SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934
Filed by the Registrant [ X ]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[X] Preliminary Proxy Statement
[ ] Definitive Proxy Statement
[ ] Confidential, for Use of the Commission Only
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Section 240.14a-11(c) or
Section 240.14a-12
KSB Bancorp, Inc.
-------------------------------------
(Name of Registrant as Specified In Its Charter)
John J. Gorman, Luse Lehman Gorman Pomerenk & Schick
--------------------------------------------------------------
(Name of Person(s) Filling Proxy Statement)
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:
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>
KSB BANCORP, INC.
MAIN STREET
KINGFIELD, MAINE 04947
April 4, 1997
Dear Stockholder:
You are cordially invited to attend the Annual Meeting of
Stockholders of KSB Bancorp, Inc. (the "Company") to be held on
Wednesday, May 7, 1997, at the Inn on Winter's Hill, Kingfield,
Maine, at 5:30 p.m.
As described in the enclosed Proxy Statement, matters
scheduled to be presented for stockholder action at the Annual
Meeting include the election of two directors, the approval of an
amendment to the Company's Certificate of Incorporation to
increase the number of authorized shares of common stock of the
Company, and the ratification of Berry, Dunn, McNeil & Parker as
the Company's independent auditors for the year ending December
31, 1997. During this meeting, we will also report on the
operations of Kingfield Bank (the "Bank"), the wholly-owned
subsidiary of the Company. Detailed information concerning the
activities and operating performance of the Company and the Bank
during the year ended December 31, 1996 is contained in our
Annual Report, which is also enclosed. Directors and officers of
the Company, as well as representatives of our independent
auditors, will be present to respond to any questions which
stockholders may have.
We hope you will be able to attend this meeting in person.
Whether or not you expect to attend, we urge you to sign, date
and return the enclosed proxy card so that your shares will be
represented.
On behalf of the Board of Directors and all of the employees
of the Company and the Bank, I wish to thank you for your support
and interest. I look forward to seeing you at the Annual Meeting.
Sincerely,
John C. Witherspoon
President and Chief Executive
Officer
<PAGE>
KSB BANCORP, INC.
MAIN STREET
KINGFIELD, MAINE 04947
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
To Be Held On May 7, 1997
NOTICE IS HEREBY GIVEN that the Annual Meeting of
Stockholders ("Annual Meeting") of KSB Bancorp, Inc. (the
"Company") will be held at the Inn on Winter's Hill, Kingfield,
Maine on Wednesday, May 7, 1997 at 5:30 p.m., Maine time, for the
following purposes:
1. The election of two directors for a term of three years
each;
2. The approval of an amendment to the Company's
Certificate of Incorporation to increase the number of
authorized shares of common stock of the Company.
3. The ratification of Berry, Dunn, McNeil & Parker as
independent auditors of the Company for the year ending
December 31, 1997; and
4. Such other matters as may properly come before the
Annual Meeting or any adjournments thereof.
Pursuant to the Bylaws of the Company, the Board of
Directors has fixed March 27, 1997 as the voting record date for
the determination of stockholders entitled to notice of and to
vote at the Annual Meeting and any adjournments thereof. Only
holders of the Common Stock of the Company as of the close of
business on that date will be entitled to notice of and to vote
at the Annual Meeting or any adjournments thereof. A list of
stockholders entitled to vote at the Annual Meeting will be
available at Kingfield Bank, Main Street, Kingfield, Maine for a
period of ten days prior to the Annual Meeting and will also be
available for inspection at the meeting itself.
By Order of the Board of Directors
Kingfield, Maine
April 4, 1997
EACH STOCKHOLDER, WHETHER HE OR SHE PLANS TO ATTEND THE
ANNUAL MEETING, IS REQUESTED TO SIGN, DATE AND RETURN THE
ENCLOSED PROXY CARD WITHOUT DELAY IN THE ENCLOSED POSTAGE-PAID
ENVELOPE.
<PAGE>
KSB BANCORP, INC.
MAIN STREET
KINGFIELD, MAINE 04947
PROXY STATEMENT
ANNUAL MEETING OF STOCKHOLDERS
May 7, 1997
Solicitation and Voting of Proxies
This Proxy Statement is being furnished to stockholders of
KSB Bancorp, Inc. (the "Company") in connection with the
solicitation by the Board of Directors of proxies to be used at
the Annual Meeting of Stockholders ("Annual Meeting") to be held
on Wednesday, May 7, 1997 at 5:30 p.m., Maine time, at the Inn on
Winter's Hill, Kingfield, Maine and at any adjournments thereof.
The 1996 Annual Report to Stockholders, including the
consolidated financial statements of the Company for the year
ended December 31, 1996, accompanies this Proxy Statement and
Proxy Card, which are first being mailed to stockholders on or
about April 4, 1997.
Regardless of the number of shares of Common Stock owned, it
is important that stockholders be represented by proxy or be
present in person at the Annual Meeting. Stockholders are
requested to vote by completing the enclosed Proxy Card and
returning it, signed and dated, in the enclosed postage-paid
envelope. Stockholders are urged to indicate the way they wish to
vote in the spaces provided on the proxy card. 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, signed proxies will be voted FOR the
election of each of the nominees for director named in this Proxy
Statement, FOR the approval of an amendment to the Company's
Certificate of Incorporation to increase the authorized shares of
stock of the Company, and FOR the ratification of Berry, Dunn,
McNeil & Parker as independent auditors of the Company for the
year ending December 31, 1997.
The Board of Directors knows of no additional matters that
will be presented for consideration at the Annual Meeting.
Execution of a proxy, however, confers on the designated
proxyholders discretionary authority to vote the shares in
accordance with their best judgement on such other business, if
any, that may properly come before the Annual Meeting or any
adjournments thereof.
A proxy may be revoked at any time prior to its exercise by
the filing of a written notice of revocation with the Secretary
of the Company, by delivering to the Company a duly executed
proxy bearing a later date, or by attending the Annual Meeting
and voting in person. However, if you are a stockholder whose
shares are not registered in your own name, you will need
appropriate documentation from your record holder to vote
personally at the Annual Meeting.
<PAGE>
The cost of solicitation of proxies in the form enclosed
herewith will be borne by the Company. Proxies may also be
solicited personally or by mail, telephone or telegraph by the
Company's Directors, officers and regular employees, without
additional compensation therefor. The Company will also request
persons, firms and corporations holding shares in their names, or
in the name of their nominees, which are beneficially owned by
others, to send proxy material to and obtain proxies from such
beneficial owners, and will reimburse such holders for their
reasonable expenses in doing so.
Voting Securities
The securities which may be voted at this Annual Meeting
consist of shares of common stock of the Company, par value $.01
per share (the "Common Stock"), with each share entitling its
owner to one vote on all matters to be voted on at the Annual
Meeting, except as provided below. The close of business on
March 27, 1997 has been fixed by the Board of Directors as the
record date (the "Record Date") for the determination of
stockholders entitled to notice of and to vote at the Annual
Meeting and any adjournments thereof. The total number of shares
of the Company's Common Stock outstanding on the Record Date was
412,705 shares.
The presence, in person or by proxy, of at least a majority
of the total number of shares of Common Stock outstanding and
entitled to vote is necessary to constitute a quorum at this
Annual Meeting. In the event there are not sufficient votes for
a quorum, or to approve or ratify any matter being presented, at
the time of this Annual Meeting, the Annual Meeting may be
adjourned in order to permit the further solicitation of proxies.
In accordance with the provisions of the Company's
Certificate of Incorporation, record holders of Common Stock who
beneficially own in excess of 10% of the outstanding shares of
Common Stock (the "Limit") are not entitled to any vote with
respect to the shares held in excess of the Limit. The Company's
Certificate of Incorporation authorizes the Board of Directors
(i) to make all determinations necessary to implement and apply
the Limit, including determining whether persons or entities are
acting in concert, and (ii) to demand that any person who is
reasonably believed to beneficially own stock in excess of the
Limit supply information to the Company to enable the Board to
implement and apply the Limit.
Voting Procedures and Method of Counting Votes
As to the election of Directors, the proxy card being
provided by the Board of Directors enables a stockholder to vote
FOR the election of the nominees proposed by the Board, or to
WITHHOLD AUTHORITY to vote for one or more of the nominees being
proposed. Under Delaware law and the Company's Certificate of
Incorporation and Bylaws, Directors are elected by a plurality of
votes cast, without regard to either broker non-votes, or proxies
as to which authority to vote for one or more of the nominees
being proposed is withheld.
<PAGE>
As to the approval of an amendment to the Company's
Certificate of Incorporation to increase the authorized shares of
stock of the Company, by checking the appropriate box, a
stockholder may: (i) vote FOR the item; (ii) vote AGAINST the
item; or (iii) ABSTAIN from voting on such item. Under the
Delaware General Corporation Law, the approval of this matter
shall be determined by a majority of the votes entitled to be
cast. Accordingly, broker non-votes and proxies marked "ABSTAIN"
will be counted as votes against the item.
As to the ratification of Berry, Dunn, McNeil & Parker as
independent auditors of the Company, by checking the appropriate
box, a stockholder may: (i) vote FOR the item; (ii) vote AGAINST
the item; or (iii) ABSTAIN from voting on such item. Under the
Company's Certificate of Incorporation and Bylaws, the
ratification of this matter shall be determined by a majority of
the votes cast, without regard to broker non-votes, or proxies
marked "ABSTAIN."
Proxies solicited hereby will be returned to the Company,
and will be tabulated by inspectors of election designated by the
Board.
Security Ownership of Certain Beneficial Owners
Persons and groups owning in excess of 5% of the Company's
Common Stock are required to file certain reports regarding such
ownership with the Company and with the Securities and Exchange
Commission ("SEC"), in accordance with the Securities Exchange
Act of 1934 (the "Exchange Act"). The following table sets forth
information regarding persons known to be beneficial owners of
more than 5% of the Company's Common Stock outstanding as of
March 27, 1997.
<TABLE>
<CAPTION>
Amount and Nature
Name and Address of Beneficial Percent
of Beneficial Owner Ownership of Class
- --------------------------------------------------------------------
<S> <C> <C>
Kingfield Bank 40,701 9.9%
Employee Stock Ownership Plan
c/o Kingfield Bank
Main Street
Kingfield, Maine 04947
Athena Capital Management, Inc. (1) 32,930 8.0%
621 E. Germantown Pike, Suite 105
Plymouth Valley, Pennsylvania 19401
- ------------------------
(1) Athena Capital Management is an investment company. The information
contained herein is based upon a Schedule 13G beneficial ownership
report, dated January 29, 1996, filed by Athena Capital Management with
the SEC. Such Schedule 13G indicates that Athena Capital Management has
shared voting and investment power over these shares of Common Stock.
</TABLE>
<PAGE>
PROPOSALS TO BE VOTED ON AT THE ANNUAL MEETING
PROPOSAL 1-- ELECTION OF DIRECTORS
Each of the members of the Board of Directors of the Company
also serves on the Board of Directors of Kingfield Bank (the
"Bank"), the Company's wholly-owned subsidiary. Directors are
elected for staggered terms of three years each, with the term of
office of only one class of Directors expiring in each year.
Directors serve until their successors are elected and qualified.
No person being nominated as a Director is being proposed for
election pursuant to any agreement or understanding between any
person and the Company.
The nominees proposed by the Board for election at this
Annual Meeting are Winfield F. Robinson and G. Norton Luce. Each
of these nominees is presently a Director of the Company. Set
forth below is certain information concerning the nominees and
the other members of the Board as of March 27, 1997. The Board
believes that such nominees will stand for election and will
serve if elected as Director. However, if any of the nominees
proposed by the Board of Directors fails to stand for election or
is unable to accept election, the proxies will be voted for the
election of such other person or persons as the Board of
Directors may recommend.
THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE "FOR" THE
ELECTION OF THE NOMINEES WHOSE NAMES APPEAR BELOW.
NOMINEES
<TABLE>
<CAPTION>
Amount and
Nature of
Beneficial
Name, Age, Principal Occupation and Expiration Ownership Percent
Business Experience for Past Five Years of Term of Stock(1) of Class
- ------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Winfield F. Robinson, Age 59 2000 13,391(2) 3.2%
Mr. Robinson has served as Chairman of
the Board of the Company since its
formation in 1993. He has served as a
Director of the Bank since 1976 and was
elected Chairman of the Board in 1986.
Mr. Robinson is a director of Somerset
Corp. and serves as a vice president of
United Timber Corporation, a Maine-based
forest products firm.
G. Norton Luce, Age 63 2000 7,106(3) 1.7
Mr. Luce has served as a Director of the
Company since its formation in 1993. He
has served as a Director of the Bank since
1978. Mr. Luce was president of
Mountain Fuel Company/Valley Gas
Company, a heating oil and gas delivery
business, as well as heating systems
installations, from 1975 until his retirement
in October 1988.
CONTINUING DIRECTORS
William P. Dubord, Age 49 1998 5,788(2) 1.4
Mr. Dubord has served as a Director of the
Company since its formation in 1993. He
has served as a Director of the Bank since
1988. Mr. Dubord is a partner in the law
firm of Marden, Dubord, Bernier &
Stevens.
Theodore C. Johanson, Age 59 1998 1,950(3) 0.47
Mr. Johanson was appointed a Director of
the Bank and the Company in October,
1996. Mr. Johanson is the President of
Falcon Shoe Company in Lewiston, Maine.
John C. Witherspoon, Age 40 1999 23,586(4) 5.6
Mr. Witherspoon has served as Chief
Executive Officer and Director of the
Company since its formation in 1993. He
joined the Bank in 1979 as an
administrative assistant and served as Vice
President from June 1981 until January
1984. In January 1984, Mr. Witherspoon
began to serve as President and Chief
Executive Officer of the Bank and was
elected to serve on the Board of Directors
of the Bank in 1987.
Roger G. Spear, Age 53 1999 2,090(3) 0.5
Mr. Spear was elected as Director of the
Bank and the Company in March 1993.
Mr. Spear is Vice President of
Administration-Chief Financial Officer of
the University of Maine at Farmington.
All directors and executive officers as a
group (ten persons) - 69,408(5)(6) 16.4%
- -------------------------
(1) Unless otherwise indicated, each person effectively exercises sole (or shared with spouse)
voting and dispositive power as to the shares reported.
(2) Includes 3,300 shares that may be acquired pursuant to the exercise of stock options granted
under the Directors' Stock Option Plan.
(3) Includes 1,650 shares that may be acquired pursuant to the exercise of stock options granted
under the Directors' Stock Option Plan.
(4) Includes 1,973 shares subject to future vesting under awards granted pursuant to the Bank's
Recognition and Retention Plans and Trusts ("BRPs") and as to which voting may currently
be directed. Includes 6,187 shares subject to options granted pursuant to the Company's
Incentive Stock Option Plan that may be exercised within 60 days of the Record Date.
Includes 2,745 shares allocated to Mr. Witherspoon's account under the Bank's ESOP.
(5) Includes 5,593 shares subject to future vesting under awards granted pursuant to the BRPs
and as to which voting may currently be directed. Includes 21,367 shares that may be acquired
pursuant to the exercise of stock options.
(6) Includes 6,356 shares allocated to the accounts of executive officers under the ESOP.
Excludes the remaining 34,345 shares of Common Stock, or 8.3% of the shares of Common
Stock outstanding, owned by the Company's ESOP for the benefit of the employees of the Company
and the Bank who are not executive officers. The ESOP Administrative Committee administers
the ESOP. Under the terms of the ESOP, shares of Common Stock allocated to the account of
employees are voted in accordance with the instructions of the respective employees.
Unallocated shares are voted by the ESOP Trustee as directed by the Administrative Committee.
The Administrative Committee shall vote the unallocated shares in a manner that reflects the
directions received from employees as to allocated shares, unless their fiduciary duties
require otherwise. As of the Record Date, 22,129 shares of Common Stock held by the ESOP
had been allocated to the account of employees, including the shares allocated to the
accounts of executive officers.
</TABLE>
<PAGE>
Meetings of the Board of Directors and Committees of the Board
During the year ended December 31, 1996, the Board of
Directors of the Company held four meetings, and the Board of
Directors of the Bank held twelve meetings. Each Director of the
Company is a Director of the Bank. No Director of the Company
attended fewer than 75% of the total meetings of the Board of
Directors and committees on which such Board member served during
this period, with respect to each the Company and the Bank.
The Board of Directors of the Company serves as the
nominating committee for directors. While the Board will consider
nominees recommended by the stockholders, it has not actively
solicited recommendations from stockholders. Nominations by
stockholders must comply with certain procedural and
informational requirements set forth in the Company's Bylaws.
See "Advance Notice of Business to be Conducted at an Annual
Meeting."
The Bank's compensation committee consists of Messrs. Dubord
and Robinson. The compensation committee reviews compensation,
officer promotions, benefits and other matters of personnel
policy and practice. The compensation committee met two times in
1996.
The Bank's audit committee, consisting of Directors Dubord,
Luce and Spear, is responsible for reviewing audit performance
and evaluating policies and procedures relating to auditing
functions and controls.
Directors' Compensation
Fees. Outside Directors of the Bank are paid an annual
retainer of $6,500 ($8,000 for the Chairman of the Board). In
addition, Outside Directors receive a fee of $100 for each Board
meeting and Committee meeting attended.
Directors Deferred Fee Plan. The Bank maintains a deferred
fee plan for members of the Board of Directors. Participation in
the Deferred Fee Plan is voluntary. Under the Deferred Fee Plan,
a Director who wishes to participate in the Plan executes an
agreement whereby the Director agrees to defer receipt of a
certain amount of fees otherwise payable to him. The Director's
account is credited with interest based on the prime rate quoted
in the Wall Street Journal on December 31 of each year. Benefits
(deferrals plus credited interest) are payable to the Director
for ten years beginning on the later of the first day of the
calendar month following the end of the Director's term of office
due to resignation, removal, failure to be re-elected, or the
Director's seventieth (70th) birthday. In the event of the
Director's death, the Bank will make specified monthly payments
to the Director's beneficiary or beneficiaries within 30 days
after the Director's death.
The Bank's obligation under the Deferred Fee Plan is an
unfunded and unsecured promise to pay. However, at its sole and
exclusive option, the Bank may elect to fund the Deferred Fee
Plan. Currently, Messrs. Robinson, Dubord and Spear participate
in the Deferred Plan.
<PAGE>
Directors Option Plan. The Company adopted a stock option
plan for Directors who are not employees of the Company or its
subsidiary. The Directors Option Plan authorized the granting of
non-statutory stock options for an aggregate of 13,200 shares of
Common Stock (as adjusted to reflect a 10% stock dividend paid by
the Company on August 12, 1996 (the "Stock Dividend") to members
of the Board of Directors who were not employees of the Bank or
the Company. The six members of the Board of Directors at the
time of the conversion of the Bank from the mutual to stock form
and the related initial public offering of the Common Stock, who
were not officers or employees of the Company or the Bank,
received an option to purchase 1,650 shares of Common Stock,
except that the Chairman of the Board received an option to
purchase 3,300 shares. Both of these figures have been adjusted
to reflect the Stock Divided. Options as to a total of 13,200
shares of Common Stock have been granted to Directors under this
plan. The exercise price of any option granted under the
Directors Option Plan may be paid in cash or common stock.
Executive Compensation
Summary Compensation Table. The following table sets forth
the cash compensation paid by the Bank, for services rendered
during the fiscal years ended December 31, 1996, 1995 and 1994,
to the Chief Executive Officer of the Bank and the Company (the
"Named Executive Officer").<PAGE>
<TABLE>
<CAPTION>
Annual Compensation Long-Term Compensation
AWARDS PAYOUTS
Other Annual Restricted Options/
Name and Year Ended Salary Compensation Stock SARS LTIP All Other
Principal Position December 31, (1) Bonus (2) Awards (#) Payouts Compensation(3)
- -------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
John C. Witherspoon 1996 $100,800 $10,746 $35,140
President and Chief 1995 96,000 12,000 -- -- -- -- 19,980
Executive Officer 1994 96,000 -- -- -- -- -- 15,832
- ----------------------
(1) Salary amount includes $7,004, $6,375 and $6,259, respectively, deferred by Mr. Witherspoon pursuant
to the Bank's 401(k) Retirement and Savings Plan for the years ended December 31, 1996, 1995 and 1994.
(2) Perquisites for the years ended December 31, 1996, 1995 and 1994 did not exceed the lesser of $50,000
or 10% of the total of the salary and bonus as reported for the Named Executive Officer.
(3) Includes $4,760, $4,572 and $4,533, respectively, of matching contributions made by the Bank on
Mr. Witherspoon's behalf pursuant to the Bank's 401(k) Retirement and Savings Plan for the years
ended December 31, 1996, 1995 and 1994. Also includes $30,380, $15,408 and $11,299, respectively,
representing the market value of shares of common stock allocated to Mr. Witherspoon under the Bank's
ESOP for the years ended December 31, 1995, 1994 and 1993.
</TABLE<PAGE>
Employment Agreements. The Bank and the Company have
entered into an employment agreement with John C. Witherspoon, as
of July 1, 1993, which provides for a three-year term. On each
anniversary date of the agreement, the term of the agreement may
be extended for an additional year such that the remaining term
is three years. If notice of renewal is not provided, the
agreement
<PAGE>
will expire two years thereafter. In addition to a current base
salary of $100,800, the agreement provides for, among other
things, disability pay, participation in stock benefit plans and
other fringe benefits applicable to executive personnel. The
agreement provides for termination by the Bank or the Company for
cause at any time, without further obligation. If termination of
employment for cause is disputed by Mr. Witherspoon, the Company
will continue making payments and providing benefits to Mr.
Witherspoon until the dispute is settled by arbitration. If it
is determined in arbitration that cause for termination existed,
payments made must be returned. In the event the Bank or the
Company choose to terminate the executive's employment for
reasons other than cause, or the executive resigns due to
demotion or loss of responsibility, relocation, reduction in
benefits and perquisites or liquidation of the Bank or the
Company, the executive may be entitled to his base salary for the
remaining term of the agreement. Life, health and disability
coverage would be provided for the remaining term of the
agreement. If termination, voluntary or involuntary, follows a
change in control of the Bank or the Company, the executive or,
in the event of death, his beneficiary would be entitled to (i) a
severance payment equal to the greater of the payments due for
the remaining term of the agreement or three times the average of
the three preceding years base salary; and (ii) life, medical and
disability coverage for thirty-six (36) months.
A "change in control" is generally defined to mean, during
the term of the agreement, the acquisition of Company or Bank
stock that would require Federal Reserve Board approval under the
Bank Holding Company Act or under the Change in Bank Control Act
or the acquisition by a person, or group of persons, of
beneficial ownership of 20% or more of the Company's Common
Stock, or a tender offer, exchange offer, merger or other form of
business combination, sale of assets, or contested election of
trustees which results in a change of a majority of the Board of
Directors. Payments to the executive under the agreement will be
made by the Company in the event that payments or benefits are
not paid by the Bank.
Incentive Stock Option Plan. The Board of Directors of the
Company adopted the 1993 Incentive Stock Option Plan which
provides for discretionary awards to officers and key employees.
The grant of awards under the Option Plan is determined by a
committee of the Board of Directors consisting of three directors
(the "Option Plan Committee"), none of whom is eligible to
receive options under the Plan. The Incentive Option Plan
authorized the granting of incentive and non-statutory stock
options for up to 26,857 shares of Common Stock (as adjusted to
reflect the Stock Dividend), to such officers and full-time
employees of the Company and its affiliates as the Option
Committee may determine.
Set forth below is certain information concerning options
outstanding to the Named Executive Officer at December 31, 1996.
No options were exercised by, or granted to, an executive officer
in 1996.
PAGE
<PAGE>
</TABLE>
<TABLE>
<CAPTION>
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND
FISCAL YEAR-END OPTION VALUE
Number of Securities
Underlying Unexercised Value of Unexercised In-
Options at The-Money Options at
Fiscal Year-End Fiscal Year-End(1)
Shares Acquired Value
Name Upon Exercise Realized Exercisable/Unexercisable(#) Exercisable/Unexercisable($)
<S> <C> <C> <C> <C>
John C. Witherspoon -- $ -- 6,187/4,125 $150,034/$100,031
- -------------------------
(1) Equals the difference between the aggregate exercise price of such options and the aggregate
fair market value of the shares of Common Stock that would be received upon exercise, assuming
such exercise occurred on December 31, 1996, at which date the average of the bid and ask price
of the Common Stock as quoted on the Nasdaq Small-Cap Market was $24.25
/TABLE
<PAGE>
Transactions With Certain Related Persons
There are loans outstanding from the Bank to certain of its
Directors and executive officers, and their related interests.
All loans or extensions of credit to executive officers and
directors, and their related interest, are made on substantially
the same terms, including interest rates and collateral, as those
prevailing at the time for comparable transactions with the
general public and do not involve more than the normal risk of
repayment or present other unfavorable features.
PROPOSAL 2 - APPROVAL OF AN AMENDMENT TO THE COMPANY'S
CERTIFICATE OF INCORPORATION TO INCREASE THE NUMBER OF AUTHORIZED
SHARES OF COMMON STOCK
The Company is currently authorized to issue 1,200,000
shares of common stock, par value $0.01 per share. The Company's
Board of Directors recommends that the Company's stockholders
approve an amendment (the "Amendment") to the Company's
Certificate of Incorporation that would increase the number of
authorized shares of the Company's common stock from 1,200,000
shares to 2,200,000 shares. The number of authorized shares of
preferred stock will remain at 200,000. If the Amendment is
approved by the Company's stockholders, ARTICLE FOURTH, Paragraph
A of the Company's Certificate of Incorporation will read as
follows:
FOURTH: A. The total number of shares of all classes of stock
which the Corporation shall have authority to issue is two
million four hundred thousand (2,400,000) consisting of:
1. Two hundred thousand (200,000) shares of Preferred
Stock, par value one cent ($.01) per share (the "Preferred
Stock"); and
2. Two million two hundred thousand (2,200,000)
shares of Common Stock, par value one cent ($.01) per share (the
"Common Stock").
<PAGE>
The Company proposes to increase the number of authorized
shares of its common stock to 2,200,000 shares to provide
additional shares for general corporate purposes, including stock
dividends and splits, raising additional capital, issuances
pursuant to employee and stockholder stock plans and possible
future acquisitions. Although the Board has considered a
possible stock split, there are no present plans, understandings,
or agreements for issuing a material number of additional shares
of common stock from the currently authorized shares of common
stock or the additional shares of stock proposed to be authorized
pursuant to the Amendment. The Board of Directors believes that
an increase in the total number of shares of authorized common
stock will better enable the Company to meet its future needs.
The proposed increase will also provide additional shares for
corporate purposes generally.
The Company's issuance of shares of common stock, including
the additional shares that will be authorized if the proposed
Amendment is adopted, could be used to dilute the present equity
ownership position of current holders of common stock and may be
made without stockholder approval. The additional authorized but
unissued shares of the Company's common stock that would become
available if the Amendment is approved could be used to make a
change in control of the Company more difficult and expensive.
Under certain circumstances, such shares could be used to create
impediments or to frustrate persons seeking to cause a takeover
or to otherwise gain control of the Company. Such shares could be
sold to purchasers who might side with the Board in opposing a
takeover bid that the Board determines not to be in the best
interests of the Company and its stockholders. Although the
purpose of seeking an increase in the number of authorized shares
of Common Stock is not intended for antitakeover purposes, SEC
rules require disclosure of existing provisions in the Company's
Certificate of Incorporation and bylaws which could have an
antitakeover effect. These include provisions: (a) limiting
voting rights of beneficial owners of more than 10% of the Common
Stock; (b) permitting directors to be removed during their term
only for cause and upon the vote of 80% of the stockholders; (c)
allowing the Board exclusively to determine the number of
directors; (d) providing for the election of directors on a
staggered-term basis; (e) requiring an 80% stockholder vote for
certain mergers and other business combinations which have not
received the approval of a majority of the Disinterested
Directors (as defined); (f) requiring any stockholder who intends
to nominate a candidate for election to the Board of Directors or
to raise new business at a stockholder meeting, to give 90 days
advance notice to the Secretary of the Company; (g) allowing
special meetings of stockholders to be called only by the Board
of Directors; (h) requiring stockholder action to be effected at
an annual or special meeting but not by the written consent of
stockholders; and (i) requiring an 80% stockholder vote to alter,
amend, or repeal the Bylaws.
The Board of Directors believes that, as proposed, the
approval of the Amendment is in the best interests of the
stockholders of the Company. Approval of this proposal requires
a vote in favor of the Amendment by the holders of a majority of
the Company's outstanding shares of common stock.
<PAGE>
THE BOARD OF DIRECTORS RECOMMENDS THAT STOCKHOLDERS VOTE FOR
THE PROPOSAL TO AMEND THE COMPANY'S CERTIFICATE OF INCORPORATION
TO INCREASE THE COMPANY'S AUTHORIZED SHARES OF COMMON STOCK.
PROPOSAL 3 - RATIFICATION OF THE APPOINTMENT
OF INDEPENDENT AUDITORS
The Company's independent auditors for the year ended
December 31, 1996 were Berry, Dunn, McNeil & Parker. The
Company's Board of Directors has reappointed Berry, Dunn, McNeil
& Parker to continue as independent auditors for the Company for
the year ending December 31, 1997, subject to ratification of
such appointment by the stockholders. Representatives of Berry,
Dunn, McNeil & Parker are expected to attend the Annual Meeting.
They will be given the opportunity to make a statement if they
desire to do so and will be available to respond to appropriate
questions from stockholders present at the Annual Meeting.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE
RATIFICATION OF THE APPOINTMENT OF BERRY, DUNN, MCNEIL & PARKER
AS THE INDEPENDENT AUDITORS OF THE COMPANY FOR THE YEAR ENDING
DECEMBER 31, 1997.
STOCKHOLDER PROPOSALS
To be considered for inclusion in the Company's proxy
statement in connection with the annual meeting of stockholders
to be held following the year ending December 31, 1997, a
stockholder proposal must be received by the Secretary of the
Company, at the address set forth on the first page of this Proxy
Statement, no later than December 8, 1997. Any stockholder
proposal submitted to the Company will be subject to SEC Rule
14a-8 under the Securities Exchange Act of 1934.
ADVANCE NOTICE OF BUSINESS TO BE CONDUCTED
AT AN ANNUAL MEETING
The Bylaws of the Company provide an advance notice
procedure for certain business, or nominations to the Board of
Directors, to be brought before an annual meeting. In order for a
stockholder to properly bring business before an annual meeting,
or to propose a nominee to the Board, the stockholder must give
written notice to the Secretary of the Company not less than
ninety (90) days before the date fixed for such meeting. The
notice must include the stockholder's name, record address,
<PAGE>
and number of shares owned by the stockholder, and describe
briefly the proposed business, the reasons for bringing the
business before the annual meeting, and any material interest of
the stockholder in the proposed business. In the case of
nominations to the Board, certain information regarding the
nominee must be provided. The date on which next year's Annual
Meeting of Stockholders is expected to held is May 6, 1998.
Accordingly, advance notice for certain business, or nominations
to the Board of Directors, to be brought before the 1998 Annual
Meeting must be given to the Company by February 5, 1998.
By Order of the Board of Directors
Kingfield, Maine
April 4, 1997
YOU ARE CORDIALLY INVITED TO ATTEND THE ANNUAL MEETING IN PERSON.
WHETHER OR NOT YOU PLAN TO ATTEND THE ANNUAL MEETING, YOU ARE
REQUESTED TO SIGN AND PROMPTLY RETURN THE ACCOMPANYING PROXY IN
THE ENCLOSED POSTAGE-PAID ENVELOPE.
<PAGE>
KSB BANCORP, INC.
ANNUAL MEETING OF STOCKHOLDERS
MAY 7, 1997
The undersigned hereby appoints the official proxy committee
of the Board of Directors, with full powers of substitution, to
act as attorneys and proxies for the undersigned to vote all
shares of Common Stock of the KSB Bancorp, Inc. (the "Company")
which the undersigned is entitled to vote at the Annual Meeting
of Stockholders ("Meeting") to be held at the Inn on Winter's
Hill, Kingfield, Maine at 5:30 p.m. (local time) on May 7, 1997.
The official proxy committee is authorized to cast all votes to
which the undersigned is entitled as follows:
VOTE
FOR WITHHELD
i. The election as directors of all / / / /
nominees listed below (except as
marked to the contrary below)
Winfield F. Robinson
G. Norton Luce
----------------------------------
FOR AGAINST ABSTAIN
/ / / / / /
ii. The approval of an amendment to
the Company's Certificate of
Incorporation to increase the
number of authorized shares of
common stock of the Company.
iii. The ratification of the
appointment of Berry, Dunn,
McNeil & Parker as auditors for
the fiscal year ending December
31, 1997.
<PAGE>
The Board of Directors recommends a vote "FOR" each of the listed
proposals.
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THIS PROXY WILL BE VOTED AS DIRECTED, BUT IF NO INSTRUCTIONS ARE
SPECIFIED, THIS PROXY WILL BE VOTED FOR EACH OF THE PROPOSITIONS
STATED ABOVE. IF ANY OTHER BUSINESS IS PRESENTED AT SUCH
MEETING, THIS PROXY WILL BE VOTED BY THE ABOVE-NAMED PROXIES AT
THE DIRECTION OF A MAJORITY OF THE BOARD OF DIRECTORS. AT THE
PRESENT TIME, THE BOARD OF DIRECTORS KNOWS OF NO OTHER BUSINESS
TO BE PRESENTED AT THE MEETING.
- -----------------------------------------------------------------
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS
Should the undersigned be present and elect to vote at the
Meeting or at any adjournment thereof and after notification to
the Secretary of the Company at the 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. This proxy may also be revoked by
sending written notice to the Secretary of the Company at the
address set forth on the Notice of Annual Meeting of
Stockholders, or by the filing of a later proxy prior to a vote
being taken on a particular proposal at the Meeting.
The undersigned acknowledges receipt from the Company prior
to the execution of this proxy of notice of the Meeting, a proxy
statement dated April 4, 1997, and a 1996 Annual Report to
Stockholders.
Dated: -----------------, 1997
/ / Check Box if You Plan
to Attend Annual Meeting
- ------------------------------ ------------------------------
PRINT NAME OF STOCKHOLDER PRINT NAME OF STOCKHOLDER
- ------------------------------ ------------------------------
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 complete and date this proxy and return it promptly
in the enclosed postage-prepaid envelope.
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