<PAGE>
<PAGE>
SCHEDULE 14A
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 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:
------------------------------------------------------
<PAGE>
<PAGE>
[ L O G O ]
June 12, 2000
Dear Fellow Stockholder:
You are cordially invited to attend the 2000 Annual
Meeting of the Stockholders of Jefferson Savings Bancorp, Inc.
to be held at the Ritz-Carlton St. Louis, 100 Carondelet Plaza,
Clayton, Missouri 63105, on Monday, July 17, 2000 at 9:00 a.m.,
Central Time.
The Annual Meeting has been called for the election of
directors and ratification of auditors. Enclosed with this
proxy statement are a proxy card and an Annual Report to
Stockholders for the 1999 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.
15435 CLAYTON ROAD
BALLWIN, MISSOURI 63011
(636) 227-3000
________________________________________________________________
________________________________________________________________
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON JULY 17, 2000
________________________________________________________________
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 Ritz-Carlton
St. Louis, 100 Carondelet Plaza, Clayton, Missouri, on Monday,
July 17, 2000 at 9:00 a.m., Central Time.
The Annual Meeting is for the purpose of considering and
acting upon:
1. The election of two 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 30, 2000 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
June 12, 2000
________________________________________________________________
IMPORTANT: THE PROMPT RETURN OF THE ENCLOSED PROXY WILL SAVE
YOUR COMPANY THE EXPENSE OF FURTHER REQUESTS FOR PROXIES IN
ORDER TO ENSURE A QUORUM. A SELF-ADDRESSED ENVELOPE IS ENCLOSED
FOR YOUR CONVENIENCE. NO POSTAGE IS REQUIRED IF MAILED IN THE
UNITED STATES.
________________________________________________________________
<PAGE>
<PAGE>
PROXY STATEMENT
OF
JEFFERSON SAVINGS BANCORP, INC.
15435 CLAYTON ROAD
BALLWIN, MISSOURI 63011
ANNUAL MEETING OF STOCKHOLDERS
JULY 17, 2000
________________________________________________________________
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 2000 Annual Meeting of Stockholders of the Company
(hereinafter called the "Annual Meeting"), which will be held at
the Ritz-Carlton St. Louis, 100 Carondelet Plaza, Clayton,
Missouri, on Monday, July 17, 2000 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 June 12, 2000.
________________________________________________________________
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
FORTHE NOMINEES FOR DIRECTOR NAMED BELOW AND FOR THE
RATIFICATION OF AUDITORS AS 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
consist of the Company's common stock, $.01 par value per share
(the "Common Stock"). Stockholders of record as of the close of
business on May 30, 2000 (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 9,964,162 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>
PERCENT OF
AMOUNT AND NATURE OF COMMON STOCK
NAME BENEFICIAL OWNERSHIP (1) OUTSTANDING (2)
---- ------------------------ ---------------
<S> <C> <C>
Mary Kathryn Drake 1,000,900 (3) 10.05%
2104 Dornoch
League City, Texas 77573
Intrepid, Ltd. 748,500 7.52%
#7 Wild Tamarind Drive
Nassau, Bahamas
Firstar Corporation 1,319,624 (4) 13.25%
777 E. Wisconsin Avenue
Milwaukee, Wisconsin 53202
<FN>
____________
(1) For purposes of this table, a person is deemed to be the
beneficial owner of shares of Common Stock if he or she has or
shares voting or investment power with respect to such Common
Stock or 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) 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) According to the statement on Schedule 13D filed by Ms. Drake, 975,700
shares are held by the Arboleda 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.
(4) Includes 1,071,074 shares held by Mercantile Trust Company, N.A. as
trustee for the Jefferson Savings Bancorp, Inc. Employee Stock Ownership
Plan. The ESOP Trustee 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. As of the Record Date,
611,366 shares had been allocated and 459,708 shares were unallocated.
</FN>
</TABLE>
-2-
<PAGE>
<PAGE>
________________________________________________________________
PROPOSAL I -- ELECTION OF DIRECTORS
________________________________________________________________
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. The Board of Directors has nominated William W.
Canfield and Edward G. Throop each to serve for terms of three
years each and until their successors are elected and qualified.
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 any nominee might be unavailable to serve.
The following table sets forth, for each nominee and each
director continuing in office, his name, age as of the Record
Date, the year he first became a director and the expiration of
his current term as a director. Except as described in "The
Shareholder Agreement," there are no arrangements or
understandings between the Company and any director pursuant to
which such person has been selected as a director or nominee for
director of the Company. No director or executive officer is
related to any other director or executive officer by blood,
marriage or adoption.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE
NOMINEES LISTED BELOW.
<TABLE>
<CAPTION>
CURRENT
DIRECTOR TERM
NAME AGE SINCE TO EXPIRE
---- --- -------- ---------
<S> <C> <C> <C>
BOARD NOMINEES FOR A TERM TO EXPIRE
AT THE 2003 ANNUAL MEETING
William W. Canfield 61 1992 2000
Edward G. Throop 50 1992 2000
DIRECTORS CONTINUING IN OFFICE
David V. McCay 57 1992 2001
Forrest W. Miller, Jr. 56 1995 2001
Lloyd D. Doerflinger 64 1992 2002
Gary L. Holland 61 1999 2002
Brad Barkau 48 1999 2002
</TABLE>
Presented below is certain information concerning the
nominees and directors continuing in office. Each director also
serves as a director of the Company's principal subsidiary,
Jefferson Heritage Bank ("Jefferson Heritage" or the "Bank").
Unless otherwise stated, all directors and nominees have held
the positions indicated for at least the past five years.
-3-
<PAGE>
<PAGE>
WILLIAM W. CANFIELD - Mr. Canfield is the Chairman of the
Board, President and Chief Executive Officer and a director of
TALX Corporation, St. Louis, Missouri, which is engaged in
developing and marketing interactive voice response systems.
Mr. Canfield has served as a director of the Bank since 1987.
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. Mr. Throop has
served as a director of the Bank since 1985. He also serves on
the board of directors of the Company's subsidiary, Jefferson
Heritage Mortgage Company.
DAVID V. MCCAY - Mr. McCay is Chairman of the Board and
Chief Executive Officer of the Company and has been Chief
Executive Officer and a director of the Bank since 1989. Mr.
McCay is also a director of Jefferson Heritage Mortgage Company
and Jefferson Financial, Inc. 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
Director 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. He was an
instructor at the St. Louis Chapter of the American Institute of
Banking for nineteen years.
FORREST W. MILLER, JR. - Mr. Miller and his wife are the
owners of Royale Orleans Restaurant. He is a past State
President of the Missouri Restaurant Association and is the
current chairman of the board of the Missouri Restaurant
Insurance Trust. He is currently active in many civic and
charitable organizations. Mr. Miller also serves as a director
of Jefferson Financial, Inc.
LLOYD D. DOERFLINGER - Mr. Doerflinger currently is
retired. He has served as a director of the Bank since 1958.
From 1988 until 1989, he was the acting President and Chief
Executive Officer of Jefferson Heritage. Mr. Doerflinger also
serves as a director of Jefferson Financial, Inc. 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.
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 Oakville, Illinois.
________________________________________________________________
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,
1999, the Board met 12 times. No director attended fewer than
75% in the aggregate of the total number of Board meetings held
during the year ended December 31, 1999 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 Company believes that the members of the Audit Committee are
independent within the meaning of the listing standards for the
Nasdaq Stock MarketSM. The Audit Committee meets periodically
to examine and approve the audited financial statements 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
-4-
<PAGE>
<PAGE>
controls, and to review and approve conflict of interest and
audit policies. During fiscal year 1999, the Audit Committee
met six 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 1999, the Board of Directors met
once as the Nominating Committee.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
For fiscal year 1999, the Company's Compensation Committee
consisted of Directors David V. McCay, Edward G. Throop, William
W. Canfield and Brad Barkau. 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.
________________________________________________________________
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 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
1999. The Company has also agreed to reimburse Messrs. Holland
and Barkau for legal fees in certain circumstances. See "The
Shareholder Agreement." 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 Canfield,
Doerflinger and Throop and former Directors Bick, Magwitz and
Monnig) received options to purchase 60,172 shares of Common
Stock at an exercise price equal to $5.00 per share on a split
adjusted basis. 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.
-5-
<PAGE>
<PAGE>
________________________________________________________________
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.
. 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.
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
-6-
<PAGE>
<PAGE>
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.
COMPENSATION OF THE CHIEF EXECUTIVE OFFICER. Mr. McCay's
annual rate of compensation for fiscal year 1999 was $287,307.
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 1999, 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 and Change-in-
Control Agreements." 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 banks nationally. Certain, but not all, of
those companies are included in the SNL Thrifts (Midwest) and
SNL OTC Thrift indexes included in 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 Brad Barkau
-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, 1994
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, 1994 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, 1994 THROUGH DECEMBER 31, 1999
[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, 1994 and plots the cumulative total
return at December 31, 1994, 1995, 1996, 1997, 1998 and 1999.
Plot points are provided below.]
<TABLE>
<CAPTION>
12/31/94 12/31/95 12/31/96 12/31/97 12/31/98 12/31/99
-------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
Jefferson Savings
Bancorp, Inc. 100 173.44 164.54 262.91 170.61 140.39
NASDAQ - Total US 100 141.34 173.90 213.07 300.44 556.91
SNL Midwest Thrift Index 100 151.14 190.42 306.89 283.55 235.73
SNL OTC Thrift Index 100 152.05 197.81 321.29 280.92 241.62
</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 1999 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 OTHER ANNUAL STOCK UNDERLYING ALL OTHER
PRINCIPAL POSITION YEAR SALARY BONUS COMPENSATION(1) AWARD(S)(2) OPTIONS COMPENSATION(3)
----------------- ------ ------ ----- --------------- ---------------------- -------------
<S> <C> <C> <C> <C> <C> <C> <C>
David V. McCay 1999 $287,307 $ -- $ -- $ -- -- $39,557
Chairman of the Board 1998 276,666 -- -- -- -- 41,714
and Chief Executive 1997 271,092 -- -- -- -- 65,184
Officer
Joe L. Williams 1999 169,434 -- -- 135,000 15,000 33,953
President and Chief 1998 140,000 -- -- -- -- 34,164
Operating Officer 1997 128,566 -- -- -- -- 21,327
Paul J. Milano 1999 118,087 -- -- -- -- 29,054
Senior Vice President, 1998 108,000 -- -- -- -- 39,412
Treasurer, Chief 1997 105,700 -- -- -- -- 62,621
Financial Officer and
Senior Accounting Officer
<FN>
____________
(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 1999,
1998 and 1997 did not exceed 10% of the Named Executive Officer's salary and
bonus.
(2) Based on the closing price of the Company's Common Stock on the date of grant
as reported on the Nasdaq National MarketSM ($13.50 per share). Mr. Williams'
shares of restricted stock vest at the rate of 20% per year beginning one year
from the date of grant (February 17, 1999). Shares are held by the MRP Trust
until vested. Any dividends received by the MRP Trust with respect to such
shares will be payable to Mr. Williams upon vesting.
(3) For fiscal year 1999, all other compensation consisted of $4,788, $3,913 and
$3,543 in Company matching contributions to the 401(k) Plan on behalf of
Messrs. McCay, Williams and Milano, respectively, and $34,769, $30,040,
$26,457 which was the value of shares of the Common Stock allocated to each of
their respective accounts in the ESOP based on the closing price of the Common
Stock as reported on the Nasdaq National MarketSM on December 31, 1999
($10.5625 per share).
</FN>
</TABLE>
-9-
<PAGE>
<PAGE>
OPTIONS GRANTS IN LAST FISCAL YEAR. The following table
contains information concerning the grants of stock options to
the Named Executive Officers during fiscal year 1999.
<TABLE>
<CAPTION>
POTENTIAL REALIZABLE
VALUE AT ASSUMED
NUMBER OF % OF TOTAL ANNUAL RATES OF STOCK
SECURITIES OPTIONS PRICE APPRECIATION
UNDERLYING GRANTED TO FOR OPTION TERM (2)
OPTIONS EMPLOYEES IN EXERCISE EXPIRATION -------------------
NAME GRANTED (1) FISCAL YEAR PRICE DATE 5% 10%
---- ----------- ------------- -------- ----------- ------- -------
<S> <C> <C> <C> <C> <C> <C>
David V. McCay -- -- % $ -- -- $ -- $ --
Joe L. Williams 15,000 14.3 13.50 02/17/09 101,250 202,500
Paul J. Milano -- -- -- -- -- --
<FN>
___________
(1) All options were granted on February 17, 1999 and vest and become exercisable
at the rate of 20% per year beginning one year from the date of grant. To the
extent not already exercisable, the options generally become immediately
exercisable in the event of a change in control of the Company, generally
defined as the acquisition of beneficial ownership of 25% or more of the
Company's voting securities by any person or group of persons.
(2) The potential realizable dollar value of a grant consists of the product of
(a) the difference between (i) the product of the per share market price at
the time of grant and the sum of 1 plus the adjusted stock price appreciation
rate (the assumed rate of appreciation compounded annually over the term of
the option) and (ii) the per share exercise price of the option, and (b) the
number of securities underlying the grant at fiscal year-end.
</FN>
</TABLE>
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 1993 Stock Option and Incentive 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 (2)
ACQUIRED ON VALUE --------------------------- --------------------------
NAME EXERCISE REALIZED (1) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
---- -------- ------------ ------------ ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
David V. McCay -- $ -- 114,672 -- $637,862 --
Joe L. Williams -- -- -- 15,000 -- --
Paul J. Milano 6,000 33,750 27,702 -- 292,602 --
<FN>
______________
(1) Based on the difference between the closing price of the Common Stock on the
date of exercise ($10.625 per share) and the exercise price ($5.00 per share)
multiplied by the number of shares acquired.
(2) Calculated based on the product of (a) the number of shares subject to option
times (b) the difference between the closing sale price of the Common Stock on
December 31, 1999 as reported on the Nasdaq National MarketSM ($10.5625 per
share), and the exercise price of the options. Options are considered in-the-
money if the exercise price of the option is less than the fair market value
of the Common Stock. None of Mr. Williams' options were in-the-money at year-
end.
</FN>
</TABLE>
EMPLOYMENT AND CHANGE-IN-CONTROL AGREEMENTS. The Company
and the Bank have entered into an employment agreement with
David V. McCay, Chief Executive Officer of the Bank and Chairman
of the Board and Chief Executive Officer of the Company. Mr.
McCay's 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 his employment
agreement, the term of employment may be
-10-
<PAGE>
<PAGE>
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's
employment agreement has previously been extended through April
8, 2003. 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. Mr. McCay's employment agreement will
terminate upon his 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 his 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).
Mr. McCay's employment agreement provides that in the
event of his 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 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. Mr. McCay's employment agreement also
provides for a similar lump-sum payment to be made in the event
of his 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 his 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 his employment
agreement assuming his termination of employment under the
foregoing circumstances at December 31, 1999 would have been
approximately $827,231.
<PAGE>
Effective May 21, 1999, the Company and the Bank entered
into an employment agreement with Joe L. Williams pursuant to
which he is employed as the President and Chief Operating
Officer of the Company and the Bank, respectively. Mr.
Williams' employment contract has a term of three years and may
be extended for such additional one-year periods as the parties
may agree to in writing. Mr. Williams' employment agreement
provides for an annual salary of $165,000 subject to increase
from time to time in accordance with the normal business
practices of the
-11-
<PAGE>
<PAGE>
Company and the Bank. In addition, Mr. Williams is entitled to
participate in the executive bonus plan and certain other
corporate benefits. Mr. Williams' employment agreement will
terminate upon his death, disability or resignation and may be
terminated by the Bank for cause as defined in the agreement.
In the event of a termination for cause, Mr. Williams will have
no right to compensation or benefits after termination. A
termination of Mr. Williams' employment by the Company or the
Bank without cause will not prejudice his right to receive the
compensation and benefits provided for under the agreement. In
the event his employment is terminated for disability, Mr.
Williams will receive the benefits provided by the Bank's
disability insurance policy which shall be no less than those
currently provided under Texas Heritage's disability insurance
policy. In the event of Mr. Williams' lawful termination for
cause or by resignation, Mr. Williams has agreed for a period of
two years following such termination not to participate in the
banking or financial business in the counties in which the Bank
maintains a branch office, not to solicit any banking business
from any customer of the Company or the Bank or their
subsidiaries and not to impart any confidential information or
knowledge relative to the Company or the Bank. Mr. Williams'
employment agreement provides that in the event his employment
is terminated by the Company or the Bank, without his prior
written consent and for a reason other than cause, in connection
with or within 12 months after a change in control of the
Company or the Bank, he will be paid within ten days of such
termination an amount equal to 2.99 times his base amount as
defined in Section 280G(b)(3) of the Code. For this purpose,
change in control has the same definition as in Mr. McCay's
employment agreement. Mr. Williams' employment agreement
provides for a similar lump sum payment in the event of his
voluntary termination of employment within 12 months following a
change in control upon the occurrence, or within 90 days
thereafter, of certain specified events which have not been
consented to in writing by Mr. Williams including (i) requiring
him to move his personal residence or perform his principal
executive functions more than 35 miles from the primary office
from which he functioned as of the date of the agreement, (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, taken as a whole, (iv)
assigning duties and responsibilities to him which are
substantially inconsistent with those normally associated with
his position with the Company and the Bank, and (v)
significantly diminishing his authority and responsibility. The
maximum payments that would be made to Mr. Williams under his
employment agreement assuming his termination of employment
under the foregoing circumstances at December 31, 1999 would
have been approximately $493,350.
Effective January 1, 2000, the Company and the Bank
entered into a change-in-control agreement with Senior Vice
President Paul J. Milano pursuant to which he will be entitled
to receive a lump sum payment equal to his salary for the
previous calendar year if the Company terminates his employment
for a reason other than just cause or his death or disability,
in connection with or within 12 months after a change-in-
control. For this purpose, change-in-control has the same
definition as in Mr. McCay's employment agreement. Mr. Milano
will be entitled to a similar payment if he terminates his
employment for Good Reason immediately before, after or pursuant
to a change-in-control. For this purpose, Good Reason is
defined as a material change in position, title, compensation,
status, responsibilities, or working conditions in effect
immediately before, pursuant to or after the change-in-control
or relocation of his place of employment more than 50 miles from
his place of employment immediately before the change-in-
control. Assuming a termination in connection with a change-in-
control during the year 2000, Mr. Milano would be entitled to a
payment of $118,087 under the change-in-control agreement.
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 compensa-
tion for three of the five calendar years preceding his
termination of employment. In the event of termination due to
-12-
<PAGE>
<PAGE>
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 his 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 his 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.
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,
1999 relating to loans made to directors and executive officers
(not including affiliates) of the Company whose total aggregate
balances exceeded $60,000 at any time since January 1, 1999.
All such loans were made by the Bank. 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 of the Bank.
<TABLE>
<CAPTION>
NAME AND BALANCE AT HIGHEST
RELATION DATE ORIGINAL DECEMBER BALANCE SINCE
TO COMPANY TYPE OF LOAN ORIGINATED AMOUNT 31, 1999 JANUARY 1, 1999
------------ ----------- ---------- -------- ----------- ---------------
<S> <C> <C> <C> <C> <C>
William W. Canfield Residential Mortgage (1)(2) 11/20/98 $400,000 $390,759 $399,275
Director Home Equity Loan 11/20/98 160,000 15,000 15,000
Lloyd D. Doerflinger Residential Mortgage (1) 1/23/89 260,000 147,364 162,991
Director
Joe L. Williams Residential Mortgage(1)(3) 6/4/87 116,000 59,918 65,631
President and Chief Installment Loan 2/7/97 21,500 7,025 12,082
Operating Officer Share Loan 4/13/98 30,139 26,344 27,159
Kevin M. Voss Resident Mortgage (1) 7/9/99 212,500 198,668 212,500
Senior Vice President
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<PAGE>
<PAGE>
<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) Adjustable-rate loan originally made at employee rate of Texas Heritage Savings
Association/Banc (50 basis points over cost-of-funds).
</FN>
</TABLE>
During 1999, the Company acquired a customer service voice
response system from TALX Corporation, of which Mr. Canfield is
President and Chief Executive Officer and a greater than 10%
stockholder. The Company's total payments to TALX Corporation
for the installation, maintenance and usage of this system
during 1999 were $68,000.
________________________________________________________________
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>
Brad Barkau 17,978 (3) 0.18%
William W. Canfield 120,994 (4) 1.21%
Lloyd D. Doerflinger 79,072 (5) 0.79%
Gary L. Holland 415,265 (6) 4.17%
David V. McCay 205,599 (7) 2.06%
Forrest W. Miller, Jr. 25,189 (8) 0.25%
Edward G. Throop 250,142 2.51%
Joe L. Williams 39,493 (9) 0.40%
Paul J. Milano 104,977 (10) 1.05%
All Directors, Nominees
and Executive Officers 1,385,373 (11) 13.90%
as a Group (17 persons)
<FN>
________________
(1) For purposes of this table, a person is deemed to be the
beneficial owner of shares of Common Stock if he or she has or
shares voting or investment power with respect to such Common
Stock or 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. Canfield and Doerflinger each
include 53,172 and 60,172 shares of Common Stock, respectively,
which they have the right to acquire pursuant to options.
Ownership figures for Messrs. McCay, Williams and Milano
include 114,672, 3,000 and 27,702 shares, respectively, which
they had 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) Held as custodian for his minor children.
(4) Includes 16,000 shares held by spouse, as to which Mr. Canfield
disclaims beneficial ownership, and 23,200 shares held in his
individual retirement accounts ("IRAs").
(5) Includes 5,000 shares held in Mr. Doerflinger's IRA and 13,902
shares held as trustee.
(6) Includes 415,165 shares held by The Gary Holland Trust.
(7) Includes 3,200 shares held by spouse as to which Mr. McCay
disclaims beneficial ownership, 48,080 shares held as trustee,
14,948 shares held in his account in the Bank's 401(k) Savings
Plan (the "401(k) Plan"), 24,699 shares allocated to his
account
-14-
<PAGE>
<PAGE>
in the Jefferson Savings Bancorp, Inc. Employee Stock
Ownership Plan and Trust (the "ESOP") and 114,672 shares which
he has the right to acquire pursuant to options.
(8) 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.
(9) Includes 7,155 shares allocated to his account in the ESOP and
2,816 held in his 401(k) Plan account. Does not include 8,000
unvested shares of restricted stock previously awarded to Mr.
Williams.
(10) Includes 3,000 shares held in Mr. Milano's IRA, 8,931 shares
held in his 401(k) Plan account and 20,072 shares allocated to
his ESOP account.
(11) Includes shares held in the various capacities described in the
footnotes above. Includes 36,401 shares held in 401(k) Plan
accounts of executive officers and 87,738 shares allocated to
their accounts in the ESOP. Includes 303,654 shares which
directors and executive officers of the Company have the right
to acquire pursuant to options exercisable within 60 days of
December 31, 1999. Does not include 458,546 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>
________________________________________________________________
PROPOSAL II -- RATIFICATION OF APPOINTMENT OF AUDITORS
________________________________________________________________
KPMG LLP, which was the Company's independent certified
public accounting firm for the 1999 fiscal year, has been
retained by the Board of Directors to be the Company's auditors
for the 2000 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 2000 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
-15-
<PAGE>
<PAGE>
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 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 1999 and
prior fiscal years all Reporting Persons have complied with
these reporting requirements, except for Messrs. Williams and
Allison who were late filing Forms 5 for 1999.
________________________________________________________________
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.
<PAGE>
The Company's 1999 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
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<PAGE>
<PAGE>
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, 1999 WILL BE FURNISHED WITHOUT CHARGE TO
STOCKHOLDERS AS OF THE RECORD DATE UPON WRITTEN REQUEST TO:
STOCKHOLDER RELATIONS, JEFFERSON SAVINGS BANCORP, INC., 15435
CLAYTON ROAD, BALLWIN, MISSOURI 63011.
________________________________________________________________
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 15435 Clayton
Road, Ballwin, Missouri 63011 no later than February 13, 2001.
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
June 12, 2000
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<PAGE>
<PAGE>
REVOCABLE PROXY
JEFFERSON SAVINGS BANCORP, INC.
______________________________
ANNUAL MEETING OF STOCKHOLDERS
JULY 17, 2000
______________________________
The undersigned hereby appoints David V. McCay, Forrest W.
Miller, Jr. and Lloyd D. Doerfinger, 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 Ritz-Carlton St.
Louis, 100 Carondelet Plaza, Clayton, Missouri 63105, on Monday,
July 17, 2000, 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 (except as
marked to the contrary).
FOR VOTE
FOR EXCEPT WITHHELD
[ ] [ ] [ ]
NOMINEES: 01 William W. Canfield 02 Edward G. Throop
(INSTRUCTION: To withhold your vote for
any individual nominee mark "FOR EXCEPT"
and insert that nominee's name on the
line provided below.)
__________________________________________
2. The ratification of the appointment
of KPMG LLP as auditors for the 2000
fiscal year
FOR AGAINST ABSTAIN
[ ] [ ] [ ]
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 1999 fiscal year.
Dated ________________________, 2000
____________________________________________________________
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.
