UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K/A
Amendment No. 1
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 1996
Commission File Number 0-12709
LIBERTY BANCORP, INC.
(Exact name of Registrant as specified in its charter)
Oklahoma 73-1218204
(State of incorporation) (I.R.S. employer
identification number)
100 North Broadway
Oklahoma City, OK 73102
(Address of principal executive offices and zip code)
Securities registered pursuant to Section 12(b) of the Act: None
Securities registered pursuant to Section 12(g) of the Act:
Common Stock, $.01 par value
(Title of Class)
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 disclosure of delinquent filers
pursuant to Item 405 or 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 [ ].
As of March 1, 1997, Registrant had 9,578,440 shares of Common
Stock outstanding.
As of March 1, 1997, the aggregate market value of the
Registrant's Common Stock held by nonaffiliates, was
approximately $259.3 million.
This Amendment is being filed to provide the information required
by Part III.
PART III
ITEM 10. Directors and Executive Officers of the Registrant
Directors
Certain information concerning the Board of Directors of the
Company is set forth below based on information supplied by the
directors:
<TABLE>
<CAPTION>
Term
Principal Occupation, First Year Expires
Directorships of Other Became a as a
Name Public Companies and Age Director Director
<S> <C> <C> <C>
Donald L. Brawner, M.D. Retired Surgeon, Tulsa, OK; age 72 1984 1998
Thomas G. Donnell President and Chief Executive Officer, 1990 1999
Cain's Coffee Company (manufacturer
and distributor of coffee, spices and
related products), Oklahoma City, OK;
age 63
Robert S. Ellis, M.D. Physician, Oklahoma Allergy Clinic, 1990 1997
Oklahoma City, OK; age 70
Charles W. Flint, III Chairman & President, Flint 1995 1998
Resources Company; Chairman,
Flint Industries, Inc. (commercial
construction), Tulsa, OK; age 46
William F. Fisher, Jr. Chairman, President and Chief 1990 1999
Executive Officer, FISHERCORP,
Inc., which owns Miss Jackson's
(department store), Tulsa, OK; age 57
James L. Hall, Jr. Member, Crowe & Dunlevy, A 1990 1998
Professional Corporation
(attorneys), Oklahoma City, OK; age 60
Raymond H. Hefner, Jr. President, Bonray, Inc.; 1986 1998
(oil and gas investments)
President, HBH Holding Corporation
(investments); age 69
Walter H. Helmerich, III Chairman, Helmerich & Payne, Inc. 1984 1999
(petroleum exploration and production,
contract drilling, chemical manufactur-
ing, real estate development and
management); Director, Rikwell Company
and Atwood Oceanics, Inc., Tulsa, OK;
age 74
Joseph S. Jankowsky Private Investor, Tulsa, OK; age 62 1990 1999
Edward F. Keller Senior Vice President of the Company 1996 1997
and Vice Chairman of Liberty Tulsa,
Tulsa, OK; age 56
John E. Kirkpatrick Private Investor; Chairman Emeritus of 1984 1999
the Company, Oklahoma City, OK; age 88
Judy Z. Kishner Senior Vice President, Sooner Pipe 1994 1997
& Supply Corporation (oilfield pipe
and supply), Tulsa, OK; age 49
David L. Kyle President and Director, Oklahoma Natural 1994 1997
Gas Company (natural gas distribution
public utility), Tulsa, OK; page 44
Edward C. Lawson, Jr. President, Lawson Petroleum Company 1990 1997
(oil and gas drilling, exploration and
production), Tulsa, OK; age 63
Herb Mee, Jr. President and Director, The Beard 1990 1998
Company (dry ice manufacturing, real
estate and environmental services),
Oklahoma City, OK; age 68
Charles E. Nelson Chairman and Chief Executive Officer 1990 1997
of the Company and Chairman,
President and Chief Executive Officer
of Liberty Oklahoma City,
Oklahoma City, OK; age 54
William G. Paul Member, Crowe & Dunlevy, A 1984 1997
Professional Corporation
(attorneys), Oklahoma City, OK;
age 66
V. Lee Powell President and Director, Fremont 1990 1998
Exploration, Inc. and Powell
Resources, Inc. (oil and gas
exploration), Oklahoma City, OK;
age 63
Jon R. Stuart President and Chief Executive 1988 1998
Officer, First Stuart Corporation
(radio broadcasting and investments
in commercial real estate and oil and
gas properties), Tulsa, OK; age 48
Clifton L. Taulbert President and Owner, The Freemount 1995 1998
Corp. (a marketing and consulting
company), Tulsa, OK; age 52
W. H. Thompson, Jr. President of the Company and Chairman 1996 1997
and Chief Executive Officer of
Liberty Tulsa, Tulsa, OK; age 62
Robert E. Torray Birmingham Capital Management Company, 1988 1999
Inc.; and Chairman, Energy Recovery
Management, Inc., Bethesda, Maryland;
age 59
J. Otis Winters Chairman, Pate, Winters & Stone, Inc. 1995 1998
(a consulting firm), Dallas, TX; age 64
John S. Zink President, Zeeco, Inc. 1990 1999
(manufacturer of industrial,
combustion equipment),
Tulsa, OK; age 68
</TABLE>
___________________
Each director of the Company also serves as a director of the
Company's two principal bank subsidiaries ("Subsidiary Banks"),
Liberty Bank and Trust Company of Oklahoma City, N.A. ("Liberty
Oklahoma City") and Liberty Bank and Trust Company of Tulsa,
N.A., ("Liberty Tulsa").
The principal occupations or business activities of all
nominees and directors listed above during the past five years
have been substantially the same as those listed above, except as
set forth below. Prior to February 15, 1996, Mr. Edward F.
Keller served as Chairman of Bank IV Oklahoma, N.A. from 1992
until January 31, 1996. Prior to his service with Bank IV
Oklahoma, N.A., he served as Chairman of Fourth National Bank of
Tulsa from 1982 until 1992. Prior to June, 1995, Mr. John E.
Kirkpatrick, a private investor, was a partner of Kirkpatrick Oil
Company. Mr. Kirkpatrick sold his interest to a family member in
June, 1995. Mr. Charles W. Flint, III, held several senior
executive positions with various subsidiaries of Flint Resources
Company prior to becoming President and Chairman in June, 1992.
In addition to the positions listed for Mr. Raymond H. Hefner,
Jr., he was a general partner of Hefner Enterprises from November
1986 to December 1996. Prior to becoming President in September,
1994, Mr. David L. Kyle occupied other senior executive
positions with Oklahoma Natural Gas Company. Mr. William G.
Paul, attorney and member of Crowe & Dunlevy, served as Senior
Vice President and General Counsel for Phillips Petroleum Company
until December, 1995.
The following family relationships exist between executive
officers and directors of the Company: Mr. Walter H. Helmerich,
III, a director of the Company, is the brother in-law of Mr. J.
Otis Winters who is a director of the Company. Mr. Walter H.
Helmerich, III, a director of the Company, is the father of Mr.
W. H. (Rik) Helmerich, IV, an advisory director of the Company.
Mr. Charles W. Flint, III, a director of the Company, is the son
of Mr. C. W. Flint, Jr., a director emeritus. Mrs. Judy Z.
Kishner, a director of the Company, is the daughter of Mr. Henry
Zarrow, a director emeritus.
Advisory Directors
The Board of Directors, by resolution, has established a
group of Advisory Directors of the Company and has appointed the
persons described below to serve in such capacity. Advisory
Directors of the Company serve in an advisory capacity to the
Board of Directors of the Company and are designated annually,
but are not elected by the shareholders and are not entitled to
vote. Persons serving as Advisory Directors of the Company will
also serve as Advisory Directors of each of the Subsidiary Banks.
W. H. (Rik) Helmerich, IV, age 44, is President of Pepper's
Inc. restaurant located in Tulsa, Oklahoma.
William N. Pirtle, age 64, is retired, having formerly
served as Senior Vice President of Oklahoma Natural Gas Company
in Oklahoma City, Oklahoma.
Executive Officers
Certain information concerning the executive officers of the
Company is set forth below:
In addition to Charles E. Nelson, the Company's Chairman and
Chief Executive Officer, the following officers of the Company or
its subsidiaries serve on the Company's Managing Committee, which
is the senior management committee responsible for the
development and implementation of Company policies, subject to
approval of the Board of Directors, when appropriate. Mr. Nelson
has been with the Company for 8 years.
William M. Bell, age 61, is Senior Vice President of the
Company and Vice Chairman of Liberty Oklahoma City and is
responsible for the Company's trust services and operations. Mr.
Bell has been with the Company for 31 years and has served as a
director of Liberty Oklahoma City for 24 years.
Kenneth R. Brown, age 60, is Senior Vice President and
Secretary of the Company and is responsible for the investments
and the capital markets activities of the Company. He also
serves as Executive Vice President, Secretary and Cashier of
Liberty Oklahoma City. Mr. Brown has been with the Company for
39 years.
Mischa Gorkuscha, age 50, is Senior Vice President and Chief
Financial Officer of the Company, Chairman of Liberty Mortgage
Company and Executive Vice President and Chief Administrative
Officer of Liberty Oklahoma City. Mr. Gorkuscha has been with
the Company for 20 years.
Edward F. Keller, age 56, is Senior Vice President of the
Company and Vice Chairman of Liberty Tulsa. Prior to his
employment with the Company, Mr. Keller served as Chairman of
Fourth National Bank, Tulsa, Oklahoma from 1982-1992 and as
Chairman of Bank IV Oklahoma, N.A. from 1992 until January 31,
1996.
W. Jeffrey Pickryl, age 45, is Senior Vice President and
Chief Credit Officer of the Company and was elected President of
Liberty Tulsa in November, 1993. Mr. Pickryl has been with the
Company for 13 years.
Stephen D. Plunk, age 46, is Senior Vice President of the
Company and Executive Vice President of Liberty Oklahoma City.
Mr. Plunk served as President of Liberty Tulsa from March, 1990,
to November, 1993. Mr. Plunk has oversight responsibility for
the Company's operations and data processing activities as well
as its special assets operations. Mr. Plunk has been with the
Company for 12 years.
Douglas L. Ruhl, age 48, is Senior Vice President of the
Company and is responsible for its retail banking. He is also
Executive Vice President of Liberty Oklahoma City. Mr. Ruhl has
been with the Company for 9 years.
W. H. Thompson, Jr., age 62, is President of the Company and
Chairman and Chief Executive Officer of Liberty Tulsa. Mr.
Thompson has been a director of Liberty Tulsa since 1978, and is
responsible for the Company's human resources functions and its
commercial banking and credit administration activities. Mr.
Thompson has been with the Company 7 years.
All executive officers and senior officers serve at the
pleasure of the Board of Directors.
Compliance with SEC Reporting Requirements
Section 16 of the Securities Exchange Act of 1934 requires
directors and certain officers of the Company to file reports
with the Securities and Exchange Commission reflecting
transactions by such persons in the Company's Common Stock.
During 1996, to the knowledge of the Company, or based on
information provided by such persons to the Company, all officers
and directors of the Company subject to such filing requirements
fully complied with such requirements.
ITEM 11. Executive Compensation
Summary of Cash and Certain Other Compensation
The following table provides certain summary information
concerning compensation paid or accrued by the Company and its
subsidiaries, to or on behalf of the Company's Chief Executive
Officer and each of the four other most highly compensated
executive officers of the Company (determined as of the end of
the last fiscal year) (hereafter referred to as the named
executive officers) for the fiscal years ended December 31, 1994,
1995 and 1996:
<TABLE>
<CAPTION>
SUMMARY COMPENSATION TABLE
Annual Long Term
Compensation(1) Compensation
Restricted All
Stock Other
Name and Principal Position Year Salary Bonus Awards(2) Options(#) Compensation(3)
<S> <C> <C> <C> <C> <C> <C>
Charles E. Nelson 1996 $400,002 $143,734 $ 0 -0- $373,340
Chairman, Chief Executive Officer 1995 $369,000 $138,320 $ 5,414 60,000 $322,604
and Director of the Company and Chairman, 1994 $369,000 $ 95,250 $ 5,715 -0- $ 30,031
President and Chief Executive Officer of
Liberty Oklahoma City
W. H. Thompson, Jr. 1996 $243,000 $ 90,611 $ 0 -0- $263,067
President and Director of the Company and 1995 $243,000 $ 88,525 $ 2,750 36,000 $257,028
Chairman and Chief Executive Officer of 1994 $243,000 $ 63,775 $ 2,551 -0- $ 64,336
Liberty Tulsa
William M. Bell 1996 $190,728 $ 61,821 $ 0 -0- $128,453
Senior Vice President-Trust of the 1995 $190,728 $ 61,646 $ 422 17,000 $111,151
Company and Vice Chairman of Liberty 1994 $190,728 $ 44,033 $ 880 -0- $ 24,902
Oklahoma City
Kenneth R. Brown 1996 $172,902 $ 61,575 $ 0 -0- $ 95,653
Senior Vice President-Investments and 1995 $155,796 $ 61,646 $ 1,408 17,000 $ 55,051
Secretary of the Company and Executive 1994 $155,796 $ 44,033 $ 175 -0- $ 22,456
Vice President, Secretary and Cashier
of Liberty Oklahoma City
Mischa Gorkuscha 1996 $173,130 $ 62,139 $ 0 -0- $ 27,719
Senior Vice President and Chief Financial 1995 $151,260 $ 61,646 $ 2,342 17,000 $ 25,474
Officer of the Company, Chairman of 1994 $151,260 $ 44,033 $ 968 -0- $ 21,933
Liberty Mortgage Company and Executive
Vice President and Chief Administrative
Officer of Liberty Oklahoma City
</TABLE>
_____________________________________________
(1) Personal benefits provided to each of the named executive
officers under various Company programs do not exceed 10% of
total annual salary and bonus reported for the named executive
officer and are not included in this total.
(2) Amounts represent awards made pursuant to the Company's
Management Incentive Bonus Plan. Restricted stock awards in 1992
vest over five years at the rate of 20% per year. Awards for
1993 vested on December 15, 1994. Awards for 1994 were made on
January 18, 1995, and vested on January 18, 1996. Awards for
1995 were made on December 20, 1995 and vest on December 20,
1996. The number of shares included in the awards for 1995,
1994, and 1993 for each officer are as follows: Mr. Nelson --
145, 192, and 918; Mr. Thompson -- 74, 85, and 665; Mr. Bell --
11, 29, and 499; Mr. Brown -- 37, 5, and 463; and Mr. Gorkuscha -
- - 63, 32, and 469. The value of the restricted stock awarded to
each of the named executive officers is based on the closing sale
price per share of the Company's Common Stock reported in the
NASDAQ National Market System for the thirty-day period
immediately preceding the date of grant of the award as provided
under the Management Incentive Bonus Plan. Dividends are paid on
shares of restricted stock. As of December 31, 1996, the number
and market value of shares of restricted stock holdings of each
named executive officer (which excludes shares previously awarded
but are no longer restricted) was as follows: Mr. Nelson -- 335
shares, $16,666; Mr. Thompson -- 241 shares, $11,990; Mr. Bell --
119 shares, $5,920; Mr. Brown -- 140 shares, $6,965; and Mr.
Gorkuscha -- 148 shares, $7,363.
(3) Amounts represent Company contributions pursuant to the
Company's Profit Sharing, Salary Deferral and Employee Stock
Ownership Plan and Supplemental Executive Retirement Plan.
Option Grants, Exercises and Holdings
There were no stock options granted during the year ended
December 31, 1996 under the Company's 1990 Stock Option Plan, as
amended, to the named executive officers:
The following table provides information, with respect to
the named executive officers, concerning the exercise of options
during the Company's last fiscal year and unexercised options
held as of the end of the last
fiscal year:
<TABLE>
<CAPTION>
OPTION EXERCISES AND YEAR-END VALUE TABLE
Shares Number of Unexercised Value of Unexercised In-the-
Acquired Options at FY-End (#) Money Options at FY-End
Name on Exercise(#) Realized($) Exercisable Unexercisable Exercisable(1) Unexercisable(1)
<S> <C> <C> <C> <C> <C> <C>
Charles E. Nelson 15,040 $561,744 104,179 64,000 $3,319,361 $1,138,750
W. H. Thompson, Jr. 2,200 $ 60,995 66,300 38,600 $2,137,515 $ 695,900
William M. Bell 1,409 $ 52,626 47,238 20,400 $1,557,054 $ 379,850
Kenneth R. Brown 8,950 $222,583 37,100 20,400 $ 954,300 $ 379,850
Mischa Gorkuscha 1,000 $ 24,475 42,605 20,400 $1,384,012 $ 379,850
<FN>
____________
(1) Market value of underlying shares of Common Stock at year-end ($49.75
per share), minus the exercise price.
</TABLE>
Supplemental Executive Retirement Plan
The Company has a Supplemental Executive Retirement Plan
("SERP") for the benefit of certain executive officers of the
Company to supplement the benefits otherwise available to such
officers under the Company's Profit Sharing, Salary Deferral and
Employee Stock Ownership Plan ("Retirement Plan"). The SERP has
been developed to provide additional retirement benefits to
senior executives due to limitations on the amount which the
Company may contribute to the Retirement Plan and because
benefits under the Retirement Plan are dependent upon market
fluctuations of the investments in the Retirement Plan, which
consist largely of Common Stock of the Company. The SERP is
designed to provide benefits not dependent on the Company's
Common Stock value and with a guaranteed minimum benefit if the
Retirement Plan benefit does not reach such minimum benefit
level.
The benefit under the SERP is equal to the vested percentage
of the accumulated contributions made by the Company to the trust
established under the Plan (adjusted for any investment income,
gains or losses) with a guaranteed minimum benefit. The minimum
benefit under the SERP is equal to the actuarial equivalence of a
lifetime annual payment equal to a specified percentage of the
executive's final earnings, at normal retirement, defined as the
higher of (i) total cash compensation for the last year or (ii)
average total cash compensation for the last three years. The
minimum benefit is reduced to the extent the executive's service
is terminated prior to normal retirement, pro rata based on the
length of service of the executive from inception of employment
to the termination of service date. The specified minimum
percentage benefit is generally 60% and the normal retirement age
is 65 (except for Mr. Nelson whose normal retirement age for
purposes of the SERP is 62).
The Company makes annual contributions to a trust
established under the SERP at a rate of 7% of each participating
executive's salary (less the amount of any discretionary profit
sharing contributions under the Retirement Plan) or, if greater,
an amount equal to the amount necessary to fund the minimum
benefit at the executive's normal retirement date. Amounts
contributed by the Company are held by Liberty Oklahoma City, as
trustee, and will be invested by the trustee in such investments
as the trustee determines, with any income or appreciation earned
thereon inuring ultimately to the benefit of a participating
executive. Benefits under the SERP vest at the rate of 20% a
year over five years commencing on January 1, 1993, or in the
event of a change in control. The benefit is payable in a lump
sum immediately following termination of service, or in annual
installments up to 10 years if the participant has properly
elected installments, and in the case of the minimum benefit, the
amount payable is offset by the amount payable to the executive
under the Retirement Plan.
The precise amount payable under the SERP to participating
executive officers is not determinable because it is dependent
upon the amounts contributed to the trust under the SERP as well
as the value of the executive's benefits under the Retirement
Plan at the time of termination of service.
Compensation of Directors
During 1995, all employee directors of the Company received $750
for each Board meeting attended. Each director who served as a
member of a committee received $150 for each committee meeting
attended and the chairman of each committee received an
additional $100 for each meeting chaired.
Shareholder Return Performance
Set forth below is a line graph comparing the yearly
percentage change in the cumulative total shareholder returns on
the Company's Common Stock against the cumulative total return of
the NASDAQ Stock Market U.S. Companies Index and the NASDAQ Bank
Stocks Index compiled by Media General Financial Services for the
period of five fiscal years commencing December 31, 1991, and
ended December 31, 1996. The line graph assumes that the value
of the investment in the Company's Common Stock and each index
was $100 on December 31, 1991, and that any dividends were
reinvested.
Cumulative Total Return
--------------------------------------------
December 31
1991 1992 1993 1994 1995 1996
---- ---- ---- ---- ---- ----
LIBERTY BANCORP, INC. 100 224.07 209.41 221.25 291.25 399.70
NASDAQ BANKING INDEX 100 145.55 165.99 165.39 246.33 325.66
NASDAQ MARKET INDEX 100 116.38 133.60 130.59 184.68 227.15
Compensation Committee Interlocks and Insider Participation
The Human Resources and Compensation Committee of the Board
of Directors is currently composed of William G. Paul (Chairman),
Charles W. Flint, III, James L. Hall, Jr., David L. Kyle, V. Lee
Powell and Robert E. Torray. The members of the Human Resources
and Compensation Committee are not, and have never been, officers
or employees of the Company or its subsidiaries.
James L. Hall, Jr. and William G. Paul, directors of the
Company and members of the Human Resources and Compensation
Committee, are members of the law firm of Crowe & Dunlevy, A
Professional Corporation, which provides legal services to the
Company and its subsidiaries.
Human Resources and Compensation Committee Report on Executive
Compensation
The Human Resources and Compensation Committee of the Board
of Directors (the "Committee") is primarily responsible for the
development and implementation of the Company's executive
compensation programs consistent with the compensation philosophy
approved by the Board of Directors in 1992, as a part of a
comprehensive review of the Company's executive compensation
program. The Committee makes recommendations to the Board of
Directors of the Company with respect to the various executive
compensation plans which have been adopted by the Company as well
as the specific compensation levels of executive officers. The
Committee periodically reviews the Company's strategic plan to
assure that the executive officer compensation programs support
the objectives of the plan. The Board of Directors oversees the
Committee by ratification and approval of Committee actions or
recommendations.
Base Salaries
Base salary levels for the Company's executive officers are
set relative to comparably sized and situated companies in the
banking industry. It is the objective of the Company to maintain
base salaries that are market-centered or, on the average,
competitive with amounts paid to senior executives with
comparable qualifications, experience and responsibilities at
other companies engaged in the same or similar business as the
Company.
Annual Incentive Compensation
Annual incentive compensation was accrued in 1996, under the
Company's Management Incentive Bonus Plan (the "Bonus Plan")
adopted in 1992. The purpose of the Bonus Plan is to attract,
retain and motivate key executives by providing a direct
financial incentive in the form of an annual cash bonus and
restricted stock compensation in such proportion as the Committee
determines upon the achievement of predetermined performance
goals. The Bonus Plan provides for incentive compensation up to
a maximum percentage of an executive's salary (as defined in the
Bonus Plan). In 1996, the Committee recommended, and the Board
approved, Company performance objectives based on asset quality
and return on assets and reviewed the individual performance
objectives of each executive officer permitting bonuses of up to
45% of salary, the same as the maximum bonus percentage in 1995.
At the end of the year, the Committee reviewed the performance
grades of individual officers and authorized payment of bonuses
under the Bonus Plan based on the results of such review.
Bonuses under the Bonus Plan for the named executives
approximated 38.2% of salary for 1995. All bonuses under the
Bonus Plan for 1996 were paid in cash.
Equity Incentives
The Company's 1990 Stock Option Plan, as amended, ("Plan"),
and the restricted stock payout provision of the Bonus Plan
comprise the bases of the Company's long-term equity incentive
plans for executive officers. No options were granted to named
executive officers in 1996.
The Company provides welfare benefits and retirement
benefits to the executive officers that are generally available
to Company employees. The Company contributions to the Profit
Sharing, Salary Deferral and Employee Stock Ownership Plan and
Trust Agreement ("Retirement Plan") are invested exclusively in
Common Stock of the Company. Thus, the Retirement Plan design
aligns employees' and shareholders' long-term financial
interests.
Chief Executive Officer Compensation
Mr. Charles E. Nelson has served as Chief Executive Officer
of the Company since his election in 1990. His base salary paid
in fiscal year 1996 was $400,002 which reflects an 8.4% increase
from his $369,000 salary which had been in effect since 1993.
This increase was designed to bring Mr. Nelson's salary in line
with peer group levels. Mr. Nelson's bonus for 1996 under the
Bonus Plan was $143,734. Mr. Nelson's bonus was based primarily
on the achievement of the Company performance objectives and, to
a lesser extent, on his individual performance objectives which
were reviewed and graded by the Human Resources and Compensation
Committee. Mr. Nelson's bonus in 1996 was unchanged from his
1995 bonus.
Termination of Employment and Change in Control Arrangements
On December 28, 1996, the Company entered into a merger agreement
(the "Merger Agreement") with BANC ONE CORPORATION ("BANC ONE")
pursuant to which the Company would be merged into a subsidiary
of BANC ONE (the "Merger"). When the Merger is consummated (the
"Effective Time") the shareholders of the Company will receive
1.175 shares of BANC ONE Common Stock for each share of Company
Common Stock (the "Exchange Rate").
Change in Control Bonus Pool. In connection with its approval of
the Merger, on December 27, 1996, the Board of Directors of the
Company approved a bonus pool equal to 3% of the market
capitalization of Company (based on the value of the
consideration to be received in the Merger determined by the
Exchange Rate and the closing price of BANC ONE Common Stock on
the date immediately preceding the date of the Merger Agreement)
in excess of the capitalization of the Company at $40.00 per
share. Based on such formula, the total bonus pool is $3.6
million. Of this amount, $1.5 million is payable to Mr. Nelson,
$1.25 million is payable to Company's Chief Financial Officer,
Mischa Gorkuscha, and the remainder of $850,000 is payable to
such executive officers of the Company and in such amounts as the
Board of Directors or Executive Committee of the Company shall
specify from time to time prior to the Effective Time. As of the
date of this Report, no additional executive officers of Company
have been selected as recipients of such bonuses. The bonuses
are payable upon consummation of the Merger. The change in
control bonuses are intended to reward executive officers for
their skills and efforts in negotiating the terms of the Merger
and obtaining superior value for the Company's shareholders.
Employment Agreements. In connection with its approval of the
Merger on December 27, 1996, the Board of Directors of the
Company also approved employment agreements (the "Employment
Agreements) between Company and each of Mr. Nelson and Mr.
Gorkuscha (the "Executives"). The Employment Agreements become
effective at the Effective Time and are intended to mitigate the
uncertainties of future employment prospects for the Executives
in connection with the Merger. If the Merger is consummated, the
Employment Agreements will supersede the existing severance
agreements with each of Messrs. Nelson and Gorkuscha as described
below under "--Severance Plan." Under the terms of the
Employment Agreements, the Company agrees to employ the
Executives for a period of three years following the Effective
Time. During this period, the Executive's position, authority,
status and responsibilities will be at least commensurate with
those which the Executive had during the 120-day period preceding
the Effective Time. The Employment Agreements provide for each
Executive to receive a monthly base salary equal to or greater
than his highest monthly base salary during the year prior to the
Effective Time, an annual bonus in cash at least equal to the
highest bonus paid to the Executive in any of the three years
immediately preceding the consummation of the Merger (the
"Highest Annual Bonus") and incentive, savings, welfare benefit,
fringe benefit and retirement plan participation at least equal
to the most favorable which were in effect during the 120 day
period prior to the Effective Time. In Mr. Nelson's case, the
Employment Agreement also provides credit for age and service
under the Company's Supplemental Executive Retirement Plan
(described above) to age 62 to be granted as of the Effective
Time. The Employment Agreements are terminable upon the death or
disability of the Executive, by the Company for cause (as defined
in the Employment Agreements), by the Executive for good reason
(as defined in the Employment Agreements) or by either the
Company or the Executive for any reason other than death,
disability or cause, including voluntarily by the Executive, for
a period of 30 days after the first anniversary of the Effective
Time (the "Window Period"). In the event of the termination of
employment by the Company other than for cause, by the Executive
for good reason or by the Company or the Executive during the
Window Period, the Executive will receive a severance payment
equal to three times the sum of the Executive's annual base
salary and Highest Annual Bonus and continuation of health and
welfare benefits for three years after the date of termination.
If severance payments were required to be made to the Executives
(assuming a termination of service as of April 1, 1997), the
amount of the severance payments are estimated to be
approximately $1,740,000 to Mr. Nelson and approximately $777,000
to Mr. Gorkuscha. Pursuant to the Employment Agreements, each
Executive is also entitled to receive a gross-up payment which,
net of all taxes, is sufficient to put the Executive in the same
after-tax position as if no excise tax had been imposed under
Section 4999 of the Internal Revenue Code on any payments
received by the Executive under his Employment Agreement.
Severance Plan. The Company has a Severance Compensation Plan
adopted in 1993 (the "Severance Plan") in which seven executive
officers of Company or its subsidiaries, excluding Messrs. Nelson
and Gorkuscha, participate. Messrs. Nelson and Gorkuscha are
participants in the Severance Plan, but their participation will
cease upon consummation of the Merger when the Change in Control
Employment Agreements (described above) become effective. The
other executive officers who participate in the Severance Plan
are the remaining members of the Company's Managing Committee,
Messrs. William M. Bell, Kenneth R. Brown, Edward F. Keller, W.
Jeffrey Pickryl, Stephen D. Plunk, Douglas L. Ruhl and W. H.
Thompson, Jr. The Severance Plan provides for a severance
payment to the participating executives if their employment with
the Company or a successor is terminated within two years
following a change in control (as defined in the Plan). The
termination of employment must be involuntary for reasons other
than death, disability or cause (as defined in the Plan) or
voluntarily with good reason (as defined in the Plan, which
includes reduction in compensation, relocation or demotions).
The amount of severance payments payable under this Plan is equal
to two times a participant's average cash compensation for the
two years immediately preceding the termination and may in no
event be greater than the amount that would be deductible by the
Company under applicable Internal Revenue Code (golden parachute)
payment limitations after taking into consideration all payments
to a participant covered by such limitations (such as payments
deemed to have been received due to any acceleration of vesting
of stock options, restricted stock, grants or other benefits).
In connection with the approval of the Merger on December 27,
1996, the Company's Board of Directors approved a modification to
the severance arrangements with W. H. Thompson, Jr. to eliminate
the deductibility limitation on payments to him and to provide
further that the Company would pay Mr. Thompson a gross-up
payment calculated in the same manner as the gross-up payment for
Mr. Nelson and Mr. Gorkuscha. BANC ONE has agreed to honor the
Company's obligations under the Severance Plan.
The consummation of the Merger will constitute a change in
control under the Severance Plan. A severance payment will be
made to a participant in the Severance Plan only if a qualifying
termination occurs with respect to such participant. If,
pursuant to the existing Severance Plan, severance payments were
required to be made to each of the participants under the
Severance Plan (assuming a termination of service on April 1,
1997), the amount of such severance payments would be
approximately $668,000, $505,000 and $462,000 for Messrs. W. H.
Thompson, Jr., William M. Bell and Kenneth R. Brown,
respectively, and $3,266,000 for all participating executive
officers as a group (consisting of seven persons). It is
anticipated that some of the participants in the Severance Plan
will not continue in the employment of BANC ONE following the
consummation of the Merger and will, therefore, receive severance
payments under the Severance Plan and that other participants in
the Severance Plan will continue in their current positions or
accept other positions with BANC ONE following the consummation
of the Merger and, in connection therewith, may waive their
respective rights under the Severance Plan.
Executive Officer Stock Options. The Company has granted stock
options to executive and other officers under a pre-existing
stock option plan. Each Company stock option which is
outstanding and unexercised as of the Effective Time will be
converted automatically into options to purchase BANC ONE Common
Stock with adjustments in terms to reflect the Exchange Rate.
Options granted under the Company stock option plan which are not
exercisable become exercisable upon a "change in control" which
for purposes of the plan occurred when the Company shareholders
approved the Merger Agreement on March 31, 1997.
Supplemental Retirement Benefits. Benefits under the Company
SERP (described above) which have not previously vested become
vested in the event of a change in control. A change of control
has occurred since the Merger Agreement has been approved by the
Company shareholders on March 31, 1997, and, accordingly,
previously unvested benefits under the SERP have been
accelerated.
Restricted Stock. Certain executive officers of Company hold
shares of restricted Company Common Stock originally awarded in
1992 in connection with Company's Management Incentive Bonus
Plan. The vesting of these shares, to the extent not previously
vested, accelerated on the change in control which occurred on
March 31, 1997 when the Merger Agreement was approved by the
Company shareholders.
ITEM 12. Security Ownership of Certain Beneficial Owners and
Management
Security Ownership of Certain Beneficial Owners
At February 10, 1997, the Company had outstanding 9,534,042
shares of Common Stock (excluding treasury stock). The following
table sets forth as of February 10, 1997, the number and
percentage of shares beneficially owned, along with the nature of
such beneficial ownership, by those persons known by the Company
to be the beneficial owners of more than five percent of the
outstanding Common Stock based upon the most recent information
provided by such persons to the Company.
<TABLE>
<CAPTION>
Beneficial Ownership
Number of
Shares and Percent
Nature of of
Name Address Ownership Class
<S> <C> <C> <C>
John E. Kirkpatrick P. O. Box 268822 1,792,895(2)(a) 18.81%
and Family Oklahoma City, OK 73126
Robert E. Torray 6610 Rockledge Drive 1,489,019(b)
Suite 450 96,000(2)(c)
Bethesda, MD 20817 1,585,019 16.62%
Liberty Bancorp, Inc. 100 N. Broadway 640,652(2)(d) 6.72%
Profit Sharing, Oklahoma City, OK 73102
Salary Deferral
and Employee Stock
Ownership Plan and
Trust Agreement
State Farm Mutual One State Farm Plaza 645,161(1) 6.77%
Automobile Insurance Bloomington, IL 61710
Company
</TABLE>
___________________
(1) Sole voting and investment power.
(2) Shared voting and investment power.
(a) John E. Kirkpatrick and various family members have
indicated that they act together in connection with the voting of
shares of the Company's Common Stock indicated as beneficially
owned by them.
(b) Of the 1,489,019 shares of the Company's Common Stock
shown, Mr. Torray claims to have sole voting and investment power
for 379,187 common shares which he owns individually; 8,638
common shares which he owns in joint tenancy with his wife; 644
common shares which his wife owns individually; 600 shares held
as custodian for his step-children; and 1,435 shares held jointly
with certain other individuals. Of the remaining 1,098,515
shares being reported, Robert E. Torray & Co., Inc. (of which Mr.
Torray is the sole shareholder and President) beneficially owns
in respect of its clients all such shares. Of these 1,030,698
shares, Mr. Torray has sole voting power over 1,027,316 of such
shares, and sole dispositive power over all such shares.
(c) The Torray Fund owns 96,000 shares of the Company's
Common Stock. Mr. Torray may be deemed to have shared voting and
investment power as to all such shares in the Torray Fund as
President of the Torray Corporation, investment manager to the
Torray Fund.
(d) Of these shares, 60,691 shares of the Company's Common
Stock are unallocated to employees and are owned by the Profit
Sharing, Salary Deferral and Employee Stock Ownership Plan and
Trust Agreement. These shares are voted by the Company's
Employee Benefit Administration Committee, composed of certain
officers of the Company or its subsidiaries. The remaining
579,961 shares of the Company's Common Stock in the Plan have
been allocated to the individual employees and are voted by those
employees. All of these shares are held of record by Liberty
Bank and Trust Company of Oklahoma City, N.A. ("Liberty Oklahoma
City"), as Trustee of the Plan, and Liberty Oklahoma City has
dispositive power over such shares under certain circumstances.
Liberty Oklahoma City also holds of record additional shares,
which represent less than 1/2 of 1% of the Company's outstanding
Common Stock, as Trustee under other trust agreements.
Security Ownership of Directors and Executive Officers
Set forth below is information concerning the security ownership
of all directors, the named executive officers and all directors
and executive officers as a group as of February 10, 1997:
Common Stock
----------------------------
Number of
Shares and
Nature of Percent
Name Ownership of Class (1)
- ---- --------- ------------
Donald L. Brawner, M.D. 101 (2)
20,208 (4)
------
20,309 0.21%
William M. Bell 3,482 (2)
47,238 (3)
3,332 (5)
119 (6)
------
54,171 0.57%
Kenneth R. Brown 27,628 (2)
19,600 (3)
3,728 (5)
140 (6)
------
51,096 0.54%
Thomas G. Donnell 6 (2) *
Robert S. Ellis, M.D. 4,458 (2) 0.05%
William F. Fisher, Jr. 760 (2) 0.01%
Charles W. Flint, III 191 (2)
62,731 (4)
------
62,922 0.66%
Mischa Gorkuscha 25,772 (2)
19,600 (3)
560 (4)
6,611 (5)
148 (6)
------
52,691 0.55%
James L. Hall, Jr. 1,078 (2)
1,449 (4)
------
2,527 0.03%
Raymond H. Hefner, Jr. 10 (2)
87,397 (4)
------
87,407 0.92%
Walter H. Helmerich, III 6,500 (2) (a)
6,000 (4) (a)
12,500 0.13%
Joseph S. Jankowsky 10 (2) *
Edward F. Keller 25,000 (3)
500 (4)
------
25,500 0.27%
John E. Kirkpatrick 1,792,895 (4)(b) 18.81%
Judy Z. Kishner 650 (2) 0.01%
David L. Kyle 100 (2) *
Edward C. Lawson, Jr. 67 (2)
4,067 (4)
------
4,134 0.04%
Herb Mee, Jr. 10 (2) *
Charles E. Nelson 80,608 (3)
42,112 (4)
2,748 (5)
335 (6)
-------
125,803 1.32%
William G. Paul 4,000 (2) 0.04%
V. Lee Powell 212 (2) *
Jon R. Stuart 94,122 (2)
103,767 (4)
-------
197,889 2.08%
Clifton L. Taulbert 50 (2) *
W. H. Thompson, Jr. 4,859 (2)
66,300 (3)
2,209 (5)
241 (6)
------
73,609 0.77%
Robert E. Torray 1,489,019 (c)
96,000 (4)(d)
---------
1,585,019 16.62%
J. Otis Winters 1,000 (2) 0.01%
John S. Zink 1,010 (2) 0.01%
All directors and executive 1,629,415 (2)
officers as a group (30 persons) 215,546 (3)
2,217,686 (4)
32,332 (5)
1,296 (6)
71,199 (7)
---------
4,217,474 44.24%
____________________________________
* Less than 0.01%
(1) Percent of Common Stock is calculated without regard to
shares of Common Stock issuable upon exercise of outstanding
stock options, except that any shares a person is deemed to own
by having a right to acquire by exercise of an option are
considered outstanding solely for purposes of calculating such
person's percentage ownership. Each share of Common Stock is
entitled to one vote on all matters submitted to shareholders.
(2) Sole voting and investment power.
(3) Right to acquire by exercise of stock option(s) currently
exercisable.
(4) Shared voting and investment power.
(5) Sole voting power under the Profit Sharing, Salary Deferral
and Employee Stock Ownership Plan and Trust Agreement.
(6) Sole voting power of restricted stock awarded under
Management Incentive Bonus Plan.
(7) Sole dispositive power.
(a) The shares indicated as beneficially owned by Mr. Helmerich
exclude 395,000 shares of Common Stock owned by Helmerich &
Payne, Inc. of which corporation Mr. Helmerich is Chairman. Mr.
Helmerich disclaims beneficial ownership of these shares.
(b) The 1,792,895 shares of Common Stock indicated as
beneficially owned by Mr. Kirkpatrick are owned by him together
with members of his family as indicated in Footnote (a) to the
table under "Security Ownership of Certain Beneficial Owners."
(c) See footnote (b) to the table under "Security Ownership of
Certain Beneficial Owners."
(d) See footnote (c) to the table under "Security Ownership of
Certain Beneficial Owners."
ITEM 13. Certain Relationships and Related Transactions
Certain principal shareholders, directors of the
Company and their associates were customers of, and had loan
transactions with Liberty Oklahoma City and Liberty Tulsa during
1996. Except as described below, any such loans which were made
during 1996, and none of them currently outstanding, are
classified as nonaccrual, past due, restructured or potential
problem loans, and all such loans (except as described below) (i)
were made in the ordinary course of business; (ii) were made on
substantially the same terms, including interest rates and
collateral, as those prevailing at the time for comparable
transactions with other persons; and (iii) did not involve more
than normal risk of collectibility or present other unfavorable
features at the time the loans were made. William M. Bell, an
executive officer of the Company, has an outstanding mortgage
loan from the Company made pursuant to the Company's Executive
Mortgage Assistance Plan, which plan has been discontinued by the
Company. Mr. Bell is the only executive officer of the Company
with a loan outstanding under this plan. The largest amount
borrowed by Mr. Bell during the year ended December 31, 1996, was
$124,639.57 and the amount outstanding at December 31, 1996, was
$119,119.50, with an interest rate of 7%.
Signature
Pursuant to the requirements of Section 13 or 15(d) of the
Securities Exchange Act of 1934, as amended, the Registrant has
duly caused this Amendment No. 1 to be signed on its behalf by
the undersigned duly authorized.
LIBERTY BANCORP, INC.
By: _______________________________________
Mischa Gorkuscha, Senior Vice President
and Chief Financial Officer
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416053/V-2
