<PAGE>
<PAGE>
SCHEDULE 14A
(RULE 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. ___)
Filed by the Registrant [x]
Filed by a Party other than the Registrant [x]
Check the appropriate box:
[ ] Preliminary Proxy Statement [ ] Confidential, for Use
[x] Definitive Proxy Statement of the Commission Only
[ ] Definitive Additional Materials (as permitted by Rule
[ ] Soliciting Material Pursuant to 14a-6(e)(2))
Rule 14a-11(c) or Rule 14a-12
JEFFERSON SAVINGS 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)
(1) and 0-11.
1. Title of each class of securities to which transaction
applies:
------------------------------------------------------
2. Aggregate number of securities to which transaction
applies:
------------------------------------------------------
3. Per unit price or other underlying value of transaction
computed pursuant to Exchange Act Rule 0-11 (Set forth
the amount on which the filing fee is calculated and
state how it was determined):
------------------------------------------------------
4. Proposed maximum aggregate value of transaction:
------------------------------------------------------
5. Total fee paid:
------------------------------------------------------
[ ] Fee paid previously with preliminary materials:
[ ] Check box if any part of the fee is offset as provided by
Exchange Act Rule 0-11(a)(2) and identify the filing for
which the offsetting fee was paid previously. Identify the
previous filing by registration statement number, or the
Form or Schedule and the date of its filing.
1. Amount Previously Paid:
------------------------------------------------------
2. Form, Schedule or Registration Statement No.:
------------------------------------------------------
3 Filing Party:
------------------------------------------------------
4. Date Filed:
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<PAGE>
[ L O G O ]
May 26, 1999
Dear Fellow Stockholder:
You are cordially invited to attend the 1999 Annual Meeting
of the Stockholders of Jefferson Savings Bancorp, Inc. to be held
at the Crowne Plaza Suites Hotel, 7800 Alpha Road, Dallas, Texas,
on Monday, June 21, 1999 at 9:00 a.m., Central Time.
The Annual Meeting has been called for the election of direc-
tors and ratification of auditors. Enclosed with this proxy
statement are a proxy card and an Annual Report to Stockholders
for the 1998 fiscal year. Directors and officers of the Company,
as well as representatives of KPMG LLP, the Company's independent
auditors, will be present at the Annual Meeting to respond to any
questions the stockholders may have.
REGARDLESS OF THE NUMBER OF SHARES YOU OWN OR WHETHER YOU
PLAN TO ATTEND, WE URGE YOU TO SIGN, DATE AND RETURN THE ENCLOSED
PROXY CARD AS SOON AS POSSIBLE IN THE ENCLOSED POSTAGE PAID
ENVELOPE. This will not prevent you from voting in person but
will assure that your vote is counted if you are unable to attend
the meeting.
To help us with our planning, please check the box on the
proxy card if you plan to attend the meeting in person.
Sincerely,
/s/ David V. McCay
David V. McCay
Chairman of the Board
and Chief Executive Officer
<PAGE>
<PAGE>
_________________________________________________________________
JEFFERSON SAVINGS BANCORP, INC.
14915 MANCHESTER ROAD
BALLWIN, MISSOURI 63011
(314) 227-3000
_________________________________________________________________
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON JUNE 21, 1999
_________________________________________________________________
NOTICE IS HEREBY GIVEN that the Annual Meeting of
Stockholders (the "Annual Meeting") of Jefferson Savings Bancorp,
Inc. (the "Company"), will be held at the Crowne Plaza Suites
Hotel, 7800 Alpha Road, Dallas, Texas, on Monday, June 21, 1999
at 9:00 a.m., Central Time.
The Annual Meeting is for the purpose of considering and
acting upon:
1. The election of three directors;
2. The ratification of auditors; and
3. The transaction of such other matters as may properly
come before the Annual Meeting or any adjournments
thereof.
Any action may be taken on the foregoing proposals at the
Annual Meeting on the date specified above or on any date or
dates to which, by original or later adjournment, the Annual
Meeting may be adjourned. Only stockholders of record at the
close of business on May 18, 1999 are entitled to notice of and
to vote at the Annual Meeting and any adjournments thereof.
The Company's Proxy Statement for the Annual Meeting
accompanies this Notice and a form of proxy is enclosed herewith.
You are requested to fill in and sign the enclosed Proxy Card
which is solicited by the Board of Directors and to mail it
promptly in the enclosed envelope. The proxy will not be used if
you attend and vote at the Annual Meeting in person.
BY ORDER OF THE BOARD OF DIRECTORS
/s/ Paul J. Milano
PAUL J. MILANO
Secretary
Ballwin, Missouri
May 26, 1999
_________________________________________________________________
IMPORTANT: THE PROMPT RETURN OF THE ENCLOSED PROXY WILL SAVE
YOUR COMPANY THE EXPENSE OF FURTHER REQUESTS FOR PROXIES IN ORDER
TO INSURE A QUORUM. A SELF-ADDRESSED ENVELOPE IS ENCLOSED FOR
YOUR CONVENIENCE. NO POSTAGE IS REQUIRED IF MAILED IN THE UNITED
STATES.
_________________________________________________________________
<PAGE>
<PAGE>
PROXY STATEMENT
OF
JEFFERSON SAVINGS BANCORP, INC.
14915 MANCHESTER ROAD
BALLWIN, MISSOURI 63011
ANNUAL MEETING OF STOCKHOLDERS
JUNE 21, 1999
_________________________________________________________________
GENERAL
_________________________________________________________________
This Proxy Statement is furnished in connection with the
solicitation of proxies by the Board of Directors of Jefferson
Savings Bancorp, Inc. (hereinafter called the "Company") to be
used at the 1999 Annual Meeting of Stockholders of the Company
(hereinafter called the "Annual Meeting"), which will be held at
the Crowne Plaza Suites Hotel, 7800 Alpha Road, Dallas, Texas, on
Monday, June 21, 1999 at 9:00 a.m., Central Time. The
accompanying Notice of Annual Meeting and form of proxy and this
Proxy Statement are being first mailed to stockholders on or
about May 26, 1999.
_________________________________________________________________
VOTING AND REVOCABILITY OF PROXIES
_________________________________________________________________
Proxies solicited by the Board of Directors of the Company
will be voted in accordance with the directions given therein.
WHERE NO INSTRUCTIONS ARE INDICATED, PROXIES WILL BE VOTED FOR
THE NOMINEES FOR DIRECTOR NAMED BELOW AND FOR THE RATIFICATION OF
AUDITORS DESCRIBED HEREIN. The proxy confers discretionary
authority on the persons named therein to vote with respect to
the election of any person as a director where the named nominee
is unable to serve or for good cause will not serve, and with
respect to matters incident to the conduct of the Annual Meeting.
If any other business is presented at the Annual Meeting, proxies
will be voted by those named therein in accordance with the
determination of a majority of the Board of Directors. Proxies
marked as abstentions will not be counted as votes cast. In
addition, shares held in street name which have been designated
by brokers on proxy cards as not voted will not be counted as
votes cast. Proxies marked as abstentions or as broker no votes,
however, will be treated as shares present for purposes of
determining whether a quorum is present.
Stockholders who execute proxies retain the right to revoke
them at any time. Unless so revoked, the shares represented by
properly executed proxies will be voted at the Annual Meeting and
all adjournments thereof. Proxies may be revoked by written
notice to the Secretary of the Company at the address above or by
the filing of a later dated proxy prior to the closing of the
polls at the Annual Meeting. A proxy will not be voted if a
stockholder attends the Annual Meeting and votes in person. The
presence of a stockholder at the Annual Meeting will not revoke
such stockholder's proxy.
_________________________________________________________________
VOTING SECURITIES AND PRINCIPAL HOLDERS THEREOF
_________________________________________________________________
The securities entitled to vote at the Annual Meeting
consistof the Company's common stock, $.01 par value per share
(the "Common Stock"). Stockholders of record as of the close of
business on May 18, 1999 (the "Record Date") are entitled to one
vote for each share of Common Stock then held, other than shares
of the Common Stock beneficially owned by any person or group of
persons acting in concert in excess of 10% of the shares of
Common Stock outstanding in violation of the Company's
Certificate of Incorporation, which shares in excess of 10% shall
only be entitled to 1/100th of a vote each. As of the Record
Date, there were 10,054,177 shares of Common Stock issued and
outstanding.
<PAGE>
<PAGE>
Persons and groups beneficially owning in excess of 5% of the
Common Stock are required to file certain reports with respect to
such ownership pursuant to the Securities Exchange Act of 1934
(the "Exchange Act"). The following table sets forth, as of the
Record Date, certain information as to the Common Stock
beneficially owned by all persons who have filed the reports
required of persons beneficially owning more than 5% of the
Common Stock.
<TABLE>
<CAPTION>
AMOUNT AND PERCENT OF
NATURE OF SHARES OF
NAME AND ADDRESS BENEFICIAL COMMON STOCK
OF BENEFICIAL OWNER OWNERSHIP (1) OUTSTANDING
- ------------------- ------------- ------------
<S> <C> <C>
Mary Kathryn Drake 963,800 (2) 9.59%
2104 Dornoch
League City, Texas 77573
Intrepid, Ltd. 748,500 7.44%
#7 Wild Tamarind Drive
Nassau, Bahamas
Jefferson Savings Bancorp, Inc. 591,474 (3) 5.88%
Employee Stock Ownership Plan and Trust
14915 Manchester Road
Ballwin, Missouri 63011
<FN>
_____________
(1) For purposes of this table, a person is considered the beneficial owner of
any shares of Common Stock as to which he or she has or shares voting or
investment power or of which he or she has the right to acquire beneficial
ownership at any time within 60 days from the Record Date. As used
herein, "voting power" is the power to vote or direct the voting of shares
and "investment power" is the power to dispose or direct the disposition
of shares. Except as otherwise noted, ownership is direct, and the named
persons exercise sole voting and investment power over the shares of the
Common Stock.
(2) According to the statement on Schedule 13D filed by Ms. Drake, 938,600
shares are held by the Mary K. Drake Family Limited Partnership. Includes
25,000 shares held as trustee for the William K. Drake Defined Benefit
Plan and 200 shares held by William K. Drake.
(3) Consists of shares held in a suspense account for future allocations among
participating employees as the loan used to purchase the shares is repaid.
The ESOP Trustee, Mercantile Bank, N.A., votes all allocated shares in
accordance with the instructions of the participants. Unallocated shares
and allocated shares for which no voting instructions have been received
are voted by the ESOP Trustee in the same proportion as participants
direct the voting of allocated shares or, in the absence of such voting
direction, as directed by the Company, or in the absence of such direction
by the Company, in the ESOP Trustee's sole discretion. At the Record
Date, 555,297 shares had been allocated.
</FN>
</TABLE>
-2-
<PAGE>
<PAGE>
________________________________________________________________
PROPOSAL I -- ELECTION OF DIRECTORS
________________________________________________________________
Effective as of the date of the Annual Meeting, the number
of directors will be increased to seven members from the current
six members. Under the Company's Certificate of Incorporation,
directors are divided into three classes and elected for terms
of three years each and until their successors are elected and
qualified. In order to make the number of directors in each
class as even as possible as required by the Company's
Certificate of Incorporation, Mr. Canfield has previously been
appointed to the class of directors whose terms expire at the
2000 Annual Meeting and three directors will be elected for
terms expiring at the Annual Meeting to be held in the year
2002. The Board of Directors has nominated Lloyd D.
Doerflinger, Gary L. Holland and Brad Barkau to serve for terms
of three years each and until their successors are elected and
qualified. For additional information, see "The Shareholder
Agreement." Frank C. Bick, whose current term as director will
expire at the Annual Meeting, is no longer eligible for
re-election under the Company's Bylaws due to his having
attained age 70. Under Delaware law, directors are elected by a
plurality of the votes present in person or represented by proxy
at the Annual Meeting and entitled to vote in the election of
directors.
Unless contrary instruction is given, the persons named in
the proxies solicited by the Board of Directors will vote each
such proxy for the election of the named nominees. If any of
the nominees are unable to serve, the shares represented by all
properly executed proxies which have not been revoked will be
voted for the election of such substitute as the Board of
Directors may recommend. At this time, the Board knows of no
reason why the nominees might be unavailable to serve.
The following table sets forth, for each nominee and each
continuing director, his name, age as of the Record Date, the
year he first became a director of the Company's principal
subsidiary, Jefferson Heritage Bank (the "Bank"), and the
expiration of his current term as a director of the Company.
All of the Company's current directors (other than Mr. Miller
who was first elected a director in 1995) were initially
appointed as directors in 1992 in connection with the
incorporation and organization of the Company. Each director of
the Company also is a member of the Board of Directors of the
Bank. Except as described in the section captioned "The
Shareholder Agreement," there are no known arrangements or
understandings between any director or nominee for director of
the Company and any other person pursuant to which such
director or nominee has been selected as a director or nominee.
No director, nominee or executive officer is related to any
other director, nominee or executive officer by blood, marriage
or adoption.
<PAGE>
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE NOMINEES
LISTED BELOW.
<TABLE>
<CAPTION>
YEAR FIRST ELECTED CURRENT
AGE AS OF THE AS DIRECTOR OF TERM
NAME RECORD DATE THE BANK TO EXPIRE
---- ------------- ------------------ ---------
<S> <C> <C> <C>
BOARD NOMINEES FOR A TERM TO EXPIRE
AT THE 2002 ANNUAL MEETING
Lloyd D. Doerflinger 63 1958 1999
Gary L. Holland 60 -- --
Brad Barkau 47 -- --
DIRECTORS CONTINUING IN OFFICE
William W. Canfield 60 1987 2000
Edward G. Throop 49 1985 2000
David V. McCay 56 1989 2001
Forrest W. Miller, Jr. 55 1995 2001
</TABLE>
-3-
<PAGE>
<PAGE>
Presented below is certain information concerning the
nominees and directors continuing in office. Unless otherwise
stated, all directors and nominees have held the positions
indicated for at least the past five years.
LLOYD D. DOERFLINGER - Mr. Doerflinger currently is retired.
From 1988 until 1989, he was the acting President and Chief
Executive Officer of the Bank. He currently is active in
charitable and religious organizations in St. Louis and Florida.
GARY L. HOLLAND - Mr. Holland is the President of Holland
Motors Corporation, a full-line General Motors dealership in
Harrisburg, Illinois, which he founded in 1986. Mr. Holland
also served as a director and Chairman of the Board of
Harrisburg Bancshares, Inc., the holding company for Harrisburg
National Bank, Harrisburg, Illinois from January 1992 to May
1995 and currently serves on the advisory board of Civitas Bank,
an affiliate of CNB Bancshares, Inc.
BRAD BARKAU - Mr. Barkau is an attorney with the firm of
Barkau & Unverfehrt, P.C. in Nashville, Illinois. He is also a
registered representative with Equitable Financial Cos. Mr.
Barkau serves on the Board of Directors of Old Exchange National
Bank, Okawville, Illinois. He is also active in youth and
religious organizations in Okawville, Illinois.
WILLIAM W. CANFIELD - Mr. Canfield is the President of TALX
Corporation, St. Louis, Missouri, which is engaged in developing
and marketing interactive voice response systems.
DAVID V. MCCAY - Mr. McCay is Chairman of the Board and
Chief Executive Officer of the Company and has been Chief
Executive Officer of the Bank since 1989. Prior to joining the
Bank, from 1973 to 1989, Mr. McCay was employed by the Boatmen's
National Bank of St. Louis, leaving as President - South Region
and head of the Indirect Lending/Leasing Division. Mr. McCay
has served in various capacities with numerous civic and
charitable organizations, including the South County Y.M.C.A.,
the American Cancer Society and the United Way.
FORREST W. MILLER, JR. - Mr. Miller and his wife are the
owners of Royale Orleans Banquet Center. He is a past State
President of the Missouri Restaurant Association and is a former
President and Chairman of the Board of the St. Louis Chapter of
the Missouri Restaurant Association. He is currently active in
many civic and charitable organizations.
EDWARD G. THROOP - Mr. Throop is President of C4
Corporation, a real estate development firm headquartered in
Chesterfield, Missouri. He is a member of the Chesterfield
Chamber of Commerce and the St. Louis Counts.
EXECUTIVE OFFICERS WHO ARE NOT DIRECTORS OR NOMINEES
The following sets forth information including their ages as
of the Record Date with respect to executive officers of the
Company who neither serve nor have been nominated to serve on
the Board of Directors. Executive officers are appointed
annually by the Board of Directors.
JOE L. WILLIAMS, 48, became President and Chief Operating
Officer effective January 1, 1999 and was elected to the Bank's
Board of Directors on the same date. Prior to that time, Mr.
Williams had served as President of the Company's former Texas
subsidiary, First Federal Savings Bank of North Texas ("First
Federal"), since 1997. Mr. Williams served as President of
Texas Heritage Savings Association/Banc from 1984 to 1996 when
it was merged into First Federal, and served as senior vice
president of First Garland Savings, Garland, Texas from 1974 to
1984.
JAMES M. ALLISON, 46, was elected Senior Vice President and
Senior Operations Officer of the Company in November 1998. Mr.
Allison has over twenty years of retail banking, mortgage,
operations and information systems experience with a large,
Missouri-based bank holding company.
-4-
<PAGE>
<PAGE>
PAUL J. MILANO, 42, has served as Senior Vice President,
Treasurer, Chief Financial Officer and Senior Accounting Officer
of the Company since 1992. He joined the Bank as Chief
Accounting Officer in 1990 and has served as Senior Vice
President and Senior Accounting Officer of the Bank since
January 1992. Prior to joining the Bank, he served for nine
years with KPMG LLP, leaving in 1990 as Manager. He is a member
of the American Institute of Certified Public Accountants, the
Missouri Society of Certified Public Accountants and the
Financial Managers Society.
JOHN P. DEVES, 34, has served as Senior Vice President/
Retail Banking Division of the Company since 1994. Mr. Deves
was hired by the Bank in 1991 to assist in the divestiture of
real estate investments and real estate acquired through
foreclosure. He was elected Senior Vice President of the Bank
in 1995. Mr. Deves is responsible for the Retail Banking
Division which networks the origination of real estate related
loans, markets for sale of deposit account products and promotes
the sale of investment services.
________________________________________________________________
MEETINGS AND COMMITTEES OF THE BOARD OF DIRECTORS
________________________________________________________________
The Company's Board of Directors conducts its business
through meetings of the Board and of its committees. The Board
of Directors of the Company meets monthly and may have
additional special meetings. During the year ended December 31,
1998, the Board met 11 times. No director attended fewer than
75% in the aggregate of the total number of Board meetings held
during the year ended December 31, 1998 and the total number of
meetings held by committees on which he served during such
fiscal year. The Board of Directors has standing Audit,
Nominating and Compensation Committees as described below.
The Audit Committee of the Company consists of Directors
William W. Canfield, Edward G. Throop and Lloyd D. Doerflinger.
The committee meets periodically to examine and approve the
audit report prepared by the independent auditors of the Company
and its subsidiaries, to review and recommend the independent
auditors to be engaged by the Company, to review the internal
audit function and internal accounting controls, and to review
and approve conflict of interest and audit policies. During
fiscal year 1998, the Audit Committee met five times.
The Company's full Board of Directors acts as a nominating
committee for selecting the management nominees for election as
directors in accordance with the Company's Bylaws. In its
deliberations, the Nominating Committee considers the
candidate's knowledge of the banking business and involvement in
community, business and civic affairs, and also considers
whether the candidate would allow the Board to continue its
geographic diversity that provides for adequate representation
of each of the Company's market areas. While the Board of
Directors will consider nominees recommended by stockholders, it
has not actively solicited recommendations from the Company's
stockholders for nominees nor, subject to the procedural
requirements set forth in the Company's Certificate of
Incorporation and Bylaws, established any procedures for this
purpose. During fiscal year 1998, the Board of Directors
met once as the Nominating Committee.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
During the last fiscal year, the Company's Compensation
Committee consisted of Directors David V. McCay, Edward G.
Throop, William W. Canfield and Frank C. Bick. The Compensation
Committee meets periodically to evaluate the compensation and
fringe benefits of the directors, officers and employees and to
recommend changes and to monitor and evaluate employee morale.
Mr. McCay does not participate in deliberations regarding his
compensation. The Compensation Committee met once during fiscal
year 1998.
<PAGE>
________________________________________________________________
DIRECTOR COMPENSATION
________________________________________________________________
Each member of the Board of Directors of the Company (other
than Mr. McCay who receives no fees for his service on the Board
of Directors) receives a monthly fee of $2,000 and a fee of $250
for each committee meeting
-5-
<PAGE>
<PAGE>
attended. Directors of the Bank (other than Mr. McCay) are also
eligible to receive a fee of $500 for each meeting of the Board
of Directors held on a day other than the day of a meeting of
the Company's Board of Directors although no such fees were paid
during fiscal year 1998. Although directors of the Bank may
individually enter into agreements with the Bank under which
payment of their board fees will be deferred to a specified
future date, as of the date hereof, no director has entered into
such an agreement with the Bank.
The Company has adopted the Directors' Retirement Plan (the
"Directors' Plan") for its non-employee directors who retire
from the Company's Board of Directors at or after age 70 in
accordance with its Bylaws. Each such director will receive, on
each of the three annual anniversary dates of his retirement, an
amount equal to 50% of the directors' fees which he received
from the Company during the calendar year preceding his
retirement. If a non-employee director dies before receiving
all payments due under the Directors' Plan, any remaining
payments will be made to his designated beneficiary. The
Company will pay plan benefits from its general assets.
Each non-employee director on the effective date of the
Jefferson Savings Bancorp, Inc. 1993 Stock Option and Incentive
Plan (the "Option Plan") (specifically, Directors Bick,
Canfield, Doerflinger and Throop and former Directors Magwitz
and Monnig) received options to purchase 60,172 shares of Common
Stock at an exercise price equal to $5.00 per share (as adjusted
for the two-for-one stock split in 1997). All such options held
by current directors will expire on April 8, 2003 if not sooner
exercised. In its sole discretion, the committee that
administers the Option Plan may grant to non-employee directors
additional options with a per share exercise price equal to the
market value of a share of Common Stock on the date of grant.
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
OVERVIEW AND PHILOSOPHY. The Company's executive
compensation policies are established by the Compensation
Committee of the Board of Directors (the "Committee") composed
of three outside directors and Director McCay. Mr. McCay does
not participate in deliberations regarding his compensation.
The Committee is responsible for developing the Company's
executive compensation policies generally and for implementing
those policies for the Company's senior executive officers (the
Chairman of the Board, President and Chief Operating Officer and
Senior Vice Presidents). The Company's Chief Executive Officer,
under the direction of the Committee, implements the Company's
executive compensation policies for the remainder of the
Company's officers. The Committee's objectives in designing and
administering the specific elements of the Company's executive
compensation program are as follows:
. To link executive compensation rewards to
increases in shareholder value, as
measured by favorable long term operating
results and continued strengthening of the
Company's financial condition.
. To provide incentives for executive
officers to work towards achieving
successful annual results as a step in
achieving the Company's long term
operating results and strategic
objectives.
. To correlate, as closely as possible,
executive officers' receipt of awards with
the attainment of specified performance
objectives.
. To maintain a competitive mix of total
executive compensation, with particular
emphasis on awards related to increases
in long term shareholder value.
<PAGE>
. To attract and retain top performing
executive officers for the long term
success of the Company.
. To facilitate stock ownership through the
granting of stock options and through
share awards issued through an employee
stock ownership plan and management
recognition plans.
In furtherance of these objectives, the Committee has
determined that there should be two specific components of
executive compensation: base salary and plans that provide
long-term incentives through the facilitation of stock ownership
in the Company, including a stock option plan, management
recognition plans and an employee stock ownership plan.
-6-
<PAGE>
<PAGE>
BASE SALARY. The Committee makes recommendations to the
Board concerning executive compensation on the basis of regional
and national surveys of salaries paid to executive officers of
other savings and loan holding companies, non-diversified banks
and other financial institutions similar in size, market
capitalization and other characteristics. The Committee's
objective is to provide for base salaries that are competitive
with the average salary paid by the Company's peers.
STOCK RELATED AWARD PLANS. The Committee believes that
stock related award plans are an important element of
compensation since they provide executives with incentives
linked to the performance of the Common Stock.
STOCK OPTION AND INCENTIVE PLAN. The Company has adopted
the Jefferson Savings Bancorp, Inc. 1993 Stock Option and
Incentive Plan (the "Option Plan") as a means of providing key
employees with the opportunity to acquire a proprietary interest
in the Company and to link their interests with those of the
Company's stockholders. Under this plan, participants are
eligible to receive stock options, stock appreciation rights and
shares of restricted stock. Awards under the Option Plan are
subject to vesting and forfeiture as determined by the
Committee. Options, restricted stock and stock appreciation
rights are granted at the market value of the Common Stock on
the date of grant, and thus acquire value only if the Company's
stock price increases. The vesting of awards under this plan
may be conditioned upon the Company's attainment of particular
performance goals.
MANAGEMENT RECOGNITION PLANS. In 1993, the Company adopted
the Management Recognition Plans and Trusts (the "MRPs") to
reward and retain personnel of experience and ability in key
positions of responsibility by providing such employees with a
proprietary interest in the Company as compensation for their
past contributions to the Company, the Bank and its subsidiaries
and as an incentive to make further contributions in the future.
Under the MRPs, participants are awarded restricted stock
subject to vesting and forfeiture as determined by the
Committee.
The Company designed its executive compensation program to
be competitive with similarly-situated institutions. Its
compensation philosophy has historically consisted of providing
competitive base compensation and benefit levels, short-term
(i.e., year to year) performance incentives and a
post-employment retirement program. In 1993, the Company
carefully restructured its benefit plans with the goal of
aligning the interests of its employees with the interests of
its stockholders. To this end, the Company, among other things,
terminated its defined benefit pension plan and replaced it with
the ESOP, amended the 401(k) Savings Plan to permit employees to
invest their accounts in Common Stock (as well as in other
investment funds) and adopted the MRPs and the Option Plan.
COMPENSATION OF THE CHIEF EXECUTIVE OFFICER. Mr. McCay's
annual rate of compensation for fiscal year 1998 was $276,666.
The Committee determines the Chief Executive Officer's
compensation on the basis of several factors. In determining
Mr. McCay's base salary for fiscal year 1998, the Committee
conducted surveys of compensation paid to chief executive
officers of similarly situated thrifts and non-diversified banks
both regionally and nationally. The Committee believes that Mr.
McCay's base salary is generally competitive with the average
salary paid by such institutions.
For future years, Mr. McCay's base salary will be
established in accordance with the terms of the employment
agreement entered into between the Company, the Bank and Mr.
McCay. See "Executive Compensation -- Employment Agreement."
In establishing Mr. McCay's compensation, the Committee reviewed
available data regarding historical levels of compensation of
stock thrifts generally, of those in the region and of
high-performing Banks nationally. Certain, but not all, of those
companies are included in the SNL Thrifts (Midwest) and SNL OTC
Thrift indexes included on the Stock Performance Graph below.
The Committee believes that the Company's executive
compensation program serves the Company and its shareholders by
providing a direct link between the interests of executive
officers and those of shareholders generally and by helping to
attract and retain qualified executive officers who are
dedicated to the long-term success of the Company.
MEMBERS OF THE COMPENSATION COMMITTEE
David V. McCay William W. Canfield
Edward G. Throop Frank C. Bick
-7-
<PAGE>
<PAGE>
________________________________________________________________
COMPARATIVE STOCK PERFORMANCE GRAPH
________________________________________________________________
The graph and table which follow show the cumulative total
return on the Common Stock for the past five years, compared
with the cumulative total returns for the Nasdaq Total Return
Index, SNL OTC Thrift Index and SNL Thrifts (Midwest) Index over
the same period. Cumulative total return on the stock or the
index equals the total increase in value since December 31, 1993
assuming reinvestment of all dividends paid on the Common Stock
or the index, respectively. The graph and table were prepared
assuming that $100 was invested on December 31, 1993 in the
Common Stock and in each of the indexes. The shareholder
returns shown on the performance graph are not necessarily
indicative of the future performance of the Common Stock or of
any particular index.
CUMULATIVE TOTAL SHAREHOLDER RETURN
COMPARED WITH PERFORMANCE OF SELECTED INDEXES
DECEMBER 31, 1993 THROUGH DECEMBER 31, 1998
[Line graph appears here depicting the cumulative total
shareholder return for $100 invested in the Common Stock as
compared to $100 invested in the Nasdaq Total Return Index, SNL
Midwest Thrift Index and SNL OTC Thrift Index. Line graph
begins at December 31, 1993 and plots the cumulative total
return at December 31, 1993, 1994, 1995, 1996, 1997 and 1998.
Plot points are provided below.]
<TABLE>
<CAPTION>
12/31/93 12/31/94 12/31/95 12/31/96 12/31/97 12/31/98
-------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
Jefferson Savings
Bancorp, Inc. 100 100.00 173.44 164.54 262.91 170.61
NASDAQ - Total US 100 97.75 138.26 170.01 208.58 293.21
SNL Midwest Thrift Index 100 104.70 158.25 199.37 321.31 296.88
SNL OTC Thrift Index 100 100.85 153.34 199.50 324.02 283.31
</TABLE>
-8-
<PAGE>
<PAGE>
________________________________________________________________
EXECUTIVE COMPENSATION AND OTHER BENEFITS
________________________________________________________________
SUMMARY COMPENSATION TABLE. The following table sets forth
the cash and noncash compensation for each of the last three
fiscal years awarded to or earned by the Chief Executive Officer
and each other executive officer of the Company whose salary and
bonus earned in fiscal year 1998 exceeded $100,000 for services
rendered in all capacities to the Company and its subsidiaries
(the "Named Executive Officers").
<TABLE>
<CAPTION>
LONG-TERM
COMPENSATION AWARDS
ANNUAL COMPENSATION ---------------------
------------------------------------ RESTRICTED SECURITIES
NAME AND FISCAL OTHER ANNUAL STOCK UNDERLYING ALL OTHER
PRINCIPAL POSITION YEAR SALARY BONUS COMPENSATION(1) AWARD(S) OPTIONS COMPENSATION(2)
- ----------------- ------ ------ ----- ---------------- --------------------- -------------
<S> <C> <C> <C> <C> <C> <C> <C>
David V. McCay 1998 $276,666 $ -- $ -- -- -- $ 41,714
Chairman of the Board 1997 271,092 -- -- -- -- 65,184
and Chief Executive 1996 249,147 -- -- -- -- 43,656
Officer
Joe L. Williams 1998 140,000 -- -- -- -- 34,164
President and Chief 1997 128,566 -- -- -- -- 21,327
Operating Officer
Gary G. Honerkamp* 1998 116,000 -- -- -- -- 48,695
Senior Vice President 1997 113,702 -- -- -- -- 63,025
and Secretary 1996 104,852 -- -- -- -- 41,807
John D. Schlecht* 1998 110,000 -- -- -- -- 56,107
Senior Vice President/ 1997 107,702 -- -- -- -- 62,286
Senior Loan Officer 1996 98,867 -- -- -- -- 41,460
Paul J. Milano 1998 108,000 -- -- -- -- 39,412
Senior Vice President, 1997 105,700 -- -- -- -- 62,621
Treasurer, Chief 1996 96,480 -- -- -- -- 41,452
Financial Officer and
Senior Accounting Officer
<FN>
__________
* Messrs. Honerkamp and Schlecht retired effective December 31, 1998.
(1) Executive officers of the Company receive indirect compensation in the form of certain
perquisites and other personal benefits. In each case, the amount of such benefits received
by each Named Executive Officer in fiscal years 1998, 1997 and 1996 did not exceed 10% of the
Named Executive Officer's salary and bonus.
(2) For fiscal year 1998, all other compensation consisted of $4,800, $4,200, $3,480, $3,000 and
$3,240 in Company matching contributions to the Bank's 401(k) Savings Plan on behalf of
Messrs. McCay, Williams, Honerkamp, Schlecht and Milano, respectively, and $36,914, $29,964,
$36,290, $36,237 and $36,172 which was the value of shares of the Common Stock allocated to
each of their respective accounts in the ESOP. All other compensation for Messrs. Honerkamp
and Schlecht for fiscal year 1998 includes the value of their retirement gifts ($11,925 and
$16,870, respectively).
</FN>
</TABLE>
-9-
<PAGE>
<PAGE>
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND FISCAL
YEAR-END OPTION VALUES. The following table sets forth
information concerning options exercised during the last fiscal
year and the number and potential realizable value at the
end of the fiscal year of options held by each of the Named
Executive Officers. No stock appreciation rights ("SARs") have
been granted under the Option Plan.
<TABLE>
<CAPTION>
NUMBER OF SECURITIES VALUE OF UNEXERCISED
UNDERLYING UNEXERCISED IN-THE-MONEY OPTIONS
SHARES OPTIONS AT FISCAL YEAR-END AT FISCAL YEAR-END (1)
ACQUIRED ON VALUE --------------------------- --------------------------
NAME EXERCISE REALIZED (1) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- ---- -------- ------------ ------------ ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
David V. McCay -- $ -- 114,672 -- $932,283 --
Joe L. Williams -- -- -- -- -- --
Gary G. Honerkamp 8,255 79,145 29,997 -- 243,876 --
John D. Schlecht 4,000 35,000 34,252 -- 278,469 --
Paul J. Milano 4,550 39,267 33,702 -- 273,997 --
<FN>
______________
(1) Based on the difference between the closing price of the Common Stock on the date of exercise
and the exercise price multiplied by the number of shares acquired.
(2) Calculated based on the product of (a) the number of shares subject to options times (b) the
difference between the closing sale price of the Common Stock on December 31, 1998 as
reported on the Nasdaq National MarketSM ($13.13 per share), and the exercise price of the
options ($5.00 per share).
</FN>
</TABLE>
EMPLOYMENT AGREEMENTS. The Company and the Bank have
entered into an employment agreement (the "Employment
Agreement") with David V. McCay, Chief Executive Officer of the
Bank and Chairman of the Board and Chief Executive Officer of
the Company. The Employment Agreement initially became
effective for a term of three years as of the date of completion
of the Bank's conversion to stock form (the "Conversion"). On
each anniversary date from the date of commencement of the
Employment Agreement, the term of employment may be extended
for an additional one-year period beyond the then-effective
expiration date, upon a determination by the Board of Directors
of the Company or the Bank that the performance of Mr. McCay has
met the required standards and that the Employment Agreement
should be extended. Mr. McCay receives a current base salary of
$276,666 per annum, and the Employment Agreement provides for a
salary review by the Board of Directors not less often than
annually, as well as inclusion in any discretionary bonus plans,
retirement and medical plans, customary fringe benefits and
vacation and sick leave. The Employment Agreement will
terminate upon Mr. McCay's death or disability and is terminable
by the Bank for "just cause" as defined in the Employment
Agreement. In the event of termination for "just cause," no
severance benefits are available. If the Bank terminates Mr.
McCay without just cause, he will be entitled to a continuation
of his salary and benefits from the date of termination through
the remaining term of the Employment Agreement plus an
additional 12-month period, but in no event in excess of three
years' salary. If the Employment Agreement is terminated due to
Mr. McCay's "disability" (as defined in the Employment
Agreement), he will be entitled to a continuation of his salary
and benefits until the end of the one-year period following
termination, less any amounts received under the Bank's
disability insurance plan. Mr. McCay may voluntarily terminate
his Employment Agreement by providing 60 days' written notice to
the Boards of Directors of the Bank and the Company, in which
case he is entitled to receive only his compensation, vested
rights and benefits up to the date of termination. If,
before attaining age 65, Mr. McCay's employment terminates for
reasons other than just cause, then he and his dependents will
continue to participate in the Bank's group health plan until he
attains age 65 (or would have attained age 65 had he lived).
The Employment Agreement provides that in the event of Mr.
McCay's involuntary termination of employment in connection
with, or within 12 months after, any Change in Control of the
Bank or the Company, other than for "just cause," he will be
paid within 10 days of such termination an amount equal to
2.99 times his "base amount," as defined under Section
280G(b)(3) of the Internal Revenue Code of 1986 (the "Code").
"Change in Control" generally refers to the following
circumstances: (i) the acquisition, other than from the Company
or the Bank, by any individual, entity or group, of the
beneficial ownership of more than 25% of the Company's or Bank's
outstanding voting securities; (ii) the individuals constituting
the current Board of Directors of the Company or the Bank (the
"Incumbent Board") or
-10-
<PAGE>
<PAGE>
individuals whose election or nomination was approved by a
majority of the Incumbent Board (but excluding any person whose
initial assumption of office was in connection with an actual or
threatened election contest) cease to constitute at least a
majority of the Board of Directors; (iii) the approval by the
stockholders of the Company or the Bank of a reorganization,
merger or consolidation in which the beneficial owners of the
Company's voting securities do not beneficially own more than
65% of the voting securities of the resulting entity or a
complete liquidation or dissolution of the Company or the Bank
or the sale or other disposition of all or substantially all of
the assets of the Company or the Bank; or (iv) the acquisition
and exercise of a controlling influence over the management or
policies of the Company or the Bank by any person or persons
acting as a group. The Employment Agreement also provides for a
similar lump-sum payment to be made in the event of Mr. McCay's
voluntary termination of employment within twelve months
following a Change in Control, upon the occurrence, or within 90
days thereafter, of certain specified events following the
Change in Control, which have not been consented to in writing
by Mr. McCay, including (i) requiring him to move his personal
residence or perform his principal executive functions more than
35 miles from the Bank's current primary office, (ii) a
reduction in his base compensation as then in effect, (iii) a
significant reduction in the compensation and benefits provided
for under the Employment Agreement, (iv) assigning duties and
responsibilities to him which are substantially inconsistent
with those normally associated with his position with the
Company and the Bank, (v) significantly diminishing his
authority and responsibility, and (vi) failing to re-elect him
to the Company's or the Bank's Board of Directors. The maximum
payments that would be made to Mr. McCay under the Employment
Agreement assuming his termination of employment under the
foregoing circumstances at December 31, 1998 would have been
approximately $800,000.
The Company previously entered into an employment agreement
with Joe L. Williams pursuant to which he
was employed as an executive officer of its Texas subsidiary
bank. Mr. Williams' employment agreement became
effective on December 30, 1996 and provides for an initial term
of three years subject to such one-year extensions as
the parties may from time to time agree to. The agreement
provides for an annual salary of $125,000 subject to increase
from time to time and entitles him to participate in the
Company's executive bonus plan and other benefit plans. The
Board of Directors may terminate Mr. Williams' employment at any
time but any termination for other than cause will
not prejudice his right to compensation or other benefits
expressly provided for under the agreement. Upon termination
of Mr. Williams' employment because of death, disability,
resignation or cause neither party will have any rights or
obligations under the agreement except for those contained in
certain provisions relating to confidentiality of
information and post-employment competition with the Company.
In the event of a termination for disability, Mr.
Williams will be entitled to benefits under the Bank's
disability policy.
SUPPLEMENTAL RETIREMENT AGREEMENT. In order to secure the
continuing services of David V. McCay, the Board of Directors of
the Bank has entered into a Supplemental Retirement Agreement
(the "SRA") with Mr. McCay. Upon termination of his employment
with the Bank, Mr. McCay will be entitled under the SRA to
receive annual payments from the Bank for the remainder of his
life in an amount equal to (i) the product of his "Vested
Percentage" times 75% of his "Average Annual Compensation," less
(ii) 50% of the sum of the annual social security benefits
payable to Mr. McCay upon his termination of employment, plus
the annual amount he would receive if his employer-provided
benefits under the 401(k) Savings Plan were paid in the form of
a 50% joint and survivor annuity (the "Offset Amount"). "Vested
Percentage" is determined pursuant to a schedule contained in
the SRA that increases the Vested Percentage by 3 % annually,
assuming Mr. McCay's continued service as an employee of the
Association, from 66 % at age 55 to 100% at age 65. "Average
Annual Compensation" means Mr. McCay's highest annual
compensation for three of the five calendar years preceding his
termination of employment. In the event of termination due to
disability, Mr. McCay would receive annual payments in the
amount of 75% of his Average Annual Compensation less 50% of his
Offset Amount. In the event Mr. McCay's spouse survives him,
she will be entitled to receive 50% of the amount Mr. McCay
would have received had he retired on the date of his death,
assuming his Vested Percentage was 100%. Termination for "just
cause" (as defined in the Employment Agreement) would result in
his forfeiture of all SRA benefits, unless the Bank's Board of
Directors determines to the contrary. In the event Mr. McCay's
employment is terminated for other than "just cause" or in the
event of termination in connection with a change in control, as
defined in the Employment Agreement, then the Vested Percentage
shall be increased to be 100% and the benefits shall be due and
payable to him as provided for in the SRA.
-11-
<PAGE>
<PAGE>
The following table sets forth the annual retirement
benefits that Mr. McCay would receive under the SRA prior to
deduction of the Offset Amount at various compensation levels at
the specified ages.
<TABLE>
<CAPTION>
SPECIFIED AGE
AVERAGE -----------------------------------------------
ANNUAL COMPENSATION 55 56 59 62 65
- ------------------- ------ ------ ------ ------ -----
<S> <C> <C> <C> <C> <C>
$200,000 $100,000 $105,000 $120,000 $135,000 $150,000
350,000 175,000 183,750 210,000 236,250 262,500
500,000 250,000 262,500 300,000 337,500 375,000
750,000 375,000 393,750 450,000 506,250 562,500
</TABLE>
"Compensation" equals salary and bonus as disclosed in the
Summary Compensation Table, as well as any additional amounts
that would be included as W-2 earnings paid to Mr. McCay and
amounts withheld from Mr. McCay under the 401(k) Plan.
________________________________________________________________
CERTAIN TRANSACTIONS
________________________________________________________________
The Bank offers loans to officers and directors and
employees of the Company and its subsidiaries in the ordinary
course of business. Loans to executive officers and directors
are made by the Bank on substantially the same terms, including
interest rates and collateral, as those prevailing at the time
for comparable transactions with other persons. These loans do
not involve more than the normal risk of collectibility or
present other unfavorable features. Set forth below is certain
information at December 31, 1998 relating to loans made to
directors, nominees and executive officers (not including
affiliates) of the Company whose total aggregate balances
exceeded $60,000 at any time since January 1, 1998. All such
loans were made by the Bank or its predecessor institutions.
Except for Mr. Williams' residential mortgage which was
originally made at the employee rate of Texas Heritage Savings
Association/Banc, all such loans were made at the prevailing
interest rates and on terms available to other customers.
<TABLE>
<CAPTION>
NAME AND BALANCE AT HIGHEST
RELATION DATE ORIGINAL DECEMBER BALANCE SINCE
TO COMPANY TYPE OF LOAN ORIGINATED AMOUNT 31, 1998 JANUARY 1, 1998
- ------------ ----------- ---------- -------- ----------- ---------------
<S> <C> <C> <C> <C> <C>
William W. Canfield Home Equity Line (1) 6/18/90 $250,000 $ 0 $236,446
Director Residential Mortgage (1)(2) 11/20/98 400,000 400,000 400,000
Lloyd D. Doerflinger Residential Mortgage (1) 1/23/89 260,000 164,339 179,567
Director
John D. Schlecht Residential Mortgage (1) 2/09/96 136,000 0 133,187
Senior Vice President Home Equity Line (3) 2/09/96 30,000 0 30,000
Residential Mortgage (1)(2) 11/23/98 169,000 168,854 169,000
Edward G. Throop Residential Mortgage (1) 1/19/96 480,000 0 470,154
Director Home Equity (1) 4/1/98 50,000 0 50,000
Joe L. Williams Residential Mortgage(1)(4) 6/4/87 116,000 66,135 71,530
President and Chief Installment Loan 2/7/97 21,500 12,510 17,582
Operating Officer Share Loan 4/13/98 21,139 10,878 12,000
<FN>
(1) Loans secured by a first mortgage on the borrower's primary residence.
(2) Loan proceeds were used to refinance previously outstanding loans.
(3) Loans secured by a second mortgage on the borrower's primary residence.
(4) Adjustable-rate loan originally made at employee rate of Texas Heritage Savings
Association/Banc (50 basis points over cost-of-funds).
</FN>
</TABLE>
In addition to the above transactions, the Company expects
to reimburse Gary L. Holland, a nominee for director, for
certain expenses incurred by him in connection with his proposed
proxy solicitation and related matters. See "The Shareholder
Agreement."
-12-
<PAGE>
<PAGE>
________________________________________________________________
SECURITY OWNERSHIP OF MANAGEMENT
________________________________________________________________
The following table sets forth, as of the Record Date, the
beneficial ownership of the Common Stock by each of the
Company's directors, nominees, and Named Executive Officers, and
by all directors, nominees and executive officers as a group.
<TABLE>
<CAPTION>
AMOUNT AND NATURE OF PERCENT OF SHARES OF
NAME BENEFICIAL OWNERSHIP(1) COMMON STOCK OUTSTANDING(2)
- ---- ----------------------- ---------------------------
<S> <C> <C>
Frank C. Bick 166,098 (3) 1.64%
William W. Canfield 148,122 (4) 1.46%
Lloyd D. Doerflinger 79,074 (5) 0.78%
David V. McCay 200,802 (6) 1.97%
Forrest W. Miller, Jr. 25,192 (7) 0.25%
Edward G. Throop 250,142 2.49%
Joe L. Williams 31,271 0.31%
Gary L. Holland 411,200 (8) 4.09%
Brad Barkau 17,978 (9) 0.18%
Gary G. Honerkamp* 100,857 (10) 1.00%
John D. Schlecht* 128,074 (11) 1.27%
Paul J. Milano 101,352 (12) 1.00%
All Directors, Nominees
and Executive Officers 1,619,794 (13) 15.58%
as a Group (14 persons)
<FN>
* Retired effective December 31, 1998.
(1) For purposes of this table, a person is considered the beneficial owner of
any shares of Common Stock as to which he or she has or shares voting or
investment power or of which he or she has the right to acquire beneficial
ownership at any time within 60 days from the Record Date. As used
herein, "voting power" is the power to vote or direct the voting of
shares and "investment power" is the power to dispose or direct the
disposition of shares. Except as otherwise noted, ownership is direct,
and the named persons exercise sole voting and investment power over the
shares of the Common Stock. Ownership figures for Messrs. Bick,
Canfield and Doerflinger each include 60,172 shares of Common Stock which
they have the right to acquire pursuant to options. Ownership figures for
Messrs. McCay and Milano include 114,672 and 33,702 shares, respectively,
which they have the right to acquire pursuant to options exercisable
within 60 days of the Record Date.
(2) In calculating the percentage ownership of each named individual and the
group, the number of shares outstanding is deemed to include any shares of
the Common Stock which the individual or the group has the right to
acquire within 60 days of the Record Date.
(3) Includes 105,404 shares held as trustee.
(4) Includes 16,000 shares held by spouse as to which Mr. Canfield disclaims
beneficial ownership, 23,200 shares held in his individual retirement
accounts ("IRAs") and 26,000 shares held as trustee.
(5) Includes 5,000 shares held in Mr. Doerflinger's IRA and 13,902 shares held
as trustee.
(6) Includes 3,200 shares held by spouse as to which Mr. McCay disclaims
beneficial ownership, 48,080 shares held as trustee, 12,907 shares held in
his account in the Bank's 401(k) Savings Plan (the "401(k) Plan"), and
21,412 shares allocated to his account in the Jefferson Savings Bancorp,
Inc. Employee Stock Ownership Plan and Trust (the "ESOP").
(7) Includes 9,173 shares held jointly, 2,008 shares held in Mr. Miller's IRA,
3,008 shares held as trustee for the Royale Orleans Incorporated
Retirement Plan, and 11,000 shares held by Royale Orleans Incorporated of
which he is President.
(8) Held through The Gary Holland Trust.
(9) Held as custodian for his minor children.
(10)Includes 30,685 shares held in Mr. Honerkamp's 401(k) Plan account and
18,182 shares allocated to his ESOP account.
(11)Includes 22,420 shares held in Mr. Schlecht's IRA, 19,262 shares held in
his 401(k) Plan account, and 17,907 shares allocated to his ESOP account.
(12)Includes 3,000 shares held in Mr. Milano's IRA, 7,588 shares held in his
401(k) Plan account and 17,751 shares allocated to his ESOP account.
(13)Includes shares held in the various capacities described in the footnotes
above. Includes 75,286 shares held in 401(k) Plan accounts of executive
officers and 93,015 shares allocated to their accounts in the ESOP.
Includes 343,158 shares which directors and executive officers of the
Company have the right to acquire pursuant to options exercisable within
60 days of the Record Date. Does not include 555,297 unallocated shares
held by the ESOP, the voting of which shares is directed by the ESOP
Trustee in the same proportion that employees vote allocated shares.
</FN>
</TABLE>
-13-
<PAGE>
<PAGE>
________________________________________________________________
PROPOSAL II -- RATIFICATION OF APPOINTMENT OF AUDITORS
________________________________________________________________
KPMG LLP, which was the Company's independent certified
public accounting firm for the 1998 fiscal year, has been
retained by the Board of Directors to be the Company's auditors
for the 1999 fiscal year, subject to ratification by the
Company's stockholders. A representative of KPMG LLP is
expected to be present at the Annual Meeting to respond to
stockholders' questions and will have the opportunity to make a
statement if he so desires. THE BOARD OF DIRECTORS RECOMMENDS
THAT STOCKHOLDERS VOTE "FOR" THE RATIFICATION OF THE APPOINTMENT
OF KPMG LLP AS THE COMPANY'S AUDITORS FOR THE 1999 FISCAL YEAR.
________________________________________________________________
THE SHAREHOLDER AGREEMENT
________________________________________________________________
On May 5, 1999, the Company entered into an agreement (the
"Shareholder Agreement") with Gary L. Holland, The Gary Holland
Trust, Brad Barkau, William Drake, Mary K. Drake, The Mary K.
Drake Family Limited Partnership, The William K. Drake Defined
Benefit Plan, Contango Limited Partnership, Howard Watson, Susan
M. Watson and Intrepid, Ltd. (the "Shareholders") pursuant to
which the Board of Directors agreed to increase the size of the
Board of Directors to seven members and to nominate, recommend
to stockholders and solicit proxies in favor of the election of
Gary L. Holland, Brad Barkau and Lloyd D. Doerflinger as
management's nominees for election for three-year terms as
directors at the 1999 Annual Meeting and Mr. Holland agreed to
terminate his solicitation of proxies for a separate slate of
nominees and to withdraw certain regulatory filings made in
connection therewith. Upon their election to the Board of
Directors, the Company has agreed to elect Messrs. Holland and
Barkau to the Bank's Board of Directors and to cause them to
remain on such board for as long as they serve as directors of
the Company. The Company has further agreed to appoint either
Mr. Holland or Mr. Barkau (but not both) to the Executive
Committee, the Outside Loan Committee, and the Employee
Compensation and Benefit Committee of the Company or the Bank
(as requested by Messrs. Holland and Barkau) and to allow them
to remain on such committees for so long as they serve as
directors of the Company. Under the Shareholder Agreement, the
Company will not take any action to prevent Messrs. Holland and
Barkau from participating in the management and affairs of the
Company to the same extent as other directors and will extend
the same benefits and treatment to Messrs. Holland and Barkau as
are extended to other directors. In the event that either Mr.
Holland or Mr. Barkau is unwilling or unable to serve his
initial term, the Board of Directors agreed to promptly fill
the vacancy with a nominee recommended by whichever of Mr.
Holland or Mr. Barkau remains in office and agreed to by
two-thirds of the directors then in office. The Company has
agreed not to seek the removal of either Mr. Holland or Mr.
Barkau as a director absent a determination by the unanimous
vote of the Board of Directors (other than Messrs. Holland and
Barkau) that there is clear and convincing evidence that removal
should be submitted to shareholders in accordance with the
Company's Certificate of Incorporation. The Company also has
agreed not to reconfigure, reclassify or increase or decrease
the size of its Board of Directors, except in accordance with
its Certificate of Incorporation, during the initial term of
Messrs. Holland and Barkau. In addition, the Company
has agreed not to allege that activities of the Shareholders
violate certain provisions of the federal securities and banking
laws or of the Company's Certificate of Incorporation. For as
long as Messrs. Holland and Barkau serve on the Board of
Directors pursuant to the Shareholder Agreement, the Company has
agreed not to issue any preferred stock with voting rights
(other than in the event of default in the payment of dividends)
or securities convertible into or rights to acquire such
preferred stock unless the issuance has been approved
either by a unanimous vote of the Board of Directors or by 80%
of the outstanding shares. Pursuant to the Shareholder
Agreement, the Company has agreed to reimburse Mr. Holland for
up to $100,000 in expenses incurred by him in connection with
his proxy solicitation and related matters and to reimburse
Messrs. Holland and Barkau for up to $15,000 in legal fees per
calendar year in the event they believe they need separate
counsel in order to carry out their duties as directors. The
Company also agreed to use its reasonable efforts to cause any
new director nominated by the Board of Directors to agree to be
bound by the Shareholder Agreement. The Shareholders each
agreed to vote in favor of management's three Class I nominees
at the Annual Meeting and also agreed, among other things, that
until the earlier of the day after the 2000 annual meeting or
July 31, 2000: (i) except in connection with a merger,
consolidation or other combination or a sale of substantially
all the Company's assets, they will not participate in any
proxy solicitation in opposition to the recommendation of a
majority
-14-
<PAGE>
<PAGE>
of the Board of Directors or initiate a shareholder proposal;
(ii) they will vote for management's nominees at the 2000 annual
meeting provided that Messrs. Holland and Barkau will have
certain rights to object to a nominee other than Messrs.
Canfield, Throop or Joe L. Williams; and (iii) except to the
extent that action is required of Messrs. Holland or Barkau to
fill a vacancy in the Board created in the event that the other
is unwilling or unable to serve, they will not nominate any
individual to the Board of Directors other than management's
nominees. In addition to the Company, the present directors and,
in certain circumstances, officers have agreed to the covenants
described above.
________________________________________________________________
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
________________________________________________________________
Pursuant to regulations promulgated under the Exchange Act,
the Company's officers and directors and all persons who own
more than 10% of the Common Stock ("Reporting Persons") are
required to file reports detailing their ownership and
changes of ownership in the Common Stock and to furnish the
Company with copies of all such ownership reports that are
filed. Based solely on the Company's review of the copies of
such ownership reports which it has received in the past
fiscal year or with respect to the past fiscal year, or written
representations that no annual report of changes in beneficial
ownership were required, the Company believes that during fiscal
year 1998 and prior fiscal years all Reporting Persons have
complied with these reporting requirements except for Messrs.
Bick, Deves and Doerflinger who each filed one late Form 4, Mr.
Milano who filed two late Form 4s, Messrs. Honerkamp, and
Schlecht who each filed three late Form 4s, Mr. Throop who filed
four late Form 4s and Mr. Allison who did not timely file a Form
3. In each case other than Mr. Allison, the required filing
was made within six days of the due date.
________________________________________________________________
OTHER MATTERS
________________________________________________________________
The Board of Directors is not aware of any business to come
before the Annual Meeting other than those matters described
above in this Proxy Statement and matters incident to the
conduct of the Annual Meeting. If any other matters
should properly come before the Annual Meeting, it is intended
that proxies in the accompanying form will be voted in respect
thereof in accordance with the determination of a majority of
the Board of Directors.
________________________________________________________________
MISCELLANEOUS
________________________________________________________________
The cost of soliciting proxies will be borne by the
Company. The Company will reimburse brokerage firms and other
custodians, nominees and fiduciaries for reasonable expenses
incurred by them in sending proxy materials to the beneficial
owners of Common Stock. In addition to solicitations by mail,
directors, officers and regular employees of the Company may
solicit proxies personally or by telegraph or telephone without
additional compensation. The Company has retained Kissel-Blake,
a division of Shareholder Communications Corporation, a
proxy soliciting firm, to assist in the solicitation of proxies,
for which they will receive a fee of $10,000, plus reimbursement
of certain out-of-pocket expenses.
The Company's 1998 Annual Report to Stockholders, including
financial statements, has been mailed to all stockholders of
record as of the close of business on the Record Date. Any
stockholder who has not received a copy of such Annual Report
may obtain a copy by writing to the Secretary of the Company.
Such Annual Report is not to be treated as a part of the proxy
solicitation material or as having been incorporated herein by
reference. A COPY OF THE COMPANY'S ANNUAL REPORT ON FORM 10-K
FOR THE FISCAL YEAR ENDED DECEMBER 31, 1998 WILL BE FURNISHED
WITHOUT CHARGE TO STOCKHOLDERS AS OF THE RECORD DATE UPON
WRITTEN REQUEST TO: STOCKHOLDER RELATIONS, JEFFERSON SAVINGS
BANCORP, INC., 14915 MANCHESTER ROAD, BALLWIN, MISSOURI 63011.
-15-
<PAGE>
<PAGE>
________________________________________________________________
STOCKHOLDER PROPOSALS
________________________________________________________________
In order to be eligible for inclusion in the Company's
proxy materials for next year's Annual Meeting of Stockholders,
any stockholder proposal to take action at such meeting must be
received at the Company's executive office at 14915 Manchester
Road, Ballwin, Missouri 63011 no later than January 28, 2000.
Any such proposals shall be subject to the requirements of the
proxy rules adopted by the Securities and Exchange Commission
under the Exchange Act.
Stockholder proposals, other than those submitted pursuant
to the Exchange Act, must be submitted in writing, delivered or
mailed by first class United States mail, postage prepaid, to
the secretary of the Company not fewer than 30 days nor more
than 60 days prior to any such meeting; provided, however, that
if notice or public disclosure of the meeting is given fewer
than 40 days before the meeting, such written notice shall be
delivered or mailed to the secretary of the Company not later
than the close of the 10th day following the day on which notice
of the meeting was mailed to shareholders.
BY ORDER OF THE BOARD OF DIRECTORS
/s/ Paul J. Milano
PAUL J. MILANO
Secretary
Ballwin, Missouri
May 26, 1999
IMPORTANT
Your vote is important, regardless of the number of shares
you own.
PLEASE SIGN, DATE AND PROMPTLY MAIL THE ENCLOSED PROXY CARD
IN THE POSTAGE-PAID ENVELOPE PROVIDED.
If you own your shares in the name of a bank or brokerage
firm, only they can vote your shares on your behalf and only
after receiving your specific instructions. Please call your
bank or broker as soon as possible and instruct him/her to
execute a proxy card on your behalf. You should also promptly
mark, sign, date and mail your proxy card when you receive it
from your bank or broker. Please do so for each separate
account you maintain.
You should return your proxy card as soon as possible to
ensure that your vote is counted. This will not prevent you
from voting in person at the meeting should you attend.
IF YOU HAVE ANY QUESTIONS OR REQUIRE ASSISTANCE IN VOTING
YOUR SHARES, PLEASE CALL:
KISSEL-BLAKE
A DIVISION OF
SHAREHOLDER COMMUNICATIONS CORPORATION
110 WALL STREET, 11TH FLOOR
NEW YORK, NY 10005
(212) 344-6733 (COLLECT)
OR
CALL TOLL FREE (800) 554-7733
<PAGE>
<PAGE>
REVOCABLE PROXY
JEFFERSON SAVINGS BANCORP, INC.
________________________________
ANNUAL MEETING OF STOCKHOLDERS
JUNE 21, 1999
________________________________
The undersigned hereby appoints David V. McCay, Forrest W.
Miller, Jr. and Edward G. Throop, with full powers of
substitution, to act as attorneys and proxies for the
undersigned, to vote all shares of Common Stock of Jefferson
Savings Bancorp, Inc. (the "Company") which the undersigned is
entitled to vote at the Annual Meeting of Stockholders (the
"Annual Meeting"), to be held at the Crowne Plaza Suites Hotel,
7800 Alpha Road, Dallas, Texas on Monday, June 21, 1999 at 9:00
a.m., Central Time, and at any and all adjournments thereof, as
indicated below and in accordance with the determination of a
majority of the Board of Directors with respect to other matters
which come before the Annual Meeting.
THIS PROXY WILL BE VOTED AS DIRECTED, BUT IF NO INSTRUCTIONS
ARE SPECIFIED, THIS PROXY WILL BE VOTED FOR THE LISTED NOMINEES
AND FOR THE RATIFICATION OF AUDITORS. IF ANY OTHER BUSINESS IS
PRESENTED AT THE ANNUAL MEETING, THIS PROXY WILL BE VOTED BY
THOSE NAMED IN THIS PROXY IN ACCORDANCE WITH THE DETERMINATION
OF A MAJORITY OF THE BOARD OF DIRECTORS. THIS PROXY CONFERS
DISCRETIONARY AUTHORITY ON THE HOLDERS THEREOF TO VOTE WITH
RESPECT TO THE ELECTION OF ANY PERSON AS DIRECTOR WHERE THE
NOMINEE IS UNABLE TO SERVE OR FOR GOOD CAUSE WILL NOT SERVE AND
MATTERS INCIDENT TO THE CONDUCT OF THE ANNUAL MEETING.
(continued on reverse side)
<PAGE>
<PAGE>
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE NAMED
NOMINEES AND "FOR" THE RATIFICATION OF THE COMPANY'S AUDITORS.
PLEASE MARK
YOUR VOTES AS X
INDICATED IN
THIS EXAMPLE
Please check if [ ]
you plan to attend
the Annual Meeting
1. The election as director of the
nominees listed below (except as
marked to the contrary)
VOTE
FOR WITHHOLD
--- --------
NOMINEES: Lloyd D. Doerflinger
Gary L. Holland Brad Barkau [ ] [ ]
(INSTRUCTION: To withhold your vote for
any individual nominee, insert that
nominee's name on the line provided below)
__________________________________________
<TABLE>
<CAPTION>
FOR AGAINST ABSTAIN
--- ------- -------
<S> <C> <C> <C>
2. The ratification of the appointment
of KPMG LLP as auditors for the 1999
fiscal year [ ] [ ] [ ]
</TABLE>
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS
Should the undersigned be present and elect to vote at the
Annual Meeting or at any adjournment thereof and after
notification to the Secretary of the Company at the Annual
Meeting of the stockholder's decision to terminate this proxy,
then the power of said attorneys and proxies shall be deemed
terminated and of no further force and effect. The undersigned
hereby revokes any and all proxies heretofore given with respect
to the shares of Common Stock held of record by the undersigned.
The undersigned acknowledges receipt from the Company prior
to the execution of this proxy of a Notice of Annual Meeting,
the Company's Proxy Statement for the Annual Meeting and an
Annual Report for the 1998 fiscal year.
Dated _________________________ 1999
____________________________________________________________
SIGNATURE OF STOCKHOLDER
____________________________________________________________
SIGNATURE OF STOCKHOLDER
Please sign exactly as your name appears on this card. When
signing as attorney, executor, administrator, trustee or
guardian, please give your full title. If shares are held
jointly, each holder should sign.
PLEASE MARK, DATE SIGN AND MAIL
THIS PROXY PROMPTLY IN THE ENCLOSED
POSTAGE-PREPAID ENVELOPE
