bancorp and the Bank and has substantial responsibilities in such capacity,
including responsibilities in Bank operations. His unique talents and efforts
have contributed substantially to the success of the Bank and the
profitability of Bancorp. Bancorp and its Board of Directors (hereinafter the
"Board") recognize that the possibility exists of a Change in Control (as
hereinafter defined), and that the occurrence of a Change in Control could
result in an alteration of the terms and conditions of Employee's employment,
or otherwise create uncertainty and concern as to his employment status. The
Board has determined that it is in Bancorp's best interest to maintain
stability and continuity of management both at Bancorp and the Bank. In this
context, Bancorp particularly wishes to retain the services of Employee and to
ensure his continued dedication and efforts on behalf of Bancorp and the Bank
in the event of a Change in Control, and eliminate undue concern for his
personal employment and financial security. For this reason, Bancorp desires
to provide Employee with certain benefits and protections in his employment,
particularly in the event of a Change in Control.
Employee and the Bank entered into an agreement dated December 21, 1989
(the "Agreement"), to grant Employee the benefits and protection sought with
respect to his employment with the Bank. The parties hereto wish to amend the
Agreement as provided herein and restate it in its entirety.
NOW, THEREFORE, in consideration of the respective agreements of the
parties contained herein, the Agreement is hereby amended and effective as of
the date hereof and restated to provide as follows:
1. TERM OF AGREEMENT.
This Amended and Restated Agreement shall commence and be effective
as of April 5, 1993, and shall continue in effect through and including
December 31, 1994. Commencing on December 31, 1994, and on each December 31
thereafter (hereinafter the "Anniversary Date"), the term of this Agreement
shall be automatically extended for a period of one (1) year, and shall
continue in effect from year-to-year unless (i) not less than ninety (90) days
prior to an Anniversary Date, by written notice to Employee, Bancorp elects
not to extend, or (ii) otherwise terminated or extended as hereinafter
provided.
<PAGE>
2. EMPLOYMENT OF EMPLOYEE
A. Effective Date. Effective April 5, 1993, Bancorp hereby agrees
to continue to employ Employee, and Employee accepts such employment as
Executive Vice President, with such duties as are presently consistent with
such title and office, and such different or additional duties as may be
assigned to Employee from time to time by the Board including, without
limitation, acting as an officer of the Bank if elected by the Board of
Directors of the Bank; provided, however, that any additional duties assigned
to Employee shall be consistent with Employee's status, title, position and
responsibilities as in effect at the time of execution of this Agreement.
B. Employee's Obligations. Employee agrees to devote his full and
exclusive time, attention and energies to the business of Bancorp and as part
of such duties shall serve in such capacities for Bancorp and the Bank as may
be required of him during his employment pursuant to this Agreement. He shall
not engage in any other business activity, whether or not such business
activity is pursued for gain, profit or other pecuniary advantage, except that
Employee shall be entitled to engage in civic and eleemosynary activities or
in passive investment activities so long as such activities do not compete or
interfere with his employment hereunder.
C. Compensation. As compensation for his services hereunder,
Employee shall receive from Bancorp, the Bank or a combination thereof, an
aggregate annual salary of One Hundred Eighty-Three Thousand Dollars
($183,000), payable in twenty-six (26) pay periods (hereinafter, as adjusted
from time to time as herein provided, the "Base Salary"). Employee's Base
Salary shall be reviewed annually for increases consistent with Bancorp's and
the Bank's executive compensation policies and Employee's duties and
contributions to Bancorp and the Bank. Notwithstanding anything herein to the
contrary, to the extent to which he shall qualify, Employee shall be entitled
to participate in any employee benefit programs which may from time to time be
in effect for Bancorp or the Bank.
D. Cessation of Obligations. The obligations of Bancorp and
Employee hereunder shall continue throughout the initial or any subsequent
term of this Agreement, unless this Agreement is terminated as provided
herein.
3. CHANGE IN CONTROL.
A. Definition. As used in this Agreement, a Change in Control of
Bancorp shall be deemed to have occurred if, and only if (i) Bertram W. Klein
(hereinafter "Klein"), the current Chief Executive Officer of Bancorp and the
Bank, ceases for any reason to hold the office of Chief Executive Officer of
Bancorp; (ii) Klein and/or members of his immediate family (including only
Klein and his spouse, children, parents, or any trusts established for the
benefit of any of them) cease to hold ten percent (10%) or more of all
outstanding voting shares of Bancorp.
<PAGE>
B. Effect of a Change in Control. In the event of a Change in
Control, if Bancorp's legal existence is terminated (i.e. is dissolved), the
Bank hereby assumes and becomes severally obligated for the obligations of
this Agreement to Employee. If Bancorp's legal existence is continued through
merger or other combination with or consolidation into any new or existing
entity, the Bank hereby assumes and becomes jointly and severally liable with
such successor entity to Employee for all the obligations of Bancorp
hereunder. Upon a Change in Control, the term of this Agreement shall be
immediately and automatically extended for a period of five (5) years from the
effective date of such Change in Control (hereinafter the "Five Year Term").
At the end of the Five Year Term, and upon each subsequent anniversary date of
the Change in Control, this Agreement shall be automatically extended for an
additional one-year period as provided in Paragraph 1 above, unless (i)
Bancorp chooses not to extend or (ii) this Agreement is otherwise terminated
in accordance with the provisions contained herein.
During the Five Year Term, Employee shall be retained in Bank's employ
(and in Bancorp's employ unless Bancorp is dissolved after the Change in
Control), and be provided with compensation and benefits at least equal in the
aggregate to that received by Employee from Bancorp and the Bank immediately
prior to the effective date of the Change in Control, unless this Agreement is
otherwise terminated by Bancorp for Cause, or by reason of the Death or
Disability of Employee; provided, however, Employee shall continue to fulfill
his obligations pursuant to paragraph 2B of this Agreement.
For a period of two (2) years following the effective date of a Change in
Control, Employee may terminate this Agreement at any time by providing
written notice of such voluntary termination to Bancorp or to the Bank at
least ninety (90) days prior to the effective date of such voluntary
termination, and, in such event (i) all obligations of Bancorp and the Bank
under this Agreement shall immediately cease as of the effective date of such
voluntary termination; and (ii) Employee shall only be entitled to receive
payment of salary and benefits accrued as of the effective date of such
voluntary termination.
Should Employee continue in the employ of the Bank or Bancorp for a
period of at least two (2) years following the effective date of a Change in
Control, Employee may thereafter terminate this Agreement by providing written
notice of such voluntary termination to Bancorp or the Bank at least ninety
(90) days prior to the effective date of such voluntary termination and, in
such event, Bancorp shall pay to the Employee (i) upon the effective date of
termination or at the next regular pay period thereafter all salary and other
benefits accrued and unpaid as of the effective date of Employee's voluntary
termination; and (ii) thereafter, on a monthly basis, an amount equal to one-
twelfth (1/12) of Employee's then-current Base Salary from Bancorp and the
Bank, such payments to continue for the lesser of (a) three (3) years from the
effective date of Employee's voluntary termination; or (b) the greater of one
year or the remainder of the Five Year Term.
4. CHANGE IN CONTROL AND DIMINUTION IN DUTIES.
A. Definition. As used in this Agreement, a Diminution in Duties
shall mean any of the following events, occurring in conjunction with or
following a Change in Control:
<PAGE>
(i) a change in Employee's status, position or
responsibilities with Bancorp (unless Bancorp's separate
existence ceases as a result of the Change in Control) or
the Bank (including without being limited to a material
change in the number or positions of those employees or
officers to whom Employee reports and who report to
Employee) which, in Employee's reasonable judgement,
represents a significant and adverse change in Employee's
status, position or responsibilities as in effect
immediately prior to the effective date of a Change in
Control, or at any time thereafter;
(ii) the assignment to Employee of any duties or
responsibilities which, in Employee's reasonable
judgement, are inconsistent with Employee's status,
position or responsibilities as in effect immediately
prior to the effective date of the Change in Control or
at any time thereafter;
(iii) any removal of Employee from, or failure to
reappoint or reelect Employee to any of his positions
with the Bank, unless such positions have been abolished
as a result of a reorganization of the Bank (such as a
merger or consolidation) resulting from the Change in
Control, except in connection with the termination of
this Agreement (a) by Bancorp or the Bank for Cause, (b)
as a result of Employee's Death or Disability, or (c) by
Employee, other than as a result of a Diminution in
Duties as described hereunder. If Employee's position
with the Bank has been abolished as herein provided, the
appointment of Employee to such positions as have
responsibilities, duties, and status within the successor
organization equal to or greater than (in Employee's
reasonable judgment) those of the office or position
abolished will be deemed to be reelection or
reappointment as required herein.
(iv) a reduction in Employee's aggregate Base
Salary or any failure to pay Employee within thirty (30)
days of the date due any compensation or benefits to
which he is entitled;
(v) the failure by Bancorp or the Bank to (a)
continue in effect (without reduction in benefit levels
or reward opportunities) any material compensation or
benefit plan in which Employee was participating through
Bancorp or the Bank immediately prior to the effective
date of a Change in Control, unless a substitute or
replacement has been implemented which provides
substantially identical or greater compensation or
benefits to Employee, in Employee's reasonable judgment;
or (b) provide Employee with compensation and benefits
equal or superior in value to that received in the
aggregate from Bancorp and the Bank under each other
compensation or employee benefit plan, program and
practices in effect immediately prior to a Change in
Control or at any time thereafter.
<PAGE>
B. Effect of a Diminution in Duties. Should the Employee suffer a
Diminution in Duties in conjunction with or following a Change in Control
Employee may at any time thereafter, upon written notice to Bancorp or the
Bank at least ninety (90) days prior to the effective date, voluntarily
terminate this Agreement and his employment with Bancorp and the Bank. Upon
receipt of such notice of voluntary termination, Bancorp may, in its sole
discretion, waive the ninety (90) day notice requirement for Employee's
voluntary termination and consider such voluntary termination effective
immediately upon Bancorp or the Bank's receipt of Employee's written notice.
Under either of such circumstances, Bancorp shall pay to the Employee (i) upon
the effective date of termination, or at the next regular pay period
thereafter, the aggregate salary and other benefits accrued from Bancorp and
the Bank through the effective date of Employee's voluntary termination; and
(ii) thereafter on a monthly basis, an amount equal to one twelfth (1/12) of
Employee's then-current aggregate Base Salary from Bancorp and the Bank, such
payments to continue for the lesser of (a) three (3) years from the effective
date of Employee's voluntary termination or (b) the greater of one year or the
remainder of the Five Year Term.
5. TERMINATION OF AGREEMENT.
A. By Employee. Employee may terminate this Agreement and his
employment with Bancorp and the Bank at any time, by providing written notice
of his voluntary termination to Bancorp at least ninety (90) days prior to the
effective date of such voluntary termination. In such an event, other than in
connection with a Change in Control or Diminution in Duties (i) all
obligations of Bancorp and the Bank under this Agreement shall immediately
cease, as of the effective date of the voluntary termination and (ii) Employee
shall be entitled to receive only payment of the aggregate salary and benefits
accrued from Bancorp and the Bank through the effective date of such voluntary
termination.
B. By Bancorp or the Bank. Bancorp may terminate this Agreement
and, at its option, Employee's employment (i) immediately and at any time for
Cause, as that term is hereinafter defined, in which event all obligations of
Bancorp and the Bank under this Agreement shall cease immediately as of the
effective date of the termination, and Employee shall be entitled to receive
payment of only the aggregate salary and benefits accrued from Bancorp and the
Bank through the effective date of the termination; or (ii) at any time prior
to a Change in Control, without cause and upon written notice to Employee,
which notice shall at Bancorp's option be effective immediately or at some
future date not to exceed ninety (90) days following date of the notice of
termination, in which event Bancorp shall itself, or cause the Bank to, pay to
Employee all salary and benefits accrued from Bancorp or the Bank through the
effective date of the termination. In addition, Employee shall also be
entitled to receive a lump-sum payment in an amount equal to Employee's then-
current aggregate Base Salary from Bancorp and the Bank (exclusive of any
stock options, profit sharing, bonuses or other benefits). An election by
Bancorp not to renew or extend Employee's employment as provided in Section 1
hereof, other than for Cause, shall be deemed a termination of this Agreement
by Bancorp without Cause and shall give rise to rights to Employee under this
Subparagraph 5B.
<PAGE>
As used in this Agreement, "Cause" for termination shall be limited to
the following: (i) Employee's conviction of a felony; (ii) the issuance by
any state or federal bank regulatory agency of a request or demand for removal
of Employee from employment with Bancorp or the Bank or from any office which
Employee then holds with Bancorp or the Bank; (iii) Employee's material breach
of Paragraph 2B of this Agreement; (iv) Employee's gross negligence in the
performance of his duties hereunder; or (v) failure of Employee to
substantially perform his duties hereunder (other than failure resulting from
Employee's disability) after demand for substantial performance is delivered
to Employee by Bancorp or the Bank, identifying specifically the manner in
which Employee has not substantially performed his duties, and a 7 day period
to cure has elapsed without substantial improvement in performance to the
reasonable standards set by Bancorp or the Bank, respectively.
C. By Death or Disability. Notwithstanding anything herein to the
contrary, this Agreement shall terminate if (i) Employee dies during the term
of this Agreement or (ii) Bancorp terminates this Agreement after Employee
shall be absent from his employment with Bancorp or the Bank for a continuous
period of more than six (6) months by reason of incapacity or illness which
Employee's physician determines has resulted in Employee's permanent
disability. In either of such events, all obligations of Bancorp and the Bank
hereunder shall cease upon such termination except that from and after
Employee's death or date of termination as aforesaid Bancorp shall pay, or
cause the Bank to pay, on a monthly basis for a period of 6 months, an amount
equal to one-twelfth (1/12) of Employee's then-current aggregate Base Salary
from Bancorp and the Bank, such amount to be paid to Employee if he be then
living; if not, then to his surviving wife or his heirs or personal
representatives.
6. SUCCESSORS AND ASSIGNS.
The rights and obligations of Bancorp and the Bank under this
Agreement shall inure to the benefit of and be binding upon their respective
successors and assigns, but the rights of Employee hereunder are personal to
him and may not be assigned and shall not inure to the benefit of his heirs,
personal representatives or assigns, except as specifically provided for
herein.
Bancorp will require any successor (whether direct or indirect, by
purchase, merger, consolidation or otherwise) to all or substantially all of
the business and/or assets of Bancorp or the Bank, expressly to assume and to
agree to perform this Agreement in the same manner and to the same extent that
Bancorp would have been required to perform if no such succession had taken
place.
7. CONFIDENTIALITY.
Employee agrees not to divulge to anyone, either during or after the
termination of his employment hereunder, any information acquired by him by
virtue of his employment with Bancorp or the Bank. Upon the termination of
his employment, Employee agrees to immediately deliver to Bancorp all books,
papers documents and other materials or property of any nature belonging to
Bancorp or the Bank, including but not limited to originals and all copies of
any graphic or recorded materials of any kind, whether handwritten,
typewritten, printed, electronically stored or recorded in any manner.
<PAGE>
8. ATTORNEYS' FEES.
Bancorp agrees to pay to Employee in full and as they are incurred
all legal fees and court costs incurred by Employee as a result of any
litigation arising from or in connection with this Agreement or the
enforcement of any rights or obligations created by this Agreement, whether
such litigation is initiated by Employee or Bancorp or the Bank and regardless
of the outcome of such litigation; provided, however that Bancorp will be
under no obligation to pay to Employee any costs, attorneys' fees or other
expenses incurred in connection with litigation initiated by Employee which is
subsequently determined by the Court in which such litigation is initiated, to
have been frivolous or filed in bad faith.
9. NOTICE.
Any notice required or permitted to be given under this Agreement
shall be in writing and shall be given or made by certified or registered
mail, postage pre-paid, or by hand delivery, via courier or otherwise, as
follows, or to such other person or address as shall be hereafter designated
by notice given in accordance with this section:
If to Bancorp or Mid-America Bancorp and
the Bank: Bank of Louisville and Trust Company
500 West Broadway
Louisville, Kentucky 40202
Attn: Chief Executive Officer
If to the Employee: Wallace A. Fudold
c/o Bank of Louisville and Trust Co.
500 West Broadway
Louisville, Kentucky 40202
Any notice or other communication hereunder shall be deemed to have been duly
given or made (i) if made by hand, when delivered or when attempted delivery
shall be rejected; or (ii) if made by letter, upon deposit thereof in the
mail, postage pre-paid, registered or certified, with return receipt
requested. Notwithstanding the foregoing, any notice or other communication
hereunder which is actually received by a party hereto shall be deemed to have
been duly given or made to such party.
10. ENTIRE AGREEMENT; MODIFICATION.
This Agreement contains the entire agreement of the parties. It may
not be changed, altered or modified in any manner except by subsequent written
agreement signed by Employee, Bancorp and the Bank.
11. SEVERABILITY.
The provisions of this Agreement shall be deemed entirely severable
and the illegality, invalidity or unenforceability of any provision shall not
affect the validity or enforceability of the other provisions hereof.
12. GOVERNING LAW
This Agreement shall be governed by and construed in accordance with
the laws of the Commonwealth of Kentucky.
<PAGE>
IN WITNESS WHEREOF, the parties have executed this Agreement the day and
year first above written.
MID-AMERICA BANCORP ("BANCORP")
By: /s/ Bertram W. Klein
Title: Chairman
BANK OF LOUISVILLE ("THE BANK")
By: /s/ Orson Oliver
Title: President
WALLACE A. FUDOLD ("EMPLOYEE")
/s/ Wallace A. Fudold
<PAGE>
Exhibit 10 (c)
AGREEMENT
THIS AGREEMENT (hereinafter the "Agreement"), is made and entered into as
of the 5th day of April, 1993, by and between MID-AMERICA BANCORP, and its
wholly owned subsidiary, BANK OF LOUISVILLE AND TRUST COMPANY, both Kentucky
corporations with their principal places of business at 500 West Broadway,
Louisville, Kentucky 40202 (hereinafter "Bancorp" and the "Bank"
respectively); and DAVID N. KLEIN, a resident of Louisville, Kentucky
(hereinafter "Employee").
RECITALS
As of the date hereof, Employee is employed by Bancorp as Executive Vice
President and by Bank as Executive Vice President, with substantial
responsibilities in retail banking. Bancorp and its Board of Directors
(hereinafter the "Board") recognize that the possibility exists of a Change in
Control (as hereinafter defined), and that the occurrence of a Change in
Control could result in an alteration of the terms and conditions of
Employee's employment, or otherwise create uncertainty and concern as to his
employment status. The Board has determined that it is in Bancorp's best
interest to maintain stability and continuity of management both at Bancorp
and the Bank. In this context, Bancorp particularly wishes to retain the
services of Employee and to ensure his continued dedication and efforts on
behalf of Bancorp and the Bank in the event of a Change in Control, and
eliminate undue concern for his personal employment and financial security.
Bancorp desires to provide Employee with certain benefits and protections in
his employment, particularly in the event of a Change in Control.
NOW, THEREFORE, in consideration of the respective agreements of the
parties contained herein, it is agreed as follows:
1. TERM OF AGREEMENT.
This Agreement shall commence and be effective as of April 5, 1993,
and shall continue in effect through and including December 31, 1994.
Commencing on December 31, 1994, and on each December 31 thereafter
(hereinafter the "Anniversary Date"), the term of this Agreement shall be
automatically extended for a period of one (1) year, and shall continue in
effect from year-to-year unless (i) not less than ninety (90) days prior to an
Anniversary Date, by written notice to Employee, Bancorp elects not to extend,
or (ii) until otherwise terminated or extneded as hereinafter provided.
2. EMPLOYMENT OF EMPLOYEE
A. Effective Date. Effective April 5, 1993, Bancorp hereby agrees
to employ Employee, and Employee accepts employment as Executive Vice-
President of Bancorp, with such duties as are presently consistent with such
title and office, and such different or additional duties as may be assigned
to Employee from time to time by the Board including, without limitation,
acting as an officer of the Bank if elected by the Board of Directors of the
Bank; provided, however, that any additional duties assigned to Employee shall
be consistent with Employee's status, title, position and responsibilities as
in effect at the time of execution of this Agreement.
<PAGE>
B. Employee's Obligations. Employee agrees to devote his full and
exclusive time, attention and energies to the business of Bancorp and as part
of such duties shall serve in such capacities for Bancorp and the Bank as may
be required of him during his employment pursuant to this Agreement. He shall
not engage in any other business activity, whether or not such business
activity is pursued for gain, profit or other pecuniary advantage, except that
Employee shall be entitled to engage in civic and eleemosynary activities or
in passive investment activities so long as such activities do not compete or
interfere with his employment hereunder.
C. Compensation. As compensation for his services hereunder,
Employee shall receive from Bancorp, the Bank or a combination thereof, an
aggregate annual salary of Ninety Five Thousand Dollars ($95,000), payable in
twenty-six (26) pay periods (hereinafter, as adjusted from time to time as
herein provided, the "Base Salary"). Employee's Base Salary shall be reviewed
annually for increases consistent with Bancorp's and the Bank's executive
compensation policies and Employee's duties and contributions to Bancorp and
the Bank. Notwithstanding anything herein to the contrary, to the extent to
which he shall qualify, Employee shall be entitled to participate in any
employee benefit programs which may from time to time be in effect for Bancorp
or the Bank.
D. Cessation of Obligations. The obligations of Bancorp and
Employee hereunder shall continue throughout the initial or any subsequent
term of this Agreement, unless this Agreement is terminated as provided
herein.
3. CHANGE IN CONTROL.
A. Definition. As used in this Agreement, a Change in Control of
Bancorp shall be deemed to have occurred if, and only if (i) Bertram W. Klein
(hereinafter "Klein"), the current Chief Executive Officer of Bancorp and the
Bank, ceases for any reason to hold the office of Chief Executive Officer of
Bancorp; or (ii) Klein and/or members of his immediate family (including only
Klein and his spouse, children, parents, or any trusts established for the
benefit of any of them) cease to hold ten percent (10%) or more of all
outstanding voting shares of Bancorp.
B. Effect of a Change in Control. In the event of a Change in
Control, if Bancorp's legal existence is terminated (i.e. is dissolved), the
Bank hereby assumes and becomes severally obligated for the obligations of
this Agreement to Employee. If Bancorp's legal existence is continued through
merger or other combination with or consolidation into any new or existing
entity, the Bank hereby assumes and becomes jointly and severally liable, with
such new entity, to Employee for all the obligations of Bancorp hereunder.
Upon a Change in Control, the term of this Agreement shall be immediately and
automatically extended for a period of five (5) years from the effective date
of such Change in Control (hereinafter the "Five Year Term"). At the end of
the Five Year Term, and upon each subsequent anniversary date of the Change in
Control, this Agreement shall be automatically extended for an additional one-
year period as provided in Paragraph 1 above, unless (i) Bancorp chooses not
to extend or (ii) this Agreement is otherwise terminated in accordance with
the provisions contained herein.
<PAGE>
During the Five Year Term, Employee shall be retained in Bank's employ
(and in Bancorp's employ unless Bancorp is dissolved after the Change in
Control), and be provided with compensation and benefits at least equal in the
aggregate to that received by Employee from Bancorp and the Bank immediately
prior to the effective date of the Change in Control, unless this Agreement is
otherwise terminated by Bancorp for Cause, or by reason of the Death or
Disability of Employee; provided, however, Employee shall continue to fulfill
his obligations pursuant to paragraph 2B of this Agreement.
For a period of two (2) years following the effective date of a Change in
Control, Employee may terminate this Agreement at any time by providing
written notice of such voluntary termination to Bancorp or to the Bank at
least ninety (90) days prior to the effective date of such voluntary
termination, and, in such event (i) all obligations of Bancorp and the Bank
under this Agreement shall immediately cease as of the effective date of such
voluntary termination; and (ii) Employee shall only be entitled to receive
payment of salary and benefits accrued as of the effective date of such
voluntary termination.
Should Employee continue in the employ of the Bank or Bancorp for a
period of at least two (2) years following the effective date of a Change in
Control, Employee may thereafter terminate this Agreement by providing written
notice of such voluntary termination to Bancorp or the Bank at least ninety
(90) days prior to the effective date of such voluntary termination and, in
such event, Bancorp shall pay to the Employee (i) upon the effective date of
termination or at the next regular pay period thereafter all salary and other
benefits accrued and unpaid as of the effective date of Employee's voluntary
termination; and (ii) thereafter, on a monthly basis, an amount equal to one-
twelfth (1/12) of Employee's then-current Base Salary from Bancorp and the
Bank, such payments to continue for the lesser of (a) three (3) years from the
effective date of Employee's voluntary termination; or (b) the greater of one
year or the remainder of the Five Year Term.
4. CHANGE IN CONTROL AND DIMINUTION IN DUTIES.
A. Definition. As used in this Agreement, a Diminution in Duties
shall mean any of the following events, occurring in conjunction with or
following a Change in Control:
(i) a change in Employee's status, position or
responsibilities with Bancorp (unless Bancorp's separate
existence ceases as a result of the Change in Control) or
the Bank (including a material change in the number or
positions of those employees or officers to whom Employee
reports and who report to Employee) which, in Employee's
reasonable judgement, represents a significant and
adverse change in Employee's status, position or
responsibilities as in effect immediately prior to the
effective date of a Change in Control, or at any time
thereafter;
(ii) the assignment to Employee of any duties or
responsibilities which, in Employee's reasonable
judgement, are inconsistent with Employee's status,
position or responsibilities as in effect immediately
prior to the effective date of the Change in Control or
at any time thereafter;
<PAGE>
(iii) any removal of Employee from, or failure to
reappoint or reelect Employee to any of his positions
with the Bank, unless such positions have been abolished
as a result of a reorganization of the Bank, such as a
merger or consolidation resulting from the Change in
Control except in connection with the termination of this
Agreement (a) by Bancorp or the Bank for Cause; (b) as a
result of Employee's Death or Disability; or (c) by
Employee, other than as a result of a Diminution in
Duties as described hereunder. If Employee's position
with the Bank has been abolished as herein provided, the
appointment of Employee to such positions as have
responsibilities, duties, and status within the Bank or
successor organization similar to those of the office or
position abolished will be deemed to be the reelection or
reappointment as required herein.
(iv) a reduction in Employee's aggregate Base
Salary or any failure to pay Employee within thirty (30)
days of the date due any compensation or benefits to
which he is entitled;
(v) the failure by Bancorp or the Bank to (a)
continue in effect (without reduction in benefit levels
and/or reward opportunities) any material compensation or
benefit plan in which Employee was participating from
Bancorp or the Bank immediately prior to the effective
date of a Change in Control, unless a substitute or
replacement has been implemented which provides
substantially identical compensation or benefits to
Employee or provides compensation equal or superior in
value to such benefits plan; or (b) provide Employee with
compensation and benefits equal or superior in value to
that received from Bancorp and the Bank, in the
aggregate, under each other compensation or employee
benefit plan, program and practices in effect immediately
prior to a Change in Control or at any time thereafter.
B. Effect of a Diminution in Duties. Should the Employee suffer a
Diminution in Duties in conjunction with or following a Change in Control
Employee may at any time thereafter, upon written notice to Bancorp or the
Bank at least ninety (90) days prior to the effective date, voluntarily
terminate this Agreement and his employment with Bancorp and the Bank. Upon
receipt of such notice of voluntary termination, Bancorp may, in its sole
discretion, waive the ninety (90) day notice requirement for Employee's
voluntary termination and consider such voluntary termination effective
immediately upon Bancorp or the Bank's receipt of Employee's written notice.
Under either of such circumstances, Bancorp shall pay to the Employee (i) upon
the effective date of termination, or at the next regular pay period
thereafter, the aggregate salary and other benefits accrued from Bancorp and
the Bank through the effective date of Employee's voluntary termination; and
(ii) thereafter on a monthly basis, an amount equal to one twelfth (1/12) of
Employee's then-current aggregate Base Salary from Bancorp and the Bank, such
payments to continue for the lesser of (a) three (3) years from the effective
date of Employee's voluntary termination or (b) the greater of one year or the
remainder of the Five Year Term.
<PAGE>
5. TERMINATION OF AGREEMENT.
A. By Employee. Employee may terminate this Agreement and his
employment with Bancorp and the Bank at any time, by providing written notice
of his voluntary termination to Bancorp at least ninety (90) days prior to the
effective date of such voluntary termination. In such an event, other than in
connection with a Change in Control or Diminution in Duties (i) all
obligations of Bancorp and the Bank under this Agreement shall immediately
cease, as of the effective date of the voluntary termination and (ii) Employee
shall be entitled to receive only payment of the aggregate salary and benefits
accrued from Bancorp and the Bank through the effective date of such voluntary
termination.
B. By Bancorp or the Bank. Bancorp may terminate this Agreement
and, at its option, Employee's employment (i) immediately and at any time for
Cause, as that term is hereinafter defined, in which event all obligations of
Bancorp and the Bank under this Agreement shall cease immediately, as of the
effective date of the termination, and Employee shall be entitled to receive
payment of only the aggregate salary and benefits accrued from Bancorp and the
Bank through the effective date of the termination; or (ii) at any time prior
to a Change in Control, without cause and upon written notice to Employee,
which notice shall at Bancorp's option be effective immediately or at some
future date not to exceed ninety (90) days following date of the notice of
termination, in which event Bancorp shall itself, or cause the Bank to, pay to
Employee all salaries and benefits accrued from Bancorp or the Bank through
the effective date of the termination. In addition, Employee shall also be
entitled to receive a lump-sum payment in an amount equal to Employee's then-
current aggregate Base Salary from Bancorp and the Bank (exclusive of any
stock options, profit sharing, bonuses or other benefits). An election by
Bancorp not to renew or extend Employee's employment as provided in Section 1
hereof, other than for Cause, shall be deemed a termination of this Agreement
by Bancorp without Cause and shall give rise to rights to Employee under this
Subparagraph 5B.
As used in this Agreement, "Cause" for termination shall be limited to
the following: (i) Employee's conviction of a felony; (ii) the issuance by
any state or federal bank regulatory agency of a request or demand for removal
of Employee from employment with Bancorp or the Bank or from any office which
Employee then holds with Bancorp or the Bank; (iii) Employee's material breach
of Paragraph 2B of this Agreement; (iv) Employee's gross negligence in the
performance of his duties hereunder; or (v) failure of Employee to
substantially perform his duties hereunder (other than failure resulting from
Employee's disability) after demand for substantial performance is delivered
to Employee by Bancorp or the Bank, identifying specifically the manner in
which Employee has not substantially performed his duties, and a 7 day period
to cure has elapsed without substantial improvement in performance to the
reasonable standards set by Bancorp or the Bank, respectively.
<PAGE>
C. By Death or Disability. Notwithstanding anything herein to the
contrary, this Agreement shall terminate if (i) Employee dies during the term
of this Agreement or (ii) Bancorp terminates this Agreement after Employee
shall be absent from his employment with Bancorp or the Bank for a continuous
period of more than six (6) months by reason of incapacity or illness which
Employee's physician determines has resulted in Employee's permanent
disability. In either of such events, all obligations of Bancorp and the Bank
hereunder shall cease upon such termination except that from and after
Employee's death or date of termination as aforesaid Bancorp shall pay, or
cause the Bank to pay, on a monthly basis for a period of 6 months, an amount
equal to one-twelfth (1/12) of Employee's then-current aggregate Base Salary
from Bancorp and the Bank, such amount to be paid to Employee if he be then
living; if not, then to his surviving wife or his heirs or personal
representatives.
6. SUCCESSORS AND ASSIGNS.
The rights and obligations of Bancorp and the Bank under this
Agreement shall inure to the benefit of and be binding upon their respective
successors and assigns, but the rights of Employee hereunder are personal to
him and may not be assigned and shall not inure to the benefit of his heirs,
personal representatives or assigns, except as specifically provided for
herein.
Bancorp will require any successor (whether direct or indirect, by
purchase, merger, consolidation or otherwise) to all or substantially all of
the business and/or assets of Bancorp or the Bank, expressly to assume and to
agree to perform this Agreement in the same manner and to the same extent that
Bancorp would have been required to perform if no such succession had taken
place.
7. CONFIDENTIALITY.
Employee agrees not to divulge to anyone, either during or after the
termination of his employment hereunder, any information acquired by him by
virtue of his employment with Bancorp or the Bank. Upon the termination of
his employment, Employee agrees to immediately deliver to Bancorp all books,
papers documents and other materials or property of any nature belonging to
Bancorp or the Bank, including but not limited to originals and all copies of
any graphic or recorded materials of any kind, whether handwritten,
typewritten, printed, electronically stored or recorded in any manner.
8. ATTORNEYS' FEES.
Bancorp agrees to pay to Employee in full and as they are incurred
all legal fees and court costs incurred by Employee as a result of any
litigation arising from or in connection with this Agreement or the
enforcement of any rights or obligations created by this Agreement, whether
such litigation is initiated by Employee or Bancorp or the Bank and regardless
of the outcome of such litigation; provided, however that Bancorp will be
under no obligation to pay to Employee any costs, attorneys' fees or other
expenses incurred in connection with litigation initiated by Employee which is
subsequently determined by the Court in which such litigation is initiated, to
have been frivolous or filed in bad faith.
<PAGE>
9. NOTICE.
Any notice required or permitted to be given under this Agreement
shall be in writing and shall be given or made by certified or registered
mail, postage pre-paid, or by hand delivery, via courier or otherwise, as
follows, or to such other person or address as shall be hereafter designated
by notice given in accordance with this section:
If to Bancorp or Mid-America Bancorp and
the Bank: Bank of Louisville and Trust Company
500 West Broadway
Louisville, Kentucky 40202
Attn: Chief Executive Officer
If to the Employee: David N. Klein
c/o Bank of Louisville and Trust Co.
500 West Broadway
Louisville, Kentucky 40202
Any notice or other communication hereunder shall be deemed to have been duly
given or made (i) if made by hand, when delivered or when attempted delivery
shall be rejected; or (ii) if made by letter, upon deposit thereof in the
mail, postage pre-paid, registered or certified, with return receipt
requested. Notwithstanding the foregoing, any notice or other communication
hereunder which is actually received by a party hereto shall be deemed to have
been duly given or made to such party.
10. ENTIRE AGREEMENT; MODIFICATION.
This Agreement contains the entire agreement of the parties. It may
not be changed, altered or modified in any manner except by subsequent written
agreement, signed by Employee, Bancorp and the Bank.
11. SEVERABILITY.
The provisions of this Agreement shall be deemed entirely severable,
and the illegality, invalidity or unenforceability of any provision shall not
affect the validity or enforceability of the other provisions hereof.
12. GOVERNING LAW
This Agreement shall be governed by and construed in accordance with
the laws of the Commonwealth of Kentucky.
<PAGE>
IN WITNESS WHEREOF, the parties have executed this Agreement the day and
year first above written.
MID-AMERICA BANCORP ("BANCORP")
By: /s/ Orson Oliver
Title: President
BANK OF LOUISVILLE ("THE BANK")
By: /s/ Orson Oliver
Title: President
DAVID N. KLEIN ("EMPLOYEE")
/s/ David N. Klein
<PAGE>
Exhibit 10 (d)
AGREEMENT
THIS AGREEMENT (hereinafter the "Agreement"), is made and entered into as
of the 5th day of April, 1993, by and between MID-AMERICA BANCORP, and its
wholly owned subsidiary, BANK OF LOUISVILLE AND TRUST COMPANY, both Kentucky
corporations with their principal places of business at 500 West Broadway,
Louisville, Kentucky 40202 (hereinafter "Bancorp" and the "Bank"
respectively); and RICHARD B. KLEIN, a resident of Louisville, Kentucky
(hereinafter "Employee").
RECITALS
As of the date hereof, Employee is employed by Bancorp as Executive Vice
President and by Bank as Executive Vice President, with responsibilities in
retail lending and lending operations. Bancorp and its Board of Directors
(hereinafter the "Board") recognize that the possibility exists of a Change in
Control (as hereinafter defined), and that the occurrence of a Change in
Control could result in an alteration of the terms and conditions of
Employee's employment, or otherwise create uncertainty and concern as to his
employment status. The Board has determined that it is in Bancorp's best
interest to maintain stability and continuity of management both at Bancorp
and the Bank. In this context, Bancorp particularly wishes to retain the
services of Employee and to ensure his continued dedication and efforts on
behalf of Bancorp and the Bank in the event of a Change in Control, and
eliminate undue concern for his personal employment and financial security.
Bancorp desires to provide Employee with certain benefits and protections in
his employment, particularly in the event of a Change in Control.
NOW, THEREFORE, in consideration of the respective agreements of the
parties contained herein, it is agreed as follows:
1. TERM OF AGREEMENT.
This Agreement shall commence and be effective as of April 5, 1993,
and shall continue in effect through and including December 31, 1994.
Commencing on December 31, 1994, and on each December 31 thereafter
(hereinafter the "Anniversary Date"), the term of this Agreement shall be
automatically extended for a period of one (1) year, and shall continue in
effect from year-to-year unless (i) not less than ninety (90) days prior to an
Anniversary Date, by written notice to Employee, Bancorp elects not to extend,
or (ii) until otherwise terminated or extended as hereinafter provided.
2. EMPLOYMENT OF EMPLOYEE
A. Effective Date. Effective April 5, 1993, Bancorp hereby agrees
to employ Employee, and Employee accepts employment as Executive Vice-
President of Bancorp, with such duties as are presently consistent with such
title and office, and such different or additional duties as may be assigned
to Employee from time to time by the Board including, without limitation,
acting as an officer of the Bank if elected by the Board of Directors of the
Bank; provided, however, that any additional duties assigned to Employee shall
be consistent with Employee's status, title, position and responsibilities as
in effect at the time of execution of this Agreement.
<PAGE>
B. Employee's Obligations. Employee agrees to devote his full and
exclusive time, attention and energies to the business of Bancorp and as part
of such duties shall serve in such capacities for Bancorp and the Bank as may
be required of him during his employment pursuant to this Agreement. He shall
not engage in any other business activity, whether or not such business
activity is pursued for gain, profit or other pecuniary advantage, except that
Employee shall be entitled to engage in civic and eleemosynary activities or
in passive investment activities so long as such activities do not compete or
interfere with his employment hereunder.
C. Compensation. As compensation for his services hereunder,
Employee shall receive from Bancorp, the Bank or a combination thereof, an
aggregate annual salary of Ninety Thousand Dollars ($90,000.00), payable in
twenty-six (26) pay periods (hereinafter, as adjusted from time to time as
herein provided, the "Base Salary"). Employee's Base Salary shall be reviewed
annually for increases consistent with Bancorp's and the Bank's executive
compensation policies and Employee's duties and contributions to Bancorp and
the Bank. Notwithstanding anything herein to the contrary, to the extent to
which he shall qualify, Employee shall be entitled to participate in any
employee benefit programs which may from time to time be in effect for Bancorp
or the Bank.
D. Cessation of Obligations. The obligations of Bancorp and
Employee hereunder shall continue throughout the initial or any subsequent
term of this Agreement, unless this Agreement is terminated as provided
herein.
3. CHANGE IN CONTROL.
A. Definition. As used in this Agreement, a Change in Control of
Bancorp shall be deemed to have occurred if, and only if (i) Bertram W. Klein
(hereinafter "Klein"), the current Chief Executive Officer of Bancorp and the
Bank, ceases for any reason to hold the office of Chief Executive Officer of
Bancorp; or (ii) Klein and/or members of his immediate family (including only
Klein and his spouse, children, parents, or any trusts established for the
benefit of any of them) cease to hold ten percent (10%) or more of all
outstanding voting shares of Bancorp.
B. Effect of a Change in Control. In the event of a Change in
Control, if Bancorp's legal existence is terminated (i.e. is dissolved), the
Bank hereby assumes and becomes severally obligated for the obligations of
this Agreement to Employee. If Bancorp's legal existence is continued through
merger or other combination with or consolidation into any new or existing
entity, the Bank hereby assumes and becomes jointly and severally liable, with
such new entity, to Employee for all the obligations of Bancorp hereunder.
Upon a Change of Control, the term of this Agreement shall be immediately and
automatically extended for a period of five (5) years from the effective date
of such Change in Control (hereinafter the "Five Year Term"). At the end of
the Five Year Term, and upon each subsequent anniversary date of the Change in
Control, this Agreement shall be automatically extended for an additional one-
year period as provided in Paragraph 1 above, unless (i) Bancorp chooses not
to extend or (ii) this Agreement is otherwise terminated in accordance with
the provisions contained herein.
<PAGE>
During the Five Year Term, Employee shall be retained in Bank's employ
(and in Bancorp's employ unless Bancorp is dissolved after the Change in
Control), and be provided with compensation and benefits at least equal in the
aggregate to that received by Employee from Bancorp and the Bank immediately
prior to the effective date of the Change in Control, unless this Agreement is
otherwise terminated by Bancorp for Cause, or by reason of the Death or
Disability of Employee; provided, however, Employee shall continue to fulfill
his obligations pursuant to paragraph 2B of this Agreement.
For a period of two (2) years following the effective date of a Change in
Control, Employee may terminate this Agreement at any time by providing
written notice of such voluntary termination to Bancorp or to the Bank at
least ninety (90) days prior to the effective date of such voluntary
termination, and, in such event (i) all obligations of Bancorp and the Bank
under this Agreement shall immediately cease as of the effective date of such
voluntary termination; and (ii) Employee shall only be entitled to receive
payment of salary and benefits accrued as of the effective date of such
voluntary termination.
Should Employee continue in the employ of the Bank or Bancorp for a
period of at least two (2) years following the effective date of a Change in
Control, Employee may thereafter terminate this Agreement by providing written
notice of such voluntary termination to Bancorp or the Bank at least ninety
(90) days prior to the effective date of such voluntary termination and, in
such event, Bancorp shall pay to the Employee (i) upon the effective date of
termination or at the next regular pay period thereafter all salary and other
benefits accrued and unpaid as of the effective date of Employee's voluntary
termination; and (ii) thereafter, on a monthly basis, an amount equal to one-
twelfth (1/12) of Employee's then-current Base Salary from Bancorp and the
Bank, such payments to continue for the lesser of (a) three (3) years from the
effective date of Employee's voluntary termination; or (b) the greater of one
year or the remainder of the Five Year Term.
4. CHANGE IN CONTROL AND DIMINUTION IN DUTIES.
A. Definition. As used in this Agreement, a Diminution in Duties
shall mean any of the following events, occurring in conjunction with or
following a Change in Control:
(i) a change in Employee's status, position or
responsibilities with Bancorp (unless Bancorp's separate
existence ceases as a result of the Change in Control) or
the Bank (including a material change in the number or
positions of those employees or officers to whom Employee
reports and who report to Employee) which, in Employee's
reasonable judgement, represents a significant and
adverse change in Employee's status, position or
responsibilities as in effect immediately prior to the
effective date of a Change in Control, or at any time
thereafter;
(ii) the assignment to Employee of any duties or
responsibilities which, in Employee's reasonable
judgement, are inconsistent with Employee's status,
position or responsibilities as in effect immediately
prior to the effective date of the Change in Control or
at any time thereafter;
<PAGE>
(iii) any removal of Employee from, or failure to
reappoint or reelect Employee to any of his positions
with the Bank, unless such positions have been abolished
as a result of a reorganization of the Bank, such as a
merger or consolidation resulting from the Change in
Control except in connection with the termination of this
Agreement (a) by Bancorp or the Bank for Cause; (b) as a
result of Employee's Death or Disability; or (c) by
Employee, other than as a result of a Diminution in
Duties as described hereunder. If Employee's position
with the Bank has been abolished as herein provided, the
appointment of Employee to such positions as have
responsibilities, duties, and status within the Bank or
successor organization similar to those of the office or
position abolished will be deemed to be the reelection or
reappointment as required herein.
(iv) a reduction in Employee's aggregate Base
Salary or any failure to pay Employee within thirty (30)
days of the date due any compensation or benefits to
which he is entitled;
(v) the failure by Bancorp or the Bank to (a)
continue in effect (without reduction in benefit levels
and/or reward opportunities) any material compensation or
benefit plan in which Employee was participating from
Bancorp or the Bank immediately prior to the effective
date of a Change in Control, unless a substitute or
replacement has been implemented which provides
substantially identical compensation or benefits to
Employee or provides compensation equal or superior in
value to such benefits plan; or (b) provide Employee with
compensation and benefits equal or superior in value to
that received from Bancorp and the Bank, in the
aggregate, under each other compensation or employee
benefit plan, program and practices in effect immediately
prior to a Change in Control or at any time thereafter.
B. Effect of a Diminution in Duties. Should the Employee suffer a
Diminution in Duties in conjunction with or following a Change in Control
Employee may at any time thereafter, upon written notice to Bancorp or the
Bank at least ninety (90) days prior to the effective date, voluntarily
terminate this Agreement and his employment with Bancorp and the Bank. Upon
receipt of such notice of voluntary termination, Bancorp may, in its sole
discretion, waive the ninety (90) day notice requirement for Employee's
voluntary termination and consider such voluntary termination effective
immediately upon Bancorp or the Bank's receipt of Employee's written notice.
Under either of such circumstances, Bancorp shall pay to the Employee (i) upon
the effective date of termination, or at the next regular pay period
thereafter, the aggregate salary and other benefits accrued from Bancorp and
the Bank through the effective date of Employee's voluntary termination; and
(ii) thereafter on a monthly basis, an amount equal to one twelfth (1/12) of
Employee's then-current aggregate Base Salary from Bancorp and the Bank, such
payments to continue for the lesser of (a) three (3) years from the effective
date of Employee's voluntary termination or (b) the greater of one year or the
remainder of the Five Year Term.
<PAGE>
5. TERMINATION OF AGREEMENT.
A. By Employee. Employee may terminate this Agreement and his
employment with Bancorp and the Bank at any time, by providing written notice
of his voluntary termination to Bancorp at least ninety (90) days prior to the
effective date of such voluntary termination. In such an event, other than in
connection with a Change in Control or Diminution in Duties (i) all
obligations of Bancorp and the Bank under this Agreement shall immediately
cease, as of the effective date of the voluntary termination and (ii) Employee
shall be entitled to receive only payment of the aggregate salary and benefits
accrued from Bancorp and the Bank through the effective date of such voluntary
termination.
B. By Bancorp or the Bank. Bancorp may terminate this Agreement
and, at its option, Employee's employment (i) immediately and at any time for
Cause, as that term is hereinafter defined, in which event all obligations of
Bancorp and the Bank under this Agreement shall cease immediately, as of the
effective date of the termination, and Employee shall be entitled to receive
payment of only the aggregate salary and benefits accrued from Bancorp and the
Bank through the effective date of the termination; or (ii) at any time prior
to a Change in Control, without cause and upon written notice to Employee,
which notice shall at Bancorp's option be effective immediately or at some
future date not to exceed ninety (90) days following date of the notice of
termination, in which event Bancorp shall itself, or cause the Bank to, pay to
Employee all salaries and benefits accrued from Bancorp or the Bank through
the effective date of the termination. In addition, Employee shall also be
entitled to receive a lump-sum payment in an amount equal to Employee's then-
current aggregate Base Salary from Bancorp and the Bank (exclusive of any
stock options, profit sharing, bonuses or other benefits). An election by
Bancorp not to renew or extend Employee's employment as provided in Section 1
hereof, other than for Cause, shall be deemed a termination of this Agreement
by Bancorp without Cause and shall give rise to rights to Employee under this
Subparagraph 5B.
As used in this Agreement, "Cause" for termination shall be limited to
the following: (i) Employee's conviction of a felony; (ii) the issuance by
any state or federal bank regulatory agency of a request or demand for removal
of Employee from employment with Bancorp or the Bank or from any office which
Employee then holds with Bancorp or the Bank; (iii) Employee's material breach
of Paragraph 2B of this Agreement; (iv) Employee's gross negligence in the
performance of his duties hereunder; or (v) failure of Employee to
substantially perform his duties hereunder (other than failure resulting from
Employee's disability) after demand for substantial performance is delivered
to Employee by Bancorp or the Bank, identifying specifically the manner in
which Employee has not substantially performed his duties, and a 7 day period
to cure has elapsed without substantial improvement in performance to the
reasonable standards set by Bancorp or the Bank, respectively.
<PAGE>
C. By Death or Disability. Notwithstanding anything herein to the
contrary, this Agreement shall terminate if (i) Employee dies during the term
of this Agreement or (ii) Bancorp terminates this Agreement after Employee
shall be absent from his employment with Bancorp or the Bank for a continuous
period of more than six (6) months by reason of incapacity or illness which
Employee's physician determines has resulted in Employee's permanent
disability. In either of such events, all obligations of Bancorp and the Bank
hereunder shall cease upon such termination except that from and after
Employee's death or date of termination as aforesaid Bancorp shall pay, or
cause the Bank to pay, on a monthly basis for a period of 6 months, an amount
equal to one-twelfth (1/12) of Employee's then-current aggregate Base Salary
from Bancorp and the Bank, such amount to be paid to Employee if he be then
living; if not, then to his surviving wife or his heirs or personal
representatives.
6. SUCCESSORS AND ASSIGNS.
The rights and obligations of Bancorp and the Bank under this
Agreement shall inure to the benefit of and be binding upon their respective
successors and assigns, but the rights of Employee hereunder are personal to
him and may not be assigned and shall not inure to the benefit of his heirs,
personal representatives or assigns, except as specifically provided for
herein.
Bancorp will require any successor (whether direct or indirect, by
purchase, merger, consolidation or otherwise) to all or substantially all of
the business and/or assets of Bancorp or the Bank, expressly to assume and to
agree to perform this Agreement in the same manner and to the same extent that
Bancorp would have been required to perform if no such succession had taken
place.
7. CONFIDENTIALITY.
Employee agrees not to divulge to anyone, either during or after the
termination of his employment hereunder, any information acquired by him by
virtue of his employment with Bancorp or the Bank. Upon the termination of
his employment, Employee agrees to immediately deliver to Bancorp all books,
papers documents and other materials or property of any nature belonging to
Bancorp or the Bank, including but not limited to originals and all copies of
any graphic or recorded materials of any kind, whether handwritten,
typewritten, printed, electronically stored or recorded in any manner.
8. ATTORNEYS' FEES.
Bancorp agrees to pay to Employee in full and as they are incurred
all legal fees and court costs incurred by Employee as a result of any
litigation arising from or in connection with this Agreement or the
enforcement of any rights or obligations created by this Agreement, whether
such litigation is initiated by Employee or Bancorp or the Bank and regardless
of the outcome of such litigation; provided, however that Bancorp will be
under no obligation to pay to Employee any costs, attorneys' fees or other
expenses incurred in connection with litigation initiated by Employee which is
subsequently determined by the Court in which such litigation is initiated, to
have been frivolous or filed in bad faith.
<PAGE>
9. NOTICE.
Any notice required or permitted to be given under this Agreement
shall be in writing and shall be given or made by certified or registered
mail, postage pre-paid, or by hand delivery, via courier or otherwise, as
follows, or to such other person or address as shall be hereafter designated
by notice given in accordance with this section:
If to Bancorp or Mid-America Bancorp and
the Bank: Bank of Louisville and Trust Company
500 West Broadway
Louisville, Kentucky 40202
Attn: Chief Executive Officer
If to the Employee: Richard B. Klein
c/o Bank of Louisville and Trust Co.
500 West Broadway
Louisville, Kentucky 40202
Any notice or other communication hereunder shall be deemed to have been duly
given or made (i) if made by hand, when delivered or when attempted delivery
shall be rejected; or (ii) if made by letter, upon deposit thereof in the
mail, postage pre-paid, registered or certified, with return receipt
requested. Notwithstanding the foregoing, any notice or other communication
hereunder which is actually received by a party hereto shall be deemed to have
been duly given or made to such party.
10. ENTIRE AGREEMENT; MODIFICATION.
This Agreement contains the entire agreement of the parties. It may
not be changed, altered or modified in any manner except by subsequent written
agreement, signed by Employee, Bancorp and the Bank.
11. SEVERABILITY.
The provisions of this Agreement shall be deemed entirely severable,
and the illegality, invalidity or unenforceability of any provision shall not
affect the validity or enforceability of the other provisions hereof.
12. GOVERNING LAW
This Agreement shall be governed by and construed in accordance with
the laws of the Commonwealth of Kentucky.
<PAGE>
IN WITNESS WHEREOF, the parties have executed this Agreement the day and
year first above written.
MID-AMERICA BANCORP ("BANCORP")
By: /s/ Orson Oliver
Title: President
BANK OF LOUISVILLE ("THE BANK")
By: /s/ Orson Oliver
Title: President
RICHARD B. KLEIN ("EMPLOYEE")
/s/ Richard B. Klein
<PAGE>
Exhibit 10 (e)
AGREEMENT
THIS AGREEMENT (hereinafter the "Agreement"), is made and entered into as
of the 5th day of April, 1993, by and between MID-AMERICA BANCORP, and its
wholly owned subsidiary, BANK OF LOUISVILLE AND TRUST COMPANY, both Kentucky
corporations with their principal places of business at 500 West Broadway,
Louisville, Kentucky 40202 (hereinafter "Bancorp" and the "Bank"
respectively); and ROBERT H. SACHS, residing at 2344 Page Avenue, Louisville,
Kentucky, 40205 (hereinafter "Employee").
RECITALS
Employee will begin his employment on the date hereof and will assume
substantial responsibilities as Executive Vice-President and General Counsel
of Bancorp. He is also expected to act as an officer of the Bank as
requested. Bancorp and its Board of Directors (hereinafter the "Board")
recognize that the possibility exists of a Change in Control (as hereinafter
defined), and that the occurrence of a Change in Control could result in an
alteration of the terms and conditions of Employee's employment, or otherwise
create uncertainty and concern as to his employment status. The Board has
determined that it is in Bancorp's best interest to maintain stability and
continuity of management both at Bancorp and the Bank. In this context,
Bancorp particularly wishes to retain the services of Employee and to ensure
his continued dedication and efforts on behalf of Bancorp and the Bank in the
event of a Change in Control, and eliminate undue concern for his personal
employment and financial security. Bancorp desires to provide Employee with
certain benefits and protections in his employment, particularly in the event
of a Change in Control.
NOW, THEREFORE, in consideration of the respective agreements of the
parties contained herein, it is agreed as follows:
1. TERM OF AGREEMENT.
This Agreement shall commence and be effective as of April 5, 1993,
and shall continue in effect through and including December 31, 1994.
Commencing on December 31, 1994, and on each December 31 thereafter
(hereinafter the "Anniversary Date"), the term of this Agreement shall be
automatically extended for a period of one (1) year, and shall continue in
effect from year-to-year for a period not to exceed Four (4) additional years
unless (i) not less than ninety (90) days prior to an Anniversary Date, by
written notice to Employee, Bancorp elects not to extend, or (ii) until
otherwise terminated or extended as hereinafter provided.
2. EMPLOYMENT OF EMPLOYEE
A. Effective Date. Effective April 5, 1993, Bancorp hereby agrees
to employ Employee, and Employee accepts employment as Executive Vice-
President and General Counsel of Bancorp, with such duties as are presently
consistent with such title and office, and such different or additional duties
as may be assigned to Employee from time to time by the Board including,
without limitation, acting as an officer and General Counsel of the Bank if
elected by the Board of Directors of the Bank; provided, however, that any
additional duties assigned to Employee shall be consistent with Employee's
status, title, position and responsibilities as in effect at the time of
execution of this Agreement.
<PAGE>
B. Employee's Obligations. Employee agrees to devote his full and
exclusive time, attention and energies to the business of Bancorp and as part
of such duties shall serve in such capacities for Bancorp and the Bank as may
be required of him during his employment pursuant to this Agreement. He shall
not engage in any other business activity, whether or not such business
activity is pursued for gain, profit or other pecuniary advantage, except that
Employee shall be entitled to engage in civic and eleemosynary activities or
in passive investment activities so long as such activities do not compete or
interfere with his employment hereunder.
C. Compensation. As compensation for his services hereunder,
Employee shall receive from Bancorp, the Bank or a combination thereof, an
aggregate annual salary of One Hundred Twenty-Five Thousand Dollars
($125,000.00), payable in twenty-six (26) pay periods (hereinafter, as
adjusted from time to time as herein provided, the "Base Salary"). Employee's
Base Salary shall be reviewed annually for increases consistent with Bancorp's
and the Bank's executive compensation policies and Employee's duties and
contributions to Bancorp and the Bank. Notwithstanding anything herein to the
contrary, to the extent to which he shall qualify, Employee shall be entitled
to participate in any employee benefit programs which may from time to time be
in effect for Bancorp or the Bank.
D. Cessation of Obligations. The obligations of Bancorp and
Employee hereunder shall continue throughout the initial or any subsequent
term of this Agreement, unless this Agreement is terminated as provided
herein.
3. CHANGE IN CONTROL.
A. Definition. As used in this Agreement, a Change in Control of
Bancorp shall be deemed to have occurred if, and only if (i) Bertram W. Klein
(hereinafter "Klein"), the current Chief Executive Officer of Bancorp and the
Bank, ceases for any reason to hold the office of Chief Executive Officer of
Bancorp; or (ii) Klein and/or members of his immediate family (including only
Klein and his spouse, children, parents, or any trusts established for the
benefit of any of them) cease to hold ten percent (10%) or more of all
outstanding voting shares of Bancorp.
B. Effect of a Change in Control. In the event of a Change in
Control, if Bancorp's legal existence is terminated (i.e. is dissolved), the
Bank hereby assumes and becomes severally obligated for the obligations of
this Agreement to Employee. If Bancorp's legal existence is continued through
merger or other combination with or consolidation into any new or existing
entity, the Bank hereby assumes and becomes jointly and severally liable, with
such new entity, to Employee for all the obligations of Bancorp hereunder.
Upon Change in Control, the term of this Agreement shall be immediately and
automatically extended until December 31, 1998. Thereafter, and upon each
subsequent December 31, this Agreement shall be automatically extended for an
additional one-year period as provided in Paragraph 1 above, unless (i)
Bancorp chooses not to extend or (ii) this Agreement is otherwise terminated
in accordance with the provisions contained herein.
<PAGE>
Until December 31, 1998, Employee shall be retained in Bank's employ (and
in Bancorp's employ unless Bancorp is dissolved after the Change in Control),
and be provided with compensation and benefits at least equal in the aggregate
to that received by Employee from Bancorp and the Bank immediately prior to
the effective date of the Change in Control, unless this Agreement is
otherwise terminated by Bancorp for Cause, or by reason of the Death or
Disability of Employee; provided, however, Employee shall continue to fulfill
his obligations pursuant to paragraph 2B of this Agreement.
At any time prior to the earlier of (a) December 31, 1998, or (b) the
expiration of twenty-four months following the effective date of a Change in
Control, Employee may terminate this Agreement by providing written notice of
such voluntary termination to Bancorp or to the Bank at least ninety (90) days
prior to the effective date of such voluntary termination, and, in such event
(i) all obligations of Bancorp and the Bank under this Agreement shall
immediately cease as of the effective date of such voluntary termination; and
(ii) Employee shall only be entitled to receive payment of salary and benefits
accrued as of the effective date of such voluntary termination.
Should Employee continue in the employ of the Bank or Bancorp for the
lesser of (a) the remaining period until December 31, 1998, or (b) twenty-four
months following the effective date of a Change in Control, Employee may
thereafter terminate this Agreement by providing written notice of such
voluntary termination to Bancorp or the Bank at least ninety (90) days prior
to the effective date of such voluntary termination and, in such event,
Bancorp shall pay to the Employee (i) upon the effective date of termination
or at the next regular pay period thereafter all salary and other benefits
accrued and unpaid as of the effective date of Employee's voluntary
termination; and (ii) thereafter, on a monthly basis, an amount equal to one-
twelfth (1/12) of Employee's then-current Base Salary from Bancorp and the
Bank, such payments to continue for the greater of (a) the number of months
remaining until December 31, 1998 or (b) twenty-four months.
4. CHANGE IN CONTROL AND DIMINUTION IN DUTIES.
A. Definition. As used in this Agreement, a Diminution in Duties
shall mean any of the following events, occurring in conjunction with or
following a Change in Control:
(i) a change in Employee's status, position or
responsibilities with Bancorp (unless Bancorp's separate
existence ceases as a result of the Change in Control) or
the Bank (including a material change in the number or
positions of those employees or officers to whom Employee
reports and who report to Employee) which, in Employee's
reasonable judgement, represents a significant and
adverse change in Employee's status, position or
responsibilities as in effect immediately prior to the
effective date of a Change in Control, or at any time
thereafter;
(ii) the assignment to Employee of any duties or
responsibilities which, in Employee's reasonable
judgement, are inconsistent with Employee's status,
position or responsibilities as in effect immediately
prior to the effective date of the Change in Control or
at any time thereafter;
<PAGE>
(iii) any removal of Employee from, or failure to
reappoint or reelect Employee to any of his positions
with the Bank, unless such positions have been abolished
as a result of a reorganization of the Bank, such as a
merger or consolidation resulting from the Change in
Control except in connection with the termination of this
Agreement (a) by Bancorp or the Bank for Cause; (b) as a
result of Employee's Death or Disability; or (c) by
Employee, other than as a result of a Diminution in
Duties as described hereunder. If Employee's position
with the Bank has been abolished as herein provided, the
appointment of Employee to such positions as have
responsibilities, duties, and status within the Bank or
successor organization similar to those of the office or
position abolished will be deemed to be the reelection or
reappointment as required herein.
(iv) a reduction in Employee's aggregate Base
Salary or any failure to pay Employee within thirty (30)
days of the date due any compensation or benefits to
which he is entitled;
(v) the failure by Bancorp or the Bank to (a)
continue in effect (without reduction in benefit levels
and/or reward opportunities) any material compensation or
benefit plan in which Employee was participating from
Bancorp or the Bank immediately prior to the effective
date of a Change in Control, unless a substitute or
replacement has been implemented which provides
substantially identical compensation or benefits to
Employee or provides compensation equal or superior in
value to such benefits plan ; or (b) provide Employee
with compensation and benefits equal or superior in value
to that received from Bancorp and the Bank, in the
aggregate, under each other compensation or employee
benefit plan, program and practices in effect immediately
prior to a Change in Control or at any time thereafter.
B. Effect of a Diminution in Duties. Should the Employee suffer a
Diminution in Duties in conjunction with or following a Change in Control
Employee may at any time thereafter, upon written notice to Bancorp or the
Bank at least ninety (90) days prior to the effective date, voluntarily
terminate this Agreement and his employment with Bancorp and the Bank. Upon
receipt of such notice of voluntary termination, Bancorp may, in its sole
discretion, waive the ninety (90) day notice requirement for Employee's
voluntary termination and consider such voluntary termination effective
immediately upon Bancorp or the Bank's receipt of Employee's written notice.
Under either of such circumstances, Bancorp shall pay to the Employee (i) upon
the effective date of termination, or at the next regular pay period
thereafter, the aggregate salary and other benefits accrued from Bancorp and
the Bank through the effective date of Employee's voluntary termination; and
(ii) thereafter on a monthly basis, an amount equal to one twelfth (1/12) of
Employee's then-current aggregate Base Salary from Bancorp and the Bank, such
payments to continue for the lesser of (a) three (3) years from the effective
date of Employee's voluntary termination or (b) the greater of one year or
until December 31, 1998.
<PAGE>
5. TERMINATION OF AGREEMENT.
A. By Employee. Employee may terminate this Agreement and his
employment with Bancorp and the Bank at any time, by providing written notice
of his voluntary termination to Bancorp at least ninety (90) days prior to the
effective date of such voluntary termination. In such an event, other than in
connection with a Change in Control or Diminution in Duties (i) all
obligations of Bancorp and the Bank under this Agreement shall immediately
cease, as of the effective date of the voluntary termination and (ii) Employee
shall be entitled to receive only payment of the aggregate salary and benefits
accrued from Bancorp and the Bank through the effective date of such voluntary
termination.
B. By Bancorp or the Bank. Bancorp may terminate this Agreement
and, at its option, Employee's employment (i) immediately and at any time for
Cause, as that term is hereinafter defined, in which event all obligations of
Bancorp and the Bank under this Agreement shall cease immediately, as of the
effective date of the termination, and Employee shall be entitled to receive
payment of only the aggregate salary and benefits accrued from Bancorp and the
Bank through the effective date of the termination; or (ii) at any time prior
to a Change in Control, without cause and upon written notice to Employee,
which notice shall at Bancorp's option be effective immediately or at some
future date not to exceed ninety (90) days following date of the notice of
termination, in which event Bancorp shall itself, or cause the Bank to, pay to
Employee all salaries and benefits accrued from Bancorp or the Bank through
the effective date of the termination. In addition, Employee shall also be
entitled to receive a lump-sum payment in an amount equal to Employee's then-
current aggregate Base Salary from Bancorp and the Bank (exclusive of any
stock options, profit sharing, bonuses or other benefits). An election by
Bancorp not to renew or extend Employee's employment as provided in Section 1
hereof, other than for Cause, shall be deemed a termination of this Agreement
by Bancorp without Cause and shall give rise to rights to Employee under this
Subparagraph.
As used in this Agreement, "Cause" for termination shall be limited to
the following: (i) Employee's conviction of a felony; (ii) the issuance by
any state or federal bank regulatory agency of a request or demand for removal
of Employee from employment with Bancorp or the Bank or from any office which
Employee then holds with Bancorp or the Bank; (iii) Employee's material breach
of Paragraph 2B of this Agreement; (iv) Employee's gross negligence in the
performance of his duties hereunder; or (v) failure of Employee to
substantially perform his duties hereunder (other than failure resulting from
Employee's disability) after demand for substantial performance is delivered
to Employee by Bancorp or the Bank, identifying specifically the manner in
which Employee has not substantially performed his duties, and a 7 day period
to cure has elapsed without substantial improvement in performance to the
reasonable standards set by Bancorp or the Bank, respectively.
<PAGE>
C. By Death or Disability. Notwithstanding anything herein to the
contrary, this Agreement shall terminate if (i) Employee dies during the term
of this Agreement or (ii) Bancorp terminates this Agreement after Employee
shall be absent from his employment with Bancorp or the Bank for a continuous
period of more than six (6) months by reason of incapacity or illness which
Employee's physician determines has resulted in Employee's permanent
disability. In either of such events, all obligations of Bancorp and the Bank
hereunder shall cease upon such termination except that from and after
Employee's death or date of termination as aforesaid Bancorp shall pay, or
cause the Bank to pay, on a monthly basis for a period of 6 months, an amount
equal to one-twelfth (1/12) of Employee's then-current aggregate Base Salary
from Bancorp and the Bank, such amount to be paid to Employee if he be then
living; if not, then to his surviving wife or his heirs or personal
representatives.
6. SUCCESSORS AND ASSIGNS.
The rights and obligations of Bancorp and the Bank under this
Agreement shall inure to the benefit of and be binding upon their respective
successors and assigns, but the rights of Employee hereunder are personal to
him and may not be assigned and shall not inure to the benefit of his heirs,
personal representatives or assigns, except as specifically provided for
herein.
Bancorp will require any successor (whether direct or indirect, by
purchase, merger, consolidation or otherwise) to all or substantially all of
the business and/or assets of Bancorp or the Bank, expressly to assume and to
agree to perform this Agreement in the same manner and to the same extent that
Bancorp would have been required to perform if no such succession had taken
place.
7. CONFIDENTIALITY.
Employee agrees not to divulge to anyone, either during or after the
termination of his employment hereunder, any information acquired by him by
virtue of his employment with Bancorp or the Bank. Upon the termination of
his employment, Employee agrees to immediately deliver to Bancorp all books,
papers documents and other materials or property of any nature belonging to
Bancorp or the Bank, including but not limited to originals and all copies of
any graphic or recorded materials of any kind, whether handwritten,
typewritten, printed, electronically stored or recorded in any manner.
8. ATTORNEYS' FEES.
Bancorp agrees to pay to Employee in full and as they are incurred
all legal fees and court costs incurred by Employee as a result of any
litigation arising from or in connection with this Agreement or the
enforcement of any rights or obligations created by this Agreement, whether
such litigation is initiated by Employee or Bancorp or the Bank and regardless
of the outcome of such litigation; provided, however that Bancorp will be
under no obligation to pay to Employee any costs, attorneys' fees or other
expenses incurred in connection with litigation initiated by Employee which is
subsequently determined by the Court in which such litigation is initiated, to
have been frivolous or filed in bad faith.
<PAGE>
9. NOTICE.
Any notice required or permitted to be given under this Agreement
shall be in writing and shall be given or made by certified or registered
mail, postage pre-paid, or by hand delivery, via courier or otherwise, as
follows, or to such other person or address as shall be hereafter designated
by notice given in accordance with this section:
If to Bancorp or Mid-America Bancorp and
the Bank: Bank of Louisville and Trust Company
500 West Broadway
Louisville, Kentucky 40202
Attn: Chief Executive Officer
If to the Employee: Robert H. Sachs
2344 Page Avenue
Louisville, Kentucky 40205
Any notice or other communication hereunder shall be deemed to have been duly
given or made (i) if made by hand, when delivered or when attempted delivery
shall be rejected; or (ii) if made by letter, upon deposit thereof in the
mail, postage pre-paid, registered or certified, with return receipt
requested. Notwithstanding the foregoing, any notice or other communication
hereunder which is actually received by a party hereto shall be deemed to have
been duly given or made to such party.
10. ENTIRE AGREEMENT; MODIFICATION.
This Agreement contains the entire agreement of the parties. It may
not be changed, altered or modified in any manner except by subsequent written
agreement, signed by Employee and Bancorp and the Bank.
11. SEVERABILITY.
The provisions of this Agreement shall be deemed entirely severable,
and the illegality, invalidity or unenforceability of any provision shall not
affect the validity or enforceability of the other provisions hereof.
12. GOVERNING LAW
This Agreement shall be governed by and construed in accordance with
the laws of the Commonwealth of Kentucky.
13. ADDITIONAL PROVISIONS
A. Employee will participate in all of the benefits
and compensation programs available to employees of
Bancorp and the Bank at the level of Executive
Vice-President, including but not limited to the
Employee Stock Ownership Plan, Incentive Stock
Option Plan, Incentive Compensation Plan,
Retirement Plan, and the health and life insurance
plans.
<PAGE>
B. In addition to the participation provided for in
Subsection A hereof,
(i) Bancorp will grant to Employee stock options
on 10,000 shares of Bancorp common stock on
the date hereof under the Incentive Stock
Option Plan at a price of $17.00. These
options shall not be exercisable until January
1, 1996, unless there is a Change of Control
as defined herein. In the event of a Change
of Control before January 1, 1996, these
options will be exercisable immediately. In
all other respects, these stock options will
be subject to the provisions of the Incentive
Stock Option Plan, and
(ii) Bancorp will grant to Employee on the date
hereof 31,988 Stock Appreciation Rights in
Bancorp at $17.00 each. Such Rights will be
adjusted from time to time for stock splits,
stock dividends and the like. Upon a Change
in Control on or before December 31, 1998 and
if Employee is then an employee of the Bank or
Bancorp, these Rights will be then treated as
stock options pursuant to the rules applicable
thereto under the Incentive Stock Option Plan,
except that the period in which the Rights can
be exercised will begin on the date of the
Change in Control. If there is no Change in
Control on or before December 31, 1998 or if
Employee ceases to be an Employee of Bancorp
or the Bank prior to the occurrence of a
Change in Control, these Rights will be
forfeited and will be null and void. For
purposes of this sub-paragraph (ii) only,
"Change in Control" will mean (a) the
reduction in share holdings of Klein and/or
his immediate family, as defined herein, to
less than ten percent (10%) of all outstanding
voting shares of Mid-America Bancorp, (b) the
acquisition (directly or indirectly) of at
least twenty percent (20%) of such shares by
someone other than Klein and/or his immediate
family, or (c) if Mid-America Bancorp ceases
to hold 100 percent of the shares of Bank of
Louisville.
(iii) Bancorp shall or shall cause the Bank to
provide a new automobile for the use of
Employee during his employment hereunder and
will pay for the attendant insurance,
maintenance and operation costs thereof. From
time to time, the Bank will replace the
automobile with a new model in accordance with
its practice applicable to Executive Vice
Presidents.
<PAGE>
IN WITNESS WHEREOF, the parties have executed this Agreement
the day and year first above written.
MID-AMERICA BANCORP ("BANCORP")
By: /s/ Bertram W. Klein
Title: Chairman
BANK OF LOUISVILLE ("THE BANK")
By: /s/ Orson Oliver
Title: President
ROBERT H. SACHS ("EMPLOYEE")
/s/ Robert H. Sachs
<PAGE>
Exhibit 10 (f)
AGREEMENT
THIS AGREEMENT (hereinafter the "Agreement"), is made and entered into as
of the 5th day of April, 1993, by and between MID-AMERICA BANCORP, and its
wholly owned subsidiary, BANK OF LOUISVILLE AND TRUST COMPANY, both Kentucky
corporations with their principal places of business at 500 West Broadway,
Louisville, Kentucky 40202 (hereinafter "Bancorp" and the "Bank"
respectively); and GAIL W. POHN, residing at 5401 Pueblo Road, Louisville,
Kentucky, 40207 (hereinafter "Employee").
RECITALS
Employee will begin his employment on the date hereof and will assume
substantial responsibilities as Executive Vice-President of Bancorp. He is
also expected to act as an officer of the Bank as requested. Bancorp and its
Board of Directors (hereinafter the "Board") recognize that the possibility
exists of a Change in Control (as hereinafter defined), and that the
occurrence of a Change in Control could result in an alteration of the terms
and conditions of Employee's employment, or otherwise create uncertainty and
concern as to his employment status. The Board has determined that it is in
Bancorp's best interest to maintain stability and continuity of management
both at Bancorp and the Bank. In this context, Bancorp particularly wishes to
retain the services of Employee and to ensure his continued dedication and
efforts on behalf of Bancorp and the Bank in the event of a Change in Control,
and eliminate undue concern for his personal employment and financial
security. Bancorp desires to provide Employee with certain benefits and
protections in his employment, particularly in the event of a Change in
Control.
NOW, THEREFORE, in consideration of the respective agreements of the
parties contained herein, it is agreed as follows:
1. TERM OF AGREEMENT.
This Agreement shall commence and be effective as of April 5, 1993,
and shall continue in effect through and including December 31, 1994.
Commencing on December 31, 1994, and on each December 31 thereafter
(hereinafter the "Anniversary Date"), the term of this Agreement shall be
automatically extended for a period of one (1) year, and shall continue in
effect from year-to-year unless (i) not less than ninety (90) days prior to an
Anniversary Date, by written notice to Employee, Bancorp elects not to extend,
or (ii) until otherwise terminated or extended as hereinafter provided.
2. EMPLOYMENT OF EMPLOYEE
A. Effective Date. Effective April 5, 1993, Bancorp hereby agrees
to employ Employee, and Employee accepts employment as Executive Vice-
President of Bancorp, with such duties as are presently consistent with such
title and office, and such different or additional duties as may be assigned
to Employee from time to time by the Board including, without limitation,
acting as an officer of the Bank if elected by the Board of Directors of the
Bank; provided, however, that any additional duties assigned to Employee shall
be consistent with Employee's status, title, position and responsibilities as
contemplated at the time of execution of this Agreement.
<PAGE>
B. Employee's Obligations. Employee agrees to devote his full and
exclusive time, attention and energies to the business of Bancorp and as part
of such duties shall serve in such capacities for Bancorp and the Bank as may
be required of him during his employment pursuant to this Agreement. He shall
not engage in any other business activity, whether or not such business
activity is pursued for gain, profit or other pecuniary advantage, except that
Employee shall be entitled to engage in civic and eleemosynary activities or
in passive investment activities so long as such activities do not compete or
interfere with his employment hereunder.
C. Compensation. As compensation for his services hereunder,
Employee shall receive from Bancorp, the Bank or a combination thereof, an
aggregate annual salary of One Hundred Thirty-Five Thousand Dollars
($135,000.00), payable in twenty-six (26) pay periods (hereinafter, as
adjusted from time to time as herein provided, the "Base Salary"). Employee's
Base Salary shall be reviewed annually for increases consistent with Bancorp's
and the Bank's executive compensation policies and Employee's duties and
contributions to Bancorp and the Bank. Notwithstanding anything herein to the
contrary, to the extent to which he shall qualify, Employee shall be entitled
to participate in any employee benefit programs which may from time to time be
in effect for Bancorp or the Bank.
On December 31, 1993 and on each December 31st thereafter through
December 31, 1997, in addition to Employee's annual salary, Employee shall
receive a payment of $6,000.00. This payment shall be in addition to, and
shall not be used in calculating or otherwise determining, any other bonus or
compensation Employee may be entitled to receive under or pursuant to any
bonus or compensation plan or program of Bancorp or the Bank.
D. Cessation of Obligations. The obligations of Bancorp and
Employee hereunder shall continue throughout the initial or any subsequent
term of this Agreement, unless this Agreement is terminated as provided
herein.
3. CHANGE IN CONTROL.
A. Definition. As used in this Agreement, a Change in Control of
Bancorp shall be deemed to have occurred if, and only if (i) Bertram W. Klein
(hereinafter "Klein"), the current Chief Executive Officer of Bancorp and the
Bank, ceases for any reason to hold the office of Chief Executive Officer of
Bancorp; or (ii) Klein and/or members of his immediate family (including only
Klein and his spouse, children, parents, or any trusts established for the
benefit of any of them) cease to hold ten percent (10%) or more of all
outstanding voting shares of Bancorp.
<PAGE>
B. Effect of a Change in Control. In the event of a Change in
Control, if Bancorp's legal existence is terminated (i.e. is dissolved), the
Bank hereby assumes and becomes severally obligated for the obligations of
this Agreement to Employee. If Bancorp's legal existence is continued through
merger or other combination with or consolidation into any new or existing
entity, the Bank hereby assumes and becomes jointly and severally liable, with
such new entity, to Employee for all the obligations of Bancorp hereunder.
Upon a Change of Control, the term of this Agreement shall be immediately and
automatically extended for a period of five (5) years from the effective date
of such Change in Control (hereinafter the "Five Year Term"). At the end of
the Five Year Term, and upon each subsequent anniversary date of the Change in
Control, this Agreement shall be automatically extended for an additional one-
year period as provided in Paragraph 1 above, unless (i) Bancorp chooses not
to extend or (ii) this Agreement is otherwise terminated in accordance with
the provisions contained herein.
During the Five Year Term, Employee shall be retained in Bank's employ
(and in Bancorp's employ unless Bancorp is dissolved after the Change in
Control), and be provided with compensation and benefits at least equal in the
aggregate to that received by Employee from Bancorp and the Bank immediately
prior to the effective date of the Change in Control, unless this Agreement is
otherwise terminated by Bancorp for Cause, or by reason of the Death or
Disability of Employee; provided, however, Employee shall continue to fulfill
his obligations pursuant to paragraph 2B of this Agreement.
For a period of two (2) years following the effective date of a Change in
Control, Employee may terminate this Agreement at any time by providing
written notice of such voluntary termination to Bancorp or to the Bank at
least ninety (90) days prior to the effective date of such voluntary
termination, and, in such event (i) all obligations of Bancorp and the Bank
under this Agreement shall immediately cease as of the effective date of such
voluntary termination; and (ii) Employee shall only be entitled to receive
payment of salary and benefits accrued as of the effective date of such
voluntary termination.
Should Employee continue in the employ of the Bank or Bancorp for a
period of at least two (2) years following the effective date of a Change in
Control, Employee may thereafter terminate this Agreement by providing written
notice of such voluntary termination to Bancorp or the Bank at least ninety
(90) days prior to the effective date of such voluntary termination and, in
such event, Bancorp shall pay to the Employee (i) upon the effective date of
termination or at the next regular pay period thereafter all salary and other
benefits accrued and unpaid as of the effective date of Employee's voluntary
termination; and (ii) thereafter, on a monthly basis, an amount equal to one-
twelfth (1/12) of Employee's then-current Base Salary from Bancorp and the
Bank, such payments to continue for the lesser of (a) three (3) years from the
effective date of Employee's voluntary termination; or (b) the greater of one
year or the remainder of the Five Year Term.
4. CHANGE IN CONTROL AND DIMINUTION IN DUTIES.
A. Definition. As used in this Agreement, a Diminution in Duties
shall mean any of the following events, occurring in conjunction with or
following a Change in Control:
<PAGE>
(i) a change in Employee's status, position or
responsibilities with Bancorp (unless Bancorp's separate
existence ceases as a result of the Change in Control) or
the Bank (including a material change in the number or
positions of those employees or officers to whom Employee
reports and who report to Employee) which, in Employee's
reasonable judgement, represents a significant and
adverse change in Employee's status, position or
responsibilities as in effect immediately prior to the
effective date of a Change in Control, or at any time
thereafter;
(ii) the assignment to Employee of any duties or
responsibilities which, in Employee's reasonable
judgement, are inconsistent with Employee's status,
position or responsibilities as in effect immediately
prior to the effective date of the Change in Control or
at any time thereafter;
(iii) any removal of Employee from, or failure to
reappoint or reelect Employee to any of his positions
with the Bank, unless such positions have been abolished
as a result of a reorganization of the Bank, such as a
merger or consolidation resulting from the Change in
Control except in connection with the termination of this
Agreement (a) by Bancorp or the Bank for Cause; (b) as a
result of Employee's Death or Disability; or (c) by
Employee, other than as a result of a Diminution in
Duties as described hereunder. If Employee's position
with the Bank has been abolished as herein provided, the
appointment of Employee to such positions as have
responsibilities, duties, and status within the Bank or
successor organization similar to those of the office or
position abolished will be deemed to be the reelection or
reappointment as required herein.
(iv) a reduction in Employee's aggregate Base
Salary or any failure to pay Employee within thirty (30)
days of the date due any compensation or benefits to
which he is entitled;
(v) the failure by Bancorp or the Bank to (a)
continue in effect (without reduction in benefit levels
and/or reward opportunities) any material compensation or
benefit plan in which Employee was participating from
Bancorp or the Bank immediately prior to the effective
date of a Change in Control, unless a substitute or
replacement has been implemented which provides
substantially identical compensation or benefits to
Employee or provides compensation equal or superior in
value to such benefits plan; or (b) provide Employee with
compensation and benefits equal or superior in value to
that received from Bancorp and the Bank, in the
aggregate, under each other compensation or employee
benefit plan, program and practices in effect immediately
prior to a Change in Control or at any time thereafter.
<PAGE>
B. Effect of a Diminution in Duties. Should the Employee suffer a
Diminution in Duties in conjunction with or following a Change in Control
Employee may at any time thereafter, upon written notice to Bancorp or the
Bank at least ninety (90) days prior to the effective date, voluntarily
terminate this Agreement and his employment with Bancorp and the Bank. Upon
receipt of such notice of voluntary termination, Bancorp may, in its sole
discretion, waive the ninety (90) day notice requirement for Employee's
voluntary termination and consider such voluntary termination effective
immediately upon Bancorp or the Bank's receipt of Employee's written notice.
Under either of such circumstances, Bancorp shall pay to the Employee (i) upon
the effective date of termination, or at the next regular pay period
thereafter, the aggregate salary and other benefits accrued from Bancorp and
the Bank through the effective date of Employee's voluntary termination; and
(ii) thereafter on a monthly basis, an amount equal to one twelfth (1/12) of
Employee's then-current aggregate Base Salary from Bancorp and the Bank, such
payments to continue for the lesser of (a) three (3) years from the effective
date of Employee's voluntary termination or (b) the greater of one year or the
remainder of the Five Year Term.
5. TERMINATION OF AGREEMENT.
A. By Employee. Employee may terminate this Agreement and his
employment with Bancorp and the Bank at any time, by providing written notice
of his voluntary termination to Bancorp at least ninety (90) days prior to the
effective date of such voluntary termination. In such an event, other than in
connection with a Change in Control or Diminution in Duties (i) all
obligations of Bancorp and the Bank under this Agreement shall immediately
cease, as of the effective date of the voluntary termination and (ii) Employee
shall be entitled to receive only payment of the aggregate salary and benefits
accrued from Bancorp and the Bank through the effective date of such voluntary
termination.
B. By Bancorp or the Bank. Bancorp may terminate this Agreement
and, at its option, Employee's employment (i) immediately and at any time for
Cause, as that term is hereinafter defined, in which event all obligations of
Bancorp and the Bank under this Agreement shall cease immediately, as of the
effective date of the termination, and Employee shall be entitled to receive
payment of only the aggregate salary and benefits accrued from Bancorp and the
Bank through the effective date of the termination; or (ii) at any time prior
to a Change in Control, without cause and upon written notice to Employee,
which notice shall at Bancorp's option be effective immediately or at some
future date not to exceed ninety (90) days following date of the notice of
termination, in which event Bancorp shall itself, or cause the Bank to, pay to
Employee all salaries and benefits accrued from Bancorp or the Bank through
the effective date of the termination. In addition, Employee shall also be
entitled to receive a lump-sum payment in an amount equal to Employee's then-
current aggregate Base Salary from Bancorp and the Bank (exclusive of any
stock options, profit sharing, bonuses or other benefits). An election by
Bancorp not to renew or extend Employee's employment as provided in Section 1
hereof, other than for Cause, shall be deemed a termination of this Agreement
by Bancorp without Cause and shall give rise to rights to Employee under this
Subparagraph 5B.
<PAGE>
As used in this Agreement, "Cause" for termination shall be limited to
the following: (i) Employee's conviction of a felony; (ii) the issuance by
any state or federal bank regulatory agency of a request or demand for removal
of Employee from employment with Bancorp or the Bank or from any office which
Employee then holds with Bancorp or the Bank; (iii) Employee's material breach
of Paragraph 2B of this Agreement; (iv) Employee's gross negligence in the
performance of his duties hereunder; or (v) failure of Employee to
substantially perform his duties hereunder (other than failure resulting from
Employee's disability) after demand for substantial performance is delivered
to Employee by Bancorp or the Bank, identifying specifically the manner in
which Employee has not substantially performed his duties, and a 7 day period
to cure has elapsed without substantial improvement in performance to the
reasonable standards set by Bancorp or the Bank, respectively.
C. By Death or Disability. Notwithstanding anything herein to the
contrary, this Agreement shall terminate if (i) Employee dies during the term
of this Agreement or (ii) Bancorp terminates this Agreement after Employee
shall be absent from his employment with Bancorp or the Bank for a continuous
period of more than six (6) months by reason of incapacity or illness which
Employee's physician determines has resulted in Employee's permanent
disability. In either of such events, all obligations of Bancorp and the Bank
hereunder shall cease upon such termination except that from and after
Employee's death or date of termination as aforesaid Bancorp shall pay, or
cause the Bank to pay, on a monthly basis for a period of 6 months, an amount
equal to one-twelfth (1/12) of Employee's then-current aggregate Base Salary
from Bancorp and the Bank, such amount to be paid to Employee if he be then
living; if not, then to his surviving wife or his heirs or personal
representatives.
6. SUCCESSORS AND ASSIGNS.
The rights and obligations of Bancorp and the Bank under this
Agreement shall inure to the benefit of and be binding upon their respective
successors and assigns, but the rights of Employee hereunder are personal to
him and may not be assigned and shall not inure to the benefit of his heirs,
personal representatives or assigns, except as specifically provided for
herein.
Bancorp will require any successor (whether direct or indirect, by
purchase, merger, consolidation or otherwise) to all or substantially all of
the business and/or assets of Bancorp or the Bank, expressly to assume and to
agree to perform this Agreement in the same manner and to the same extent that
Bancorp would have been required to perform if no such succession had taken
place.
7. CONFIDENTIALITY.
Employee agrees not to divulge to anyone, either during or after the
termination of his employment hereunder, any information acquired by him by
virtue of his employment with Bancorp or the Bank. Upon the termination of
his employment, Employee agrees to immediately deliver to Bancorp all books,
papers documents and other materials or property of any nature belonging to
Bancorp or the Bank, including but not limited to originals and all copies of
any graphic or recorded materials of any kind, whether handwritten,
typewritten, printed, electronically stored or recorded in any manner.
<PAGE>
8. ATTORNEYS' FEES.
Bancorp agrees to pay to Employee in full and as they are incurred
all legal fees and court costs incurred by Employee as a result of any
litigation arising from or in connection with this Agreement or the
enforcement of any rights or obligations created by this Agreement, whether
such litigation is initiated by Employee or Bancorp or the Bank and regardless
of the outcome of such litigation; provided, however that Bancorp will be
under no obligation to pay to Employee any costs, attorneys' fees or other
expenses incurred in connection with litigation initiated by Employee which is
subsequently determined by the Court in which such litigation is initiated, to
have been frivolous or filed in bad faith.
9. NOTICE.
Any notice required or permitted to be given under this Agreement
shall be in writing and shall be given or made by certified or registered
mail, postage pre-paid, or by hand delivery, via courier or otherwise, as
follows, or to such other person or address as shall be hereafter designated
by notice given in accordance with this section:
If to Bancorp or Mid-America Bancorp and
the Bank: Bank of Louisville and Trust Company
500 West Broadway
Louisville, Kentucky 40202
Attn: Chief Executive Officer
If to the Employee: Gail W. Pohn
5401 Pueblo Road
Louisville, Kentucky 40207
Any notice or other communication hereunder shall be deemed to have been duly
given or made (i) if made by hand, when delivered or when attempted delivery
shall be rejected; or (ii) if made by letter, upon deposit thereof in the
mail, postage pre-paid, registered or certified, with return receipt
requested. Notwithstanding the foregoing, any notice or other communication
hereunder which is actually received by a party hereto shall be deemed to have
been duly given or made to such party.
10. ENTIRE AGREEMENT; MODIFICATION.
This Agreement contains the entire agreement of the parties. It may
not be changed, altered or modified in any manner except by subsequent written
agreement, signed by Employee, Bancorp and the Bank.
11. SEVERABILITY.
The provisions of this Agreement shall be deemed entirely severable,
and the illegality, invalidity or unenforceability of any provision shall not
affect the validity or enforceability of the other provisions hereof.
12. GOVERNING LAW
This Agreement shall be governed by and construed in accordance with
the laws of the Commonwealth of Kentucky.
<PAGE>
13. EXHIBIT A
Exhibit A is incorporated by reference as though fully set forth
herein.
IN WITNESS WHEREOF, the parties have executed this Agreement the day and
year first above written.
MID-AMERICA BANCORP ("BANCORP")
By: /s/ Bertram W. Klein
Title: Chairman
BANK OF LOUISVILLE ("THE BANK")
By: /s/ Orson Oliver
Title: President
GAIL W. POHN ("EMPLOYEE")
/s/ Gail W. Pohn
Exhibit A
1. Employee shall be issued options on 10,000 shares of Mid-
America Bancorp at $15.88 dated April 5, 1993 pursuant to the
Bank's Stock Option Plan.
2. Employee shall be enrolled immediately in the Bank's Health
Benefit Plans.
3. Employee shall be enrolled immediately in the Bank's Employee
Stock Ownership Plan.
4. Bank shall assume Employee's automobile lease ($488.09 per
month) through September 1994. Employee shall be supplied
with a new automobile as of September 1994. Bank will pay all
expenses for the Employee's automobile.
5. Bank will provide Employee with a parking space at its main
office.
<PAGE>
Exhibit 10 (g)
AGREEMENT
THIS AGREEMENT (hereinafter the "Agreement"), is made and entered into as
of the 3rd day of May, 1993, by and between MID-AMERICA BANCORP, and its
wholly owned subsidiary, BANK OF LOUISVILLE AND TRUST COMPANY, both Kentucky
corporations with their principal places of business at 500 West Broadway,
Louisville, Kentucky 40202 (hereinafter "Bancorp" and the "Bank"
respectively); and STEVEN A. SMALL, a resident of Prospect, Kentucky
(hereinafter "Employee").
RECITALS
Employee will begin his employment on or before July 1, 1993, and will
assume substantial responsibilities as Executive Vice-President and Chief
Financial Officer of Bancorp. He is also expected to act in a similar
capacity as an officer of the Bank as requested. Bancorp and its Board of
Directors (hereinafter the "Board") recognize that the possibility exists of a
Change in Control (as hereinafter defined), and that the occurrence of a
Change in Control could result in an alteration of the terms and conditions of
Employee's employment, or otherwise create uncertainty and concern as to his
employment status. The Board has determined that it is in Bancorp's best
interest to maintain stability and continuity of management both at Bancorp
and the Bank. In this context, Bancorp particularly wishes to retain the
services of Employee and to ensure his continued dedication and efforts on
behalf of Bancorp and the Bank in the event of a Change in Control, and
eliminate undue concern for his personal employment and financial security.
Bancorp desires to provide Employee with certain benefits and protections in
his employment, particularly in the event of a Change in Control.
NOW, THEREFORE, in consideration of the respective agreements of the
parties contained herein, it is agreed as follows:
1. TERM OF AGREEMENT.
This Agreement shall commence and be effective as of the date
Employee first reports to work (the "Commencement Date"), and shall continue
in effect through and including December 31, 1994. Commencing on December 31,
1994, and on each December 31 thereafter (hereinafter the "Anniversary Date"),
the term of this Agreement shall be automatically extended for a period of one
(1) year, and shall continue in effect from year-to-year unless (i) not less
than ninety (90) days prior to an Anniversary Date, by written notice to
Employee, Bancorp elects not to extend, or (ii) until otherwise terminated or
extended as hereinafter provided.
2. EMPLOYMENT OF EMPLOYEE
A. Effective Date. Effective on the Commencement Date, Bancorp
hereby agrees to employ Employee, and Employee accepts employment as Executive
Vice-President and Chief Financial Officer of Bancorp, with such duties as are
presently consistent with such title and office, and such different or
additional duties as may be assigned to Employee from time to time by the
Board including, without limitation, acting as an officer of the Bank if
elected by the Board of Directors of the Bank; provided, however, that any
additional duties assigned to Employee shall be consistent with Employee's
status, title, position and responsibilities as contemplated at the time of
execution of this Agreement.
<PAGE>
B. Employee's Obligations. Employee agrees to devote his full and
exclusive time, attention and energies to the business of Bancorp and as part
of such duties shall serve in such capacities for Bancorp and the Bank as may
be required of him during his employment pursuant to this Agreement. He shall
not engage in any other business activity, whether or not such business
activity is pursued for gain, profit or other pecuniary advantage, except that
Employee shall be entitled to engage in civic and eleemosynary activities or
in passive investment activities so long as such activities do not compete or
interfere with his employment hereunder.
C. Compensation. As compensation for his services hereunder,
Employee shall receive from Bancorp, the Bank or a combination thereof, an
aggregate annual salary of One Hundred Forty-Five Thousand Dollars
($145,000.00), payable in twenty-six (26) pay periods (hereinafter, as
adjusted from time to time as herein provided, the "Base Salary"). Employee's
Base Salary shall be reviewed annually after December 31, 1994, for increases
consistent with Bancorp's and the Bank's executive compensation policies and
Employee's duties and contributions to Bancorp and the Bank. If in either
calendar 1993 or 1994, the after-tax earnings of Bancorp equal $12,000,000 or
more, Employee's annual base salary beginning January 1, 1995, shall increase
by no less than 10%. Notwithstanding anything herein to the contrary, to the
extent to which he shall qualify, Employee shall be entitled to participate in
any employee benefit programs which may from time to time be in effect for
Bancorp or the Bank. Notwithstanding anything to the contrary, Employee shall
be covered by Bancorp's or Bank's health benefit and/or medical insurance plan
beginning with his first day of employment.
D. Cessation of Obligations. The obligations of Bancorp and
Employee hereunder shall continue throughout the initial or any subsequent
term of this Agreement, unless this Agreement is terminated as provided
herein.
3. CHANGE IN CONTROL.
A. Definition. As used in this Agreement, a Change in Control of
Bancorp shall be deemed to have occurred if, and only if (i) Bertram W. Klein
(hereinafter "Klein"), the current Chief Executive Officer of Bancorp and the
Bank, ceases for any reason to hold the office of Chief Executive Officer of
Bancorp; or (ii) Klein and/or members of his immediate family (including only
Klein and his spouse, children, parents, or any trusts established for the
benefit of any of them) cease to hold ten percent (10%) or more of all
outstanding voting shares of Bancorp.
B. Effect of a Change in Control. In the event of a Change in
Control, if Bancorp's legal existence is terminated (i.e. is dissolved), the
Bank hereby assumes and becomes severally obligated for the obligations of
this Agreement to Employee. If Bancorp's legal existence is continued through
merger or other combination with or consolidation into any new or existing
entity, the Bank hereby assumes and becomes jointly and severally liable, with
such new entity, to Employee for all the obligations of Bancorp hereunder.
Upon a Change in Control, the term of this Agreement shall be immediately and
automatically extended for a period of five (5) years from the effective date
of such Change in Control (hereinafter the "Five Year Term"). At the end of
the Five Year Term, and upon each subsequent anniversary date of the Change in
Control, this Agreement shall be automatically extended for an additional one-
year period as provided in Paragraph 1 above, unless (i) Bancorp chooses not
to extend or (ii) this Agreement is otherwise terminated in accordance with
the provisions contained herein.
<PAGE>
During the Five Year Term, Employee shall be retained in Bank's employ
(and in Bancorp's employ unless Bancorp is dissolved after the Change in
Control), and be provided with compensation and benefits at least equal in the
aggregate to that received by Employee from Bancorp and the Bank immediately
prior to the effective date of the Change in Control, unless this Agreement is
otherwise terminated by Bancorp for Cause, or by reason of the Death or
Disability of Employee; provided, however, Employee shall continue to fulfill
his obligations pursuant to paragraph 2B of this Agreement.
For a period of two (2) years following the effective date of a Change in
Control, Employee may terminate this Agreement at any time by providing
written notice of such voluntary termination to Bancorp or to the Bank at
least ninety (90) days prior to the effective date of such voluntary
termination, and, in such event (i) all obligations of Bancorp and the Bank
under this Agreement shall immediately cease as of the effective date of such
voluntary termination; and (ii) Employee shall only be entitled to receive
payment of salary and benefits accrued as of the effective date of such
voluntary termination.
Should Employee continue in the employ of the Bank or Bancorp for a
period of at least two (2) years following the effective date of a Change in
Control, Employee may thereafter terminate this Agreement by providing written
notice of such voluntary termination to Bancorp or the Bank at least ninety
(90) days prior to the effective date of such voluntary termination and, in
such event, Bancorp shall pay to the Employee (i) upon the effective date of
termination or at the next regular pay period thereafter all salary and other
benefits accrued and unpaid as of the effective date of Employee's voluntary
termination; and (ii) thereafter, on a monthly basis, an amount equal to one-
twelfth (1/12) of Employee's then-current Base Salary from Bancorp and the
Bank, such payments to continue for the lesser of (a) three (3) years from the
effective date of Employee's voluntary termination; or (b) the greater of one
year or the remainder of the Five Year Term.
4. CHANGE IN CONTROL AND DIMINUTION IN DUTIES.
A. Definition. As used in this Agreement, a Diminution in Duties
shall mean any of the following events, occurring in conjunction with or
following a Change in Control:
(i) a change in Employee's status, position or
responsibilities with Bancorp (unless Bancorp's separate
existence ceases as a result of the Change in Control) or
the Bank (including a material change in the number or
positions of those employees or officers to whom Employee
reports and who report to Employee) which, in Employee's
reasonable judgement, represents a significant and
adverse change in Employee's status, position or
responsibilities as in effect immediately prior to the
effective date of a Change in Control, or at any time
thereafter;
(ii) the assignment to Employee of any duties or
responsibilities which, in Employee's reasonable
judgement, are inconsistent with Employee's status,
position or responsibilities as in effect immediately
prior to the effective date of the Change in Control or
at any time thereafter;
<PAGE>
(iii) any removal of Employee from, or failure to
reappoint or reelect Employee to any of his positions
with the Bank, unless such positions have been abolished
as a result of a reorganization of the Bank, such as a
merger or consolidation resulting from the Change in
Control except in connection with the termination of this
Agreement (a) by Bancorp or the Bank for Cause; (b) as a
result of Employee's Death or Disability; or (c) by
Employee, other than as a result of a Diminution in
Duties as described hereunder. If Employee's position
with the Bank has been abolished as herein provided, the
appointment of Employee to such positions as have
responsibilities, duties, and status within the Bank or
successor organization similar to those of the office or
position abolished will be deemed to be the reelection or
reappointment as required herein.
(iv) a reduction in Employee's aggregate Base
Salary or any failure to pay Employee within thirty (30)
days of the date due any compensation or benefits to
which he is entitled;
(v) the failure by Bancorp or the Bank to (a)
continue in effect (without reduction in benefit levels
and/or reward opportunities) any material compensation or
benefit plan in which Employee was participating from
Bancorp or the Bank immediately prior to the effective
date of a Change in Control, unless a substitute or
replacement has been implemented which provides
substantially identical compensation or benefits to
Employee or provides compensation equal or superior in
value to such benefits plan; or (b) provide Employee with
compensation and benefits equal or superior in value to
that received from Bancorp and the Bank, in the
aggregate, under each other compensation or employee
benefit plan, program and practices in effect immediately
prior to a Change in Control or at any time thereafter.
B. Effect of a Diminution in Duties. Should the Employee suffer a
Diminution in Duties in conjunction with or following a Change in Control
Employee may at any time thereafter, upon written notice to Bancorp or the
Bank at least ninety (90) days prior to the effective date, voluntarily
terminate this Agreement and his employment with Bancorp and the Bank. Upon
receipt of such notice of voluntary termination, Bancorp may, in its sole
discretion, waive the ninety (90) day notice requirement for Employee's
voluntary termination and consider such voluntary termination effective
immediately upon Bancorp or the Bank's receipt of Employee's written notice.
Under either of such circumstances, Bancorp shall pay to the Employee (i) upon
the effective date of termination, or at the next regular pay period
thereafter, the aggregate salary and other benefits accrued from Bancorp and
the Bank through the effective date of Employee's voluntary termination; and
(ii) thereafter on a monthly basis, an amount equal to one twelfth (1/12) of
Employee's then-current aggregate Base Salary from Bancorp and the Bank, such
payments to continue for the lesser of (a) three (3) years from the effective
date of Employee's voluntary termination or (b) the greater of one year or the
remainder of the Five Year Term.
<PAGE>
5. TERMINATION OF AGREEMENT.
A. By Employee. Employee may terminate this Agreement and his
employment with Bancorp and the Bank at any time, by providing written notice
of his voluntary termination to Bancorp at least ninety (90) days prior to the
effective date of such voluntary termination. In such an event, other than in
connection with a Change in Control or Diminution in Duties (i) all
obligations of Bancorp and the Bank under this Agreement shall immediately
cease, as of the effective date of the voluntary termination and (ii) Employee
shall be entitled to receive only payment of the aggregate salary and benefits
accrued from Bancorp and the Bank through the effective date of such voluntary
termination.
B. By Bancorp or the Bank. Bancorp may terminate this Agreement
and, at its option, Employee's employment (i) immediately and at any time for
Cause, as that term is hereinafter defined, in which event all obligations of
Bancorp and the Bank under this Agreement shall cease immediately, as of the
effective date of the termination, and Employee shall be entitled to receive
payment of only the aggregate salary and benefits accrued from Bancorp and the
Bank through the effective date of the termination; or (ii) at any time prior
to a Change in Control, without cause and upon written notice to Employee,
which notice shall at Bancorp's option be effective immediately or at some
future date not to exceed ninety (90) days following date of the notice of
termination, in which event Bancorp shall itself, or cause the Bank to, pay to
Employee all salaries and benefits accrued from Bancorp or the Bank through
the effective date of the termination. In addition, Employee shall also be
entitled to receive a lump-sum payment in an amount equal to Employee's then-
current aggregate Base Salary from Bancorp and the Bank (exclusive of any
stock options, profit sharing, bonuses or other benefits). An election by
Bancorp not to renew or extend Employee's employment as provided in Section 1
hereof, other than for Cause, shall be deemed a termination of this Agreement
by Bancorp without Cause and shall give rise to rights to Employee under this
Subparagraph 5B.
As used in this Agreement, "Cause" for termination shall be limited to
the following: (i) Employee's conviction of a felony; (ii) the issuance by
any state or federal bank regulatory agency of a request or demand for removal
of Employee from employment with Bancorp or the Bank or from any office which
Employee then holds with Bancorp or the Bank; (iii) Employee's material breach
of Paragraph 2B of this Agreement; (iv) Employee's gross negligence in the
performance of his duties hereunder; or (v) failure of Employee to
substantially perform his duties hereunder (other than failure resulting from
Employee's disability) after demand for substantial performance is delivered
to Employee by Bancorp or the Bank, identifying specifically the manner in
which Employee has not substantially performed his duties, and a 7 day period
to cure has elapsed without substantial improvement in performance to the
reasonable standards set by Bancorp or the Bank, respectively.
<PAGE>
C. By Death or Disability. Notwithstanding anything herein to the
contrary, this Agreement shall terminate if (i) Employee dies during the term
of this Agreement or (ii) Bancorp terminates this Agreement after Employee
shall be absent from his employment with Bancorp or the Bank for a continuous
period of more than six (6) months by reason of incapacity or illness which
Employee's physician determines has resulted in Employee's permanent
disability. In either of such events, all obligations of Bancorp and the Bank
hereunder shall cease upon such termination except that from and after
Employee's death or date of termination as aforesaid Bancorp shall pay, or
cause the Bank to pay, on a monthly basis for a period of 6 months, an amount
equal to one-twelfth (1/12) of Employee's then-current aggregate Base Salary
from Bancorp and the Bank, such amount to be paid to Employee if he be then
living; if not, then to his surviving wife or his heirs or personal
representatives.
6. SUCCESSORS AND ASSIGNS.
The rights and obligations of Bancorp and the Bank under this
Agreement shall inure to the benefit of and be binding upon their respective
successors and assigns, but the rights of Employee hereunder are personal to
him and may not be assigned and shall not inure to the benefit of his heirs,
personal representatives or assigns, except as specifically provided for
herein.
Bancorp will require any successor (whether direct or indirect, by
purchase, merger, consolidation or otherwise) to all or substantially all of
the business and/or assets of Bancorp or the Bank, expressly to assume and to
agree to perform this Agreement in the same manner and to the same extent that
Bancorp would have been required to perform if no such succession had taken
place.
7. CONFIDENTIALITY.
Employee agrees not to divulge to anyone, either during or after the
termination of his employment hereunder, any information acquired by him by
virtue of his employment with Bancorp or the Bank. Upon the termination of
his employment, Employee agrees to immediately deliver to Bancorp all books,
papers documents and other materials or property of any nature belonging to
Bancorp or the Bank, including but not limited to originals and all copies of
any graphic or recorded materials of any kind, whether handwritten,
typewritten, printed, electronically stored or recorded in any manner.
8. ATTORNEYS' FEES.
Bancorp agrees to pay to Employee in full and as they are incurred
all legal fees and court costs incurred by Employee as a result of any
litigation arising from or in connection with this Agreement or the
enforcement of any rights or obligations created by this Agreement, whether
such litigation is initiated by Employee or Bancorp or the Bank and regardless
of the outcome of such litigation; provided, however that Bancorp will be
under no obligation to pay to Employee any costs, attorneys' fees or other
expenses incurred in connection with litigation initiated by Employee which is
subsequently determined by the Court in which such litigation is initiated, to
have been frivolous or filed in bad faith.
<PAGE>
9. NOTICE.
Any notice required or permitted to be given under this Agreement
shall be in writing and shall be given or made by certified or registered
mail, postage pre-paid, or by hand delivery, via courier or otherwise, as
follows, or to such other person or address as shall be hereafter designated
by notice given in accordance with this section:
If to Bancorp or Mid-America Bancorp and
the Bank: Bank of Louisville and Trust Company
500 West Broadway
Louisville, Kentucky 40202
Attn: Chief Executive Officer
If to the Employee: Steven A. Small
7210 Leafland Place
Prospect, Kentucky 40059
Any notice or other communication hereunder shall be deemed to have been duly
given or made (i) if made by hand, when delivered or when attempted delivery
shall be rejected; or (ii) if made by letter, upon deposit thereof in the
mail, postage pre-paid, registered or certified, with return receipt
requested. Notwithstanding the foregoing, any notice or other communication
hereunder which is actually received by a party hereto shall be deemed to have
been duly given or made to such party.
10. ENTIRE AGREEMENT; MODIFICATION.
This Agreement contains the entire agreement of the parties. It may
not be changed, altered or modified in any manner except by subsequent written
agreement, signed by Employee, Bancorp and the Bank.
11. SEVERABILITY.
The provisions of this Agreement shall be deemed entirely severable,
and the illegality, invalidity or unenforceability of any provision shall not
affect the validity or enforceability of the other provisions hereof.
12. GOVERNING LAW
This Agreement shall be governed by and construed in accordance with
the laws of the Commonwealth of Kentucky.
13. EXHIBIT A
Exhibit A is incorporated by reference as though fully set forth
herein.
<PAGE>
IN WITNESS WHEREOF, the parties have executed this Agreement the day and
year first above written.
MID-AMERICA BANCORP ("BANCORP")
By: /s/ Bertram W. Klein
Title: Chairman
BANK OF LOUISVILLE ("THE BANK")
By: /s/ Orson Oliver
Title: President
STEVEN A. SMALL ("EMPLOYEE")
/s/ Steven A. Small
EXHIBIT A
1. Employee shall be supplied by the Bank with a new automobile
as of July 1, 1993, which shall be selected by Employee at a
cost to Bank not to exceed $20,000. To the extent Employee
chooses an automobile costing in excess of $20,000, the excess
shall be borne by Employee Any proceeds from the resale of
the automobile shall be split between Bank and Employee in
proportion to the part of the purchase price each of them
incurred. Bank will pay all expenses for the Employee's
automobile in the same manner as it does for other executive
level employees.
<PAGE>
Exhibit 10(h)
AGREEMENT and GENERAL RELEASE
This is an Agreement dated as of October 26, 1993, between MID-AMERICA BANCORP
and MID-AMERICA BANK OF LOUISVILLE & TRUST COMPANY, on one hand (collectively,
the "Bank") and STANLEY L. ATLAS, on the other ("Atlas").
Whereas Atlas has expressed a desire to retire early from the Bank, and
Whereas the Bank would like to utilize the expertise and competence of Atlas
during a reasonable transition period,
NOW THEREFORE, the parties agree as follows:
1. Atlas will retire from the service of the Bank
effective December 17, 1993. He will then be eligible
to receive a pension from the Bank's Retirement Plan
based on his early retirement in accordance with the
provisions of that Plan. The first payment thereunder
will be as of January 1, 1994. Atlas will receive
notification from the Bank concerning his options for
receiving the pension payments. The Bank will announce
that Atlas has decided to take early retirement and
that he will remain a member of the Board of Directors.
2. In addition, the Bank will pay Atlas the sum of
$62,137.92 per year, payable in monthly installments,
from the date of retirement until his sixty-fifth
birthday. Should Atlas die prior to reaching his
sixty-fifth birthday, this payment will continue until
he would have reached age sixty-five and will be paid
to his surviving spouse. If his spouse should
predecease him, then said payments will be made to his
estate.
3. Atlas will be treated under the Bank's Employee Stock
Ownership Plan as if he worked through December 31,
1993.
4. The stock options heretofore accumulated by Atlas will
be exercisable by him in accordance with the provisions
of the Incentive Stock Option Plans applicable thereto.
If approved by the Committee charged with the
administration of those Plans, the intent of the
parties hereto is that shares equal to the "in-the-
money" value of the options be given to Atlas in
satisfaction of the obligation of the Plans with
respect to the options held by Atlas.
<PAGE>
5. CONSULTING AGREEMENT - Atlas agrees to consult with the
Bank on matters within his expertise and competence
and, in this regard, will make himself available to the
Bank for a minimum of 15 hours per month for a period
of five years beginning December 20, 1993. Requests by
the Bank for consulting time will be upon reasonable
notice and during normal working hours. Atlas will
perform consulting services hereunder as an independent
contractor and not as an employee of the Bank.
Services requested of Atlas by the Bank will be
consistent with duties performed by persons in
executive level positions within the Bank. As
compensation therefor, the Bank will pay Atlas the sum
of $32,619.61 per year, payable in monthly
installments.
6. BOARD MEMBERSHIP - Atlas will remain a member of the
Board of Directors of Bancorp consistent with the
provisions of the By-Laws of Bancorp and for such time
as the number of shares in Bancorp owned (directly or
beneficially) or controlled by Atlas or June Atlas, his
spouse, does not fall below 225,000 shares, adjusted
for stock dividends after the date hereof. Atlas'
service on the Board will correspond to that of an
executive officer of the Bank, and he will not receive
a stipend for serving as a Board member.
PROXY - Atlas and June Atlas, his spouse, hereby grant an
irrevocable proxy to Bank management on all shares of Mid-
America Bancorp ("Bancorp") owned or controlled by them now
or in the future and for which and to the extent that they are
legally entitled to grant a proxy. This proxy is an important part
of the consideration for this Agreement and Release and is
intended by the parties to be a proxy coupled with an interest.
Atlas and June Atlas agree further that shares of Bancorp
owned or controlled by them now or in the future will not be
disposed of without first giving the Bank the opportunity to
purchase such shares or, if the Bank declines, to the Chairman
thereof to either purchase such shares or arrange for a third-
party purchaser. "Purchase" in this paragraph means a purchase
at the bid price net of commissions. Any right to purchase
hereunder must be exercised within two business days of
notification by Atlas.
7. Each party agrees to make best efforts to avoid public
statements that would intentionally disparage the other.
8. This Agreement and General Release supersedes all other
agreements previously made between the parties relating to
employment, payments, benefits or retirement. There are no
other understandings or agreements. Atlas will receive no
payments or benefits under any program, plan or provision of
the Bank not specifically set forth herein, including, without
limitation, the Bank's Incentive Compensation Plan.
<PAGE>
9. Atlas may purchase from the Bank for current book value the
Honda Accord automobile now used as his executive
automobile.
10. Atlas will share with the Garlove family the use of Churchill
Downs Box in Section 316, Number EO9 for Derby Day and
Oaks Day only, provided however, that during his lifetime Sam
Klein may provide the Bank with other directions regarding use
of the box during those days and these directions will take
precedence over use by Atlas and the Garlove family. The use
of this box must be paid for under the same terms as presently
exist.
11. Atlas will receive notification from Bank of his right to obtain
extended health insurance coverage, at his own expense,
pursuant to COBRA. Nothing in this Agreement is intended to
result in a waiver or release of Atlas' rights under COBRA.
12. Atlas represents and agrees that he has not commenced and will
not at any time hereafter commence, prosecute or maintain, any
legal actions, lawsuits, administrative proceedings, workers'
compensation claims or suits, or other legal charges, claims or
proceedings against the Bank, Bancorp or their officers,
directors, agents and employees with respect to any matter
arising out of his employment with the Bank or encompassed by
the terms of the General Release set forth below.
With the exceptions stated below, Atlas and the Bank
mutually agree that they will not publicize or disclose the
conditions, terms or contents of this Agreement and
General Release, in any manner, whether in writing or
orally, to any person whomsoever, directly or indirectly, or
by or through an agent, representative, attorney or any
other such person. Exceptions as to Atlas: Atlas may
disclose the conditions, terms or contents of this
Agreement and General Release to members of his
family, providing they agree in turn to keep confidential
the information received, and to his accountant, tax
preparer, attorney or other professional advisor, provided
such persons agree in turn to keep confidential the
information received. Exceptions at to the Bank: The
Bank may disclose the conditions, terms or contents of this
Agreement and General Release to Bank executives and
managers who need to know this information for
legitimate business reasons, providing such persons agree
in turn to keep the information confidential, and the
Bank's attorneys, accountants, consultants, or other
professional advisors, providing such persons agree in turn
to keep the information they receive confidential.
<PAGE>
Atlas agrees that this Agreement and General Release may be
pleaded as a full and complete defense to and may be used as
the basis for an injunction against any claim, charge, action, suit
or other proceeding which may be instituted, prosecuted or
attempted in breach of this Agreement and General Release.
Any damages suffered by reason of any breach of any provision
of this Agreement and General Release by the parties shall
include attorney's fees and other costs and expenses of
instituting, preparing, prosecuting or defending any action or
suit resulting from a breach of this Agreement, whether taxable
or otherwise.
Atlas agrees that this Agreement and General Release shall be
binding upon his heirs, administrators, successors and assigns
and shall inure to the benefit of the Bank, and its officers,
directors, agents, employees, parents, subsidiaries, divisions,
affiliates, successors, assigns and attorneys.
GENERAL RELEASE - Atlas hereby releases and forever
discharges the Bank, its officers, directors, agents, employees,
attorneys and representatives, from any and all claims, demands,
actions, suits, causes of action, debts, accounts or controversies
of any nature whatsoever, known or unknown, which Atlas has,
or may have, against the Bank or its officers, directors, agents,
employees, attorneys and representatives, up to the date of
execution of this Agreement and General Release.
This Release specifically includes any and all claims arising out
of, or in any way related to, Atlas' employment with the Bank,
or his retirement, or any actions taken by the Bank during the
course of Atlas' employment.
IN WITNESS WHEREOF, the parties hereto on the date first written above have
signed this Agreement and General Release.
MID-AMERICA BANCORP
MID-AMERICA BANK OF LOUISVILLE & TRUST COMPANY
By /s/ Robert H. Sachs /s/ Stanley L. Atlas
Executive Vice-President STANLEY L. ATLAS
APPROVED AS TO APPLICABLE
PROVISIONS OF SECTION 6 HEREOF
/s/ June Atlas
JUNE ATLAS
<PAGE>
STATEMENT RE: COMPUTATION OF PER SHARE EARNINGS Exhibit 11
(In Thousands Except for Per Share Data) ------------
<TABLE>
<CAPTION>
Year ended December 31
---------------------------------
1993 1992 1991
--------- --------- ---------
<S> <C> <C> <C>
Weighted average common stock outstanding................ 8,462 8,425 8,421
Common equivalent shares for stock option plan using
the treasury stock method............................ 95
--------- --------- ---------
Weighted average shares outstanding...................... 8,557 8,425 8,421
========= ========= =========
Net income............................................... $11,573 $9,521 $9,025
========= ========= =========
Net income per share..................................... $1.35 $1.13 $1.07
========= ========= =========
</TABLE>
All share and per share information has been adjusted for the 3% stock
dividend issued in December 1993.
<PAGE>
Selected Portions of the Annual Report to Shareholders Exhibit 13
for the Year ended December 31, 1993. ------------
Comparative Summary
<TABLE>
<CAPTION>
Dollars In Thousands, Except Per Share Amounts 1993 1992 1991
-----------------------------------------------
<S> <C> <C> <C>
AT YEAR END
Total assets $1,169,023 $1,041,649 $981,703
Total deposits 729,449 689,377 672,926
Loans, net of unearned income 657,568 583,267 493,373
Total shareholders' equity 119,590 112,629 107,444
FOR THE YEAR
Net income $11,573 $9,521 $9,025
Cash dividends declared* $ 5,356 $4,554 $4,086
Weighted average shares outstanding 8,557 8,425 8,421
PER SHARE DATA
Book value $14.05 $13.34 $12.76
Market value 17.75 15.63 12.13
Cash dividends declared* 0.65 0.60 0.60
Net income 1.35 1.13 1.07
RATIOS
Return on average total assets 1.11% 1.01% 1.01%
Return on average shareholders' equity 10.00 8.77 8.70
Cash dividend payout ratio 46.75 48.85 45.38
Average shareholders' equity to average total assets 11.09 11.48 11.64
Allowance for loan losses to loans, net of unearned income 1.00 1.03 1.12
</TABLE>
* The Company's normal cash dividend policy, which is $.15 per share per
quarter, has not been affected by the stock dividends declared during the
last three years. See Note M of Notes to Consolidated Financial Statements.
<PAGE>
MANAGEMENT'S DISCUSSION and ANALYSIS
OF
FINANCIAL CONDITION and RESULTS OF OPERATIONS
This discussion analyzes the results of operations and
financial condition for Mid-America Bancorp and subsidiaries (the
Company), including its primary subsidiary, Mid-America Bank of
Louisville and Trust Company (the Bank). It should be read in
conjunction with the consolidated financial statements and related
notes presented on pages XX-XX.
<PAGE>
1993 COMPARED TO 1992
Net income for 1993 was $11,573,000 or $1.35 per share
compared with $9,521,000 or $1.13 per share for 1992. This
increase was primarily due to an increase in net interest income,
and an increase in certain sources of non-interest income. For
1993, return on average total assets (ROA) was 1.11% and return on
average equity (ROE) was 10.00%, compared with 1992 when the ROA
was 1.01% and ROE was 8.77%. The discussion that follows explains
in more detail the factors affecting 1993 operating results and
changes in financial condition.
NET INTEREST INCOME
Net interest income is the difference between interest income
on earning assets and the interest expense incurred for funding
sources used to support earning assets. Earning assets include
primarily loans and securities. The primary sources used to fund
these assets include deposits, purchased and borrowed funds, and
capital. The net interest spread is the difference between the
average rate of interest earned on earning assets on a tax
equivalent basis and the average rate of interest expensed on
interest bearing liabilities. The net yield on earning assets is
net interest income on a tax equivalent basis as a percent of the
average balance of earning assets. Detailed information on the
average balances of earning assets and funding sources, interest
rates, and the net yield on earning assets is shown in the table on
page XX.
In 1993, net interest income on a tax equivalent basis
increased $5,118,000 to $41,426,000. Net interest income was
favorably impacted by increases in average earning assets and the
net interest spread. During 1993 the rate structure for earning
assets and interest bearing liabilities was lowered in response to
declining market interest rates. The average yield on earning
assets declined from 8.18% in 1992 to 7.45% in 1993, with an
offsetting decline in the average rate on interest bearing
liabilities from 4.79% in 1992 to 3.82% in 1993. The shift to
lower rates, interacting with the timing of repricing and shift in
composition of earning assets and interest bearing liabilities
during the year, resulted in a net interest spread of 3.63% in 1993
compared to 3.39% in 1992. The net yield on earning assets also
increased in 1993 to 4.27% compared to 4.15% in 1992. The average
prime rate in 1993 was 6.00% compared to 6.25% in 1992.
Average earning assets increased approximately $94 million or
11% in 1993 to $969,102,000. The increase was centered in loans,
which increased approximately $81 million or 15% to $615,070,000,
and in the securities portfolio, which increased approximately $56
million. These increases were offset by a $42 million decrease in
short-term lower yielding assets (federal funds sold and securities
purchased under agreements to resell). Changes in the composition
and amounts of earning assets arose from Management's response to
the declining interest rate environment in 1993, where such changes
were necessary to maintain a proper match among assets and
liabilities, while increasing the yield on investable funds.
<PAGE>
The growth in average earning assets was achieved despite a
minor increase in average deposits. Advances from the Federal Home
Loan Bank and other borrowings increased $43 million as Management
matched a portion of the increased fixed rate loan volume with
these advances. Securities sold under agreements to repurchase, a
short-term higher yielding collateralized instrument used by
customers with large amounts of investable funds, increased $29
million. Non-interest bearing liabilities, which include
outstanding money orders, continued to increase in 1993 and provide
support for earning asset growth. Non-interest bearing deposits
and capital were 21.1% of earning assets in 1993 compared to 21.3%
in 1992.
The changes in interest income attributable to volume and rate
changes are summarized in the table on page XX.
PROVISION FOR LOAN LOSSES
The provision for loan losses was $390,000 in 1993 compared to
$650,000 for 1992. During 1993, the Company had net recoveries of
$168,000, a decline in the level of non-performing loans, and no
appreciable increase in the risk characteristics of its loan
portfolio. These and other factors were considered in determining
the lower provision for loan losses in 1993.
The allowance for loan losses is maintained at a level
sufficient to provide for the risk in the loan portfolio,
considering non-performing loan and overall economic conditions.
In evaluating the allowance for loan losses, Management considers
its evaluation of the risk characteristics of the loan portfolio,
including the impact of current economic conditions on the
borrowers' ability to repay, past collection experience and such
other factors which, in Management's judgement, deserve current
recognition. At December 31, 1993, the allowance for loan losses
was 1.00% of loans outstanding compared to 1.03% at the end of
1992. The following is a summary of the Company's loan loss
experience for each of the last three years.
<PAGE>
<TABLE>
<CAPTION>
Dollars In Thousands 1993 1992 1991
-----------------------------------------
<S> <C> <C> <C>
Balance, January 1 $6,020 $5,523 $5,220
Provision for loan losses 390 650 725
Net loan recoveries (charge-offs) 168 (153) (422)
-----------------------------------------
Balance, December 31 $6,578 $6,020 $5,523
=========================================
Average loans $615,070 $534,525 $479,667
Loans at year end 657,568 583,267 493,373
Non-performing and restructured loans at year-end 3,872 5,829 5,056
Provision for loan losses to average loans 0.06% 0.12% 0.15%
Net charge-offs (recoveries) to average loans (0.03) 0.03 0.09
Allowance for loan losses to average loans 1.07 1.13 1.15
Allowance for loan losses to year-end loans 1.00 1.03 1.12
</TABLE>
NON-INTEREST INCOME
Non-interest income includes the Company's fee related
revenues, which are the primary source of sustainable non-interest
income. Also included are securities and trading account gains and
losses which are not recurring in nature. During 1993 all major
sources of fee related income increased over 1992. However, due to
fluctuations in securities and trading account gains (losses)
between 1993 and 1992, non-interest income in the aggregate was
down 2% in 1993.
Trust Department income increased $361,000 to $1,345,000 in
1993. This increase results primarily from increased volume and
special services in the stock transfer area. Also contributing to
the increase was the effect of revising and increasing the trust
services fee structure. Service charges on deposit accounts
increased 2% in 1993 compared to 1992. The percentage increase in
deposit service charges in 1993 lagged behind the trend over the
last two years. This decline in the fee growth rate results from
the introduction of new and more competitively priced deposit
products. Money order fees increased from $1,767,000 in 1992 to
$2,553,000 in 1993, an increase of 44%. This increase was due to
the increased sales volume of the money order subsidiary. The
money order subsidiary has expanded its operations to 48 states at
the end of 1993 compared to 30 in 1991. Through its network of
approximately 2,500 agents, there has been a consistent increase in
the monthly volume of money order sales throughout 1993.
Securities and trading account activity resulted in a net loss of
$101,000 in 1993 compared to a gain of $1,438,000 in 1992. There
were no significant fluctuations between 1993 and 1992 in the
several components of other non-interest income.
<PAGE>
OTHER OPERATING EXPENSES
Other operating expenses increased $2,211,000 or 7% to
$34,463,000 from $32,252,000 in 1992. This increase is primarily
associated with increases in personnel costs, and expenses related
to technology improvements and maintenance. In comparing 1993 to
1992 there is a shift in the composition of expenses associated
with data processing resulting from the Company's acquisition of
its data processing service bureau in May of 1992. This
contributed to the decrease in data processing expense of
$1,168,000 when comparing 1993 and 1992. This change also caused
increases in salaries and benefits, occupancy expense and furniture
and equipment expenses.
Salaries and benefits increased $2,090,000 or 13% to
$18,426,000. Excluding the effect of the data processing service
bureau acquisition, the increase would have been 12%. The increase
is explained by salary increases, which averaged approximately 5%,
and an increase in the number of employees. The full-time employee
count was relatively stable during 1993, despite the addition of
several positions, as efforts to shift certain functions to part-
time personnel continued to be successful. During 1993, the
Company added three new Executive Vice Presidents, created and
staffed a credit analysis function, upgraded the management and
staffing of its leasing operation, added a fixed-income security
specialist for managing Bank and Trust Department investment
activities, and added other appropriate personnel to support the
Company's activities, products and customer service objectives.
Furniture and equipment expenses increased $423,000 or 12%.
Excluding the effect of the data processing service bureau
acquisition the increase would have been 8% and relates primarily
to money order equipment and maintenance expenses associated with
the increased level of activity. Professional fees increased in
1993 primarily as a result of fees for investment management
services for the Bank's securities portfolio, which services were
discontinued in the fourth quarter of 1993. Other categories of
other operating expenses included no significant unusual items and
no significant variances between 1993 and 1992 exist.
INCOME TAXES
The effective tax rates were 31.2%, 30.2%, and 30.4% for 1993,
1992, and 1991, respectively. The difference between the statutory
and the effective tax rates was principally attributable to the
tax-exempt status of interest income on obligations of states and
political subdivisions and certain loans.
The Company adopted FASB Statement No. 109, "Accounting for
Income Taxes", prospectively in the first quarter of 1993. The
implementation of this new accounting standard was not significant
to financial condition or results of operations.
<PAGE>
BALANCE SHEET
Total assets were $1,169,023,000 at December 31, 1993,
compared with $1,041,649,000 one year ago. Total assets averaged
$1,043,706,000 during 1993, an increase of $97,900,000, or 10%.
Average earning assets increased $94,129,000 or 11% to
$969,102,000. Increased loan volume accounted for a substantial
portion of the increase in earning assets.
SECURITIES
The Company's securities portfolio includes obligations of the
U.S. Government or its agencies, obligations of various states and
political subdivisions, and other securities which are comprised of
corporate debt securities and Federal Reserve Bank and Federal Home
Loan Bank stock. At December 31, 1993, investment securities
totalled $225,096,000, with U.S. Treasury and agency obligations of
$174,395,000, comprising 77% of the portfolio. Also, the Company
had $109,202,000 of securities classified as available for sale at
December 31, 1993.
The Financial Accounting Standards Board has issued FASB
Statement No.115, "Accounting for Certain Investments in Debt and
Equity Securities", effective for the Company on January 1, 1994.
The principal effect of adoption of FASB Statement No.115 will be
that debt securities classified as available for sale will be
reported at fair value, with unrealized gains and losses excluded
from earnings and reported as a separate component of shareholders'
equity, on a net of tax basis. Investment securities will continue
to be reported at amortized cost and trading account securities
will continue to be reported at fair value with unrealized gains
and losses included in earnings. If FASB Statement No.115 had been
adopted as of December 31, 1993, the carrying value of securities
available for sale would have increased $275,000 and shareholders'
equity would have increased $179,000.
The investment securities portfolio had a net unrealized gain
of $407,000 on December 31, 1993, compared to $2,234,000 at
December 31, 1992. The decline in unrealized appreciation is
attributed to maturities or calls of certain high yielding
securities. See Note B of the consolidated financial statements
for gross unrealized gain and loss information.
The securities portfolio is utilized for pledging requirements
on certain borrowings and public and fiduciary deposits, and
provides liquidity through proceeds from scheduled maturities.
The Company's securities portfolio is considered to be high
grade. Direct obligations of the U.S. Government are full faith
and credit obligations of the federal government. Issues of
federal agencies are also directly guaranteed or sponsored by the
United States. Obligations of the states and political
subdivisions and corporate securities are the areas of highest risk
in the portfolio. However, risk is minimized through the purchase
of high quality investments and the avoidance of concentrations
with any single issuer. At December 31, 1993, the largest
percentage of tax exempt securities held were issued by Kentucky
municipalities. Rated state and political obligations are rated
"A" or better by Moody's Investor Services and corporate
investments have a "Baa1" rating or better.
LOANS
Total loans and leases, net of unearned income, were
$657,568,000 at December 31, 1993 compared to $583,267,000 one year
ago. Average loans increased $80,545,000, or 15%, to $615,070,000
in 1993 from $534,525,000 in 1992.
The loan portfolio continues to be concentrated in residential
real estate mortgage loans. Total loans in this category increased
$24 million to $320,007,000 at December 31, 1993. The Company has
been a market leader in home equity financing which contributes to
this concentration in the loan portfolio. Recent growth in
mortgage loans relates to the Company's "Preferred Mortgage", a
flexible low-cost financing alternative. The real estate mortgages
are principally in the metropolitan Louisville, Kentucky area.
Unlike other regions of the United States, this market has not
experienced high inflation in real estate prices and has been
consistently in the lower 10% for housing costs in national
surveys.
During 1993, construction and development loans increased
$7,367,000 to $59,581,000. These loans are principally for the
development of residential housing tracts, office buildings and
shopping centers.
Commercial and industrial loans increased $35 million to
$258,889,000, as the Company continued to emphasize lending to
businesses in the community.
The Company has no foreign loans and continues to lend
principally within its metropolitan area.
NON-PERFORMING and RESTRUCTURED ASSETS
Non-performing assets include non-accrual and restructured
loans, loans 90 days or more past due and other real estate held
for sale. On December 31, 1993, non-performing assets totaled
$6,842,000 compared with $9,390,000 at December 31, 1992.
Information with respect to non-performing loans and assets is
presented in the table below:
The accrual of interest on loans is discontinued when it is
determined that the collection of interest or principal is
doubtful, or generally when a default of interest or principal has
existed for 90 days or more, unless the loan is fully secured and
in the process of collection. At December 31, 1993, there were
loans for which payments were current or less than 90 days past due
where borrowers are currently experiencing financial difficulties.
These potential problem loans, amounting to approximately $14
million, are subject to management review and are considered in
determining the adequacy of the allowance for loan losses.
In 1993 non-performing and restructured loans decreased
$1,957,000 to $3,872,000. Non-accrual loans decreased $1,758,000
in 1993, primarily as a result of the restoration to accrual status
of a development loan. This borrower's underlying situation has
improved significantly and permitted sustained performance during
1993. Management has carefully evaluated its risk, including
consideration of underlying collateral values based on current
market conditions, with respect to non-accrual loans, loans past
due 90 days or more, and potential problem loans. Additionally,
Management takes a conservative approach toward accounting for and
valuation of non-performing loans. Non-accrual loan situations are
promptly identified and all identified losses charged off.
Other real estate held for sale decreased $591,000 to
$2,970,000 at December 31, 1993. During 1993 other real estate
acquired in settlement of loans aggregated $1,207,000 and sales of
other real estate aggregated $1,759,000.
During May 1993, the Financial Accounting Standards Board
issued FASB Statement No. 114, "Accounting by Creditors for
Impairment of a Loan", which is effective for the Company beginning
in 1995. FASB Statement No. 114 requires that the value of
impaired loans be measured at the present value of expected future
cash flows discounted at the loan's effective interest rate, or at
the loan's observable market price or the fair value of the
collateral if the loan is collateral dependent. At this time, the
Company has not evaluated the financial implications of adopting
this new accounting standard.
NON-PERFORMING AND RESTRUCTURED ASSETS
<TABLE>
<CAPTION>
Dollars In Thousands December 31
----------------------------------------------------
1993 1992 1991 1990 1989
-------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
Loans accounted for on a non-accrual basis $2,695 $4,453 $2,006 $5,096 $1,105
Loans restructured as to principal or interest --- --- 1,931 --- 16
Loans contractually past due ninety days or more
as to interest or principal payments 1,177 1,376 1,119 1,445 2,647
------ ------ ------ ------ ------
Total non-performing and restructured loans 3,872 5,829 5,056 6,541 3,768
Other real estate held for sale 2,970 3,561 3,292 2,780 983
------ ------ ------ ------ ------
Total non-performing and restructured assets $6,842 $9,390 $8,348 $9,321 $4,751
====== ====== ====== ====== ======
Non-performing and restructured loans to total loans 0.59% 1.00% 1.02% 1.38% 0.90%
Non-performing and restructured assets to total assets 0.59 0.90 0.85 0.95 0.56
Allowance for loan losses to non-performing and
restructured loans 169.89 103.28 109.24 79.80 112.79
</TABLE>
<PAGE>
PREMISES AND EQUIPMENT
Premises and equipment net of accumulated depreciation
increased $497,000 to $17,821,000. During 1993 the Company
acquired approximately $2.5 million of premises and equipment.
This increase was due primarily to continuing additional equipment
purchases by the money order subsidiary to support its expanding
agent base, and technology and equipment upgrades.
DEPOSITS
Total deposits increased $40,072,000 to $729,449,000 on
December 31, 1993, compared to $689,377,000 at the same time in
1992. Average deposits increased to $733,320,000 from $725,215,000
in 1992.
Although total deposits increased at December 31, 1993, they
were relatively stable in the aggregate on an average basis during
the year. Average interest bearing deposits for the year decreased
slightly from $647,368,000 to $644,467,000. Average non-interest
bearing deposits increased 14% to $88,853,000. There continued to
be a shift in deposit accounts toward more liquid type accounts as
interest-bearing checking and savings products increased.
Large certificates of deposits increased $3,649,000 to
$26,456,000, at December 31, 1993, from $22,807,000 at December 31,
1992; on average, there was a decrease for the year as the Company
decreased its reliance on these types of deposits.
ADVANCES FROM THE FEDERAL HOME LOAN BANK AND OTHER BORROWINGS
Federal Home Loan Bank advances increased $45,470,000 during
1993 from $34,636,000 to $80,106,000. The Company has continued to
use this source of fixed rate funds to match its fixed rate
mortgage and commercial loan products.
ACCRUED EXPENSES and OTHER LIABILITIES
Accrued expenses and other liabilities increased $12,135,000
to $44,090,000 at December 31, 1993 from $31,955,000 a year ago.
This increase was primarily due to an increase in money orders
outstanding.
INTEREST SENSITIVITY MANAGEMENT
Interest rate risk at any time interval may be measured in
absolute dollars by examining the gap position, or difference
between interest-sensitive assets and interest-sensitive
liabilities. A positive gap, which arises when interest-sensitive
assets exceed interest-sensitive liabilities in designated time
frames, will result in a greater proportion of assets than
liabilities repricing with changes in market interest rates. A
positive gap is normally advantageous when market rates are rising.
A negative gap is the converse, where interest-sensitive
liabilities exceed interest-sensitive assets, and is normally
advantageous when market interest rates are declining. Asset/
liability management strategies attempt to control exposure to
these interest rate risks.
The interest sensitivity of the Company's earning assets and
interest bearing liabilities is shown on the table on page XX. The
distribution in the Interest Rate Sensitivity Analysis is based on
a combination of maturities and repricing frequencies. Variable
rate assets and liabilities are distributed based on the repricing
frequency of the instrument. In measuring the Company's interest
sensitivity, Management adjusts the timing of non-contractual
deposit repricing to more accurately reflect anticipated pricing
behavior. In order to provide a more realistic one-year gap
position on the Interest Rate Sensitivity Analysis, 40 percent of
interest bearing demand and savings deposits are distributed in the
0 to 90 Days category with the remainder in the over 5 Years
category. The adjusted cumulative positive gap position in the
less than one year category of 5.82% indicates the Company is well
positioned for a rising rate environment. Absent this adjustment
to the repricing behavior of certain deposit types, the one year
cumulative negative gap would be 9.73%.
Gap alone does not accurately measure the magnitude of changes
in net interest income, since changes in interest rates do not
occur simultaneously or equally to all assets or liabilities in a
category. Management supplements traditional gap analyses with
computer simulation modeling to estimate the financial impact of
rate changes.
SHAREHOLDERS' EQUITY
Shareholders' equity increased $6,961,000 to $119,590,000 at
December 31, 1993. Average shareholders' equity increased
$7,144,000 to $115,716,000 and was 11.09% of average total assets
for 1993, which compares favorably to the Company's peer group.
The Company's primary source of capital is net income, net of
dividends paid.
Regulators monitor capital adequacy under risk based capital
guidelines which place assets and certain off-balance-sheet
activities in various categories of risk with varying weights.
Also, a minimum leverage ratio, based on shareholders' equity as a
percentage of total assets, is required. As of December 31, 1993
and 1992, the Company's capital ratios and the required minimums
are as follows:
December 31
----------------------- Minimum
1993 1992 Requirement
---------------------------------------
Total risk-based capital ratio 19.25% 18.68% 8.00%
Tier I risk-based capital ratio 18.24 17.74 4.00
Leverage ratio 10.20 10.81 3.00
LIQUIDITY MANAGEMENT
Liquidity represents an institution's ability to generate cash
or otherwise obtain funds at a reasonable price to satisfy
commitments to borrowers as well as the demands of depositors.
Liquidity needs are generally met by either converting assets into
cash or accessing sources of incremental funding. Liquid assets,
which include cash, federal funds sold, securities purchased under
agreements to resell, securities available for sale at market
value, and investment securities maturing within one year at market
value, are approximately $86 million at December 31, 1993. In the
opinion of Management, incremental funding sources are sufficient
to meet known or reasonably anticipated funding requirements.
The liquidity of the holding company is impacted primarily by
the ability of its principal subsidiary, the Bank, to pay
dividends. Certain regulatory restrictions limit the amount of
dividends the Bank may pay. Additional information about these
restrictions is in Note K to the consolidated financial statements.
NEW DEVELOPMENTS
In December 1993, Mid-America Bank, FSB, a federal savings
bank, commenced operations in a county adjacent to the historical
market of the Bank. The opening of this institution, a wholly-
owned subsidiary of the Company, permits the Company to expand its
geographical market for financial products and services.
1992 RESULTS OF OPERATIONS COMPARED TO 1991
Net income for 1992 was $9,521,000 or $1.13 per share compared
with $9,025,000 or $1.07 per share for 1991. This increase was
primarily due to an increase in net interest income, and an
increase in certain sources of non-interest income. For 1992,
return on average total assets (ROA) was 1.01% and return on
average equity (ROE) was 8.77%, compared with 1991 when the ROA was
1.01% and ROE was 8.70%.
NET INTEREST INCOME
In 1992, net interest income on a tax equivalent basis
increased $1,311,000 to $36,308,000. Net interest income was
favorably impacted by the increase in average earning assets and
the increase in the net interest spread. During 1992 the rate
structure for earning assets and interest bearing liabilities was
lowered in response to declining market interest rates. The
average yield on earning assets declined from 9.62% in 1991 to
8.18% in 1992, with an offsetting decline in the average rate on
interest bearing liabilities from 6.43% in 1991 to 4.79% in 1992.
This shift to lower rates interacting with the timing of repricing
and shift in composition of earning assets and interest bearing
liabilities during the year resulted in a net interest spread of
3.39% in 1992 compared to 3.19% in 1991. The net yield on earning
assets declined slightly in 1992 to 4.15% compared to 4.22% in
1991. The average prime rate in 1992 was 6.25% compared to 8.47%
in 1991.
Average earning assets increased approximately $45 million or
5% in 1992 to $874,973,000. The increase was centered in loans,
which increased approximately $55 million or 11% to $534,525,000,
and in short-term investments (federal funds sold and securities
purchased under agreements to resell), which increased
approximately $10 million. These increases were offset by a
decrease in securities. Also federal funds sold balances were
decreased and invested in higher yielding and collateralized
instruments, primarily securities purchased under agreements to
resell. These changes in the composition and amount of securities
and short-term investments arose from Management's response to the
declining interest rate environment in 1992, where such changes
were necessary to maintain a proper match among assets and
liabilities.
The growth in average earning assets was supported by a 9%
increase in interest bearing deposits, which included a 47%
increase in interest bearing demand deposits, and a 10% decrease in
time deposits. Advances from the Federal Home Loan Bank, a new
source of funds in 1992, and other borrowings increased $14,229,000
as Management matched some of the increased loan volume with these
advances. Non-interest bearing liabilities continued to increase
in 1992 and provide support for earning asset growth. Non-interest
bearing deposits and capital were 21.3% of earning assets in 1992
compared to 21.4% in 1991.
The changes in interest income attributable to volume and rate
changes are summarized in the table on page XX.
PROVISION FOR LOAN LOSSES
The provision for loan losses decreased $75,000 to $650,000
for 1992 compared to $725,000 for 1991. Management continued to
evaluate its position with respect to non-performing and potential
problem loans throughout 1992. The stabilization of the level of
non-performing loans, propriety of amounts charged-off with respect
to non-performing loans identified, and the decreased level of loan
charge-offs in 1992, all contributed in determining the amount of
the provision for loan losses in 1992.
At December 31, 1992, the allowance for loan losses was 1.03%
of loans outstanding compared to 1.12% at the end of 1991.
NON-INTEREST INCOME
Non-interest income increased $719,000 or 7% compared to 1991.
This increase was primarily due to an increase in service charges
on deposit accounts and money order income. These increases were
partially offset by decreases in trust income and insurance
premiums and commissions.
Service charges on deposit accounts increased $578,000 or 14%
over 1991. This increase was primarily related to an increase in
checking account activity charges. Money order fees increased from
$982,000 in 1991 to $1,767,000 in 1992, an increase of 80%. This
increase was due to the increased sales volume of the money order
subsidiary. The money order subsidiary expanded its operations to
47 states at the end of 1992 compared to 30 at December 31, 1991.
Securities gains of $1,128,000 were generated by the sale of
securities which Management had segregated during the year as held
for sale. A trading account established in late 1991 to take
advantage of the market's interest rate volatility resulted in
$310,000 of trading account profits in 1992 compared to $199,000
for 1991.
OTHER OPERATING EXPENSES
Other operating expenses increased $1,822,000 or 6% to
$32,252,000 from $30,430,000 in 1991. This was caused primarily by
increases in salaries and benefits, and furniture and equipment
expense.
In 1992 there was a shift in the composition of expenses
associated with data processing resulting from the Company's
acquisition of its data processing service bureau in May of 1992.
This caused a decrease in data processing expense of $2,062,000
when comparing 1992 and 1991, with corresponding increases in
salaries and benefits, occupancy expense and furniture and
equipment expenses. The increase in salaries and benefits of
$2,113,000 was the result of an average 5% salary increase and the
addition of the data processing company's staff. Excluding the
data processing company the increase would have been $970,000.
Furniture and equipment expenses increased $1,052,000 or 42% due to
the increase in the purchases and maintenance of money order
machines and the addition of the data processing operation.
<PAGE>
INTEREST RATE SENSITIVITY ANALYSIS
<TABLE>
<CAPTION>
Dollars In Thousands Non-interest
0-90 91-180 181-365 1-5 Over 5 Bearing
Days Days Days Years Years Funds Total
----------- ----------- ----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
Assets
Loans, net of unearned income $362,075 $12,182 $22,663 $125,528 $128,237 $6,883 $657,568
Securities 20,878 16,279 29,377 248,163 19,601 334,298
Federal funds sold 9,000 9,000
Securities purchased under
agreements to resell 75,000 75,000
Other assets 93,157 93,157
----------- ----------- ----------- ----------- ----------- ----------- -----------
Total assets 466,953 28,461 52,040 373,691 147,838 100,040 1,169,023
----------- ----------- ----------- ----------- ----------- ----------- -----------
Sources of funds
Interest bearing deposits:
Demand deposits 88,601 132,903 118,591 340,095
Savings deposits 32,643 609 48,964 82,216
Time deposits 57,854 43,324 54,490 151,072 398 307,138
Securities sold under
agreements to repurchase 183,288 183,288
Federal funds purchased 12,500 12,500
Advances from the Federal Home Loan
Bank and other borrowings 1,524 1,494 3,051 26,078 48,010 80,157
Other liabilities 44,039 44,039
Shareholders' equity 119,590 119,590
----------- ----------- ----------- ----------- ----------- ----------- -----------
Total sources of funds 376,410 44,818 58,150 177,150 230,275 282,220 1,169,023
----------- ----------- ----------- ----------- ----------- ----------- -----------
Interest sensitivity gap 90,543 (16,357) (6,110) 196,541 (82,437) (182,180)
----------- ----------- ----------- ----------- ----------- -----------
Cumulative interest sensitivity gap $90,543 $74,186 $68,076 $264,617 $182,180
=========== =========== =========== =========== ===========
Cumulative interest sensitivity gap
as a percent of total assets 7.75% 6.35% 5.82% 22.64% 15.58%
Rate-sensitive assets to rate-
sensitive liabilities 1.24X 0.64X 0.89X 2.11X 0.64X
</TABLE>
<PAGE>
AVERAGE BALANCES AND YIELDS/RATES TAX EQUIVALENT BASIS
<TABLE>
<CAPTION>
Dollars In Thousands 1993 1992 1991
----------------------------- ---------------------------- ----------------------------
Average Yields/ Average Yields/ Average Yields/
Balance Interest Rates Balance Interest Rates Balance Interest Rates
----------- -------- ------ --------- --------- ------ --------- --------- ------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Earning assets:
Securities:
U.S. Treasury and
government agencies $191,492 $8,131 4.25% $136,160 $9,154 6.72% $150,898 $11,843 7.85%
States and political
subdivisions 3,790 436 11.50 6,556 703 10.72 13,693 1,483 10.83
Corporate and other 52,828 3,338 6.32 48,902 3,926 8.03 56,621 5,019 8.86
Federal funds sold 22,479 692 3.08 30,549 1,096 3.59 49,278 3,000 6.09
Securities purchased under
agreements to resell 72,657 2,299 3.16 106,429 4,023 3.78 77,829 4,434 5.70
Trading account securities 10,786 626 5.80 11,852 545 4.60 1,790 109 6.09
Loans, net of unearned income 615,070 56,656 9.21 534,525 52,160 9.76 479,667 53,963 11.25
----------- -------- ------ --------- --------- ------ --------- --------- ------
Total earning assets 969,102 72,178 7.45% 874,973 71,607 8.18% 829,776 79,851 9.62%
Non-earning assets:
Allowance for loan losses (6,023) (5,544) (5,612)
Cash and due from banks 48,159 45,793 39,722
Other 32,468 30,584 27,667
----------- --------- ---------
Total assets $1,043,706 $945,806 $891,553
=========== ========= =========
Interest bearing liabilities:
Deposits:
Demand deposits $250,387 6,502 2.60% $241,530 8,545 3.54% $164,434 8,393 5.10%
Savings deposits 81,060 2,107 2.60 75,685 2,594 3.43 64,456 3,178 4.93
Certificates of deposit
$100,000 and over 23,486 1,056 4.50 25,690 1,390 5.41 32,101 2,262 7.05
Other time deposits 289,534 14,720 5.08 304,463 19,374 6.36 333,290 25,235 7.57
----------- -------- ------ --------- --------- ------ --------- --------- ------
Total interest bearing deposits 644,467 24,385 3.78 647,368 31,903 4.93 594,281 39,068 6.57
Federal funds purchased and
securities sold under
agreements to repurchase 102,734 2,851 2.78 73,947 2,504 3.39 101,525 5,742 5.66
Advances from the Federal Home Loan
Bank and other borrowings 58,336 3,516 6.03 15,524 892 5.75 1,295 44 3.40
----------- -------- ------ --------- --------- ------ --------- --------- ------
Total interest bearing liabilities 805,537 30,752 3.82% 736,839 35,299 4.79% 697,101 44,854 6.43%
----------- -------- ------ --------- --------- ------ --------- --------- ------
Non-interest bearing liabilities:
Demand deposits 88,853 77,847 73,403
Other 33,600 22,548 17,288
----------- --------- ---------
Total liabilities 927,990 837,234 787,792
Shareholders' equity 115,716 108,572 103,761
Total liabilities and ----------- --------- ---------
shareholders' equity $1,043,706 $945,806 $891,553
=========== ========= =========
Net interest income $41,426 $36,308 $34,997
======== ========= =========
Net interest spread 3.63% 0.03% 0.03%
Net yield on earning assets 4.27% 4.15% 4.22%
====== ====== ======
</TABLE>
Tax exempt income is calculated on a tax equivalent basis using a tax rate
of 35% in 1993 and 34% in 1992 and 1991.
Non-accrual loans and loan fees are included in the computation of loan
yields. The Company has no deposits from foreign depositors.
INTEREST INCOME AND INTEREST EXPENSE
VOLUME AND RATE CHANGES FOR THE YEARS 1993 AND 1992 TAX EQUIVALENT BASIS
<TABLE>
<CAPTION>
In Thousands Net Change Due to Due to Net Change Due to Due to
1993/1992 Volume Rate 1992/1991 Volume Rate
-----------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Increase (decrease)
Interest income:
Securities ($1,878) $2,983 ($4,861) ($4,562) ($2,501) ($2,061)
Federal funds sold (404) (263) (141) (1,904) (915) (989)
Securities purchased under
agreements to resell (1,724) (1,140) (584) (411) 1,343 (1,754)
Trading account securities 81 (52) 133 436 469 (33)
Loans, net of unearned income 4,496 7,539 (3,043) (1,803) 5,793 (7,596)
-----------------------------------------------------------------------------------------
Total interest income 571 9,067 (8,496) (8,244) 4,189 (12,433)
Interest expense:
Deposits:
Demand deposits (2,043) 303 (2,346) 152 3,206 (3,054)
Savings deposits (487) 174 (661) (584) 493 (1,077)
Certificates of deposit
$100,000 and over (334) (112) (222) (872) (403) (469)
Other time deposits (4,654) (913) (3,741) (5,861) (2,060) (3,801)
Federal funds purchased and
securities sold under
agreements to repurchase 347 855 (508) (3,238) (1,307) (1,931)
Advances from the Federal Home Loan
Bank and other borrowings 2,624 2,578 46 848 798 50
-----------------------------------------------------------------------------------------
Total interest expense (4,547) 2,885 (7,432) (9,555) 727 (10,282)
-----------------------------------------------------------------------------------------
Change in net interest income $5,118 $6,182 ($1,064) $1,311 $3,462 ($2,151)
=========================================================================================
</TABLE>
The volume/rate variance is allocated to the volume and rate categories based
on the relationship that the absolute volume or rate variance bears to the
total of the absolute variance for volume and rate before the allocation.
<PAGE>
Summary of Financial Data
<TABLE>
<CAPTION>
In Thousands, Except Per Share Amounts Years Ended December 31
-----------------------------------------------------------------
1993 1992 1991 1990 1989
-----------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Total interest income $71,302 $70,487 $78,347 $81,882 $75,892
Total interest expense 30,752 35,299 44,854 47,113 42,161
-----------------------------------------------------------------
Net interest income 40,550 35,188 33,493 34,769 33,731
Provision for loan losses 390 650 725 4,607 794
-----------------------------------------------------------------
Net interest income after
provision for loan losses 40,160 34,538 32,768 30,162 32,937
Non-interest income 11,129 11,357 10,638 7,913 6,589
Other operating expenses 34,463 32,252 30,430 28,981 25,069
-----------------------------------------------------------------
Income before income taxes 16,826 13,643 12,976 9,094 14,457
Income tax expense 5,253 4,122 3,951 2,464 3,725
-----------------------------------------------------------------
Net income $11,573 $9,521 $9,025 $6,630 $10,732
=================================================================
Per common share:
Net income $1.35 $1.13 $1.07 $0.78 $1.25
Cash dividends declared 0.65 0.60 0.60 0.65 0.70
</TABLE>
<TABLE>
<CAPTION>
December 31
-----------------------------------------------------------------
1993 1992 1991 1990 1989
-----------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Loans, net of unearned income $657,568 $583,267 $493,373 $473,963 $417,365
Total assets 1,169,023 1,041,649 981,703 982,764 849,546
Total deposits 729,449 689,377 672,926 674,567 588,859
Total shareholders' equity 119,590 112,629 107,444 102,505 101,304
</TABLE>
<PAGE>
QUARTERLY FINANCIAL DATA
<TABLE>
<CAPTION>
In Thousands, Except 1993 1992 1991
Per Share Amounts ----------------------------------- ---------------------------------- ----------------------------------
First Second Third Fourth First Second Third Fourth First Second Third Fourth
-------- ------- ------- ------- ------- ------- ------- ------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Total interest
income $17,421 $17,576 $17,656 $18,649 $17,903 $17,899 $17,296 $17,389 $20,512 $19,826 $19,494 $18,515
Total interest
expense 7,859 7,614 7,634 7,645 10,020 9,177 8,339 7,763 12,035 11,340 11,045 10,434
rovision for
loan losses 100 100 100 90 50 50 50 500 450 100 50 125
Net interest income ------ ------ ------ ------ ------ ------ ------ ----- ------ ------ ------ ------
after provision for
loan losses 9,462 9,862 9,922 10,914 7,833 8,672 8,907 9,126 8,027 8,386 8,399 7,956
Non-interest income 2,544 2,737 2,884 2,964 1,979 2,760 3,219 3,399 2,763 2,721 2,183 2,971
Other operating
expenses 8,272 8,392 8,546 9,253 7,895 8,038 8,011 8,308 7,473 7,742 7,603 7,612
------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------
Income before
income taxes 3,734 4,207 4,260 4,625 1,917 3,394 4,115 4,217 3,317 3,365 2,979 3,315
Income taxes 1,156 1,281 1,393 1,423 443 912 1,198 1,569 1,038 923 818 1,172
------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------
Net income $2,578 $2,926 $2,867 $3,202 $1,474 $2,482 $2,917 $2,648 $2,279 $2,442 $2,161 $2,143
====== ====== ====== ====== ====== ====== ====== ====== ====== ====== ====== ======
Per common share
Net income $0.30 $0.34 $0.33 $0.38 $0.18 $0.29 $0.35 $0.31 $0.27 $0.28 $0.27 $0.25
====== ====== ====== ====== ====== ====== ====== ====== ====== ====== ====== ======
</TABLE>
MARKET FOR MID-AMERICA BANCORP'S STOCK AND
RELATED SECURITY HOLDER MATTERS
Mid-America Bancorp's common stock is traded on the American Stock
Exchange (AMEX) under the symbol MAB. As of December 31, 1993, the total
number of holders of Mid-America Bancorp's common stock was 1,031 and the
market price of the Company's common stock was $17.75.
Mid-America Bank of Louisville and Trust Company is the stock transfer
agent, dividend disbursing agent, and registrar for the common stock of
Mid-America Bancorp.
The tables below respresent the high and low market prices reported for
Mid-America Bancorp's common stock and the cash dividends declared
on common stock, in each quarter of the last two years. Market prices have
been adjusted to reflect the effect of stock dividends during the years
presented.
<PAGE>
Market Price
--------------------------
1993 Cash Dividends Declared High Low
- ----------------------------------------------------------------------------
1st Quarter $ .15 $16.75 $15.25
2nd Quarter .15 16.63 15.13
3rd Quarter .15 19.00 16.00
4th Quarter .20 20.25 17.50
Market Price
--------------------------
1992 Cash Dividends Declared High Low
- ----------------------------------------------------------------------------
1st Quarter $ .15 $14.00 $13.00
2nd Quarter .15 14.88 13.25
3rd Quarter .15 15.38 14.00
4th Quarter .15 16.13 14.25
Management's Statement on Financial Reporting
The Management of the Company is responsible for the integrity and
objectivity of the financial information presented in this Annual Report.
Management has prepared the financial statements according to generally
accepted accounting principles, which involve the use of estimates and
judgements where appropriate.
To meet its responsibility, Management maintains a comprehensive system of
internal control to assure proper authorization of transactions, safeguarding
of assets, and reliability of financial records. This system can provide
only reasonable, not absolute, assurance that errors and irregularities can
be prevented or detected. The concept of reasonable assurance is based on
the recognition that the cost of a system of internal control must be
related to the benefits derived.
The Audit Committee of the Board of Directors reviews the systems of
internal control and financial reporting. The Committee meets and consults
regularly with Management, the internal auditors, and the independent
auditors to review the scope and results of their work.
The accounting firm of KPMG Peat Marwick has performed an independent audit of
the Company's financial statements. The firm's report appears below.
Independent Auditors' Report
The Board of Directors and Shareholders
Mid-America Bancorp:
We have audited the accompanying consolidated balance sheets of Mid-America
Bancorp and subsidiaries as of December 31, 1993 and 1992, and the related
consolidated statements of income, changes in shareholders' equity, and cash
flows for each of the years in the three-year period ended December 31, 1993.
These consolidated financial statements are the responsibility of the
Company's management. Our responsibility is to express an opinion on these
consolidated financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements.
An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the consolidated financial statements referred to above
present fairly, in all material respects, the financial position of
Mid-America Bancorp and subsidiaries as of December 31, 1993 and 1992, and
the results of their operations and their cash flows for each of the years
in the three-year period ended December 31, 1993, in conformity with
generally accepted accounting principles.
As discussed in Note A to the consolidated financial statements, the Company
adopted the provisions of the Financial Standards Board's Statement of
Financial Accounting Standards No. 109, "Accounting for Income Taxes,"
in 1993.
KPMG Peat Marwick
Louisville, Kentucky
January 21, 1994
<PAGE>
CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
In Thousands, Except Share and Per Share Amounts December 31
-------------------------
1993 1992
--------- ---------
<S> <C> <C>
ASSETS
Cash and due from banks $62,937 $50,994
Federal funds sold 9,000 49,200
Securities purchased under agreements to resell 75,000 166,000
Securities available for sale-market value, $109,477 (1993) and $22,935 (1992) 109,202 22,935
Investment securities-market value, $225,503 (1993) and $146,065 (1992) 225,096 143,831
Loans, net of unearned income of $32,984 (1993) and $44,044 (1992) 657,568 583,267
Allowance for loan losses (6,578) (6,020)
--------- ---------
Loans, net 650,990 577,247
Premises and equipment 17,821 17,324
Other assets 18,977 14,118
--------- ---------
Total assets $1,169,023 $1,041,649
========= =========
LIABILITIES
Deposits:
Non-interest bearing $118,591 $87,224
Interest bearing 610,858 602,153
--------- ---------
Total deposits 729,449 689,377
Securities sold under agreements to repurchase 183,288 162,077
Federal funds purchased 12,500 10,975
Advances from the Federal Home Loan Bank 80,106 34,636
Accrued expenses and other liabilities 44,090 31,955
--------- ---------
Total liabilities 1,049,433 929,020
Commitments and contingencies
SHAREHOLDERS' EQUITY
Preferred stock, no par value; authorized-750,000 shares; none issued ---- ----
Common stock, no par value; stated value $2.77 per share;
authorized-10,000,000 shares; issued and outstanding-
8,510,125 shares (1993) and 8,194,756 shares (1992) 23,607 22,734
Additional paid-in capital 91,535 86,561
Retained earnings 4,448 3,334
--------- ---------
Total shareholders' equity 119,590 112,629
--------- ---------
Total liabilities and shareholders' equity $1,169,023 $1,041,649
========= =========
</TABLE>
See notes to consolidated financial statements.
<PAGE>
CONSOLIDATED STATEMENTS OF INCOME
<TABLE>
<CAPTION>
In Thousands, Except Per Share Amounts Years Ended December 31
----------------------------------------------
1993 1992 1991
---------- ---------- ----------
<S> <C> <C> <C>
INTEREST INCOME
Interest and fees on loans $55,928 $51,279 $52,964
Interest on securities:
U.S. Treasury and agencies 8,131 9,154 11,843
States and political subdivisions 288 464 979
Corporate and other 3,338 3,926 5,019
Interest on federal funds sold 692 1,096 3,000
Interest on securities purchased under agreements to resell 2,299 4,023 4,434
Interest on trading account securities 626 545 108
---------- ---------- ----------
Total interest income 71,302 70,487 78,347
INTEREST EXPENSE
Interest on deposits 24,385 31,903 39,068
Interest on federal funds purchased and
securities sold under agreements to repurchase 2,851 2,504 5,742
Interest on Federal Home Loan Bank advances and other borrowings 3,516 892 44
---------- ---------- ----------
Total interest expense 30,752 35,299 44,854
---------- ---------- ----------
NET INTEREST INCOME 40,550 35,188 33,493
Provision for loan losses 390 650 725
---------- ---------- ----------
NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES 40,160 34,538 32,768
NON-INTEREST INCOME
Income from trust department 1,345 984 1,012
Service charges on deposit accounts 4,728 4,617 4,039
Money order fees 2,553 1,767 982
Securities gains, net 106 1,128 1,463
Trading account gains (losses) (207) 310 199
Other 2,604 2,551 2,943
---------- ---------- ----------
Total non-interest income 11,129 11,357 10,638
OTHER OPERATING EXPENSES
Salaries and employee benefits 18,426 16,336 14,223
Occupancy expense 2,413 2,305 2,020
Furniture and equipment expenses 3,955 3,532 2,480
Other 9,669 10,079 11,707
---------- ---------- ----------
Total other operating expenses 34,463 32,252 30,430
---------- ---------- ----------
INCOME BEFORE INCOME TAXES 16,826 13,643 12,976
Income tax expense 5,253 4,122 3,951
---------- ---------- ----------
NET INCOME $11,573 $9,521 $9,025
========== ========== ==========
Weighted average shares outstanding 8,557 8,425 8,421
========== ========== ==========
PER COMMON SHARE
Net Income $1.35 $1.13 $1.07
========== ========== ==========
</TABLE>
See notes to consolidated financial statements.
<PAGE>
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY
<TABLE>
<CAPTION>
In Thousands, Except Share and Per Share Amounts Years Ended December 31, 1993, 1992 and 1991
-------------------------------------------------------------------------
Common Stock Additional Total
--------------------------- Paid-in Retained Shareholders'
Shares Amount Capital Earnings Equity
-------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Balance, January 1, 1991 6,555,320 $18,193 $66,565 $17,747 $102,505
Net income 9,025 9,025
Cash dividends declared,
($0.60 per share) (4,086) (4,086)
Stock dividend declared 1,015,155 2,812 11,498 (14,310) ---
-------------------------------------------------------------------------
Balance, December 31, 1991 7,570,475 21,005 78,063 8,376 107,444
Net income 9,521 9,521
Cash dividends declared,
($0.60 per share) (4,554) (4,554)
Stock dividend declared 606,588 1,680 8,329 (10,009) ---
Stock options exercised 17,693 49 169 218
-------------------------------------------------------------------------
Balance, December 31, 1992 8,194,756 22,734 86,561 3,334 112,629
Net income 11,573 11,573
Cash dividends declared,
($0.65 per share) (5,356) (5,356)
Stock dividend declared 247,415 685 4,418 (5,103) ---
Stock options exercised,
including related tax benefits 67,954 188 556 744
-------------------------------------------------------------------------
Balance, December 31, 1993 8,510,125 $23,607 $91,535 $4,448 $119,590
=========================================================================
</TABLE>
See notes to consolidated financial statements.
<PAGE>
CONSOLIDATED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
In Thousands Years Ended December 31
--------------------------------------------
1993 1992 1991
CASH FLOWS FROM OPERATING ACTIVITIES: ---------- ---------- ----------
<S> <C> <C> <C>
Net income $11,573 $9,521 $9,025
Adjustments to reconcile net income to net cash
provided by (used in) operating activities:
Depreciation, amortization and accretion, net 4,413 2,496 1,762
Provision for loan losses 390 650 725
Gain on sales of securities (106) (1,128) (1,463)
Loss (gain) on sales of premises and equipment (28) 8 (105)
Loss (gain) on trading account securities 207 (310) (199)
Deferred taxes (162) 98 (202)
Net decrease (increase) in trading account securities (91,585) 5,334 (4,825)
Decrease (increase) in interest receivable (1,288) 2,376 1,559
Decrease (increase) in other assets (2,713) 1,422 3,066
Decrease in interest payable (250) (869) (455)
Increase (decrease) in taxes payable (579) 48 810
Increase in other liabilities 13,270 11,746 8,466
---------- ---------- ----------
Net cash provided by (used in) operating activities (66,858) 31,392 18,164
---------- ---------- ----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of securities available for sale (68,897) (22,935) --
Proceeds from maturities of securities available for sale 103,000 - --
Proceeds from sales of securities available for sale 9,957 61,467 --
Proceeds from maturities of investment securities 111,068 81,880 94,796
Proceeds from sales of investment securities 12,089 13,364 62,904
Purchases of investment securities (245,460) (106,339) (86,102)
Net increase in customer loans (75,340) (93,264) (23,323)
Proceeds from sales of premises and equipment 134 170 176
Payments for purchases of premises and equipment (2,472) (3,124) (3,145)
---------- ---------- ----------
Net cash provided by (used in) investing activities (155,921) (68,781) 45,306
---------- ---------- ----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Net increase (decrease) in deposits 40,072 16,451 (1,641)
Net increase (decrease) in securities sold
under agreements to repurchase 21,211 (2,877) 20,071
Net increase (decrease) in federal funds purchased 1,525 (3,525) (31,325)
Advances from the Federal Home Loan Bank 51,687 50,350 --
Repayment of advances from the Federal Home Loan Bank (6,217) (15,714) --
Net increase (decrease) in other borrowings (50) 91 (1,773)
Stock options exercised 650 218 --
Dividends paid (5,356) (5,592) (4,037)
---------- ---------- ----------
Net cash provided by (used in) financing activities 103,522 39,402 (18,705)
---------- ---------- ----------
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS (119,257) 2,013 44,765
CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR 266,194 264,181 219,416
---------- ---------- ----------
CASH AND CASH EQUIVALENTS AT END OF YEAR $146,937 $266,194 $264,181
========== ========== ==========
</TABLE>
<PAGE>
Supplemental Cash Flow Information
Cash paid for income taxes amounted to $5,577,000, $4,107,000 and
$2,253,000 for 1993, 1992 and 1991, respectively.
Cash paid for interest was $31,002,000, $36,168,000 and $45,309,000 for
1993, 1992 and 1991, respectively.
Loans transferred to other assets were $1,207,000 in 1993, $3,217,000 in
1992, and $3,491,000 in 1991.
Investment securities transferred to securities available for sale amounted
to $39,468,000 in 1993 and $60,478,000 in 1992.
Trading account securities transferred to securities available for sale
amounted to $91,378,000 in 1993.
See notes to consolidated financial statements.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
A. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Mid-America Bancorp (the Company) is a bank holding company whose primary
subsidiary is Mid-America Bank of Louisville and Trust Company (the Bank).
Other subsidiaries include Mid-America Bank, FSB, and Mid-America Money Order
Company.
Principles of Consolidation--The consolidated financial statements
include the accounts of the Company and its wholly-owned subsidiaries.
Significant intercompany items have been eliminated in consolidation.
Certain prior year amounts have been reclassified to conform with current
classifications.
Statement of Cash Flows--For purposes of reporting cash flows, cash and
cash equivalents include cash on hand, amounts due from banks, federal funds
sold, and securities purchased under agreements to resell. Generally,
federal funds are purchased and sold for one-day periods and securities
purchased under agreements to resell generally have maturities of five days
or less. Certain activities of the Company, such as the acquisition of
property in exchange for release of indebtedness, do not result in cash
receipts or payments and, therefore, are not presented in the statement of
cash flows.
Securities Purchased Under Agreements to Resell--The Company obtains
possession and\or control through third parties of underlying securities held
as collateral for securities purchased under agreements to resell.
Collateral for securities purchased under agreements to resell is priced with
accrued interest based on the bid price at the end of the day and must exceed
the face amount of the security purchased under agreements to resell by a
stated margin amount. The Company monitors the prices and margins on a daily
basis.
Securities--Securities intended to be held until maturity are classified
as investment securites and carried at amortized historical cost. Securities
to be held for indefinite periods of time and not intended to be held to
maturity are classified as available for sale and carried at the lower of
aggregate cost or fair value, with unrealized losses recognized in non-
interest income. Securities held for indefinite periods of time include
securities that Management intends to use as part of its asset/liability
management strategy and that may be sold in response to or in anticipation of
changes in interest rates or based on other factors. Securities purchased
with the intention of recognizing short-term profits are placed in a trading
account. Trading account securities are carried at fair value. Realized and
unrealized gains and losses are included as part of non-interest income.
Amortization of premiums and accretion of discounts are recorded on the
interest method. The specific identification method is used in determining
gains and losses on the sale of securities. The Financial Accounting
Standards Board has issued FASB Statement No. 115, "Accounting for Certain
Investments in Debt and Equity Securities", effective for the Company January
1, 1994. The principal effect of adoption of FASB Statement No. 115 will be
that debt securities classified as available for sale securities will be
reported at fair value, with unrealized gains and losses excluded from
earnings and reported as a separate component of shareholders' equity, on a
net of tax basis. Investment securities will continue to be reported at
amortized cost and trading account securities will continue to be reported at
fair value with unrealized gains and losses included in earnings.
Loans and Interest Income--Loans are reported at the principal balance
outstanding, net of unearned income and deferred loan fees. Interest on
loans and amortization of unearned income and deferred loan fees, are
computed by methods which generally result in level rates of return on
principal amounts outstanding. The accrual of interest on loans is
discontinued when it is determined that the collection of interest or
principal is doubtful, or when a default of interest or principal has existed
for 90 days or more, unless such loan is well secured and in the process of
collection.
Allowance for Loan Losses--The allowance for loan losses is maintained at
a level adequate to absorb probable losses. Management determines the
adequacy of the allowance based upon reviews of individual credits,
evaluation of the risk characteristics of the loan portfolio, including the
impact of current economic conditions on the borrowers' ability to repay,
past collection and loss experience and such other factors, which, in
Management's judgement, deserve current recognition. The allowance for loan
losses is increased by charges to operating earnings and reduced by charge-
offs, net of recoveries.
Premises and Equipment--Premises and equipment are stated at cost less
accumulated depreciation and amortization. Depreciation is computed over the
estimated useful lives of the assets or lease term, if shorter, on the
straight line method.
Other Assets--Included in other assets is real estate acquired in
settlement of loans which is carried at the lower of cost or fair value minus
estimated selling costs. Any write-downs at the date of acquisition are
charged to the allowance for loan losses. Expenses incurred in maintaining
assets, subsequent write-downs to reflect declines in value, and realized
gains or losses are relected in income. The Company also holds real estate
for investment purposes. These income producing properties are carried at
the lower of cost or net realizable value. Income and expenses, including
depreciation, are reflected in other non-interest income.
Income Taxes--The Company accounts for income taxes in accordance with
FASB Statement No. 109 "Accounting for Income Taxes" which requires the use
of the asset and liability method in accounting for income taxes. The
amounts provided for income taxes are based upon the amounts of current and
deferred taxes payable or refundable at the date of the financial statements
as measured by the provisions of enacted laws and tax rates. The Company
previously followed FASB Statement No. 96 " Accounting for Income Taxes", and
adopted FASB Statement No. 109 on a prospective basis in the first quarter of
1993. The implementation of this new accounting standard was not significant
to financial condition or results of operations.
<PAGE>
Net Income Per Common Share--Net income per common share is determined by
dividing net income by the weighted average number of shares of common stock
outstanding, adjusted for the number of shares that would be issued assuming
the exercise of stock options.
B. SECURITIES
The book and market value of investment securities follows:
<TABLE>
<CAPTION>
In Thousands December 31, 1993 December 31, 1992
--------------------------------------------------------------------------------------------
Book Unrealized Market Book Unrealized Market
Value Gains Losses Value Value Gains Losses Value
--------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
U.S. Treasury and
U.S. Government agencies $174,395 $138 $325 $174,208 $91,113 $1,074 $58 $92,129
States and political subdivisions 2,956 127 -- 3,083 4,700 230 --- 4,930
Corporate obligations 33,557 480 13 34,024 40,469 1,204 216 41,457
Other 14,188 -- -- 14,188 7,549 --- --- 7,549
--------------------------------------------------------------------------------------------
$225,096 $745 $338 $225,503 $143,831 $2,508 $274 $146,065
============================================================================================
</TABLE>
The book and market value of securities available for sale follows:
<TABLE>
<CAPTION>
In Thousands December 31, 1993 December 31, 1992
-----------------------------------------------------------------------------------------------
Book Unrealized Market Book Unrealized Market
Value Gains Losses Value Value Gains Losses Value
-----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
U.S. Treasury and
U.S. Government agencies $109,202 $342 $67 $109,477 $22,935 $ -- $ -- $22,935
===============================================================================================
</TABLE>
<PAGE>
A summary of debt securities at December 31, 1993 based on contractual
maturities is shown in the table below. Actual maturities may differ from
contractual maturities because issuers may have the right to call or prepay
obligations with or without prepayment penalties.
<TABLE>
<CAPTION>
In Thousands Investment Securities Securities Available for Sale
----------------------------------- ---------------------------------
Book Market Book Market
Value Value Value Value
----------------------------------- ---------------------------------
<S> <C> <C> <C> <C>
Due within one year $48,197 $48,388 $18,337 $18,347
Due after one year through five years 157,298 157,487 90,865 91,130
Due after five years through ten years 3,578 3,611 -- --
Due after ten years 2,085 2,079 --
----------------------------------- ---------------------------------
$211,158 $211,565 $109,202 $109,477
=================================== =================================
</TABLE>
Gross realized gains and losses on the sales of securities were $107,000 and
$1,000, respectively, in 1993, $1,183,000 and $55,000, respectively, in 1992,
and $1,489,000 and $26,000, respectively in 1991.
Securities with a book value of $253,905,000 and $88,996,000 at December 31,
1993 and 1992, respectively, were pledged to secure public deposits, trust
deposits, repurchase agreements and for other purposes.
C. LOANS
The composition of loans follows:
<TABLE>
<CAPTION>
In Thousands December 31
---------------------------
1993 1992
------------ ------------
<S> <C> <C>
Commercial $258,889 $223,926
Real estate - construction and development 59,581 52,214
Real estate - mortgage 320,007 296,277
Consumer 52,075 54,894
------------ ------------
690,552 627,311
Unearned income (32,984) (44,044)
------------ ------------
$657,568 $583,267
============ ============
</TABLE>
<PAGE>
Loans outstanding and unfunded commitments are primarily concentrated in the
Bank's market area which encompasses Jefferson County, Kentucky and
surrounding communities. The Bank's credit exposure is diversified, with
secured and unsecured loans to consumers, small businesses and large
corporations. Although the Bank has a diversified loan portfolio, the ability
of customers to honor loan commitments is based, in part, on the economic
stability of the geographic region and/or industry in which they do business.
Nonaccrual and restructured loan balances and income information were as
follows:
<TABLE>
<CAPTION>
In Thousands 1993 1992 1991
------------ ------------ ------------
<S> <C> <C> <C>
Recorded investment at year-end $2,695 $4,453 $3,937
Interest computed at original terms 259 429 388
Interest recognized 166 175 195
</TABLE>
D. ALLOWANCE FOR LOAN LOSSES
Activity in the allowance for loan losses follows:
<TABLE>
<CAPTION>
In Thousands 1993 1992 1991
---------------------------------------------
<S> <C> <C> <C>
Balance, January 1 $6,020 $5,523 $5,220
Loans charged-off (860) (693) (1,649)
Recoveries 1,028 540 1,227
---------------------------------------------
Net recoveries (charge-offs) 168 (153) (422)
Provision for loan losses 390 650 725
---------------------------------------------
Balance, December 31 $6,578 $6,020 $5,523
=============================================
</TABLE>
<PAGE>
E. PREMISES AND EQUIPMENT AND LEASE COMMITMENTS
A summary of premises and equipment follows:
<TABLE>
<CAPTION>
In Thousands December 31
------------------------------
1993 1992
------------------------------
<S> <C> <C>
Land $4,314 $3,966
Buildings and leasehold improvements 10,796 9,902
Furniture and equipment 16,751 17,163
------------------------------
31,861 31,031
Less accumulated depreciation and amortization 14,040 13,707
------------------------------
$17,821 $17,324
==============================
</TABLE>
At December 31, 1993, the Company was obligated under long-term noncancelable
operating leases covering various premises and equipment. The Company's main
office and most branch office agreements contain renewal options. Computer
equipment leases are cancelable generally within a short period of time and
without substantial penalties.
Rental expense, net of insignificant amounts of sublease rental income, was
$1,042,000, $1,003,000 and $697,000 for 1993, 1992 and 1991, respectively.
Minimum rental commitments under noncancelable leases in future years are as
follows:
Year Ended December 31 Premises and Equipment
In Thousands Gross Rentals
----------------------------------------------------------------
1994 $954
1995 711
1996 554
1997 549
1998 401
Thereafter 2,721
================================================================
<PAGE>
F. INCOME TAXES
The provision for income taxes consists of the following:
<TABLE>
<CAPTION>
In Thousands 1993 1992 1991
------------ ------------ -------------
<S>
Current: <C> <C> <C>
Federal $5,373 $4,037 $4,146
State and local 42 (13) 7
------------ ------------ -------------
5,415 4,024 4,153
Deferred: ------------ ------------ -------------
Installment loan income (50) (120) (168)
Provision for loan losses (195) (110) (103)
Depreciation (9) (3) 130
Other, net 92 331 (61)
------------ ------------ -------------
(162) 98 (202)
------------ ------------ -------------
$5,253 $4,122 $3,951
============ ============ =============
</TABLE>
The provision for income taxes in the statements of income are reconciled to
the federal statutory rate as follows:
<TABLE>
<CAPTION>
1993 1992 1991
------------ ------------ -------------
<S> <C> <C> <C>
Tax at federal statutory rate 35.0% 34.0% 34.0%
Tax exempt interest income (3.8) (5.7) (7.9)
Non-deductible expenses 1.1 1.9 2.8
Other, net (1.1) -- 1.5
------------ ------------ -------------
31.2% 30.2% 30.4%
============ ============ =============
</TABLE>
Other liabilities include deferred income taxes of $131,000 and $215,000 at
December 31, 1993 and 1992, respectively. During 1993, certain prior year's
deferred tax items were reclassified to current taxes payable, which
increased deferred income taxes $ 78,000. The principal types of basis
differences between assets and liabilities for financial reporting and tax
return purposes which give rise to deferred taxes relate to the following:
In Thousands 1993 1992
------------ -------------
Allowance for loan losses ($2,422) ($2,164)
Depreciation 1,722 1,708
Installment loan income 82 129
Other, net 749 542
------------ -------------
$131 $215
============ =============
G. DEPOSITS
Included in deposits are certificates of deposit and other time deposits in
denominations of $100,000 or more in the amounts of $31,591,000 and
$28,438,000 at December 31, 1993 and 1992, respectively.
H. SECURITIES SOLD UNDER AGREEMENTS TO REPURCHASE
The Company enters into sales of securities under agreements to repurchase
which are treated as financings. The obligation to repurchase securities
sold is reflected as a liability and the assets underlying the agreements
remain in the respective securities account.
<TABLE>
<CAPTION>
December 31, 1993
-------------------------------------------------------
Asset Sold Repurchase Liability
----------------------------- -----------------------
Dollars In Thousands Carrying Market Interest
Maturity/Type of Asset Amount Value Amount Rate
------------- ------------- ------------- -------
<S> <C> <C> <C> <C>
Overnight to 30 Days
U.S. Treasury $184,647 $184,559 $181,466 3.20%
31 to 90 Days
U.S. Treasury 1,823 1,823 1,822 2.57
------------- ------------- ------------- -------
$186,470 $186,382 $183,288 3.20%
============= ============= ============= =======
</TABLE>
<PAGE>
I. ADVANCES FROM THE FEDERAL HOME LOAN BANK
The Bank is a member of the Federal Home Loan Bank of Cincinnati (FHLB) and,
accordingly, is eligible to borrow from the FHLB. The Bank pledges certain
first mortgage loans as collateral for these advances. The aggregate balance
in these mortgages must equal 150% of the advances outstanding. Certain
information with respect to outstanding advances from the FHLB is summarized
below:
<TABLE>
<CAPTION>
Dollars In Thousands
December 31, 1993 December 31, 1992
--------------------------------------------------
Weighted Weighted
Average Average
Interest Interest
Year of Maturity Amount Rate Amount Rate
--------------------------------------------------
<S> <C> <C> <C> <C>
1995 $1,252 4.25 % $1,895 4.25 %
1996 1,454 4.55 1,924 4.55
1997 1,733 4.80 2,135 4.80
1998 3,419 5.94 --- ---
2000 thru 2004 27,445 5.72 10,668 6.50
2005 thru 2009 42,207 6.08 15,559 6.61
2010 thru 2013 2,596 6.98 2,455 7.04
------------ ----------- ----------- -----------
$80,106 5.89 % $34,636 6.25 %
============ =========== =========== ===========
</TABLE>
Scheduled principal repayments on advances from the FHLB are $6,018,000,
$6,241,000, $5,899,000, $5,695,000, and $8,243,000 for 1994 through 1998,
respectively and $48,010,000 thereafter.
J. Employee Benefit Plans
The Company has a defined benefit pension plan covering substantially all of
its employees. The benefits are based on years of service and employee's
compensation during the ten years of employment prior to retirement. The
Company's funding policy is to contribute annually the amount greater than or
equal to the funding requirements of ERISA, but not in excess of the maximum
deductible limit. Employer contributions are intended to provide not only for
benefits attributed to service to date, but also for those expected to be
earned in the future.
<PAGE>
The following table sets forth the plan's funded status and amounts recognized
in the Company's consolidated balance sheet:
<TABLE>
<CAPTION>
In Thousands December 31
-------------------------
1993 1992
-------------------------
<S> <C> <C>
Actuarial present value of benefit obligations:
Accumulated benefit obligation, including vested benefits of
$6,629 (1993) and $5,780 (1992) $6,832 $5,865
=========================
Plan assets at market value, primarily fixed income mutual funds
and U. S. government securities, respectively $11,212 $10,493
Projected benefit obligation for service rendered to date 9,608 8,665
-------------------------
Plan assets in excess of projected benefit obligation 1,604 1,828
Unrecognized net loss from past experience different from that assumed 212 161
Unrecognized prior service cost 202 291
Unrecognized net asset at January 1, 1986 being recognized over
approximately 16 years (1,380) (1,561)
-------------------------
Prepaid pension cost included in other assets $638 $719
=========================
</TABLE>
Net pension benefit (expense) for 1993, 1992 and 1991 included the following
components:
<TABLE>
<CAPTION>
In Thousands Years ended December 31
--------------------------------------
1993 1992 1991
--------------------------------------
<S> <C> <C> <C>
Service cost-benefits earned during the period ($464) ($358) ($253)
Interest cost on projected benefit obligation (653) (583) (497)
Actual return on plan assets 1,018 887 1,117
Amortization and deferral - net 18 94 (174)
--------------------------------------
Net pension income (expense) ($81) $40 $193
======================================
</TABLE>
A discount rate of 7.20 percent (1993) and 7.625 percent (1992) and a rate of
increase in future compensation levels of 6.0 percent were used in determining
the actuarial present value of the projected benefit obligation. The expected
long-term rate of return on assets was 8.50 percent.
The Company does not have a significant commitment to pay post-retirement or
post-employment benefits other than pension benefits.
The Company also sponsors an unfunded, non-qualified excess benefit plan
covering certain executive officers. The plan has an accrued unfunded
accumulated benefit obligation of $558,000 at December 31, 1993. Expenses of
the plan were approximately $135,000 in 1993, $105,000 in 1992 and $87,000 in
1991.
The Company also offers a defined contribution employee stock ownership plan.
The Company's contribution to this plan was $375,000, $312,000, and $301,000
for 1993, 1992, and 1991, respectively.
K. Regulatory Restrictions on Dividends and Cash
Under the Federal Reserve Act, prior approval of the Federal banking
authorities is required if dividends declared by the Company's banking
subsidiary in any year exceed its net profits for that year, as defined,
combined with retained net profits, as defined, for the two preceding years.
As of January 1, 1994, the aggregate amount of retained earnings available for
distribution to the Company by all subsidiaries without prior approval was
approximately $11,800,000. In addition to restrictions on the payment of
dividends, the Federal Reserve and the Commonwealth of Kentucky place certain
cash reserve requirements on deposits. The reserve requirements, which were
$29,987,000 at December 31, 1993, are met by holding a percentage of deposits
in vault cash or maintaining a balance directly with the Federal Reserve. The
Company was in compliance with all cash reserve requirements at December 31,
1993.
<PAGE>
L. STOCK OPTIONS
The Company has incentive stock option plans under which shares of common
stock have been reserved for the granting of stock options to certain key
employees of the Company. The plans provide that the option price shall not be
less than the fair market value of the stock at the effective date the options
are granted, and that the term of the options shall not be more than ten years
from the date of the grant. Options granted under the plans are exercisable
one year after date of the grant. Shares available for future grants under the
plans were 210,324 at December 31, 1993.
Shares
Under
Option Price Range
----------------------------
Balance at January 1, 1991 199,448 $10.62 to $14.20
Granted 172,978 $11.44 to $13.84
Cancelled (8,184)
Exercised ---
--------
Balance at December 31, 1991 364,242 $10.62 to $14.20
Granted 157,590 $15.42 to $16.96
Cancelled (4,310)
Exercised (19,681) $10.62 to $12.91
--------
Balance at December 31, 1992 497,841 $10.62 to $16.96
Granted 204,100 $15.42 to $19.94
Cancelled (4,635)
Exercised (89,135) $10.62 to $15.42
--------
Balance at December 31, 1993 608,171 $10.62 to $19.94
========
Common stock received through the exercise of incentive stock options which
are sold by the optionee within two years of grant or one year of exercise
result in a tax deduction for the Company equivalent to the taxable gain
recognized by the optionee. For financial reporting purposes, the tax effect
of this deduction is accounted for as a credit to paid-in capital rather than
as a reduction of income tax expense. Such optionee sales resulted in a tax
benefit to the Company of approximately $94,000 in 1993.
<PAGE>
M. Common Stock Dividends
The following table sets forth the Company's stock dividends to common
shareholders:
<TABLE>
<CAPTION>
Declaration Record Payable Stock Dividend
Date Date Date Percentage
- ---------- ---------- ---------- --------------
<S> <C> <C> <C>
November 15, 1993 December 15, 1993 December 31, 1993 3.0 %
November 16, 1992 December 16, 1992 December 30, 1992 8.0
November 18, 1991 December 13, 1991 January 3, 1992 10.0
January 28, 1991 February 21, 1991 March 8, 1991 5.0
April 11, 1990 May 4, 1990 June 7, 1990 10.0
April 10, 1989 May 12, 1989 June 9, 1989 15.0
April 18, 1988 May 24, 1988 June 10, 1988 12.5
</TABLE>
Appropriate share and per share information in the consolidated financial
statements reflects the adjusted number of shares.
N. COMMITMENTS AND CONTINGENCIES
In the normal course of business in order to meet the financing needs of
customers, the Company has outstanding commitments and contingent liabilities.
At December 31, 1993, the Company had $207,350,000 of commitments to extend
credit (of which $95,241,000 relates to home equity lines of credit),
including standby letters of credit of $8,334,000 which are not reflected in
the consolidated financial statements. The Company's exposure to credit loss
in the event of nonperformance by the other party to these commitments is
represented by the contractual amount of those instruments.
Commitments to extend credit are agreements to lend to a customer as long as
there is no violation of any condition established in the contract.
Commitments generally have fixed expiration dates or other termination clauses
and may require payment of a fee. Since many of the commitments are expected
to expire without being drawn upon, the total commitment amounts do not
necessarily represent future cash requirements. The Company evalutes each
customers's creditworthiness on a case-by-case basis. The amount of
collateral obtained if deemed necessary by the Company upon extension of
credit is based on Management's credit evaluation of the counterparty.
Collateral held varies but may include accounts receivable, inventory, plant,
property and equipment, real estate and income-producing commercial
properties.
Standby letters of credit and financial guarantees written are conditional
commitments issued by the Company to guarantee the performance of a customer
to a third party. Those guarantees are primarily issued to support public and
private borrowing arrangements, including commercial paper, bond financing,
and similar transactions.
At December 31, 1993, there were various pending legal actions and proceedings
in which claims for damages were asserted. In one such matter, the Bank is one
of 13 defendants named in a lawsuit filed on December 10, 1993, by Kentucky
Central Life Insurance Company (in Rehabilitation) involving certain real
estate loans. Management, after discussion with legal counsel concerning the
adequacy of the Company's defenses, believes that this and other legal actions
will not have a material adverse effect upon the financial condition of the
Bank or the Company.
O. OTHER OPERATING EXPENSES
<TABLE>
<CAPTION>
In Thousands 1993 1992 1991
----------------------------------------
<S> <C> <C> <C>
Operating supplies $1,319 $1,250 $984
Data processing fees 200 1,368 3,430
Professional fees 1,374 974 1,115
Taxes-Bank shares, property and other 1,349 1,265 1,085
Deposit insurance 1,579 1,532 1,382
Other 3,848 3,690 3,711
----------------------------------------
$9,669 $10,079 $11,707
========================================
</TABLE>
P. RELATED PARTY TRANSACTIONS
Loans to directors, executive officers and principal holders of the Company's
stock and associates of such persons are presented below:
In Thousands
Balance, January 1, 1993 $30,825
New loans 14,672
Repayments (19,493)
----------
Balance, December 31, 1993 $26,004
==========
The above transactions were made on substantially the same terms, including
interest rates and collateral, as those prevailing at the time for other
customers in the ordinary course of business.
The Company leases certain office space and purchases services from companies
controlled by certain members of the Board of Directors. Amounts paid were
approximately $936,000, $947,000 and $924,000 for 1993, 1992 and 1991,
respectively.
Q. DISCLOSURES ABOUT FAIR VALUE OF FINANCIAL INSTRUMENTS
The estimated fair values of the Company's financial instruments are as
follows:
<TABLE>
<CAPTION>
In Thousands December 31, 1993 December 31, 1992
---------------------------------------------------
Carrying Fair Carrying Fair
Amount Value Amount Value
---------------------------------------------------
<S> <C> <C> <C> <C>
Financial assets:
Cash and short-term investments $146,937 $146,937 $266,194 $266,194
Securities 334,298 334,980 166,766 169,000
Loans 650,990 670,935 577,247 591,112
Financial liabilities:
Deposits 729,449 735,843 689,377 698,932
Short-term borrowings 195,788 195,788 173,052 173,052
Other debt 80,157 80,290 34,737 34,377
</TABLE>
The following methods and assumptions were used to estimate the fair value of
each class of financial instruments:
Cash, Short-Term Investments, and Short-Term Borrowings--For those short-term
instruments, the carrying amount is a reasonable estimate of fair value.
Securities--For securities, fair value equals quoted market price, if
available. If a quoted market price is not available, fair value is estimated
using quoted market prices for similar securities or dealer quotes.
Loans--The fair value of loans is estimated by discounting the future cash
flows using the current rates at which similar loans would be made to
borrowers with similar credit ratings and for the same remaining maturities.
Deposits--The fair value of demand deposits, savings accounts, and certain
money market deposits is the amount payable on demand at the reporting date.
The fair value of fixed-maturity certificates of deposit is estimated using
the rates currently offered for deposits of similar remaining maturities.
Other Debt--Rates currently available to the Company for debt with similar
terms and remaining maturities are used to estimate fair value of existing
debt.
Commitments--The fair value of commitments to extend credit is estimated using
the fees currently charged to enter into similar agreements, taking into
account the remaining terms of the agreements and the present creditworthiness
of the counterparties. For fixed rate loan commitments, fair value also
considers the difference between current levels of interest rates and the
committed rates. Off-balance-sheet financial instruments are discussed further
in Note N.
Limitations--The fair value estimates are made at a discrete point in time
based on relevant market information about the financial instruments. Because
no market exists for a significant portion of the Company's financial
instruments, fair value estimates are based on judgements regarding future
expected loss experience, current economic conditions, risk characteristics of
various financial instruments, and other factors. These estimates are
subjective in nature and involve uncertainties and matters of significant
judgement and therefore cannot be determined with precision. Changes in
assumptions could significantly affect the estimates.
<PAGE>
R. Condensed Financial Information - Parent Company Only
Condensed Balance Sheets
<TABLE>
<CAPTION>
In Thousands December 31
------------------------------
1993 1992
Assets ------------------------------
<S> <C> <C>
Cash on deposit with bank subsidiary $1,140 $5,402
Investment in bank and thrift subsidiaries 105,755 95,819
Investment in other subsidiaries 12,560 11,828
Other assets 182 367
------------------------------
Total assets $119,637 $113,416
==============================
Liabilities and shareholders' equity
Other liabilities $47 $787
Shareholders' equity 119,590 112,629
------------------------------
Total liabilities and shareholders' equity $119,637 $113,416
==============================
</TABLE>
Condensed Statements of Income
<TABLE>
<CAPTION>
In Thousands Years Ended December 31
------------------------------------------
1993 1992 1991
------------------------------------------
<S> <C> <C> <C>
Cash dividends from bank subsidiary $4,800 $10,400 $3,460
Cash dividends from other subsidiaries -- -- 934
Other income 2 1 1
Other expenses (219) (268) (217)
------------------------------------------
Income before income taxes and equity
in earnings of subsidiaries 4,583 10,133 4,178
Applicable income tax benefit 72 86 74
------------------------------------------
Income before equity in earnings of
subsidiaries 4,655 10,219 4,252
Equity in earnings of subsidiaries 6,918 (698) 4,773
------------------------------------------
Net income $11,573 $9,521 $9,025
==========================================
</TABLE>
<PAGE>
R. Condensed Financial Information - Parent Company Only (Continued)
Condensed Statements of Cash Flow
<TABLE>
<CAPTION>
In Thousands Years Ended December 31
-----------------------------------------
1993 1992 1991
-----------------------------------------
<S> <C> <C> <C>
Cash flows from operating activities:
Net income $11,573 $9,521 $9,025
Adjustment to reconcile net income to net cash
from operating activities:
Equity in earnings of subsidiaries (6,918) 698 (4,773)
(Increase) decrease in other assets 279 (362) 169
Increase (decrease) in other liabilities (740) 708 38
-----------------------------------------
Net cash provided by operating activities 4,194 10,565 4,459
-----------------------------------------
Cash flows from investing activities:
Investment in subsidiaries (3,750) (450) (25)
-----------------------------------------
Net cash used in investing activities (3,750) (450) (25)
-----------------------------------------
Cash flows from financing activities:
Dividends paid (5,356) (5,592) (4,037)
Issuance of common stock 650 218 --
-----------------------------------------
Net cash used by financing activities (4,706) (5,374) (4,037)
-----------------------------------------
Net increase (decrease) in cash and cash equivalents (4,262) 4,741 397
Cash and cash equivalents at beginning of year 5,402 661 264
-----------------------------------------
Cash and cash equivalents at end of year $1,140 $5,402 $661
=========================================
</TABLE>
<PAGE>
Exhibit 21
-----------
Subsidiaries of the Registrant
The principal investment of Mid-America Bancorp is its 100% ownership of the
outstanding capital stock of Mid-America Bank of Louisville and Trust Company.
The subsidiaries of Mid-America Bancorp (other than Mid-America Bank of
Louisville and Trust Company), if considered in the aggregate as a single
subsidiary, would not constitute a significant subsidiary. All subsidiaries
are included in the consolidated financial statements.
<PAGE>
Exhibit 23
----------
CONSENT OF INDEPENDENT AUDITORS
The Board of Directors
Mid-America Bancorp:
We consent to incorporation by reference in the Registration
Statements No. 2-92270, No. 2-99495, and No. 33-42989 on Forms S-8
of Mid-America Bancorp of our report dated January 21, 1994,
relating to the consolidated balance sheets of Mid-America Bancorp
and subsidiaries as of December 31, 1993 and 1992, and the related
consolidated statements of income, changes in shareholders' equity,
and cash flows for each of the years in the three-year period ended
December 31, 1993, which report appears in the 1993 annual report
to shareholders, which is incorporated by reference in the December
31, 1993 Form 10-K of Mid-America Bancorp.
Our report refers to a change in the method of accouting for income taxes
in 1993.
Louisville, Kentucky /s/ KPMG Peat Marwick
March 23, 1994
<PAGE>
<ARTICLE> 9
<MULTIPLIER> 1000
<BALANCE-SHEET>
[FISCAL-YEAR-END] DEC-31-1993
<PERIOD-START> JAN-01-1993
<PERIOD-END> DEC-31-1993
<PERIOD-TYPE> YEAR
<CASH> 62,937
<INT-BEARING-DEPOSITS> 0
<FED-FUNDS-SOLD> 84,000
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 109,202
<INVESTMENTS-CARRYING> 225,096
<INVESTMENTS-MARKET> 225,503
<LOANS> 657,568
<ALLOWANCE> 6,578
<TOTAL-ASSETS> 1,169,023
<DEPOSITS> 729,449
<SHORT-TERM> 195,788
<LIABILITIES-OTHER> 44,090
<LONG-TERM> 80,106
0
0
<COMMON> 23,607
<OTHER SE> 95,983
<TOTAL-LIABILITIES-AND-EQUITY> 1,169,023
<INTEREST-LOAN> 55,928
<INTEREST-INVEST> 11,757
<INTEREST-OTHER> 3,617
<INTEREST-TOTAL> 71,302
<INTEREST-DEPOSIT> 24,385
<INTEREST-EXPENSE> 30,752
<INTEREST-INCOME-NET> 40,550
<LOAN-LOSSES> 390
<SECURITIES-GAINS> 106
<EXPENSE-OTHER> 34,463
<INCOME-PRETAX> 16,826
<INCOME-PRE-EXTRAORDINARY> 16,826
<EXTRAORDINARY> 0
<CHANGE> 0
<NET-INCOME> 11,573
<MULTIPLIER> 1
<EPS-PRIMARY> 1.35
<EPS-DILUTED> 1.35
<PAGE>
ADDITIONAL EXHIBITS EXHIBIT 99
------------
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 11-K
[X] ANNUAL REPORT PURSUANT TO SECTION 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 1993
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from _______ to ________
Commission File Number 1-10602
A. Full title of the plan and the address of the plan,
if different from that of the issuer named below.
The Bank of Louisville Employee Stock Ownership Plan
B. Name of the issuer of the securities held pursuant
to the plan and the address of its principal
executive office.
Mid-America Bancorp
500 West Broadway
Louisville, KY 40202
REQUIRED INFORMATION
Financial statements and schedules prepared in accordance with the
financial reporting requirements of ERISA will be filed under cover of
Form SE within 180 days of the Plan's year-end (December 31, 1993)
