SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a)
of the Securities Exchange Act of 1934
[ X ] Filed by the registrant
[ ] 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 ss. 240.14a-11(c) or ss. 240.14a-12
KSB BANCORP, INC.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified in Its Charter)
<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,
/s/John C. Witherspoon
----------------------
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 number of authorized shares of Common 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.
As to the approval of an amendment to the Company's Certificate of
Incorporation to increase the number or authorized shares of Common 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.
<PAGE>
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 an Amended Schedule 13G beneficial ownership
report, dated January 22, 1997, 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.
<TABLE>
<CAPTION>
NOMINEES
Amount and Nature of
Name, Age, Principal Occupation and Beneficial Ownership Percent
Business Experience for Past Five Years Expiration 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.
<PAGE>
<CAPTION>
CONTINUING DIRECTORS
Amount and Nature of
Name, Age, Principal Occupation and Beneficial Ownership Percent
Business Experience for Past Five Years Expiration of Term of Stock (1) of Class
- --------------------------------------- ------------------ ---------------------------- ---------
<S> <C> <C> <C>
William P. Dubord, Age 49............... 1998 5,788 (3) 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) 0.5
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.
<PAGE>
(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 Employee Stock Ownership Plan (the "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 accounts of employees, including the
shares allocated to the account 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 (Chairman)
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.
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
<PAGE>
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").
<TABLE>
<CAPTION>
Annual Compensation Long-Term Compensation
--------------------------------------- -------------------------------------
Other
Year Annual Awards Payouts All Other
Name and Ended Salary Bonus Compensation Compensation
Principal Position December 31, (1) (2) (3)
- -------------------- --------------- ---------- ---------- --------------- ------------------------------------- -------------
Restricted Options/
Stock SARS LTIP
Awards (#) Payouts
------------ -----------------------
<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, 1996, 1995 and 1994.
</TABLE>
<PAGE>
Employment Agreements. The Bank and the Company have entered into an
employment agreement with John C. Witherspoon, 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 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 (the "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 Option Plan authorizes 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 Plan
Committee may determine.
<PAGE>
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, a Named Executive Officer in 1996.
<TABLE>
<CAPTION>
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND
FISCAL YEAR-END OPTION VALUES
=========================================================================================================================
Number of Unexercised Value of Unexercised In-
Options at The-Money Options at
Year-End Year-End (1)
Shares Acquired Value Exercisable/Unexercisable Exercisable/Unexercisable
Name Upon Exercise Realized (#) ($)
<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>
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.
<PAGE>
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").
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
<PAGE>
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.
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 5, 1997. Any stockholder proposal
submitted to the Company will be subject to SEC Rule 14a-8 under the Securities
Exchange Act of 1934.
<PAGE>
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, 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>
REVOCABLE PROXY
KSB BANCORP, INC.
[ X ] PLEASE MARK VOTES
AS IN THIS EXAMPLE
ANNUAL MEETING OF STOCKHOLDERS
May 7, 1997 at 5:30 p.m.
The undersigned hereby appoints JohnC. Witherspoon and William P. Dubord, each
with full power of substitution, to act as attorneys and proxies for the
undersigned, and to vote all shares of Common Stock of KSBBancorp, Inc., which
the undersigned is entitled to vote, at the Annual Meeting of Stockholders, to
be held at the Inn on Winter's Hill, Kingfield, Maine, on May 7, 1997 at 5:30
p.m. and at any and all adjournments thereof, as follows:
1. The election of Directors:
Winfield F. Robinson
G.Norton Luce
[ ] FOR [ ] WITHHOLD [ ] EXCEPT
INSTRUCTION: To withhold authority to vote for any individual nominee, mark
"Except"and write that nominee's name in the space provided below.
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2. The approval of an amendment to the Company's Certificate of Incorporation to
increase the number of authorized shares of common stock.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
3. The ratification of Berry, Dunn, McNeil &Parker as independent auditors for
the Company for the year ending December 31, 1997.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" EACH OF THE LISTED PROPOSALS.
This proxy is revocable and will be voted as directed, but if no instructions
are specified, this proxy will be voted FOR each of the proposals listed. If any
other business is presented at the meeting, this proxy will be voted by those
named in this proxy in their best judgment.
The undersigned acknowledges receipt from KSBBancorp, Inc. prior to the
execution of this proxy of a Notice of Annual Meeting and of a Proxy Statement,
each dated April 4, 1997.
<PAGE>
Please be sure to sign and date this Proxy in the box below.
- --------------------------------------------------------------------------------
Date
- --------------------------------------------------------------------------------
Stockholder sign above
- --------------------------------------------------------------------------------
Co-holder (if any) sign above
Detach above card, sign, date and mail in postage paid envelope provided.
KSB BANCORP, INC.
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 but only one
signature is required.
PLEASE ACT PROMPTLY
SIGN, DATE & MAIL YOUR PROXY CARD TODAY
