As filed with the Securities and Exchange Commission on October 2, 1997
Registration No. 33-_________
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
-------------------
FORM S-8
REGISTRATION STATEMENT UNDER
THE SECURITIES ACT OF 1933
-------------------
The Bank of Kentucky Financial Corporation
(Exact name of registrant as specified in its Articles)
Kentucky 61-1256535
- ------------------------------------ --------------------------------------
(State or other jurisdiction (I.R.S. Employer Identification No.)
of incorporation or organization)
1065 Burlington Pike
Florence, Kentucky 41042
- ------------------------------------------ -------------------------------
(Address of Principal Executive Offices) (Zip Code)
The Bank of Kentucky Financial Corporation
1997 Stock Option and Incentive Plan
- -------------------------------------------------------------------------------
(Full title of the plan)
Robert W. Zapp, President
The Bank of Kentucky Financial Corporation
1065 Burlington Pike
Florence, Kentucky 41042
- -------------------------------------------------------------------------------
(Name and address of agent for service)
(606) 282-2805
- -------------------------------------------------------------------------------
(Telephone number, including area code, of agent for service)
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
Title of Proposed maximum Proposed maximum Amount of
securities to Amount to be offering price aggregate offering registration
be registered registered per share(1) price (1) fee
- --------------- ------------ ---------------- ------------------ ------------
<S> <C> <C> <C> <C>
Common Stock
$5.00 par value 360,000 $20.00 $7,189,500 $2,179.00
<FN>
- -------------------
<F1> Of the 360,000 shares being registered, 6,000 shares may be purchased for
$18.25 per share upon the exercise of options already granted. The
offering price of the remaining 354,000 shares, which have been reserved
for the future grant of options, has been determined for purposes of
calculating the registration fee pursuant to 17 C.F.R. [SECTION]
230.457(h) to be $20.00 per share on September 26, 1997.
</FN>
</TABLE>
PROSPECTUS
October 2, 1997
THE BANK OF KENTUCKY FINANCIAL CORPORATION
1997 STOCK OPTION AND INCENTIVE PLAN
In connection with its 1997 Stock Option and Incentive Plan (the "Plan"),
The Bank of Kentucky Financial Corporation ("BKFC") has executed stock option
agreements (the "Agreements"), pursuant to which BKFC offers common stock,
$5.00 par value per share, of BKFC (the "Common Shares").
This document constitutes part of a prospectus in respect of the Common
Shares. The following documents are incorporated by reference in the
prospectus: (i) BKFC's Annual Report on Form 10-KSB for the Fiscal Year Ended
December 31, 1996; (ii) all documents filed with the Securities and Exchange
Commission (the "Commission") pursuant to Sections 13(a), 13(c), 14 or 15(d) of
the Securities Exchange Act of 1934 (the "Exchange Act") since March 27, 1997;
(iii) the description of the Common Shares contained in BKFC's Registration
Statement on Form 8-A (File No. 0-25960) filed with the Commission on April 28,
1995; and (iv) any definitive Proxy Statement or Information Statement filed
pursuant to Section 14 of the Exchange Act and all documents which may be filed
with the Commission pursuant to Sections 13(a), 13(c), 14 or 15(d) of the
Exchange Act subsequent to the date hereof and prior to the completion of the
offering contemplated hereby.
Upon the written or oral request of any participant, copies of the
documents incorporated by reference (excluding exhibits), copies of all
reports, proxy statements and other communications sent to BKFC's stockholders
generally and additional information regarding the Agreements and their
administrator shall be provided without charge. Requests may be made to Robert
W. Zapp in writing at The Bank of Kentucky Financial Corporation, 1065
Burlington Pike, Florence, Kentucky 41042, or by telephone at (606) 371-2340.
Purpose
The purpose of the Plan is to promote the best interests of BKFC and its
shareholders by enabling BKFC to attract, retain and reward directors,
officers, managerial and other key employees and to strengthen the mutuality of
interests between such directors, employees and BKFC's shareholders by
providing such directors, officers, and other key employees with a proprietary
interest in pursuing the long-term growth, profitability and financial success
of BKFC. BKFC has reserved for issuance upon the exercise of options granted
under the Plan 360,000 Common Shares.
Risk Factors
Concentration of Voting Power. The directors and executive officers of BKFC own
in the aggregate approximately 885,792 Common Shares, or 50.6%, of the
1,750,467 outstanding Common Shares, excluding the 360,000 Common Shares to be
issued upon the exercise of options to purchase Common Shares held by directors
and executive officers. Upon the exercise of such options, the directors and
executive officers of BKFC will own in the aggregate approximately 59.0% of the
2,110,467 outstanding Common Shares. Such aggregate ownership will permit the
current directors and executive officers of BKFC to exert a controlling
influence over the operations of BKFC and its subsidiaries.
Limited Market for Common Shares. There is presently no active market for the
Common Shares. In light of the total number of Common Shares outstanding and
the large number of Common Shares held by the directors and executive officers
of BKFC, the development of an active and liquid market for the Common Shares
is unlikely, as a result of which BKFC stockholders may have difficulty selling
their Common Shares. Persons who consider exercising options to purchase Common
Shares should consider, therefore, the potentially illiquid and long-term
nature of the investment in the Common Shares.
Anti-Takeover Provisions Which May Discourage a Change of Control of BKFC.
Federal law and regulations, Kentucky law, and the Articles of Incorporation
and By-Laws of BKFC contain certain provisions which may deter or prohibit a
change of control of BKFC. Such provisions are intended to encourage any
acquiror to negotiate the terms of an acquisition with the Board of Directors
of BKFC, thereby reducing the vulnerability of BKFC to takeover attempts and
certain other transactions which have not been negotiated with and approved by
the Board of Directors.
Anti-takeover devices and provisions may also, however, have the effect
of discouraging sudden and other hostile takeover attempts which are not
approved by the Board of Directors, even under circumstances in which
shareholders may deem such takeovers to be in their best interests or in which
shareholders may receive a substantial premium for their shares over then
current market prices. As a result, shareholders who might desire to
participate in such a transaction may not have an opportunity to participate by
virtue of such devices and provisions. Such provisions may also benefit
management by discouraging changes of control in which incumbent management
would be removed from office. The following is a summary of certain provisions
of such laws, regulations and documents.
Articles of Incorporation and By-Laws of BKFC. BKFC's Articles of
Incorporation, as amended (the "Amended Articles"), and By-Laws contain certain
provisions which could discourage non-negotiated takeover attempts that certain
stockholders might deem to be in their interests or through which stockholders
might otherwise receive a premium for their Common Shares and which may tend to
perpetuate existing management. These provisions include: (1) the
classification of the terms of the members of the Board; (2) a nomination
procedure set forth in the By-Laws of BKFC and (3) supermajority provisions for
the approval of certain business combinations.
BKFC's Amended Articles provide for a Board of Directors consisting of
not less than nine (9) nor more than fifteen (15) members. The Board of
Directors currently consists of thirteen (13) members, divided into three
classes. Each class is elected by a separate election, and the directors in
each class serve three years. As a result of the classification of the Board of
Directors in this manner, a minimum of two annual meetings of stockholders will
be necessary for a majority of the members of the Board to stand for election.
Cumulative voting is required by Kentucky law and BKFC's Amended Articles for
the election of directors. With cumulative voting, stockholders are entitled to
cast the number of votes in the aggregate equal to the number of Common Shares
held by the stockholder, multiplied by the number of directors to be elected at
such election. Each stockholder may cast the whole number of votes for one
candidate or distribute such votes among two or more candidates. The holders of
less than a majority of the Common Shares could, therefore, elect a minority of
the members of each class of directors then standing for election if they
cumulate their votes.
The Amended Articles of Incorporation of BKFC also provide that the
affirmative vote of the holders of at least 75% of the voting power of BKFC is
required to authorize any of the following transactions, unless the directors
of BKFC recommend their approval: (1) a proposed amendment to BKFC's Amended
Articles; (2) a proposed amendment to the By-Laws of BKFC; (3) a proposal to
change the number of directors by action of the stockholders; (4) an agreement
of merger or consolidation providing for the proposed merger or consolidation
of BKFC with or into one or more other corporations; (5) a proposed combination
or majority share acquisition involving the issuance of Common Shares and
requiring stockholder approval; (6) a proposal to sell, exchange, transfer or
otherwise dispose of all, or substantially all, of the assets, with or without
the goodwill, of BKFC; or (7) a proposed dissolution of BKFC. If the directors
recommend that stockholders approve any of the foregoing transactions, the
affirmative vote of only a majority of the voting power of BKFC would be
required to approve such transactions, unless expressly otherwise provided by
statute.
BKFC's By-Laws provide that stockholder nominations for the election of
directors must be made in writing and must be delivered or mailed to the
Secretary of BKFC. In the case of a nominee proposed for election as a director
at an annual meeting of stockholders, such written notice must be received by
the Secretary of BKFC on or before the later of (i) the November 30th
immediately preceding such annual meeting or (ii) the sixtieth day (60th)
before the first anniversary of the most recent annual meeting of stockholders
of BKFC held for the election of directors. If, however, the annual meeting for
the election of directors in any year is not held on or before the thirty-first
day next following such anniversary, the written notice must be received by the
Secretary no later than the close of business on the seventh day following the
day on which such notice of the annual meeting was mailed to stockholders. In
the case of a nominee proposed for election as a director at a special meeting
of stockholders, such written notice of a proposed nominee shall be received by
the Secretary of BKFC no later than the close of business on the seventh day
following the day on which notice of the special meeting was mailed to
stockholders.
The written notice of a proposed nominee must set forth: (1) the name,
age, business or residence address of each nominee proposed in such notice; (2)
the principal occupation or employment of each such nominee; and (3) the number
of Common Shares owned beneficially and/or of record by each such nominee and
the length of time any such shares have been so owned.
Kentucky Bank Regulations. BKFC's principal operating subsidiary, The
Bank of Kentucky, Inc. (the "Bank"), is a bank incorporated under the laws of
the Commonwealth of Kentucky and is, therefore, subject to regulation,
supervision and examination by the Department of Financial Institutions of the
Commonwealth of Kentucky (the "Department"). The Department has approval
authority over any (1) mergers involving or (2) acquisition of control of
Kentucky banks.
Federal Law and Regulations. The Federal Deposit Insurance Act (the
"FDIA") provides that no person, acting directly or indirectly or in concert
with one or more persons, shall acquire control of any insured savings bank or
holding company unless 60 days prior written notice has been given to the
Federal Deposit Insurance Corporation (the "FDIC"), and the FDIC has not issued
a notice disapproving the proposed acquisition. Control, for purposes of the
FDIA, means the power, directly or indirectly, to direct the management or
policies of an insured institution or to vote 25% or more of any class of
securities of such institution. There is a rebuttable presumption that the
power to vote 10% of any class of securities constitutes control if a bank's
securities are registered under the Securities Exchange Act of 1934 or the
holder is the largest shareholder of the bank.
Interest Rate Risk. The results of operations of BKFC are dependent upon the
results of operations of its principal operating subsidiary, the Bank. The
operating results of the Bank are dependent to a significant degree on net
interest income, which is the difference between interest income from loans,
investments and interest-bearing deposits, and interest expense on deposits and
borrowings. Like most financial institutions, the interest income and interest
expense of the Bank changes as the interest rates on loans, securities and
other assets and on deposits and other interest-bearing liabilities change.
Interest rates generally may change because of general economic conditions, the
policies of various regulatory authorities and other factors beyond the control
of the Bank. The interest rates on specific assets and liabilities of the Bank
will change or "reprice" in accordance with the contractual terms of the asset
or liability instrument and in accordance with customer reaction to general
economic trends. The Bank is subject to interest rate risk to the extent that
interest-earning assets reprice differently than its interest-bearing
liabilities.
In the event that interest rates rise from the historically low levels of
1997, the net interest income of the Bank could be expected to be negatively
affected. Moreover, rising interest rates could negatively affect net interest
income due to diminished loan demand. If the net interest income of the Bank is
adversely affected, the results of operations of BKFC will also be adversely
affected.
Administration, Eligibility and Amendment
The Plan is administered by a committee which currently consists of all
of the directors of BKFC (the "Stock Option Committee"). The Stock Option
Committee may grant options under the Plan at such times as it deems most
beneficial on the basis of the potential recipient's responsibility, tenure and
future potential. Eligibility to receive grants under the Plan is limited to
the directors and managerial and other key employees of BKFC and its
subsidiaries.
Without further approval of the shareholders, the Board of Directors may
at any time terminate the Plan, or may amend it from time to time in such
respects as the Board of Directors may deem advisable, except that the Board of
Directors may not, without approval of the shareholders, make any amendment
which would (a) increase the aggregate number of Common Shares that may be
issued under the Plan (except for adjustments to reflect certain changes in the
capitalization of BKFC), (b) materially modify the requirements as to
eligibility for participation in the Plan, or (c) materially increase the
benefits accruing to participants under the Plan. Notwithstanding the
foregoing, the Board of Directors may amend the Plan to take into account
changes in applicable securities, federal income tax and other applicable laws.
The Plan shall terminate on April 28, 2007, except with respect to
options then outstanding.
Option Terms
Options granted under the Plan may be "incentive stock options" ("ISOs")
within the meaning of Section 422 of the Internal Revenue Code of 1986, as
amended (the "Code"). Options granted under the Plan to directors or officers
who are not full-time employees will not qualify as ISOs under the Code
("Non-Qualified Stock Options").
The option exercise price for an option granted to a non-employee
director or an option granted to non-employee officer shall be the fair market
value of the Common Shares on the date of grant as determined in the manner set
forth in the Plan. The option exercise price for an option granted to an
employee shall be determined by the Stock Option Committee at the time of
grant, except that the exercise price for an ISO must not be less than 100% of
the fair market value of the Common Shares on the date of grant. No stock
option will be exercisable after the expiration of ten years from the date that
it is granted. In the case of an ISO granted to an employee who owns more than
10% of the outstanding Common Shares at the time an ISO is granted under the
Plan, the exercise price of such ISO may not be less than 110% of the fair
market value of the Common Shares on the date of grant, and such ISO shall not
be exercisable after the expiration of five years from the date it is granted.
An option recipient (an "Optionee") cannot transfer or assign an option
other than by will or in accordance with the laws of descent and distribution.
Except in the event of an Optionee's death or disability, any option that has
not yet become exercisable shall terminate as of the date the Optionee ceases
to hold at least one of the following positions: a director, officer or
employee of BKFC or one of BKFC's subsidiaries. If a participant is "terminated
for cause," as defined in the Plan, any option which has not been exercised
shall terminate as of the date of such termination for cause.
Options granted under the Plan are and will be exercisable at such times
and subject to such terms as the Stock Option Committee may specify in an
applicable option award agreement; provided, however, that in order to qualify
as an ISO, an option may not be exercised more than ten years after the date of
grant (five years if the Optionee, at the time of grant, owns more than ten
percent of the voting power of BKFC) or more than three months after the
Optionee ceases to be employed by the Bank or BKFC. BKFC will receive no
monetary consideration for the granting of options under the Plan. Upon the
exercise of options, BKFC will receive payment of cash, Common Shares or a
combination of cash and Common Shares from Optionees in exchange for Common
Shares issued.
Tax Treatment
ISOs. An Optionee who is granted an ISO does not recognize taxable income
either on the date of grant or on the date of exercise. However, upon the
exercise of the ISO, the difference between the fair market value of the Common
Shares received and the option price is a tax preference item potentially
subject to the alternative minimum tax. On the later sale or other disposition
of the Common Shares, generally only the difference between the fair market
value of the Common Shares on the exercise date and the amount realized on the
sale or disposition is includable in alternative minimum taxable income. The
determination of when the alternative minimum tax is potentially applicable and
the fair market value of the Common Shares for such purpose will depend in part
on whether the Common Shares are subject to a substantial risk of forfeiture or
restriction on transferability. Special treatment is also applicable for
alternative minimum tax purposes if the Common Shares are disposed of within
the same year that it is acquired. The portion of the alternative minimum tax
attributable to the difference between the option price and the fair market
value of the Common Shares received from exercise of an ISO can be credited
against the Optionee's regular tax liability in later years to the extent such
liability exceeds the alternative minimum tax.
Upon disposition of the Common Shares acquired from the exercise of an
ISO, mid-term or long-term capital gain or loss is generally recognized in an
amount equal to the difference between the amount realized on the sale or
disposition and the exercise price. However, if the Optionee disposes of the
Common Shares within two years of the date of grant or within one year from the
date of the transfer of the Common Shares to the Optionee (a "Disqualifying
Disposition"), then the Optionee will recognize ordinary income, as opposed to
capital gain, at the time of the disposition in an amount generally equal to
the lesser of (i) the amount of gain realized on the disposition, or (ii) the
difference between the fair market value of the Common Shares received on the
date of exercise and the exercise price. Any remaining gain or loss is treated
as a short-term, mid-term, or long-term capital gain or loss, depending upon
the period of time the Common Shares have been held.
BKFC is not entitled to a tax deduction upon either the exercise of an
ISO or the disposition of the Common Shares acquired pursuant to such exercise,
except to the extent that the Optionee recognizes ordinary income in a
Disqualifying Disposition. Ordinary income from a Disqualifying Disposition
will constitute compensation but will not be subject to tax withholding, nor
will it be considered wages for payroll tax purposes.
If the holder of an ISO pays the exercise price, in whole or in part,
with previously acquired Common Shares, the exchange should not affect the ISO
tax treatment of the exercise. Upon such exchange, and except as otherwise
described herein, no gain or loss is recognized by the Optionee upon delivering
previously acquired Common Shares to BKFC and Common Shares received by the
Optionee, equal in number to previously acquired Common Shares exchanged
therefor, will have the same basis and holding period for mid-term or long-term
capital gain purposes as the previously acquired Common Shares. (The Optionee,
however, will not be able to utilize the prior holding period for the purpose
of satisfying the ISO statutory holding period requirements.) Common Shares
received by the Optionee in excess of the number of Common Shares previously
acquired will have a basis of zero and a holding period that commences as of
the date the Common Shares are transferred to the Optionee upon exercise of the
ISO. If the exercise of an ISO is effected using Common Shares previously
acquired through the exercise of an ISO, the exchange of such previously
acquired Common Shares will be considered a disposition of such Common Shares
for the purpose of determining whether a Disqualifying Disposition has
occurred.
Non-Qualified Stock Options. An Optionee receiving a Non-Qualified Stock
Option does not recognize taxable income on the date of grant of the option,
provided that the option does not have a readily ascertainable fair market
value at the time it is granted. The Optionee must recognize ordinary income
generally at the time of exercise of a Non-Qualified Stock Option in the amount
of the difference between the fair market value of the Common Shares on the
date of exercise and the option price. The ordinary income received will
constitute compensation for which tax withholding generally will be required.
The amount of ordinary income recognized by an Optionee will be deductible by
BKFC in the year that the Optionee recognizes the income if BKFC complies with
the applicable withholding requirement.
If the sale of Common Shares could subject the Optionee to liability
under Section 16(b) of the Securities Exchange Act of 1934, such Optionee
generally will recognize ordinary income only on the date that such Optionee is
no longer subject to such liability in an amount equal to the fair market value
of the Common Shares on such date less the option price. Nevertheless, such
Optionee may elect under Section 83(b) of the Code within 30 days of the date
of exercise to recognize ordinary income as of the date of exercise, without
regard to the restriction of Section 16(b).
Common Shares acquired upon the exercise of a Non-Qualified Stock Option
will have a tax basis equal to their market value on the exercise date or other
relevant date on which ordinary income is recognized, and the holding period
for such Common Shares generally will begin on the date of exercise or such
other relevant date. Upon subsequent disposition of the Common Shares, the
Optionee will recognize long-term capital gain or loss if the Optionee has held
the Common Shares for more than eighteen months prior to disposition, mid-term
capital gain or loss if the Optionee has held Common Shares for more than one
year but not more than eighteen months prior to disposition, or short-term
capital gain or loss if the Optionee has held the Common Shares for one year or
less prior to disposition.
If the holder of a Non-Qualified Stock Option pays the exercise price, in
whole or in part, with previously acquired Common Shares, the Optionee will
recognize ordinary income in the amount by which the fair market value of the
Common Shares received exceeds the exercise price. The Optionee will not
recognize gain or loss with respect to the previously acquired Common Shares
upon delivering such shares to BKFC. Common Shares received by an Optionee
equal in number to the previously acquired Common Shares exchanged therefor
will have the same basis and holding period as such previously acquired Common
Shares. Common Shares received by an Optionee in excess of the number of such
previously acquired Common Shares will have a basis equal to the fair market
value of such additional Common Shares as of the date ordinary income is
recognized. The holding period for such additional Common Shares will commence
as of the date of exercise or such other relevant date.
The Plan is not qualified under Section 401(a) of the Code.
Employee Retirement Income Security Act of 1974
The Plan is not subject to the Employee Retirement Income Security Act of
1974.
Reports
No reports will be made to Optionees as to the number and status of their
options.
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 3. Incorporation of Documents by Reference.
----------------------------------------
The Registrant's Annual Report on Form 10-KSB for the fiscal year ended
December 31, 1996 (File No. 0-25960), filed with the Securities and Exchange
Commission on March 27, 1997, and all documents filed with the Commission
pursuant to the requirements of Sections 13(a) or 15(d) of the Securities
Exchange Act of 1934 ("Exchange Act") since that date are hereby incorporated
by reference.
The description of the Registrant's common stock contained in the
Registrant's Form 8-A (File No. 0-25960), filed with the Commission on April
28, 1995, is hereby incorporated by reference.
Any definitive Proxy Statement or Information Statement filed pursuant to
Section 14 of the Exchange Act and all documents which may be filed with the
Commission pursuant to Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act
subsequent to the date hereof prior to the filing of a post-effective amendment
which indicates that all securities offered have been sold or which deregisters
all securities then remaining unsold, shall also be deemed to be incorporated
herein by reference and to be made a part hereof from the date of filing such
documents.
ITEM 4. Description of Securities.
--------------------------
Not Applicable.
ITEM 5. Interests of Named Experts and Counsel.
---------------------------------------
Not Applicable.
ITEM 6. Indemnification of Directors and Officers.
------------------------------------------
A. Sections 8-500 to 8-580 of Chapter 271B of the Kentucky Revised
Statutes govern indemnification by a Kentucky corporation, including the
Registrant, and provide as follows:
271B.8-500. Definitions for KRS 271B.8-510 to 271B.8-580. - As used in
KRS 271B.8-510 to 271B.8-580:
(1) "Corporation" includes any domestic or foreign predecessor entity of
a corporation in a merger or other transaction in which the predecessor's
existence ceased upon consummation of the transaction.
(2) "Director" means an individual who is or was a director of a
corporation or an individual, while a director of a corporation, is or was
serving at the corporation's request as a director, officer, partner, trustee,
employee, or agent of another foreign or domestic corporation, partnership,
joint venture, trust, employee benefit plan, or other enterprise. A director
shall be considered to be serving an employee benefit plan at the corporation's
request if his duties to the corporation also impose duties on, or otherwise
involve services by, him to the plan or to participants in or beneficiaries of
the plan. "Director" includes, unless the context requires otherwise, the
estate or personal representative of a director.
(3) "Expenses" include counsel fees.
(4) "Liability" means the obligation to pay a judgment, settlement,
penalty, fine (including an excise tax assessed with respect to an employee
benefit plan), or reasonable expenses incurred with respect to a proceeding.
(5) "Official capacity" means:
(a) When used with respect to a director, the office of director in
a corporation; and
(b) When used with respect to an individual other than a director,
as contemplated in KRS 271B.8-560, the office in a corporation held by
the officer or the employment or agency relationship undertaken by the
employee or agent on behalf of the corporation. "Official capacity" shall
not include service for any other foreign or domestic corporation or any
partnership, joint venture, trust, employee benefit plan, or other
enterprise.
(6) "Party" includes an individual who was, is, or is threatened to be
made a named defendant or respondent in a proceeding.
(7) "Proceeding" means any threatened, pending, or completed action,
suit, or proceeding, whether civil, criminal, administrative, or investigative
and whether formal or informal.
271B.8-510. Authority to indemnify. - (1) Except as provided in
subsection (4) of this section, a corporation may indemnify an individual made
a party to a proceeding because he is or was a director against liability
incurred in the proceeding if:
(a) He conducted himself in good faith; and
(b) He reasonably believed:
1. In the case of conduct in his official capacity with
the corporation, that his conduct was in its best
interests; and
2. In all other cases, that his conduct was at least not
opposed to its best interests; and
(c) In the case of any criminal proceeding, he had no reasonable
cause to believe his conduct was unlawful.
(2) A director's conduct with respect to an employee benefit plan for a
purpose he reasonably believed to be in the interests of the participants in
and beneficiaries of the plan shall be conduct that satisfies the requirement
of subsection (1)(b)2. of this section.
(3) The termination of a proceeding by judgment, order, settlement,
conviction, or upon a plea of nolo contendere or its equivalent shall not be,
of itself, determinative that the director did not meet the standard of conduct
described in this section.
(4) A corporation may not indemnify a director under this section:
(a) In connection with a proceeding by or in the right of the
corporation in which the director was adjudged liable to the
corporation; or
(b) In connection with any other proceeding charging improper
personal benefit to him, whether or not involving action in
his official capacity, in which he was adjudged liable on the
basis that personal benefit was improperly received by him.
(5) Indemnification permitted under this section in connection with a
proceeding by or in the right of the corporation shall be limited to reasonable
expenses incurred in connection with the proceeding.
271B.8-520. Mandatory indemnification. - Unless limited by its articles
of incorporation, a corporation shall indemnify a director who was wholly
successful, on the merits or otherwise, in the defense of any proceeding to
which he was a party because he is or was a director of the corporation against
reasonable expenses incurred by him in connection with the proceeding.
271B.8-530. Advance for expenses. - (1) A corporation may pay for or
reimburse the reasonable expenses incurred by a director who is a party to a
proceeding in advance of final disposition of the proceeding if:
(a) The director furnishes the corporation a written affirmation
of his good faith belief that he has met the standard of
conduct described in KRS 271B.8-510;
(b) The director furnishes the corporation a written undertaking,
executed personally or on his behalf, to repay the advance if
it is ultimately determined that he did not meet the standard
of conduct; and
(c) A determination is made that the facts then known to those
making the determination would not preclude indemnification
under KRS 271B.8-500 to 271B.8-580.
(2) The undertaking required by subsection (1)(b) of this section shall
be an unlimited general obligation of the director but shall not be required to
be secured and may be accepted without reference to financial ability to make
repayment.
(3) Determinations and authorizations of payments under this section
shall be made in the manner specified in KRS 271B.8-550.
271B.8-540. Court-ordered indemnification. - Unless a corporation's
articles of incorporation provide otherwise, a director of the corporation who
is a party to a proceeding may apply for indemnification to the court
conducting the proceeding or to another court of competent jurisdiction. On
receipt of an application, the court after giving any notice the court
considers necessary may order indemnification if it determines:
(1) The director is entitled to mandatory indemnification under KRS
271B.8-520, in which case the court shall also order the corporation to pay the
director's reasonable expenses incurred to obtain court-ordered
indemnification; or
(2) The director is fairly and reasonably entitled to indemnification in
view of all the relevant circumstances, whether or not he met the standard of
conduct set forth in KRS 271B.8-510 or was adjudged liable as described in
subsection (4) of KRS 271B.8-510, but if he was adjudged so liable his
indemnification shall be limited to reasonable expenses incurred.
271B.8-550. Determination and authorization of indemnification. - (1) A
corporation shall not indemnify a director under KRS 271B.8-510 unless
authorized in the specific case after a determination has been made that
indemnification of the director is permissible in the circumstances because he
has met the standard of conduct set forth in KRS 271B.8-510.
(2) The determination shall be made:
(a) By the board of directors by majority vote of a quorum
consisting of directors not at the time parties to the
proceeding;
(b) If a quorum cannot be obtained under subsection (2)(a) of
this section, by majority vote of a committee duly designated
by the board of directors (in which designation directors who
are parties may participate), consisting solely of two (2) or
more directors not at the time parties to the proceeding;
(c) By special legal counsel:
1. Selected by the board of directors or its committee in
the manner prescribed in subsection (2)(a) and (b) of
this section; or
2. If a quorum of the board of directors cannot be
obtained under subsection (2)(a) of this section and a
committee cannot be designated under subsection (2)(b)
of this section, selected by majority vote of the full
board of directors (in which selection directors who
are parties may participate); or
(d) By the shareholders, but shares owned by or voted under the
control of directors who are at the time parties to the
proceeding shall not be voted on the determination.
(3) Authorization of indemnification and evaluation as to reasonableness
of expenses shall be made in the same manner as the determination that
indemnification is permissible, except that if the determination is made by
special legal counsel, authorization of indemnification and evaluation as to
reasonableness of expenses shall be made by those entitled under subsection
(2)(c) of this section to select counsel.
271B.8-560. Indemnification of officers, employees, and agents. - Unless
a corporation's articles of incorporation provide otherwise:
(1) An officer of the corporation who is not a director shall be entitled
to mandatory indemnification under KRS 271B.8-520, and is entitled to apply for
court-ordered indemnification under KRS 271B.8-540, in each case to the same
extent as a director;
(2) The corporation may indemnify and advance expenses under KRS
271B.8-500 to 271B.8-580 to an officer, employee, or agent of the corporation
who is not a director to the same extent as to a director; and
(3) A corporation may also indemnify and advance expenses to an officer,
employee, or agent who is not a director to the extent, consistent with public
policy, that may be provided by its articles of incorporation, bylaws, general
or specific action of its board of directors, or contract.
271B.8-570. Insurance. - A corporation may purchase and maintain
insurance on behalf of an individual who is or was a director, officer,
employee, or agent of the corporation, or who, while a director, officer,
employee or agent of the corporation, is or was serving at the request of the
corporation as a director, officer, partner, trustee, employee, or agent of
another foreign or domestic corporation, partnership, joint venture, trust,
employee benefit plan, or other enterprise, against liability asserted against
or incurred by him in that capacity or arising from his status as a director,
officer, employee, or agent, whether or not the corporation would have power to
indemnify him against the same liability under KRS 271B.8-510 or 271B.8-520.
271B.8-580. Application of KRS 271B.8-500 to 271B.8-580. - (1) The
indemnification and advancement of expenses provided by, or granted pursuant
to, KRS 271B.8-500 to 271B.8-580 shall not be deemed exclusive of any other
rights to which those seeking indemnification or advancement of expenses may be
entitled under any bylaw, agreement, vote of shareholders or disinterested
directors, or otherwise, both as to action in his official capacity and as to
action in another capacity while holding such office.
(2) KRS 271B.8-500 to 271B.8-580 shall not limit a corporation's power to
pay or reimburse expenses incurred by a director in connection with his
appearance as a witness at a proceeding at a time when he has not been made a
named defendant or responded to the proceeding.
B. Article X of the Registrant's By-Laws governs indemnification by
Registrant and provides as follows:
To the extent permitted by the laws of the Commonwealth of Kentucky:
A. The corporation shall indemnify each of its directors and officers who
was or is a party or is threatened to be made a party to any threatened,
pending or completed action, suit, or proceeding, whether civil, criminal,
administrative or investigative (other than an action by or in the right to the
corporation) by reason of the fact that he is or was a director or officer of
the corporation, or is or was serving at the request of the corporation, as a
director, officer, employee or agent of another corporation, partnership, joint
venture, trust or other enterprise, against expenses (including attorneys'
fees), judgments, fines and amounts paid in settlement actually and reasonably
incurred by him in connection with such action, suit or proceeding if he acted
in good faith and in a manner he reasonably believed to be in the best
interests of the corporation, and with respect to any criminal action or
proceeding, had no reasonable cause to believe his conduct was unlawful.
Except as provided herein below, any such indemnification shall be made
by the corporation only as authorized in the specific case upon a determination
that indemnification of the director or officer is proper in the circumstances
because he has met the applicable standard of conduct set forth above. Such
determination shall be made: (a) by the Board of Directors by a majority vote
of a quorum of directors who were or are not parties to such action, suit, or
proceeding, or (b) by the shareholders.
B. Expenses (including attorneys' fees) incurred in defending a civil or
criminal action, suit, or proceeding may be paid by the corporation in advance
of the final disposition of such action, or proceeding if authorized by the
Board of Directors and upon receipt of an undertaking by or on behalf of the
director or officer to repay such amount, unless it shall ultimately be
determined that he is entitled to be indemnified by the corporation.
C. To the extent that a director or officer has been successful on the
merits or otherwise in defense of any action, suit or proceeding referred to
above, or in defense of any claim issue or matter therein, he shall be
indemnified against expenses (including attorneys' fees) actually and
reasonably incurred by him in connection therewith, without any further
determination that he has met the applicable standard of conduct set forth
above.
ITEM 7. Exemption from Registration Claimed.
------------------------------------
Not Applicable.
ITEM 8. Exhibits.
---------
See the Exhibit Index attached hereto.
ITEM 9. Undertakings.
-------------
A. Registrant hereby undertakes:
(1) To file, during any period in which it offers or sells
securities, a post-effective amendment to this registration
statement:
(i) To include any prospectus required by section 10(a)(3)
of the Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events
arising after the effective date of the registration
statement (or the most recent post-effective amendment
thereof) which, individually or in the aggregate,
represent a fundamental change in the information set
forth in the registration statement. Notwithstanding
the foregoing, any increase or decrease in volume of
securities offered (if the total dollar value of
securities offered would not exceed that which was
registered) and any deviation from the low or high end
of the estimated maximum offering range may be
reflected in the form of prospectus filed with the
Commission pursuant to Rule 424(b) if, in the
aggregate, the changes in volume and price represent no
more than a 20% change in the maximum aggregate
offering price set forth in the "Calculation of
Registration Fee" table in the effective registration
statement.
(iii) To include any material information with respect to the
plan of distribution not previously disclosed in the
registration statement or any material change to such
information in the registration statement;
Provided, however, That paragraphs (a)(1)(i) and
(a)(1)(ii) of this section do not apply if the
registration statement is on Form S-3, Form S-8 or Form
F-3, and the information required to be included in a
post-effective amendment by those paragraphs is
contained in periodic reports filed with or furnished
to the Commission by the Registrant pursuant to section
13 or section 15(d) of the Securities Exchange Act of
1934, that are incorporated by reference in the
registration statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment
shall be deemed to be a new registration statement relating
to the securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial
bona fide offering thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain
unsold at the termination of the offering.
B. Registrant hereby undertakes that, for purposes of determining any
liability under the Securities Act of 1933, each filing of the
Registrant's annual report pursuant to section 13(a) or section
15(d) of the Securities Exchange Act of 1934 (and, where
applicable, each filing of an employee benefit plan's annual report
pursuant to section 15(d) of the Securities Exchange Act of 1934)
that is incorporated by reference in the registration statement
shall be deemed to be a new registration statement relating to the
securities offered therein, and the offering of such securities at
that time shall be deemed to be the initial bona fide offering
thereof.
SIGNATURES
The Registrant. Pursuant to the requirements of the Securities Act of
1933, the registrant certifies that it has reasonable grounds to believe that
it meets all of the requirements for filing on Form S-8 and has duly caused
this registration statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of Florence, State of Kentucky, on
September 29, 1997.
THE BANK OF KENTUCKY FINANCIAL CORPORATION
By: /s/ Robert W. Zapp
--------------------------------------
Robert W. Zapp, President
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in the
capacities and as of the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
- ------------------------------- ------------------------------- ------------------
<S> <C> <C>
/s/ Rodney S. Cain Director and Secretary September 29, 1997
- -------------------------------
Rodney S. Cain
/s/ Ruth Seligman Doering Director September 29, 1997
- -------------------------------
Ruth Seligman-Doering
/s/ R.C. Durr Director, Chairman of the Board September 29, 1997
- ------------------------------- of Directors
R.C. Durr
/s/ John J. Flesch Director and Treasurer September 29, 1997
- -------------------------------
John J. Flesch
/s/ Thomas L. Franxman Director September 29, 1997
- -------------------------------
Thomas L. Franxman
/s/ Harry J. Humpert Director September 29, 1997
- -------------------------------
Harry J. Humpert
/s/ David E. Meyer Director September 29, 1997
- -------------------------------
David E. Meyer
Director ____________, 1997
- -------------------------------
John E. Miracle
/s/ Mary Sue Rudicill Director September 29, 1997
- -------------------------------
Mary Sue Rudicill
/s/ Robert B. Sathe Director August 22, 1997
- -------------------------------
Robert B. Sathe
/s/ William E. Snyder Director September 29, 1997
- -------------------------------
William E. Snyder
/s/ Herbert H. Works Director September 29, 1997
- -------------------------------
Herbert H. Works
/s/ Robert W. Zapp Director and President September 29, 1997
- -------------------------------
Robert W. Zapp
</TABLE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit
No. Description Location
- ------- ------------------------------------------- ---------------------------------------------------
<S> <C> <C>
4(a) The Bank of Kentucky Financial Corporation Incorporated by reference to the Proxy Statement
1997 Stock Option and Incentive Plan filed by Registrant on March 27, 1997, Exhibit A.
4(b) Articles of Incorporation of Registrant, as Incorporated by reference to Form 8-A filed by
amended. Registrant on April 28, 1995 (the "8-A"), Exhibits
2(a), 2(b) & 2(c).
4(c) By-Laws of Registrant. Incorporated by reference to the 8-A, Exhibit 2(d).
5 Opinion of Ziegler & Schneider, P.S.C., as
to legality.
23(a) Consent of Crowe, Chizek and Company.
23(b) Consent of Ziegler & Schneider, P.S.C. Included in Exhibit 5.
</TABLE>
EXHIBIT 5
September 29, 1997
Board of Directors
The Bank of Kentucky Financial Corporation
1065 Burlington Pike
Florence, KY 41042
Ladies and Gentlemen:
We have acted as counsel for The Bank of Kentucky Financial Corporation,
a Kentucky corporation (the "Company"), in connection with the proposed
issuance and sale of the common shares of the Company, $5.00 par value per
share (the "Common Shares"), upon the exercise of options granted to purchase
such Common Shares pursuant to The Bank of Kentucky Financial Corporation 1997
Stock Option and Incentive Plan as described in the Registration Statement on
Form S-8 to be filed with the Securities and Exchange Commission on or about
October 2, 1997 (the "Registration Statement"), for the purpose of registering
360,000 Common Shares reserved for issuance under the Plan pursuant to the
provisions of the Securities Act of 1933, as amended, and the rules and
regulations promulgated thereunder.
In connection with this opinion, we have examined an original or copy of,
and have relied upon the accuracy of, without independent verification or
investigation, (a) the Registration Statement; (b) the Company's Articles of
Incorporation, as amended through the date hereof as certified by the President
of the Company; (c) the By-Laws of the Company amended through the date hereof
as certified by the President of the Company; (d) the Report of the Tellers'
Committee for the meeting of the shareholders of The Bank of Kentucky Financial
Corporation held on April 18, 1997; (e) the minutes of the meeting of the Board
of Directors of the Company dated August 22, 1997 and (f) such other
representations of the Company and its officers as we have deemed relevant.
In our examinations, we have assumed the genuineness of all signatures,
the conformity to original documents of all documents submitted to us as copies
and the authenticity of such originals of such latter documents. We have also
assumed the due preparation of share certificates and compliance with
applicable federal and state securities laws.
Based solely upon and subject to the foregoing and the further
qualifications and limitations set forth below, as of the date hereof, we are
of the opinion that after the Common Shares shall have been issued by the
Company upon the exercise of the options and payment therefor in full in the
manner provided in the Plans and in the Registration Statements (when they
become effective), such Common Shares issued upon the exercise of such options
will be validly issued, fully paid and non-assessable.
This opinion is limited to the federal laws of the United States and to
the laws of the Commonwealth of Kentucky having effect as of the date hereof.
This opinion is furnished by us solely for the benefit of the Company in
connection with the offering of the Common Shares and the filing of the
Registration Statements and any amendments thereto. This opinion may not be
relied upon by any other person or assigned, quoted or otherwise used without
our specific written consent.
We consent to the filing of this opinion as an exhibit to the
aforementioned Registration Statements and to the reference to us in the
Registration Statements.
Very truly yours,
ZIEGLER & SCHNEIDER, P.S.C.
EXHIBIT 23(a)
Consent Of Independent Auditors
Board of Directors
The Bank of Kentucky Financial Corporation
Florence, Kentucky
We consent to the incorporation by reference in the Registration Statement of
The Bank of Kentucky Financial Corporation on Form S-8 of our Independent
Auditor's Report, dated January 23, 1997, on the consolidated balance sheets of
The Bank of Kentucky Financial Corporation as of December 31, 1996 and 1995 and
the related consolidated statements of income, changes in shareholders' equity
and cash flows for the two years in the period ended December 31, 1996.
Crowe, Chizek and Company LLP
September 30, 1997
