SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [_]
Check the appropriate box:
[_] Preliminary Proxy Statement [_] Confidential, for Use of the
Commission Only (as permitted
by Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to Section 240.14a-11(c) or
Section 240.14a-12
CNB BANCORP, INC.
- -----------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter
- -----------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the
Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[_] Fee computed on table below per Exchange Act Rules 14a-6(i)(4)
and 0-11.
(1) Title of each class of securities to which transaction
applies:
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(2) Aggregate number of securities to which transaction
applies:
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(3) Per unit price or other underlying value of transaction
computed pursuant to Exchange Act Rule 0-11 (Set forth
the amount on which the filing fee is calculated and
state how it was determined):
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(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid:
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[_] Fee paid previously with preliminary materials.
[_] Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the offsetting
fee was paid previously. Identify the previous filing by
registration statement number, or the Form or Schedule and the date
of its filing.
(1) Amount Previously Paid:
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(2) Form, Schedule or Registration Statement No.:
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(3) Filing Party:
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(4) Date Filed:
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Notes:
<PAGE>
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
A Special Meeting of Shareholders of CNB BANCORP, INC. will be held
at the Holiday Inn, 308 North Comrie Avenue, Johnstown, New York at 4:00 p.m.
on October 20, 1998 for the purpose of considering and voting upon the
following matters:
1. To consider and vote upon a proposal to approve the
CNB Bancorp, Inc. Stock Option Plan.
2. To transact such other business as may properly
come before the meeting or any adjournment
thereof.
As the record date for the meeting the Board of Directors has set
September 18, 1998. Only holders of the Company's common stock of record at
the close of business on such date will be entitled to vote at such meeting.
By Order of the Board of Directors
George A. Morgan
Vice President & Secretary
September 18, 1998
IMPORTANT
Whether or not you contemplate attending the meeting, it is
suggested that the enclosed Proxy be executed and returned promptly to the
Company in the enclosed reply envelope. If you attend the meeting, you may
withdraw your Proxy. No officer or employee of the Company may be named as
Proxy.
<PAGE>
CNB BANCORP, INC.
Principal Office - 10-24 North Main Street, Gloversville, New York 12078
--------------------------------------------
PROXY STATEMENT
FOR
SPECIAL MEETING OF SHAREHOLDERS
To Be Held October 20, 1998
--------------------------------------------
GENERAL INFORMATION
This proxy statement is furnished in connection with the
solicitation, by the Board of Directors of CNB Bancorp, Inc., a New York
corporation (the "Company"), of proxies to be voted at a Special Meeting of
Shareholders to be held at 4:00 p.m., October 20, 1998 at the Holiday Inn,
308 North Comrie Avenue, Johnstown, New York 12095. At the Special Meeting,
shareholders of the Company are being asked to consider and vote upon a
proposal to approve the CNB Bancorp, Inc. Stock Option Plan (the "Stock
Option Plan" or "Plan") adopted by the Company's Board of Directors. This
proxy statement and the form of proxy are first being sent to shareholders on
September 18, 1998. Proxies may be revoked by (i) filing with the Secretary
of the Company at or before the Special Meeting a written notice of
revocation bearing a later date than the proxy, (ii) duly executing a
subsequent proxy relating to the same shares and delivering it to the
Secretary of the Company at or prior to the Special Meeting, or (iii)
attending the Special Meeting and voting in person (although attendance at
the meeting will not, in and of itself, constitute revocation of a proxy).
All shares represented by valid proxies sent to the Company to be
voted at the Special Meeting will be voted if received in time. Each proxy
will be voted in accordance with the directions of the shareholder executing
such proxy. If no directions are given, proxies will be voted FOR the
approval of the CNB Bancorp, Inc. Stock Option Plan.
Proxies will be solicited by mail. They may also be solicited by
directors, officers, and regular employees of the Company and the City
National Bank and Trust Company (the "Bank"), a wholly-owned subsidiary of
the Company, personally or by telephone, but such persons will receive no
additional compensation for such services. The Company will bear all costs of
soliciting proxies. In addition the Company will, upon the request of
brokers, dealers, banks and voting trustees, and their nominees, who are
holders of record of the Company's common stock on the record date, bear
their reasonable expenses for mailing copies of this Proxy Statement, the
form of proxy and Notice of Special Meeting, to the beneficial owners of such
shares.
As of September 18, 1998, there were 1,600,000 shares of common
stock, $2.50 par value, of the Company outstanding. Only holders of such
stock at the close of business on September 18, 1998 are entitled to notice
of and to vote at the Special Meeting. Each shareholder of record on that
date is entitled to one vote for each share held. As of September 1, 1998, of
the total outstanding 13,584 shares were held by the Trust Department of the
Bank as sole trustee. Such number of shares as may be held by the Bank in
this manner on the record date will not be voted for the approval of the
Stock Option Plan.
As of September 1, 1998, directors and officers of the Company
beneficially owned an aggregate of 122,965 shares of the Company's common
stock, which represented 7.69% of the shares of common stock then
outstanding.
No person is known to the Company to be the beneficial owner of more
than five percent of the Company's common stock.
<PAGE>
RATIFICATION OF THE ADOPTION OF THE STOCK OPTION PLAN
General
The Company's Board of Directors has adopted the Stock Option Plan.
The Stock Option Plan is subject to ratification by the Company's
shareholders. The Stock Option Plan will become effective upon its approval
by the Shareholders of the Company ("Effective Date") and will continue in
effect for a term of ten years from the Effective Date. Pursuant to the Plan,
up to 160,000 shares of common stock, which is equal to up to 10% of the
total shares of common stock presently issued and outstanding, are reserved
for issuance by the Company upon exercise of stock options ("Options")
granted pursuant to the Plan. The purpose of the Stock Option Plan is to
attract and retain qualified personnel in positions of substantial
responsibility and to provide additional incentive to certain officers and
key employees so as to promote the success of the business of the Company and
the Bank. The following summary of the material features of the Plan is
qualified in its entirety by reference to the complete provisions of the
Stock Option Plan which is attached hereto as Exhibit A.
The Plan will be administered by the Board of Directors or the
Compensation Committee of the Board of Directors ("Compensation Committee").
The Compensation Committee consists of three directors, none of whom are or
may be officers or employees of the Company or the Bank. It is intended that
members of the Compensation Committee be deemed "Non-Employee Directors"
within the meaning of Rule 16b-3 pursuant to the Securities Exchange Act of
1934 (the "1934 Act").
Officers and key employees who are designated by the Compensation
Committee (the "Optionees") will be eligible to receive Options under the
Stock Option Plan. It is anticipated that Options granted under the Plan will
constitute either Incentive Stock Options (options that afford favorable tax
treatment to recipients upon compliance with certain restrictions pursuant to
Section 422 of the Internal Revenue Code ("Code")) or Nonqualified Stock
Options (options that do not afford recipients favorable tax treatment under
Code Section 422). Option shares may be paid for in cash, shares of common
stock, or a combination of both. The Company will receive no monetary
consideration for the granting of stock options under the Plan. Further, the
Company will receive no consideration other than the exercise price per share
for common stock issued to Optionees upon the exercise of Options.
Shares issuable pursuant to the Stock Option Plan may be authorized
but unissued shares, or shares purchased in the open market. Shares subject
to an Option which expires, becomes unexercisable, or is forfeited for any
reason prior to its exercise will again be available for purchase under other
Options subsequently granted pursuant to the Plan. No Option or any right or
interest therein is assignable or transferable except by will or the laws of
descent and distribution.
Stock Options
The Compensation Committee shall from time to time determine the
officers and employees to be granted Options under the Plan, the number of
Options to be granted, and whether Options granted will be Incentive Stock
Options or Nonqualified Stock Options. In selecting officers or employees to
be participants and in determining the number of shares of common stock
subject to Options to be granted to each such participant, the Board or the
Compensation Committee may consider the nature of the services rendered by
the officer or employee, his or her current and potential contribution to the
Company and such other factors as may be deemed relevant. Individuals who
have been granted Options may, if otherwise eligible, be granted additional
Options. At the present time, no determination has been made by the
Compensation Committee as to the individual officers or employees of the
Company who will participate in the Plan as Optionees or the number of shares
to be awarded pursuant to any Option
The exercise price for the purchase of common stock subject to an
Option will be equal to the Fair Market Value (as defined in the Plan) of the
common stock covered by the Option on the date of grant. If an Optionee owns
common stock representing more than ten percent of the outstanding common
stock at the time an Incentive Stock Option is granted, then the exercise
price shall not be less than one hundred and ten percent (110%) of the Fair
Market Value of the common stock at the time the Incentive Stock Option is
granted. No more than $100,000 of Incentive Stock Options can become
exercisable for the first time in any one year for any one person. Further,
no one Optionee may be granted Options for more than 100,000 shares of common
stock (whether the Options are Incentive Stock Options or Nonqualified Stock
Options). The Compensation Committee may impose additional conditions upon
the right of an Optionee to exercise any Option granted hereunder which are
not inconsistent with the terms of the Plan or the requirements for
qualification as an Incentive Stock Option, if the Option is intended to
qualify as an Incentive Stock Option.
<PAGE>
In the event of the death or disability of an Optionee during
employment, all Options granted the Optionee will terminate no later than the
date which is twelve months after the date of death or date of termination of
employment on account of disability. In the event of the retirement of an
Optionee, all Options granted the Optionee will terminate no later than five
years from the retirement date. In the event an Optionee's employment with
the Company is terminated for "Cause" (as such term is defined in the Plan)
all Options granted the Optionee will immediately terminate. If an Optionee's
employment terminates for any reason other than death, disability, retirement
or cause, all Options will terminate no later than three months following
termination of employment.
All Options will vest at a rate established by the Compensation
Committee, but no faster than 25% per year for Incentive Stock Options or 50%
per year for Nonqualified Stock Options. Provided, however, all Options will
vest (1) upon the Optionee's attaining age 65, (2) if the Company sells all
or substantially all of its assets, (3) if the Company merges with another
corporation and the Company is not the surviving entity (4) if any person
(other than a trustee or other fiduciary holding securities under an employee
benefit plan of the Company or its affiliates) is or becomes the beneficial
owner of 25% or more of the common stock of the Company, or (5) if, during
any period of two consecutive years, individuals who at the beginning of such
period constitute the Board of Directors of the Company (each an "Incumbent
Board Member") cease, for any reason, to constitute at least a majority
thereof, (except that any person becoming a director of the Company after the
beginning of the two year period whose election is approved by a vote of at
least three-quarters of the Incumbent Board Members is considered to be an
Incumbent Board Member). In addition the Board of Directors may accelerate
the vesting of any or all Options in its discretion.
No shares of common stock shall be issued upon the exercise of an
Option until full payment has been received by the Company, and no Optionee
shall have any of the rights of a shareholder of the Company until shares of
common stock are issued to such Optionee.
The Plan provides that the Compensation Committee may, with the
consent of the Optionee, modify, extend or renew any outstanding Option.
Mergers, Recapitalizations and Other Adjustments
Proportionate adjustment will be made to the number of shares of
common stock to be purchased on exercise of an Option and subject to the Plan
in the event of any recapitalization, stock dividend, stock split,
combination of shares or other change in the common stock of the Company. In
the event of the sale of all or substantially all of the assets of the
Company or merger of the Company with another corporation where the Company
is not the surviving corporation, outstanding Options may be assumed or
equivalent options may be substituted by the successor corporation (or its
parent or subsidiary). If outstanding Options are not assumed or substituted
by equivalent options, all outstanding Options may be terminated at the
discretion of the Compensation Committee. All outstanding Option shall also
terminate immediately prior to the dissolution of the Company, should the
Company dissolve.
Effect of Plan in the Event of Takeover
The power of the Compensation Committee to accelerate the vesting of
Options and the immediate vesting of Options (1) in the case of a merger of
the Company where the Company is not the surviving corporation, (2) in the
event of the sale of all or substantially all of the assets of the Company,
(3) where any person (other than a trustee or other fiduciary holding
securities under an employee benefit plan of the Company or its affiliates)
is or become the beneficial owner of 25% or more of the common stock of the
Company, or (4) if during any period of two consecutive years, individuals
who at the beginning of such period constitute the Board of Directors of the
Company (each an Incumbent Board Member") cease for any reason to constitute
at least a majority thereof, (except that any person becoming a director of
the Company after the beginning of the two year period whose election is
approved by a vote of at least three-quarters of the Incumbent Board Members
is considered to be an Incumbent Board Member) could have an anti-takeover
effect by making it more costly for a potential acquiror to obtain control of
the Company due to the higher number of shares outstanding following the
exercise of Options.
Although the Stock Option Plan may have an anti-takeover effect, the
Company's Board of Directors did not adopt the Stock Option Plan for
anti-takeover purposes.
The Stock Option Plan could render it more difficult to obtain
support for shareholder proposals opposed by the Company's Board and
management in that recipients of Options could choose to exercise such
Options and thereby increase the number of shares for which they hold voting
power. Also, the exercise of such Options could make it easier for the Board
and management to block the approval of certain transactions requiring the
voting approval of 75% of the common stock in accordance with the Articles of
Incorporation of the Company.
<PAGE>
Amendment and Termination of the Stock Option Plan
The Board of Directors may alter, suspend or discontinue the Stock
Option Plan except that no action of the Board may increase the maximum
number of shares of common stock issuable under the Stock Option Plan (except
for increases as a result of adjustments in the common stock of the Company),
materially increase the benefits accruing to Optionees under the Plan, or
materially modify the requirements for eligibility for participation in the
Plan, unless the action of the Board is ratified by the shareholders of the
Company.
Possible Dilutive Effects of the Stock Option Plan
The common stock to be issued upon the exercise of Options awarded
under the Stock Option Plan may either be authorized but unissued shares of
common stock or shares purchased in the open market. Because the shareholders
of the Company do not have preemptive rights, to the extent that the Company
funds the Stock Option Plan, in whole or in part, with authorized but
unissued shares, the interests of current shareholders will be diluted, If
upon the exercise of all of Options which could be granted pursuant to the
Plan, the Company delivers newly issued shares of common stock (i.e., 160,000
shares of common stock), then the dilutive effect to current shareholders
would be approximately 9.5%.
Federal Income Tax Consequences
Under present federal tax laws, awards under the Stock Option Plan
will have the following consequences:
1. The grant of an Option will not by itself result
in the recognition of taxable income to an
Optionee nor entitle the Company to a tax
deduction at the time of such grant.
2. The exercise of an Option which is an "Incentive
Stock Option" within the meaning of Section 422
of the Code generally will not, by itself, result
in the recognition of taxable income to an Optionee
nor entitle the Company to a deduction at the time
of such exercise. However, the difference between
the Option exercise price and the Fair Market Value
of the common stock on the date of Option exercise
is an item of tax preference which may, in
certain situations, trigger the alternative minimum
tax for an Optionee. An Optionee will recognize
capital gain or loss upon resale of the shares of
common stock received pursuant to the exercise of
Incentive Stock Options, provided that such shares
are held for at least one year after transfer of
the shares or two years after the grant of the
Option, whichever is later. Generally, if the
shares are not held for that period, the Optionee
will recognize ordinary income upon disposition in
an amount equal to the difference between the
Option exercise price and the Fair Market Value
of the common stock on the date of exercise, or,
if less, the sale proceeds of the shares acquired
pursuant to the Option.
3. The exercise of a Nonqualified Stock Option will
result in the recognition of ordinary income by
the Optionee on the date of exercise in an amount
equal to the difference between the exercise price
and the Fair Market Value of the common stock
acquired pursuant to the Option.
4. The Company will be allowed a tax deduction for
federal tax purposes equal to the amount of
ordinary income recognized by an Optionee at the
time the Optionee recognizes such ordinary income.
5. In accordance with Section 162(m) of the Code, the
Company's tax deductions for compensation paid to
its most highly paid executives may be limited to
no more than $1 million per year, excluding certain
"performance-based" compensation. The Company
intends for the award of Options under the
Stock Option Plan to comply with the requirement
for an exception to Section 162(m) of the Code
applicable to stock option plans so that the
Company's deduction for compensation related to
the exercise of Options would not be subject to
the deduction limitation set forth in Section
162(m) of the Code.
<PAGE>
Accounting Treatment
Neither the grant nor the exercise of an Option under the Stock
Option Plan currently requires any charge against earnings under generally
accepted accounting principles. Common stock issuable pursuant to outstanding
Options which are exercisable under the Stock Option Plan will be considered
outstanding for purposes of calculating diluted earnings per share.
Shareholder Ratification
Shareholder ratification of the adoption of the Stock Option Plan is
required by the New York Business Corporation Law and is also being sought in
order to qualify the Stock Option Plan for the granting of Incentive Stock
Options in accordance with the Code, to enable Optionees to qualify for
certain exemptive treatment from the short-swing profit recapture provisions
of Section 16(b) of the 1934 Act, and to meet the requirements for the
tax-deductibility of certain compensation items under Section 162(m) of the
Code. A majority of the issued and outstanding shares must be present, in
person or by proxy, at the Special Meeting in order to constitute a quorum.
Any shares for which a broker indicates on the proxy that it does not have
discretionary authority as to such shares to vote on a matter ("Broker
Non-Votes") will be considered present for purposes of determining whether a
quorum is present. The form of proxy being provided by the Board of Directors
enables a shareholder to check the appropriate box on the proxy: (i) to vote
"FOR" the approval of the Stock Option Plan, (ii) to vote "AGAINST" approval
of the Stock Option Plan, or (iii) to "ABSTAIN" from voting. An affirmative
vote of the majority of the votes cast at the meeting, in person or by proxy,
is required to constitute shareholder approval of the Stock Option Plan.
Shares as to which the "ABSTAIN" box is checked will have the effect of a
vote against approval of the Stock Option Plan. Broker Non-Votes will not be
counted in determining the voting on the approval of the Plan.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" APPROVAL OF THE STOCK
OPTION PLAN.
EXECUTIVE OFFICERS COMPENSATION
At present, officers of the Company are not compensated in any way
for their services. The following summary compensation table shows the annual
compensation for the last three fiscal years for the Bank's chief executive
officer, and executive vice president, the only officers of the Company or
the Bank whose total salaries and bonuses exceeded $100,000 in 1997.
<TABLE>
SUMMARY COMPENSATION TABLE
Annual Compensation
<CAPTION>
Name and All Other
Principal Position Year Salary Bonus Compensation<F1>
- ------------------ ---- ------ ----- ----------------
<S> <C> <C> <C> <C>
William N. Smith, 1997 $169,000 $6,760 $16,567
Chairman of the Board, 1996 $159,000 $6,360 $14,918
President and Chief 1995 $150,000 $6,000 $14,590
Executive Officer of the
Company and the Bank
George A. Morgan 1997 $113,000 $4,520 $14,764
Vice President and 1996 $106,000 $4,240 $13,054
Secretary of the Company 1995 $100,000 $4,000 $12,053
and Executive Vice-
President, Cashier and
Trust Officer of the Bank
<FN>
<F1> Includes contributions to Mr. Smith's profit sharing plan
account of $9,167, $9,068 and $8,740 and Board of Directors
fees of $7,400, $5,850 and $5,850 for the years 1997, 1996
and 1995 respectively and contributions to Mr. Morgan's
profit sharing plan account of $7,364, $7,204 and $6,203
and Board of Directors fees of $7,400, $5,850 and $5,850
for the same period.
</FN>
</TABLE>
<PAGE>
COMPENSATION PURSUANT TO PLANS
Retirement Plans - The following table shows the estimated annual benefits
payable upon retirement under the pension plans of the Bank based on specific
compensation and years of service classifications.
<TABLE>
ESTIMATED ANNUAL BENEFITS FOR YEARS OF SERVICE INDICATED
<CAPTION>
Highest 5-Year Average Years of Service
Base Compensation 20 30 40
-- -- --
<S> <C> <C> <C>
$ 25,000 $ 6,300 $ 9,450 $ 12,588
50,000 14,628 21,942 28,724
75,000 23,378 35,067 45,599
100,000 32,128 48,192 62,474
125,000 40,878 61,317 79,349
150,000 49,628 74,442 96,224
175,000 58,378 87,567 113,099
200,000 67,128 100,692 129,974
</TABLE>
The Bank has a non-contributory defined benefit retirement plan by
participation in the New York State Bankers Retirement System. This Plan
covers all employees of the Bank age 21 years, and less than 65 years, with
more than one year of service who complete 1,000 or more hours of
service during the year. Benefits are based on the number of years of service
and salary at retirement. An employee becomes fully vested in the Plan after
five years of service. The amount of contributions, payment, or accrual, in
respect to a specified person, is not and cannot readily be separately or
individually calculated by the actuaries of the Plan. During 1997, the
aggregate amount expensed for retirement contributions to the Plan equaled
approximately 3.75% of the total covered remuneration paid to participants in
the Plan. In addition, the Bank has entered into an Agreement with William N.
Smith whereby the Bank has agreed to pay Mr. Smith a supplemental retirement
benefit equivalent to the excess of (i) the benefit he would receive under
the Plan if the compensation limitations provided by Section 401 (a)(17) of
the Internal Revenue Code did not exist over (ii) his Plan benefit. The
agreement also provides that, for purposes of computing the supplemental
benefit payable to Mr. Smith, he will receive credit for an additional ten
years of service beyond his actual service with the Bank and the Company. Mr.
Smith's supplemental retirement benefit under this Agreement is only payable
on his termination of employment on or after his normal retirement date, his
earlier death or disability or if his employment terminates within four years
of a change in control of the Company or the Bank. The Bank has purchased a
life insurance policy on Mr. Smith's life so that it will have funds
available to satisfy its obligations under this Agreement. This life
insurance is held in a so-called "Rabbi" trust but is available to the
creditors of the Bank. Under the Plan, as supplemented by the Agreement, each
participant who retires at age 65 is entitled to receive an annual retirement
income for life equal to 1.75% of the average of the highest consecutive five
years of compensation during his or her career (average compensation) times
creditable service up to 35 years, plus 1.25% of the average compensation
times creditable service in excess of 35 years (up to five such years), less
.49% of the final three year average compensation (limited to covered
compensation, which is defined as the average of the individual's last 35
years of taxable social security wage base), times creditable service up to
35 years. Estimated annual benefits to individual employees for the years of
service indicated, exclusive of social security benefits, are shown in the
preceding table. (The Plan and the Agreement contain provisions for optional
benefits of equivalent actuarial value which may be elected by the employee.)
As of December 31, 1997, William N. Smith had 22 years of credited service
with the Bank and George A. Morgan had 30 years.
<PAGE>
Profit Sharing Plans - The Bank has a deferred profit sharing plan.
At present, the profit sharing plan provides for annual contributions, if
any, by the Bank, at the discretion of the Board of Directors. Employees are
eligible to participate in the profit sharing plan after completing one year
of service with the Bank and having attained the age of 21 years.
Contributions on behalf of participating employees are allocated to
participants' accounts in proportion to their annual compensation. Amounts
expensed for deferred profit sharing plan contributions are included in the
above summary compensation table. Participants are fully vested over a six
year period. Contributions are invested and administered by the Bank as sole
trustee and administrator. In addition, the Agreement between William N.
Smith and the Bank provides that Mr. Smith will receive credit in an account
maintained on the books of the Bank for an amount equal to the difference
between (i) the amount actually credited to Mr. Smith's account under the
profit sharing plan and (ii) the contribution he would have received without
regard to the compensation limitations of Section 401 (a)(17) of the Internal
Revenue Code. The balance in Mr. Smith's supplemental profit sharing account
is payable on his termination of employment on or after his normal retirement
date, his earlier death or disability or if his employment terminates within
four years of a change in control of the Company or the Bank. The Bank
is contributing money to the "Rabbi" trust previously referred to so that it
will have funds available to satisfy its obligation under the Agreement to
pay Mr. Smith supplemental profit sharing benefits.
Director Fees Plan - The Bank has a deferred fees plan for
directors. This plan allows directors the election to defer the receipt of
meeting fees to a future date. Deferred fees are credited, together with
interest accruing thereon, to a separate liability account. Interest is
credited annually at a rate of twenty-five basis points above the six month
Treasury Bill average discount rate for the year. The balance of any account
is payable to the director, or to his designated beneficiaries, in a lump sum
or in up to ten annual installments, at the election of the director.
Payments begin on a date specified by the director or upon his termination as
a director of the Bank, whichever is applicable, or upon his death, whichever
shall occur first.
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The objective of the Bank's compensation program is to attract and
retain high quality personnel to lead the organization in a changing
industry, to produce sustainable, profitable earnings in support of
shareholder interests, to meet customer needs and to serve the communities in
which the Company and the Bank operate.
The Compensation Committee reviews executive compensation policies
and levels and evaluates the performance of management in the context of the
Company's performance.
Appropriate base salaries are determined by analysis of salary data
on positions of comparable responsibility within banking industry peer
groups. Holiday bonuses are paid to all Bank employees and are equal to
approximately two weeks base salary. The Bank does not have a long term
incentive plan.
The Company's performance is measured by analysis of selected peer
group comparisons, with a major consideration given to net income.
Members of the Compensation Committee are: Frank E. Perrella, Chairman;
Clark Easterly, Sr., and John C. Miller.
SECTION 16 TRANSACTIONS
Section 16 (a) of the Securities Exchange Act of 1934 requires the
Company's executive officers and directors to file reports of ownership and
changes in ownership with the Securities and Exchange Commission. The Company
assists executive officers and directors in filing the required reports and,
to its knowledge during the year 1997, all filing requirements applicable to
officers and directors were met.
<PAGE>
PERFORMANCE GRAPH
The following line graph presentation compares the five-year
cumulative total shareholder return on CNB Bancorp, Inc.'s common stock
against the cumulative total return of the Standard & Poor's 500 Index and
the Keefe, Bruyette & Woods, Inc. 50 Bank Index (KBW 50). The graph assumes
that $100 was invested on December 31, 1992 and includes both price change
and reinvestment of cash dividends. Graph points are as of December 31 of
each year.
The KBW 50 Index is made up of fifty of the nation's most important
banking companies, including both money center and major regional banks, and
is considered to be representative of the price performance of the nation's
largest banks. It should be kept in mind that, by design, the KBW 50 Index
does not reflect the price or total return performance of smaller banking
companies.
<TABLE>
COMPARISON OF FIVE YEAR CUMULATIVE TOTAL RETURN<F1>
AMONG CNB BANCORP, INC., THE S & P 500 INDEX
AND THE KBW 50 INDEX
<CAPTION>
12/92 12/93 12/94 12/95 12/96 12/97
<S> <C> <C> <C> <C> <C> <C>
CNB BANCORP, INC. $100 $122 $157 $178 $203 $277
S & P 500 $100 $110 $112 $153 $189 $252
KBW 50 $100 $106 $100 $160 $227 $332
<FN>
<F1> $100 INVESTED ON 12/31/92 IN STOCK OR INDEX
INCLUDING REINVESTMENT OF DIVIDENDS.
FISCAL YEAR ENDING DECEMBER 31.
</FN>
</TABLE>
RELATED PARTY TRANSACTIONS
The Bank has had, and expects to have in the future, banking
transactions in the ordinary course of business with many of its directors,
executive officers, and the businesses in which they are associated. During
the calendar year 1997, loans to directors and executive officers, together
with their business interests, reached maximum aggregate totals of $3,312,973
which equals 11.16% of the Company's December 31, 1997 equity capital
accounts. At year-end 1997, loans to directors and executive officers,
together with their business interests, were $2,193,639 which equals 7.39% of
the Company's December 31, 1997 equity capital accounts. All extensions of
credit to such persons have been made in the ordinary course of business on
substantially the same terms, including interest rates and collateral, as
those prevailing at the time for comparable transactions with other persons,
and in the opinion of the management of the Bank, do not involve more than a
normal risk of collectibility or present other unfavorable features.
Robert L. Maider, who is a member of the Board of Directors, is a
partner of the law firm of Maider & Smith, which the Bank has retained in the
past and proposes to retain in the current fiscal year. During 1997, the Bank
made payments to this firm for services in the amount of $51,259.58.
SHAREHOLDER PROPOSALS
In order for shareholder proposals to be eligible for inclusion in
the Company's proxy material relating to its 1999 Annual Meeting, the
shareholder proposal must be directed to the Secretary of the Company and
received by the Company no later than November 18, 1998. All shareholder
proposals will be subject to the proxy rules adopted under the 1934 Act.
<PAGE>
OTHER MATTERS
As of the date of this Proxy Statement, the Board of Directors does
not know of any matter other than as indicated above that will come before
the meeting. In the event that any other matter properly comes before the
meeting, the persons named in the enclosed form of proxy will have
discretionary authority to vote all proxies in accordance with their best
judgment on such matters.
A COPY OF FORM 1OK (ANNUAL REPORT) FOR 1997, FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION BY THE COMPANY, IS AVAILABLE TO
SHAREHOLDERS FREE OF CHARGE BY WRITTEN REQUEST TO GEORGE A. MORGAN, VICE
PRESIDENT AND SECRETARY, CNB BANCORP, INC. 10-24 NORTH MAIN STREET,
GLOVERSVILLE, NY 12078.
All shares represented by proxies sent to the Company to be voted at
the Special Meeting will be voted if received in time.
By Order of the Board of Directors
George A. Morgan
Vice President & Secretary
September 18, 1998
Enclosure
PLEASE MARK, SIGN, DATE AND MAIL
YOUR PROXY NOW!
<PAGE>
EXHIBIT A
CNB BANCORP, INC. STOCK OPTION PLAN
1. PURPOSE. The purpose of this CNB Bancorp, Inc. Stock Option Plan
("the Plan") is to provide a method whereby those key employees of CNB
Bancorp, Inc. and its affiliates (collectively, "the Company"), who are
primarily responsible for the management and growth of the Company's business
and who are presently making and are expected to make substantial
contributions to the Company's future management and growth, may be offered
incentives in addition to those presently available, and may be stimulated by
increased personal involvement in the success of the Company to continue in
its service, thereby advancing the interests of the Company and its
shareholders. The word "affiliate," as used in the Plan, means any
corporation in any unbroken chain of corporations beginning or ending with
the Company, if at the time of the granting of an option, each corporation
other than the last in that chain owns stock possessing fifty percent (50%)
or more of the total combined voting power of all classes of stock in one of
the other corporations in the chain.
2. ADMINISTRATION. The following provisions shall govern the
administration of the Plan:
(a) Board or Committee Administration. The Plan shall be
administered by the Board of Directors which may delegate its administrative
powers and authority under the Plan to the Compensation Committee of the
Company's Board of Directors (the "Compensation Committee"). (References in
this Plan to the "Committee" shall be deemed to refer to the Compensation
Committee or the Board of Directors, as the case may be.) The Board of
Directors may from time to time remove members from or add members to the
Compensation Committee. Vacancies on the Compensation Committee, however
caused, shall be filled by the Board of Directors. The Board of Directors may
designate a Chairman and Vice-Chairman of the Compensation Committee from
among the committee members. Acts of the Compensation Committee (i) at a
meeting, held at a time and place and in accordance with rules adopted by the
committee at which a quorum of the committee is present and acting, or (ii)
reduced to and approved in writing by all members of the committee, shall be
the valid acts of the committee.
(b) Special Rule for Officers. The grant of options to
employees who are officers of the Company may be made by and all discretion
with respect to the material terms of the options may be exercised by either
(i) the Board of Directors, or (ii) the Compensation Committee composed
solely of two or more nonemployee directors having full authority to act in
the matter.
(c) Committee Powers. The Committee shall effect the grant
of options under the Plan by execution of instruments in writing in a form
approved by the Committee. Subject to the express terms and conditions of the
Plan, the Committee shall have full power to construe the Plan and the terms
of any option granted under the Plan, to prescribe, amend and rescind rules
and regulations relating to the Plan or options and to make all other
determinations necessary or advisable for the Plan's administration,
including, without limitation, the power to:
(i) determine which persons meet the
requirements of Section 3 hereof for selection as
participants in the Plan;
(ii) determine to whom of the eligible
persons, if any, options shall be granted under the
Plan;
(iii) establish the terms and conditions
required or permitted to be included in every option
agreement or any amendments thereto, including whether
options to be granted thereunder shall be "incentive
stock options," as defined in section 422 of the Internal
Revenue Code of 1986, as amended (the "Code"), or
nonqualified stock options not described in sections
422 or 423 of the Code;
(iv) specify the number of shares to be
covered by each option;
(v) determine the fair market value of shares
of the Company's common stock for any purpose under
the Plan;
<PAGE>
(vi) take appropriate action to amend any
option hereunder, provided that no such action may be taken
without the written consent of the affected optionee;
(vii) cancel outstanding options and issue
replacement options therefor with the consent of
the affected optionee; and
(viii) make all other determinations deemed
necessary or advisable for administering the Plan.
The Committee's determination on the foregoing matters shall be
conclusive.
3. ELIGIBILITY. The persons who shall be eligible to receive the
discretionary grant of options under the Plan shall be those key employees
and officers of the Company selected for participation by the Committee
("Eligible Persons"). Notwithstanding any other provision of the Plan, no
Eligible Person shall be granted options to purchase more than an aggregate
of 100,000 shares of the Company's common stock under the Plan, as adjusted
pursuant to Section 8.
4. THE SHARES. The shares of stock subject to options authorized to
be granted under the Plan shall consist of 160,000 shares of the Company's
Common Stock (the "Shares"), or the number and kind of shares of stock or
other securities which shall be substituted for the Shares or to which the
Shares shall be adjusted as provided in Section 8 hereof. Upon the expiration
or termination for any reason of an outstanding option under the Plan which
has not been exercised in full, all unissued Shares thereunder shall again
become available for the grant of options under the Plan. Shares of the
Company's common stock which are (i) delivered by an optionee in payment of
the exercise price of an option, or (ii) delivered by an optionee, or
withheld by the Company from the shares otherwise due upon exercise of an
option, in satisfaction of applicable withholding taxes, shall again become
available for the grant of options under the Plan.
5. INCENTIVE STOCK OPTION TERMS AND CONDITIONS. Options granted to
employees under the terms and conditions of this Section 5 are intended to be
incentive stock options (ISOS) under section 422 of the Code. Each incentive
stock option granted under the Plan shall be authorized by action of the
Committee and shall be evidenced by a written agreement in such form as the
Committee shall from time to time approve, which agreement shall comply with
and be subject to the following terms and conditions:
(a) Exercise Price. The exercise price of each incentive
stock option shall be one hundred percent (100%) of the fair market value of
a Share of common stock of the Company on the date the option is granted;
provided, however, that the exercise price of an incentive stock option
granted to an individual who owns stock possessing more than ten percent
(10%) of the total combined voting power of all classes of stock of the
Company, as determined under the stock ownership rules specified in
Subsection 5(c), shall be one hundred ten percent (110%) of the fair market
value of a Share of common stock of the Company on the date the option is
granted.
(b) Duration of Options. No incentive stock option shall
be exercisable after the expiration of ten (10) years from the date on
which that option is granted; provided, however, that no incentive stock
option granted to an individual who owns stock possessing more than ten
percent (10%) of the total combined voting power of all classes of stock of
the Company, as determined under the stock ownership rules specified in
Subsection 5(c), shall be exercisable after the expiration of five (5) years
from the date on which that option is granted.
(c) Determination of Stock Ownership. For purposes of
determining in Subsections 5(a) and 5(b) whether an employee owns stock
possessing more than ten percent (10%) of the total combined voting power of
all classes of stock of the Company, an employee shall be considered as
owning the stock owned, directly or indirectly, by or for his or her brothers
and sisters (whether by the whole or half blood), spouse, ancestors, and
lineal descendants. Stock owned, directly or indirectly, by or for a
corporation, partnership, estate, or trust shall be considered as being owned
proportionately by or for its shareholders, partners, or beneficiaries. Stock
with respect to which the employee holds an option shall not be counted.
<PAGE>
(d) Right to Exercise. Each incentive stock option shall
become exercisable and vest according to the terms and conditions established
by the Committee and reflected in the written agreement evidencing the
option, provided, however, that no option shall vest at a rate of less than
twenty-five percent (25%) per year during the four (4) year period following
the date of grant of the option. Notwithstanding the preceding sentence, all
options shall become immediately exercisable in the event of (1) the
employee's attainment of age 65, (2) the closing of the sale of all or
substantially all of the assets of the Company, (3) the merger or
consolidation of the Company into or with another corporation in a
transaction where the Company is not the surviving corporation, (4) if any
person (other than a trustee or other fiduciary holding securities under an
employee benefit plan of the Company or its affiliate is or becomes the
beneficial owner of 25% or more of the common stock of the Company, or (5)
if, during any period of two consecutive years, individuals who at the
beginning of such period constitute the Board of Directors of the Company
(each an "Incumbent Board Member") cease for any reason to constitute at
least a majority thereof, provided, however, that any person becoming a
director of the Company after the beginning of such period whose election is
approved by a vote of at least three-quarters of the Incumbent Board Members
shall be considered to be an incumbent Board Member. In addition, the Board
of Directors shall have the authority to accelerate the exercisability of any
options granted to an employee. Each incentive stock option shall be subject
to termination before its date of expiration as provided in Subsection 5(e).
(e) Terminations of Options. If an optionee ceases to be an
employee of the Company, his or her rights to exercise an incentive stock
option then held shall be only as follows:
DEATH: If an optionee dies while he or she is employed by the
Company, the optionee's estate shall have the right for a period of twelve
(12) months after the date of death to exercise the option to the extent the
optionee was entitled to exercise the option on that date, provided the date
of exercise is in no event after the expiration of the term of the option. To
the extent the option is not exercised within this period, the option will
terminate. An optionee's "estate" shall mean the optionee's legal
representative or any person who acquires the right to exercise an option by
reason of the optionee's death.
DISABILITY: If an optionee's employment with the Company ends
because the optionee becomes disabled, the optionee or his or her qualified
representative (in the event of the optionee's mental disability) shall have
the right for a period of twelve (12) months after the date on which the
optionee's employment ends to exercise the option to the extent the optionee
was entitled to exercise -the option on that date, provided the date of
exercise is in no event after the expiration of the term of the option. To
the extent the option is not exercised within this period, the option will
terminate.
RESIGNATION: If an optionee voluntarily resigns from the Company,
the optionee shall have the right for a period of three (3) months after the
date of resignation to exercise the option to the extent the optionee was
entitled to exercise the option on that date, provided the date of exercise
is in no event after the expiration of the term of the option. To the extent
the option is not exercised within this period, the option will terminate.
TERMINATION FOR REASONS OTHER THAN CAUSE: If an optionee's
employment is terminated by the Company for reasons other than "Cause," the
optionee shall have the right for a period of three (3) months after the date
of termination to exercise the option to the extent the optionee was entitled
to exercise the option on that date, provided the date of exercise is in no
event after the expiration of the term of the option. To the extent the
option is not exercised within this period, the option will terminate.
Notwithstanding the above, an employee shall have five (5) years from the
date of his/her retirement from the Company to exercise incentive stock
options, provided, however, that at the expiration of the three (3) month
period following retirement, such option shall no longer be treated as
incentive stock options, but shall be treated as non-qualified stock options
pursuant to Section 6 below.
<PAGE>
For the purpose of this clause, "Cause" shall mean that: the
optionee is determined by the Committee to have committed an act of
embezzlement, fraud, dishonesty, or breach of fiduciary duty to the Company,
or to have deliberately disregarded the rules of the Company which resulted
in loss, damage, or injury to the Company, or because the optionee has made
any unauthorized disclosure of any of the secrets or confidential information
of the Company, has induced any client or customer of the Company to break
any contract with the Company, has induced any principal for whom the Company
acts as agent to terminate the agency relationship, or has engaged in any
conduct that constitutes unfair competition with the Company.
OTHER REASONS: If an optionee's employment with the Company ends for
any reason not mentioned above in this Subsection 5(e), all rights of the
optionee in an incentive stock option, to the extent that it has not been
exercised, shall terminate on the date the optionee's employment ends.
(f) Notice of Sale. If an optionee sells or otherwise
disposes of any Shares acquired upon exercise of an incentive stock option,
and the sale or disposition occurs within two (2) years after the grant of
the option or within one (1) year after the exercise of the option, the
optionee shall give the Company notice of the sale or disposition within
fifteen (15) days thereafter.
(g) Limit on Exercise of Incentive Stock Options.
To the extent that the aggregate fair market value (determined as of
the time the option is granted) of the Stock with respect to which
incentive stock options are exercisable for the first time by any
individual during any calendar year (under all plans of the Company
and its parent and subsidiary corporations) exceeds One Hundred
Thousand Dollars ($100,000), the options shall be treated as
options that are not incentive stock options.
6. NONQUALIFIED STOCK OPTION TERMS AND CONDITIONS. The options
granted under the terms and conditions of this Section 6 are nonqualified
stock options and are not intended to qualify as either a qualified stock
option or an incentive stock option as those tenons are defined by applicable
provisions of the Code. Each nonqualified stock option granted under the Plan
shall be authorized by action of the Committee and shall be evidenced by a
written agreement in such form as the Committee shall from time to time
approve, which agreement shall comply with and be subject to the following
terms and conditions:
(a) Exercise Price. The exercise price of each nonqualified
stock option shall not be less than one hundred percent (100%) of the fair
market value of a Share of the Company on the date the option is granted.
(b) Duration of Options. Each nonqualified stock option
shall be for a term determined by the Committee; provided, however, that the
term of any option may not exceed ten (10) years.
(c) Right to Exercise. Each nonqualified stock option shall
become exercisable and vest according to the terms and conditions established
by the Committee and reflected in the written agreement evidencing the
option, provided, however, that no option shall vest at a rate of less than
fifty percent (50%) per year during the two (2) year period following the
date of grant of the option. Notwithstanding the preceding sentence, all
options shall become immediately exercisable in the event of (1) the
employee's attainment of age 65, (2) the closing of the sale of all or
substantially all of the assets of the Company, (3) the merger or
consolidation of the Company into or with another corporation in a
transaction where the Company is not the surviving corporation, (4) if any
person (other than a trustee or other fiduciary holding securities under an
employee benefit plan of the Company or its affiliate is or becomes the
beneficial owner of 25% or more of the common stock of the Company, or (5)
if, during any period of two consecutive years, individuals who at the
beginning of such period constitute the Board of Directors of the Company
(each an "Incumbent Board Member") cease for any reason to constitute at
least a majority thereof, provided, however, that any person becoming a
director of the Company after the beginning of such period whose election is
approved by a vote of at least three-quarters of the Incumbent Board Members
shall be considered to be an incumbent Board Member. In addition, the Board
of Directors shall have the authority to accelerate the exercisability of any
options granted to an employee. Each nonqualified stock option shall be
subject to termination before its date of expiration as provided in
Subsection 6(d).
<PAGE>
(d) Terminations of Options. If an optionee ceases to be an
employee of the Company, his or her rights to exercise a nonqualified stock
option then held shall be only as follows:
DEATH: If an optionee dies while he or she is employed by the
Company, the optionee's estate shall have the right for a period of twelve
(12) months after the date of death to exercise the option to the extent the
optionee was entitled to exercise the option on that date, provided the date
of exercise is in no event after the expiration of the term of the option. To
the extent the option is not exercised within this period, the option will
terminate. An optionee's "estate" shall mean the optionee's legal
representative or any person who acquires the right to exercise an option by
reason of the optionee's death.
DISABILITY: If an optionee's employment with the Company ends
because the optionee becomes disabled, the optionee or his or her qualified
representative (in the event of the optionee's mental disability) shall have
the right for a period of twelve (12) months after the date on which the
optionee's employment ends to exercise the option to the extent the optionee
was entitled to exercise the option on that date, provided the date of
exercise is in no event after the expiration of the term of the option. To
the extent the option is not exercised within this period, the option will
terminate.
RESIGNATION: If an optionee voluntarily resigns from the Company,
the optionee shall have the right for a period of three (3) months after the
date of resignation to exercise the option to the extent the optionee was
entitled to exercise the option on that date, provided the date of exercise
is in no event after the expiration of the term of the option. To the extent
the option is not exercised within this period, the option will terminate.
TERMINATION FOR REASONS OTHER THAN CAUSE: If an optionee's
employment is terminated by the Company for reasons other than "Cause," the
optionee shall have the right for a period of three (3) months after the date
of termination to exercise the option to the extent the optionee was entitled
to exercise the option on that date, provided the date of exercise is in no
event after the expiration of the term of the option. To the extent the
option is not exercised within this period, the option will terminate.
Notwithstanding the above, an employee shall have five (5) years from the
date of his/her retirement from the Company to exercise non-qualified
options.
For the purpose of this clause, "Cause" shall mean that: the
optionee is determined by the Committee to have committed an act of
embezzlement, fraud, dishonesty, or breach of fiduciary duty to the Company,
or to have deliberately disregarded the rules of the Company which resulted
in loss, damage, or injury to the Company, or because the optionee has made
any unauthorized disclosure of any of the secrets or confidential information
of the Company, has induced any client or customer of the Company to break
any contract with the Company, has induced any principal for whom the Company
acts as agent to terminate the agency relationship, or has engaged in any
conduct that constitutes unfair competition with the Company.
OTHER REASONS: If an optionee's employment with the Company ends for
any reason not mentioned above in this Subsection 6(d), all rights of the
optionee in a nonqualified stock option, to the extent that it has not been
exercised, shall terminate on the date the optionee's employment ends.
7. ADDITIONAL TERMS AND CONDITIONS OF ALL OPTIONS. The
following terms and conditions shall apply to all options granted
pursuant to the Plan:
<PAGE>
(a) Exercise of Options. To the extent the right to
purchase Shares has vested under an optionee's stock option agreement,
options may be exercised from time to time by:
(1) delivering payment therefor in cash,
certified check, official bank check, or
the equivalent thereof acceptable to the
Company, together with written notice to
the Company at the address specified in
the written agreement evidencing the
option. The written notice must identify
the option or part thereof being
exercised and specify the number of
Shares for which payment is being
tendered.
(2) the delivery and surrender of Shares
which (i) have been owned by the optionee
for at least twelve (12) months or for
such other period as the Committee may
require; and (ii) have an aggregate fair
market value on the date of surrender
equal to the exercise price.
(3) delivering to the Company (i) an exercise
notice instructing the Company to deliver
the certificates for the Shares purchased
to a designated brokerage firm; and (ii)
a copy of irrevocable instructions
delivered to the brokerage firm to sell
the Shares acquired upon exercise of the
option and to deliver to the Company from
the sale proceeds sufficient cash to pay
the exercise price and applicable
withholding taxes arising as a result of
the exercise.
The Company shall deliver to the optionee, without transfer or issue
tax to the optionee (or other person entitled to exercise the option), at the
principal office of the Company, or such other place as shall be mutually
acceptable, a certificate or certificates for the Shares acquired under the
option dated the date the option was validly exercised; provided, however,
that the time of delivery may be postponed by the Company for such period as
may be required for it with reasonable diligence to comply with any
requirements of law.
(b) Transferability of Options and Shares. Each option
shall be transferable only by will or the laws of descent and distribution
and shall be exercisable during the optionee's lifetime only by the optionee,
or in the event of disability, the optionee's qualified representative. In
addition, in order for Shares acquired upon exercise of incentive stock
options to receive the tax treatment afforded such Shares, the-Shares may not
be disposed of within two years from the date of the option grant nor within
one year after the date of transfer of such Shares to the optionee.
(c) Withholding. The Company shall have the right to
condition the issuance of Shares upon exercise of an option upon
payment by the optionee of any applicable taxes required to be withheld under
federal, state or local tax laws or regulations in connection with the
exercise. To the extent permitted in an optionee's stock option agreement, an
optionee may elect to pay such tax by (i) requesting the Company to withhold
a sufficient number of Shares from the total number of Shares issuable upon
exercise of the option or (ii) delivering a sufficient number of Shares which
have been held by the optionee for at least twelve (12) months to the
Company. This election is subject to approval or disapproval by the
Committee. The value of Shares withheld or delivered shall be the fair market
value of the Shares on the date the exercise becomes taxable as determined by
the Committee.
<PAGE>
(d) Fair Market Value of Shares. For any purposes under the
Plan, fair market value per Share shall mean, where there is a public market
for the Shares, the mean of the bid and asked prices (or the closing price if
listed on a stock exchange or the NASDAQ National Market) of the Shares for
the date of grant, as reported in the Wall Street Journal (or, if not so
reported, as otherwise reported by the NASDAQ Stock Market or the National
Quotation Bureau). If this fair market value information is not available for
the date of grant, then such information for the last preceding date for
which it is available shall be considered as the fair market value.
(e) Other Terms and Conditions. Options may also contain
such other provisions, which shall not be inconsistent with any of the
foregoing terms, as the Committee shall deem appropriate. No option, however,
nor anything contained in the Plan, shall confer upon any optionee any right
to continue in the employ or in the status as a director of the Company, nor
limit in any way the right of the Company to terminate an optionee's
employment at any time.
8. ADJUSTMENT OF, AND CHANGES IN, THE SHARES.
(a) Changes in Capitalization. Subject to any required
action by the shareholders of the Company, the number of Shares covered by
each outstanding option, and the number of Shares which have been authorized
for issuance under the Plan but as to which no options have yet been granted,
as well as the price per Share covered by each outstanding option, shall be
proportionately adjusted for any increase or decrease in the number of issued
Shares resulting from a stock split, reverse stock split, stock dividend,
recapitalization, combination or reclassification of the Shares, or any other
increase or decrease in the number of issued Shares effected without receipt
of consideration by the Company; provided, however, that conversion of any
convertible securities of the Company shall not be deemed to have been
"effected without receipt of consideration." Such adjustment shall be made by
the Committee, whose determination in that respect shall be final,
binding, and conclusive. Except as expressly provided herein, no issuance by
the Company of shares of stock of any class, or securities convertible into
shares of stock of any class, shall affect, and no adjustment by reason
thereof shall be made with respect to, the number or price of Shares subject
to an option.
(b) Dissolution, Liquidation, Sale, or Merger. In the
event of a proposed dissolution or liquidation of the Company, options
outstanding under the Plan shall terminate immediately before the
consummation of such proposed action. The Committee will, in such
circumstances, provide written notice to the optionees of the expected dates
of termination of outstanding options and consummation of the proposed
dissolution or liquidation.
In the event of a proposed sale of all or substantially all of the
assets of the Company, or the merger or consolidation of the Company with or
into another corporation in a transaction in which the Company is not the
surviving corporation, outstanding options may be assumed or equivalent
options may be substituted by the successor corporation (or a parent or
subsidiary of the successor corporation), unless the successor corporation
does not agree to assume the options or to substitute equivalent options. If
outstanding options are not assumed or substituted by equivalent options, the
Committee shall have the power to cause the termination of all outstanding
options (subject to the actual consummation of the sale or merger) and the
Company shall provide written notice to the optionees of the expected dates
of termination of the options and consummation of the transaction. If the
transaction is not consummated, unexercised options shall continue in
accordance with their original terms.
(c) Notice of Adjustments, Fractional Shares. To the
extent the foregoing adjustments relate to stock or securities of the
Company, such adjustments shall be made by the Committee, whose determination
in that respect shall be final, binding, and conclusive. No right to purchase
fractional shares shall result from any adjustment in options pursuant to
this Section 8. In case of any such adjustment, the shares subject to the
option shall be rounded up to the nearest whole share. Notice of any
adjustment shall be given by the Company to each holder of an option which
was in fact so adjusted and the adjustment (whether or not notice is given)
shall be effective and binding for all purposes of the Plan.
No adjustment shall be made for dividends or other rights for which
the record date is prior to the date of such issuance, except as provided in
this Section 8.
<PAGE>
Any issue by the Company of shares of stock of any class, or
securities convertible into shares of any class, shall not affect the number
or price of Shares subject to the option, and no adjustment by reason thereof
shall be made. The grant of an option pursuant to the Plan shall not
affect in any way the right or power of the Company to make adjustments,
reclassifications, reorganizations or changes of its capital or business
structure or to merge or to consolidate or to dissolve, liquidate or sell, or
transfer all or any part of its business or assets.
9. AMENDMENT AND TERMINATION OF THE PLAN. The Board shall have
complete power and authority to terminate or amend the Plan; provided,
however, that the Board shall not, without the approval of the shareholders
of the Company, amend the Plan in a manner that requires shareholder approval
for continued compliance with section 422 of the Code, any successor rules,
or other regulatory authority. Except as provided in Section 8, no
termination, modification or amendment of the Plan may, without the consent
of optionees to whom options were previously granted under the Plan,
adversely effect the rights of those optionees. Any consent required by the
preceding sentence may be obtained in any manner deemed appropriate by the
Committee.
The Plan, unless sooner terminated, shall terminate on ten (10)
years from the date the Plan was originally adopted by the Board. An option
may not be granted under the Plan after the Plan is terminated.
10. EFFECTIVENESS OF THE PLAN. The Plan will become effective upon
approval by the Company's shareholders within twelve months of the date the
Plan is adopted by the Company's Board of Directors.
11. INFORMATION TO OPTIONEES. The Company shall provide to each
optionee during the period for which he or she has one or more outstanding
options, copies of all annual reports and all other information which is
provided to shareholders of the Company. The Company shall not be required to
provide such information to key employees whose duties in connection with the
Company assure their access to equivalent information.
12. PRIVILEGES OF STOCK OWNERSHIP, SECURITIES LAW COMPLIANCE. No
optionee shall be entitled to the privileges of stock ownership as to any
Shares not actually issued and delivered to the optionee. The exercise of any
option under the Plan shall be conditioned upon the registration of the
Shares with the SEC and qualification of the options and underlying Shares
under applicable state securities laws, unless in the opinion of counsel to
the Company registration or qualification is not necessary. The Company shall
diligently endeavor to comply with all applicable securities laws before any
options are granted under the Plan and before any Shares are issued pursuant
to the exercise of such options.
13. INDEMNIFICATION. To the extent permitted by applicable
law in effect from time to time, no member of the Board or the
Committee shall be liable for any action or omission of any other member of
the Board or Committee nor for any act or omission on the member's own part,
excepting only the member's own willful misconduct or gross negligence. The
Company shall pay expenses incurred by, and satisfy a judgment or fine
rendered or levied against, a present or former director or member of the
Committee in any action against such person (whether or not the Company is
joined as a party defendant) to impose liability or a penalty on such person
for an act alleged to have been committed by such person while a director or
member of the Committee arising with respect to the Plan or administration
thereof or out of membership on the Committee or by the Company, or all or
any combination of the preceding; provided the director or Committee member
was acting in good faith, within what such director or Committee member
reasonably believed to have been within the scope of his or her employment or
authority and for a purpose which he or she reasonably believed to be in the
best interests of the Company or its shareholders. Payments authorized
hereunder include amounts paid and expenses incurred in settling any such
action or threatened action. This section does not apply to any action
instituted or maintained in the right of the Company by a shareholder or
holder of a voting trust certificate representing shares of the Company. The
provisions of this section shall apply to the estate, executor,
administrator, heirs, legatees or devisees of a director or Committee member,
and the term "person" as used in this section shall include the estate,
executor, administrator, heirs, legatees or devisees of such person.
Date Plan Approved by the Board: ____________________
Date Plan Approved by Shareholders: _________________
<PAGE>
CNB BANCORP, INC.
PROXY FOR SPECIAL MEETING - OCTOBER 20, 1998
KNOW ALL MEN BY THESE PRESENTS, that I, the undersigned shareholder
of CNB BANCORP, INC. do hereby nominate, constitute and appoint, Clark
Easterly, Sr., John C. Miller and Frank E. Perrella or any one of them (with
full power to act alone), my true and lawful attorney(s) with full power of
substitution, for me and in my name, place, and stead to vote all the common
stock of said Company, standing in my name on its books at the Special
Meeting of its shareholders to be held at the HOLIDAY INN, 308 NORTH COMRIE
AVENUE, JOHNSTOWN, NY on October 20, 1998 at 4:00 p.m., or at any adjournment
thereof, with all the powers the undersigned would possess if personally
present, as follows:
CHECK ONE BOX ONLY
1. To ratify and approve the Yes [ ]
CNB Bancorp, Inc. Stock No [ ]
Option Plan. Abstain [ ]
2. At the discretion of the Proxies, to vote for or against
any other proposition which may come before the meeting or
any adjournment thereof. The Board of Directors knows of no
other business to be brought before the meeting.
THIS PROXY CONFERS AUTHORITY TO VOTE IN FAVOR OF THE APPROVAL OF
THE CNB BANCORP, INC. STOCK OPTION PLAN UNLESS OTHERWISE INSTRUCTED
HEREIN BY THE SIGNER. THIS PROXY CONFERS DISCRETIONARY AUTHORITY
TO VOTE FOR OR AGAINST ANY OF THE FOLLOWING MATTERS:
(1) ANY OTHER PROPOSITION WHICH MAY BE PRESENTED AT THE
MEETING. THE BOARD OF DIRECTORS, AT THE DATE OF THE NOTICE
OF THE MEETING, KNOWS OF NO SUCH MATTERS EXCEPT A
PROPOSITION TO APPROVE THE MINUTES OF THE LAST MEETING OF
SHAREHOLDERS, BUT SUCH APPROVAL SHALL NOT AMOUNT TO A
RATIFICATION OF ACTION TAKEN AT THAT MEETING.
(2) PROPOSITIONS INCIDENT TO THE CONDUCT OF THE MEETING.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS AND MAY BE
REVOKED PRIOR TO ITS EXERCISE.
Dated: __________________________, 1998
__________________________________(L.S.)
__________________________________(L.S.)
When signing as attorney, executor, administrator, trustee or guardian,
please give full title. If more than one trustee, all should sign.
All joint owners must sign.
