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SCHEDULE 14A
(RULE 14A-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the registrant [X]
Filed by a party other than the registrant [ ]
Check the appropriate box:
[ ] Preliminary proxy statement [ ] Confidential, for Use of the
Commission Only (as permitted by
Rule 14a-6(e)(2))
[X] Definitive proxy statement
[ ] Definitive additional materials
[ ] Soliciting material pursuant to Rule 14a-12
EXCHANGE NATIONAL BANCSHARES, INC.
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(Name of Registrant as Specified in Its Charter)
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(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of filing fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and
0-11.
(1) Title of each class of securities to which transaction applies:
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(2) Aggregate number of securities to which transaction applies:
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(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the filing fee
is calculated and state how it was determined):
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(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid:
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[ ] Fee paid previously with preliminary materials.
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[ ] 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:
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(2) Form, schedule or registration statement no.:
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(3) Filing party:
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(4) Date filed:
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EXCHANGE NATIONAL BANCSHARES, INC.
132 EAST HIGH STREET,
JEFFERSON CITY, MISSOURI 65101
May 4, 2001
Dear Shareholder:
You are cordially invited to attend the annual meeting of shareholders
of Exchange National Bancshares, Inc., to be held at The Exchange National Bank
of Jefferson City's facility, located at 3701 West Truman Boulevard, Jefferson
City, Missouri, on Wednesday, June 13, 2001, commencing at 9:00 a.m., local
time. The business to be conducted at this meeting is described in the
accompanying notice of annual meeting and proxy statement. In addition, there
will be an opportunity to meet with members of senior management and review the
business and operations of our Company.
Your board of directors joins with me in urging you to attend the
meeting. Whether or not you plan to attend the meeting, however, please sign,
date and return the enclosed proxy card promptly. A prepaid return envelope is
provided for this purpose. You may revoke your proxy at any time before it is
exercised and it will not be used if you attend the meeting and prefer to vote
in person.
Sincerely yours,
Donald L. Campbell
Chairman of the Board
and President
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EXCHANGE NATIONAL BANCSHARES, INC.
132 EAST HIGH STREET
JEFFERSON CITY, MISSOURI 65101
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON JUNE 13, 2001
NOTICE IS HEREBY GIVEN that the annual meeting of the shareholders of
Exchange National Bancshares, Inc., a Missouri corporation, will be held at The
Exchange National Bank of Jefferson City's facility, located at 3701 West Truman
Boulevard, Jefferson City, Missouri, on Wednesday, June 13, 2001, commencing at
9:00 a.m., local time, and thereafter as it may from time to time be adjourned,
for the following purposes:
1. To elect three Class III directors to hold office for a term
expiring at the 2004 annual meeting of the shareholders of our
Company and until their respective successors are duly elected
and qualified or until their respective earlier resignation or
removal;
2. To consider and act upon ratification and approval of the
selection of the accounting firm of KPMG LLP as the
independent auditors of our Company for the year ending
December 31, 2001; and
3. To transact such other business as properly may come before
the meeting.
Our board of directors has fixed the close of business on April 18,
2001 as the record date for determination of the shareholders entitled to notice
of, and to vote at, the annual meeting.
All shareholders are cordially invited to attend the meeting. Whether
or not you intend to be present at the meeting, our board of directors solicits
you to sign, date and return the enclosed proxy card promptly. A prepaid return
envelope is provided for this purpose. You may revoke your proxy at any time
before it is exercised and it will not be used if you attend the meeting and
prefer to vote in person. Your vote is important and all shareholders are urged
to be present in person or by proxy.
By Order of the Board of Directors
Donald L. Campbell
Chairman of the Board
and President
May 4, 2001
Jefferson City, Missouri
PLEASE SIGN AND DATE THE ENCLOSED PROXY CARD AND RETURN IT PROMPTLY IN
THE ENVELOPE PROVIDED, WHETHER OR NOT YOU EXPECT TO ATTEND THE ANNUAL
MEETING IN PERSON.
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EXCHANGE NATIONAL BANCSHARES, INC.
132 EAST HIGH STREET
JEFFERSON CITY, MISSOURI 65101
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PROXY STATEMENT
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ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD JUNE 13, 2001
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INTRODUCTION
The board of directors of Exchange National Bancshares, Inc. solicits
your proxy for use at the annual meeting of shareholders to be held on
Wednesday, June 13, 2001, and at any adjournment or adjournments thereof. The
annual meeting will commence at 9:00 a.m., local time, and will be held at The
Exchange National Bank of Jefferson City's facility located at 3701 West Truman
Boulevard, Jefferson City, Missouri. Our Company's principal business activity
is the ownership, directly or indirectly, of all the issued and outstanding
stock of The Exchange National Bank of Jefferson City, Citizens Union State Bank
& Trust of Clinton, and Osage Valley Bank of Warsaw.
Our principal executive offices are located at 132 East High Street,
Jefferson City, Missouri, 65101. This proxy statement and the enclosed form of
proxy were first mailed to shareholders on or about May 4, 2001.
INFORMATION ABOUT THE MEETING AND VOTING
PURPOSE OF THE MEETING
The purposes of the annual meeting are:
- to elect three Class III directors to hold office for a term
expiring at the 2004 annual meeting of the shareholders of our
Company;
- to consider and vote upon ratification and approval of the
selection of the accounting firm of KPMG LLP as the
independent auditors of our Company for the current year; and
- to transaction such other business as may properly come before
the annual meeting, including a proposal to adjourn or
postpone the meeting.
SHAREHOLDERS ENTITLED TO VOTE AT THE MEETING
Shareholders of record as of the close of business on the April 18,
2001 record date are entitled to notice of, and to vote at, the annual meeting
or any adjournment or adjournments thereof. As of the record date, 2,863,493
shares of our Company's common stock were issued and outstanding. Each such
share of common stock is entitled to one vote on each matter properly to come
before the annual meeting.
ATTENDING THE MEETING AND VOTING IN PERSON
If you plan to attend the annual meeting and vote in person, we will
give you a ballot when you arrive. However, if your shares are held in the name
of your broker, bank or other nominee (commonly referred to as being held in
"street" name), proof of ownership may be required for you to be admitted to the
meeting. A recent brokerage statement or letter from a bank or broker are
examples of proof of ownership. If you want to vote your shares of common stock
held in street name in person at the meeting, you will have to get a written
proxy in your name from the broker, bank or other nominee who holds your shares.
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VOTING BY PROXY
This proxy statement is being sent to you by our board of directors for
the purpose of requesting that you allow your shares of common stock to be
represented at the annual meeting by the persons named in the enclosed proxy
card. We urge you to complete, date and sign the enclosed form of proxy and
return it promptly in the enclosed postage prepaid envelope. If you properly
complete and sign your proxy card and send it to us in time to vote, the shares
represented by your proxy will be voted as you have directed. If you sign the
proxy card but do not make specific voting instructions, your shares will be
voted as follows:
- "FOR" the election of the nominees for director named in this
proxy statement, and
- "FOR" ratification of the selection of the accounting firm of
KPMG LLP as our Company's independent auditors for the current
year.
If any other matter is properly brought before the annual meeting, your
shares will be voted in accordance with the discretion and judgment of the
appointed proxies. A shareholder who has given a proxy may revoke it at any time
before it is exercised at the annual meeting by filing written notice of
revocation with the Secretary of our Company, by executing and delivering to the
Secretary of our Company a proxy bearing a later date, or by appearing at the
annual meeting and voting in person.
If your shares of common stock are held in street name, you will
receive instructions from your broker, bank or other nominee that you must
follow in order to have your shares voted. Your broker or bank may allow you to
deliver your voting instructions via the telephone or the Internet.
If you participate in The Exchange National Bank of Jefferson City
Profit Sharing Trust, a form of proxy/direction to trustee will be furnished to
you which represents a voting instruction to the trustee of the plan as to the
number of shares in your plan account. Each participant in the plan may direct
the trustee as to the manner in which shares of common stock allocated to the
participant's plan account are to be voted.
QUORUM REQUIREMENT
A quorum of shareholders is necessary to hold a valid meeting. The
presence in person or by proxy of shareholders holding a majority of the total
outstanding shares of our Company's common stock will constitute a quorum at the
annual meeting. Shares of common stock represented by a proxy which directs that
the shares be voted to abstain or to withhold a vote on any matter will be
counted in determining whether a quorum is present. Shares of common stock as to
which there is a broker non-vote (i.e., when a broker holding shares for clients
in street name is not permitted to vote on certain matters without instruction)
also will be counted for quorum purposes. If a quorum should not be present, the
annual meeting may be adjourned from time to time until a quorum is obtained.
REQUIRED VOTE TO APPROVE EACH PROPOSAL
Election of Directors. Directors are elected by a majority of the votes
cast, in person or by proxy, of shareholders entitled to vote at the annual
meeting for that purpose. Shareholders can withhold authority to vote for one or
more nominees for director. Votes withheld from a particular nominee will have
the same effect as a vote against the nominee. Shareholders do not have
cumulative voting rights in the election of directors.
Selection of Auditors and Other Matters. The affirmative vote of a
majority of the shares of our Company's common stock, represented in person or
by proxy and entitled to vote at the annual meeting, is required for (i) the
ratification of the selection of KPMG LLP as our Company's independent auditors,
and (ii) the approval of such other matters as properly may come before the
annual meeting or any adjournment thereof. Shareholders can abstain from voting
on these proposals. If you abstain from voting on any of these proposals, it has
the same effect as a vote against the proposal.
Effect of Broker Non-Votes. If your broker does not vote your shares on
any proposal, such "broker non-votes" do not count as shares present for
purposes of such proposal. This means that a broker non-vote would reduce the
number of affirmative votes that are necessary to approve the proposal.
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SOLICITATION OF PROXIES
This solicitation of proxies for the annual meeting is being made by
our Company's board of directors. Our Company will bear all costs of such
solicitation, including the cost of preparing and mailing this proxy statement
and the enclosed form of proxy. After the initial mailing of this proxy
statement, proxies may be solicited by mail, telephone, facsimile transmission
or personally by directors, officers, employees or agents of our Company,
Exchange National Bank, Citizens Union State Bank or Osage Valley Bank.
Brokerage houses and other custodians, nominees and fiduciaries will be
requested to forward soliciting materials to beneficial owners of shares held of
record by them, and their reasonable out-of-pocket expenses, together with those
of our Company's transfer agent, will be paid by our Company.
A list of shareholders entitled to vote at the annual meeting will be
available for examination at least ten days prior to the date of the annual
meeting during normal business hours at the registered office of our Company
located at 132 East High Street, Jefferson City, Missouri. The list also will be
available at the annual meeting.
ITEM 1: ELECTION OF DIRECTORS
THE BOARD OF DIRECTORS
Our Company's board of directors consists of nine directors. The
articles of incorporation of our Company divide the board of directors into
three classes of directors, with the directors serving staggered terms of three
years and until their respective successors are duly elected and qualified or
until their respective earlier resignation or removal. The present terms of
Donald L. Campbell, Kevin L. Riley and David T. Turner, the three directors in
Class III, expire at this annual meeting. Directors in Class I (Charles G.
Dudenhoeffer, Jr., Philip D. Freeman and James E. Smith) and Class II (David R.
Goller, James R. Loyd and Gus S. Wetzel, II) have been elected to terms expiring
at the time of the annual meeting of shareholders in 2002 and 2003,
respectively.
One of the purposes of this annual meeting is to elect three directors
in Class III to serve for a three-year term expiring at the annual meeting of
shareholders in 2004 and until their respective successors are duly elected and
qualified or until their respective earlier resignation or removal. The board of
directors has designated Donald L. Campbell, Kevin L. Riley and David T. Turner
as the three nominees proposed for election at the annual meeting. Unless
authority to vote for the nominees or a particular nominee is withheld, it is
intended that the shares represented by properly executed proxies in the form
enclosed will be voted for the election as directors of these three nominees. In
the event that one or more of the nominees should become unavailable for
election, it is intended that the shares represented by the proxies will be
voted for the election of such substitute nominee or nominees as may be
designated by the board of directors, unless the authority to vote for all
nominees or for the particular nominee who has ceased to be a candidate has been
withheld. Each of the nominees has indicated his willingness to serve as a
director if elected, and the board of directors has no reason to believe that
any nominee will be unavailable for election.
THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE FOR THE ELECTION OF
DONALD L. CAMPBELL, KEVIN L. RILEY AND DAVID T. TURNER AS CLASS III DIRECTORS.
NOMINEES AND DIRECTORS CONTINUING IN OFFICE
The following table sets forth certain information with respect to each
person nominated by the board of directors for election as a Class III director
at the annual meeting and each director whose term of office will continue after
the annual meeting.
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POSITION COMPANY
NAME AGE WITH OUR COMPANY DIRECTOR SINCE
---- --- ---------------- --------------
NOMINEES
CLASS III: TERM TO EXPIRE IN 2004
Donald L. Campbell 74 President, 1993
Chairman of
the Board
and Director
Kevin L. Riley 45 Director 1995
David T. Turner 44 Vice Chairman 1997
and Director
DIRECTORS CONTINUING IN OFFICE
CLASS I: TERM TO EXPIRE IN 2002
Charles G. Dudenhoeffer, Jr. 61 Director 1993
Philip D. Freeman 47 Director 1993
James E. Smith 56 Vice Chairman 1997
and Director
CLASS II: TERM TO EXPIRE IN 2003
David R. Goller 69 Director 1993
James R. Loyd 69 Director 1993
Gus S. Wetzel, II 60 Director 1999
The business experience during the last five years of each person
nominated by the board of directors for election as a Class III director at the
annual meeting and each director whose term of office will continue after the
annual meeting is as follows:
Donald L. Campbell has served as a Director of Exchange National Bank
since 1967, of Citizens Union State Bank since 1997, and of our Company since
1993. He has served as Chairman of Exchange National Bank since 1990, and of our
Company since 1993. Mr. Campbell has served as President of Exchange National
Bank from 1971 until December 1996 and of our Company since 1993.
Kevin L. Riley has served as a Director of Exchange National Bank since
1995 and of our Company since 1995. He has been co-owner of Riley Chevrolet,
Inc. and Riley Oldsmobile, Cadillac, Inc., each a Jefferson City, Missouri
automobile dealership, since 1986 and 1992, respectively. Mr. Riley also serves
on our Company's Audit, Compensation and Incentive Stock Option Committees.
David T. Turner has served as a Director of Exchange National Bank and
of our Company since January 1997. Mr. Turner has served as President of
Exchange National Bank since January 1997 and as Vice Chairman of our Company
since June 1998. From 1993 until June 1998, he served as Senior Vice President
of our Company. He served as Senior Vice President of Exchange National Bank
from June 1992 through December 1996 and as Vice President from 1985 until June
1992.
Charles G. Dudenhoeffer, Jr. has served as a Director of Exchange
National Bank since 1978 and of our Company since 1993. Mr. Dudenhoeffer served
as Vice President and Trust Officer of Exchange National Bank from 1974 until
June 1992. He served as Senior Vice President and Trust Officer of Exchange
National Bank from June 1992 until June 2000. He served as Senior Vice President
of our Company from 1993 through June 2000.
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Philip D. Freeman has served as a Director of Exchange National Bank
since 1990 and of our Company since 1993. He has been the Owner/Manager of
Freeman Mortuary, Jefferson City, Missouri since 1974. Mr. Freeman also serves
on our Company's Audit, Compensation and Incentive Stock Option Committees.
James E. Smith has served as a Director of Citizens Union State Bank
since 1975, of our Company since 1997, and of Osage Valley Bank since January
2000. He has served as Vice Chairman of our Company since 1998, as President and
Secretary of Citizens Union State Bank from 1975 through May 2000 when he was
promoted to Chairman and Chief Executive Officer, and as President of Osage
Valley Bank since January 2000.
David R. Goller has served as a Director of Exchange National Bank
since 1975 and of our Company since 1993. He has been an attorney with the law
firm of Goller, Gardner & Feather, P.C. (formerly Goller & Associates, P.C.),
Jefferson City, Missouri, counsel for Exchange National Bank, since 1975. Mr.
Goller also serves on our Company's Audit, Compensation and Incentive Stock
Option Committees.
James R. Loyd has served as a Director of Exchange National Bank since
1974 and of our Company since 1993. He served as Executive Vice President of
Exchange National Bank from 1974 until October 1996 and as Executive Vice
President of our Company from 1993 until October 1996. Mr. Loyd also serves on
our Company's Compensation and Incentive Stock Option Committees.
Gus S. Wetzel, II has served as a Director of Citizens Union State Bank
since 1974, and of our Company since 1999. He served as Chairman of Citizens
Union State Bank from 1974 until May 2000. Dr. Wetzel has served as a
physician/surgeon with the Wetzel Clinic, Clinton, Missouri since 1972. He also
serves on our Company's Audit and Incentive Stock Option Committees.
There is no arrangement or understanding between any director and any
other person pursuant to which such director was selected as a director.
COMPENSATION OF DIRECTORS
Only outside (non-employee) members of our Company's board of directors
receive compensation for their service to our Company as a director. Each of
these outside (non-employee) directors is paid $300 for each meeting of the
Board attended in person. Each member of our Company's Audit Committee receives
$700 for each committee meeting attended. Each member of our Company's
Compensation and Incentive Stock Option Committee receives $300 for each meeting
attended.
All directors of our Company (other than Mr. Smith and Mr. Wetzel) are
also directors of Exchange National Bank, and in that capacity may receive
compensation from Exchange National Bank. Each of Exchange National Bank's
outside (non-employee) directors is paid a monthly $500 retainer and $300 for
each meeting of the Board attended in person. In addition, these directors are
eligible for a $2,400 bonus if Exchange National Bank meets certain financial
goals and the director attends at least 80% of the Board meetings held (which
could include one telephone conference meeting). All of Exchange National Bank's
non-employee directors received this bonus for 2000.
Three of our Company's directors -- Mr. Campbell, Mr. Smith and Mr.
Wetzel -- also are directors of Citizens Union State Bank. Mr. Campbell and Mr.
Smith are not eligible to receive compensation for their service to Citizens
Union State Bank as a director. For his service to Citizens Union State Bank as
a director, Mr. Wetzel is paid a quarterly $300 retainer plus $300 for each
meeting of the Board that he attends in person. Mr. Wetzel also receives $100
for each meeting of Citizens Union State Bank's Trust Committee held, and $50
for each meeting of Citizens Union State Bank's Loan (Discount) Committee that
he attends. One of our Company's directors -- Mr. Smith -- also is a director of
Osage Valley Bank, but is not eligible to receive compensation for his service
in that capacity.
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MEETINGS OF THE BOARD AND COMMITTEES
During 2000 the board of directors of our Company held five meetings.
All directors attended at least 75% of the meetings of the board of directors
which were held during 2000. It should be noted that our Company's directors
discharge their responsibilities throughout the year, not only at such board of
directors and committee meetings, but through personal meetings and other
communications with members of management and others regarding matters of
interest and concern to our Company.
Our Company's board of directors has established an Audit Committee.
The Audit Committee assists the Board in fulfilling its responsibilities with
respect to accounting and financial reporting practices and the scope and
expense of audit and related services provided by external auditors, among
others. The Audit Committee is responsible for apprising the Board of
management's compliance with Board mandated policies, internal procedures and
applicable laws and regulations. The committee works with the internal audit
department and external auditors and supervises the internal audit function
directly, reviews and approves the hiring of audit personnel and evaluates the
performance of the internal audit function and the external auditors. The
committee also has the duty to make, or cause to be made, a suitable examination
and audit of the financial affairs of our Company and its subsidiaries at least
annually, and to report thereon to the board of directors. Members of the Audit
Committee currently are Messrs. Freeman, Goller, Riley and Wetzel. Each
committee member attended at least 75% of the committee meetings held during
2000. The Audit Committee met nine times during 2000. The Audit Committee has
adopted a written charter, which is attached to this proxy statement as appendix
A.
In January 2000, our Company established a Compensation Committee which
assumed the responsibility to make recommendations to the board of directors
regarding the compensation and benefits of our executive officers and directors
and the establishment and administration of our Company's executive compensation
program. The members of the Compensation Committee currently are Messrs.
Freeman, Goller, Riley and Loyd. Each committee member attended at least 75% of
the committee meetings held during 2000. The Compensation Committee held one
meeting during 2000.
In February 2000, our board of directors approved an Incentive Stock
Option Plan under which an Incentive Stock Option Committee was established. The
committee is authorized to construe, interpret and administer the Plan, and to
exercise exclusive authority over the grant of options under the Plan. Members
of the committee are Messrs. Freeman, Goller, Riley, Loyd and Wetzel. The
Incentive Stock Option Committee met four times during 2000. Each committee
member attended at least 75% of the committee meetings held during 2000.
With the exception of the Audit, Compensation and Incentive Stock
Option Committees, there currently are no other standing compensation,
executive, nominating or other committees of our Company's board of directors,
or committees performing similar functions of the Board.
EXECUTIVE COMPENSATION AND OTHER INFORMATION
REPORT ON EXECUTIVE COMPENSATION
This report has been prepared by the Compensation Committee of our
Company's board of directors (the "Committee") which has general responsibility
for the establishment, direction and administration of all aspects of the
compensation policies and programs for the executive officers of our Company and
its affiliate banks. Under an agreement between our Company and Exchange
National Bank, employees of our Company and Exchange National Bank, including
persons who are employees of both our Company and Exchange National Bank, are
compensated as such by Exchange National Bank. Our Company's executive
compensation program, insofar as it pertains to the Chairman of the Board and
Chief Executive Officer (the "Chief Executive Officer") and the Vice Chairmen of
our Company (the "Vice Chairmen"), is administered by the Committee. The
Committee is composed of four independent outside directors, none of whom is an
officer or employee of our Company or any affiliate bank. Our Company's
executive compensation program, insofar as it pertains to executive officers
other than the Chief Executive Officer and the Vice Chairmen, is administered by
the Chief Executive Officer and the Vice Chairmen. Mr. Donald Campbell, the
Chief Executive Officer, and certain other executive officers of our Company and
affiliate banks, may attend meetings of the Committee, but are not present
during discussions or deliberations regarding their own compensation.
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COMPENSATION POLICY. Our Company's executive compensation policy is
premised upon three basic goals: (1) to attract and retain qualified individuals
who provide the skills and leadership necessary to enable our Company and its
affiliate banks to achieve earnings growth, capital compliance and return on
investment objectives, while maintaining a commitment to equal employment
opportunity and affirmative action guidelines and practices; (2) to create
incentives to achieve company and individual performance objectives through the
use of performance-based compensation programs; and (3) to create a mutuality of
interest between executive officers and shareholders through compensation
structures that create a direct link between executive compensation and
shareholder return.
In determining the structure and levels of each of the components of
executive compensation needed to achieve these goals, all elements of the
compensation package are considered in total, rather than any one component in
isolation. As more fully described below, the determination of such levels of
executive compensation is a subjective process in which many factors are
considered, including our Company's and/or affiliate banks' performance and the
individual executive's specific responsibilities, historical and anticipated
personal contribution to our business, and length of service with our Company or
affiliate banks.
COMPENSATION COMPONENTS. The Committee, as well as the Chief Executive
Officer and the Vice Chairmen, reviews our Company's compensation program
annually to ensure that compensation levels and incentive opportunities are
competitive and reflect the performance of our Company and its affiliate banks
as well as performance of the individual executive officer. The particular
elements of the compensation program for executive officers are base salary,
incentive compensation and periodic stock option grants. The Committee believes
that these compensation components together advance both the short- and
long-term interests of our shareholders. In this regard, the Committee believes
that the long-term interests of our shareholders are advanced by designating a
portion of executive compensation to be at risk: namely, incentive compensation
(which permits individual performance to be recognized on an annual and
long-term basis based, in part, on an evaluation of the executive's contribution
to our Company's and/or affiliate bank's performance) and the grant of stock
options (which directly ties a portion of the executive's long-term remuneration
to stock price appreciation realized by shareholders). Each of the components of
the compensation program is addressed separately below.
Base Salary. The base salary for each executive officer is reviewed
from the previous year. In determining whether to adjust base salary levels,
management's recommendations and subjective assessments of each executive's
growth and effectiveness in the performance of his or her duties are taken into
account. In addition, the performance of our Company and/or the affiliate bank
is considered. The increases in the base salaries of executives of our Company
and affiliate banks for 2000 were based primarily upon a subjective analysis of
our Company's and/or the banks' performance during the period since the last
salary increase and the individual executive's role in generating that
performance. In this regard, the analysis of performance included a review of
our Company's and/or affiliate bank's earnings and return on investment for the
prior year. The analysis of the role played by each individual executive in
generating our Company's and/or bank's performance included a consideration of
the executive's specific responsibilities, contributions to our Company's and/or
bank's business, and length of service. The factors impacting base salary levels
are not independently assigned specific weights. Rather, all of these factors
are reviewed, and specific base pay recommendations are made which reflect an
analysis of the aggregate impact of these factors. The Committee and the Chief
Executive Officer and the Vice Chairmen believe that base pay levels for the
executive officers are maintained within a range that is considered to be
appropriate and necessary.
Incentive Compensation. Our Company's and affiliate banks' officers are
eligible to receive incentive bonus awards. Each of the officers who are
eligible to receive bonus awards are assigned to one of four bonus tiers, which
assignments are made primarily according to job category. Tier one consists of
the Chief Executive Officer. Tier two consists of our Company's Vice Chairmen
and affiliate bank presidents. Tier three consists of senior officers of our
Company and affiliate banks. Tier four includes officers of affiliate banks. In
1997, the Committee engaged a consulting firm to assist it in the establishment
of our Company's incentive compensation program. After careful analysis of our
Company's needs and an examination of the competitive practices among peer
companies, the Committee recommended, and the full board of directors approved,
the adoption of an incentive bonus program.
Officers identified by the Chief Executive Officer and the Vice
Chairmen and the Committee are eligible to receive incentive bonuses. These
officers may earn annual awards only upon the achievement of performance
objectives which are established at the beginning of the year. Threshold, target
and maximum levels of awards are established, and no awards are paid if the
threshold is not met. The performance objectives are weighted based upon
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their relative importance to each individual. The performance objectives for
participants may include corporate performance objectives and personal targeted
objectives for performance. The performance objectives may include functional or
operating unit objectives. Each participant's target bonus is expressed as a
percentage of his or her base salary, dependent on responsibility and function.
The target award is 30% of base salary in the case of the Chief Executive
Officer, and in the case of the Vice Chairmen, Presidents, senior officers and
other officers, the target award ranges from 20% to 10% of base pay. Earned
awards may range from 0% to 150% of the target award. In 2000, the Committee
granted an incentive bonus award of $63,000, or 29% of base pay, to Mr.
Campbell, the Chief Executive Officer, for the 1999 fiscal year.
Incentive bonus awards to the Vice Chairmen are allocated based upon
the recommendation of the Chief Executive Officer. In allocating bonus awards
among the other participants, the Chief Executive Officer and the Vice Chairmen
exercise their discretion and judgment after considering the individual
participant's performance, responsibilities and contributions to our Company
and/or affiliate banks, and subjectively analyzing the basis of their aggregate
impact on the success of our Company and/or affiliate banks for the preceding
year.
Stock Options. The Committee believes that in order to enhance
long-term shareholder value it must provide incentives that provide motivation
beyond short-term results. In 2000, the Board of Directors engaged a consulting
firm and legal counsel to develop a stock option plan. The stock option plan was
approved (subject to shareholder approval) at our Company's February 2000 board
meeting. The objective of stock option grants is to advance the longer term
interests of our Company and its shareholders and complement incentives tied to
annual performance by rewarding executives upon the creation of incremental
shareholder value. Stock options only produce value to executives if the price
of our Company' common stock appreciates, thereby directly linking the interests
of executives with those of shareholders. Therefore, in order to provide
long-term incentives to executive officers and other employees related to
long-term growth in the value of our Company's common stock, it is intended that
stock options be granted to such persons under our Company' stock option plan.
The selection of the persons eligible to receive stock options and the
designation of the number of stock options to be granted to such persons are
made by our Company's Incentive Stock Option Committee after taking into account
management's assessment of each person's relative level of authority and
responsibility with the Bank, years of service and base salary, among other
factors.
COMPENSATION COMMITTEE
Philip D. Freeman David R. Goller Kevin L. Riley James R. Loyd
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
Members of the Compensation Committee are Mr. Freeman, the Chairman,
Mr. Goller, Mr. Riley and Mr. Loyd. As discussed above under "Report on
Executive Compensation", Mr. Campbell, the Chief Executive Officer, and Messrs.
Smith and Turner, Vice Chairmen, administer the executive compensation program
insofar as it pertains to executive officers other than the Chief Executive
Officer and the Vice Chairmen. All decisions relating to the compensation of
executive officers are reviewed by, and subject to the approval of, the
Compensation Committee. Among the members of the banks' board of directors,
Messrs. Campbell, Smith and Turner are officers and employees of the Company and
affiliate banks.
None of the members of the Committee were an officer or employee of our
Company or any of its subsidiaries during 1999. Messrs. Freeman, Riley and
Goller, and certain corporations and firms in which such persons have interests,
have obtained loans from the affiliate banks. Each of such loans are believed to
have been made to such persons, corporations or firms in the ordinary course of
business, on substantially the same terms, including interest rates and
collateral, as those prevailing at the time for comparable transactions with
other persons, and did not involve more than the normal risk of collectibility
or present other unfavorable features.
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EXECUTIVE OFFICERS
Executive officers of our Company are appointed by the board of
directors and serve at the discretion of the Board. The following table sets
forth certain information with respect to all executive officers of our Company.
NAME AGE POSITION
---- --- --------
Donald L. Campbell 74 President, Chairman of the Board
and Director
James E. Smith 56 Vice Chairman and Director
David T. Turner 44 Vice Chairman and Director
Richard G. Rose 49 Treasurer
Kathleen L. Bruegenhemke 35 Senior Vice President and Secretary
The business experience of the executive officers of our Company (with
the exception of those executive officers previously described under the caption
"Election of Directors--Nominees and Directors Continuing in Office") during the
last five years is as follows:
Richard G. Rose has served as Treasurer of our Company since July 1998
and as Senior Vice President and Controller of Exchange National Bank since July
1998. Prior to that he served as Senior Vice President and Controller of the
First National Bank of St. Louis from June 1979 until June 1998.
Kathleen L. Bruegenhemke has served as Senior Vice President and
Secretary of our Company since November 1997. From January 1992 until November
1997, she served as Internal Auditor of Exchange National Bank. Prior to joining
Exchange National Bank, Ms. Bruegenhemke served as a Commissioned Bank Examiner
for the Federal Deposit Insurance Corporation from 1986 to 1992.
There is no arrangement or understanding between any executive officer
and any other person pursuant to which such executive officer was selected as an
officer.
EXECUTIVE COMPENSATION
Our Company does not pay compensation to its officers. The following
table sets forth for the years ended December 31, 2000, 1999 and 1998,
respectively, the compensation paid or accrued by our Company's subsidiaries to
the chief executive officer of our Company and the only three other executive
officers whose remuneration for 2000 was in excess of $100,000 for services to
our Company and its subsidiaries in all capacities:
SUMMARY COMPENSATION TABLE
Long Term
Compensation
Annual Compensation Awards
----------------------------------------------- ----------------
Securities
Name and Other Annual Underlying All Other
Principal Position Year Salary Bonus Compensation (1) Options/SARs Compensation (2)
-------------------------- ------- -------------- -------------- ----------------- ---------------- -----------------
Donald L. Campbell 2000 $214,104 $ 63,000 $ 0 8,571 $25,609
Chairman and 1999 $214,104 $ 63,000 $ 0 0 $22,094
Director of ENB 1998 $214,632 $ 0 $ 0 0 $24,548
James E. Smith 2000 $130,000 $ 25,103 $ 0 5,306 $ 6,500
President and 1999 $125,516 $ 23,480 $ 0 0 $ 6,248
Director of USB 1998 $114,269 $ 3,084 $ 0 0 $ 5,868
David T. Turner 2000 $143,360 $ 26,780 $ 0 5,684 $25,609
President and 1999 $138,004 $ 26,000 $ 0 0 $22,094
Director of ENB 1998 $134,632 $ 0 $ 0 0 $20,656
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Richard G. Rose
CFO of ENB 2000 $ 93,989 $ 10,526 $ 0 1,862 $15,925
1999 $ 90,288 $ 4,300 $ 0 0 $ 6,234
1998 $ 44,284 $ 0 $ 0 0 $ 0
-------------
(1) Excludes perquisites and other benefits, unless the aggregate amount of
such compensation is equal to the lesser of either $50,000 or 10% of
the total of annual salary and bonus reported for the named executive
officer.
(2) All Other Compensation includes (i) Exchange National Bank's
contributions to the Exchange National Bank profit-sharing plan and
trust for 2000, 1999 and 1998 of $25,609, $22,094 and $24,548,
respectively, allocated to Mr. Campbell's account; $25,609, $22,094 and
$20,656, respectively, allocated to Mr. Turner's account, and $15,925,
$6,234 and $0, respectively, allocated to Mr. Rose's account, and (ii)
Citizens Union State Bank's contributions to the Citizens Union State
Bank profit-sharing plan for 2000, 1999 and 1998 of $6,500, $6,248 and
$5,868, respectively, allocated to Mr. Smith's account.
The following table sets forth information concerning grants of stock
options to each named executive officer during 2000.
OPTION/SAR GRANTS IN LAST FISCAL YEAR
Individual Grants
---------------------------------------------------------- Potential Realizable Value at
Percent of Assumed Annual Rates of
Number of Total Stock Price Appreciation for
Securities Options Option Term (3)
Underlying Granted to Exercise or ------------------------------
Options Employee in Base Price Expiration
Name Granted (1) Fiscal Year ($/Share)(2) Date 0% 5% 10%
---- ------------ ----------- ------------ ---- -- -- ---
Donald L. Campbell 8,571 (4) 24.54 24.50 12/4/2010 0 132,061 334,669
James E. Smith 5,306 (5) 15.19 24.50 12/4/2010 0 81,754 207,182
David T. Turner 5,684 (5) 16.27 24.50 12/4/2010 0 87,579 221,941
Richard G. Rose 1,862 (5) 5.33 24.50 12/4/2010 0 28,690 72,705
--------------
(1) All stock options are incentive stock options.
(2) All grants were made at 100% of the fair market value as of the grant
date.
(3) The dollar amounts under these columns are the result of calculations
at the 5% and 10% assumed annual growth rates mandated by the
Securities and Exchange Commission and, therefore, are not intended to
forecast possible future appreciation, if any, in the common stock
price. The calculations were based on the exercise prices and the
10-year term of the options. No gain to the optionees is possible
without an increase in stock price which will benefit all shareholders
proportionately. The "Potential Realizable Value" to all Exchange
shareholders as a group which would result from the application of the
same assumptions to the 2,863,493 shares of common stock outstanding at
December 31, 2000, at the closing price of $23.25 per share of common
stock on December 29, 2000, as reported by The Nasdaq Stock Market is
an incremental gain of $0, $41,864,268 and $106,092,416 for 0%, 5% and
10%, respectively.
(4) These stock options vest at the rate of 4,081 shares on the date of grant,
4,081 shares on January 1, 2001 and 409 shares on January 1, 2002.
(5) These stock options vest 25% each year on the first four anniversaries of
the grant date.
OPTION EXERCISES AND HOLDINGS
The following table sets forth information with respect to each named
executive officer concerning the exercise of options during 2000 and unexercised
options held as of December 31, 2000.
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AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR AND DECEMBER 31, 2000 OPTION/SAR VALUES
Number of Securities Underlying Value of Unexercised
Unexercised Options/SARs at In-the-Money Options/SARs at
Shares December 31, 2000 December 31, 2000(1)
Acquired on Value ---------------------------------- -------------------------------
Name Exercise Realized Exercisable Unexercisable Exercisable Unexercisable
------------------------------ ------------- -------------- ----------------- ---------------- ------------- -----------------
Donald L. Campbell -- -- 4,081 4,490 $ 0 $ 0
James E. Smith -- -- 0 5,306 $ 0 $ 0
David T. Turner -- -- 0 5,684 $ 0 $ 0
Richard G. Rose -- -- 0 1,862 $ 0 $ 0
-------------------
(1) Based on the $23.25 per share fair market value of our Company's common
stock on the last trading day of 2000, less the option exercise price.
No options were in-the-money as of December 31, 2000.
EXCHANGE NATIONAL BANK PROFIT-SHARING TRUST
Exchange National Bank established a profit-sharing plan and trust in
1951, which has been amended and restated from time to time, and was most
recently amended and restated on July 16, 2000. All employees who have completed
one year of service are eligible to participate. Exchange National Bank makes
all contributions except for voluntary contributions by participants who are not
highly compensated employees. Exchange National Bank is required to make an
annual contribution to the trust in an amount equal to 6% of its income before
provision for Federal and state income taxes and before provision for
contributions to the profit-sharing plan and retirement plan, limited, however,
to the maximum amount deductible for Federal income tax purposes. Exchange
National Bank's contribution to the trust for any given year is allocated to the
accounts of the participants in direct proportion to the compensation of the
participants for such year. The trust can invest up to 60% of the value of its
assets in our Company's stock, and such common stock held by the trust is
allocated to the accounts of the participants. The interest of a participant in
Exchange National Bank contributions does not vest prior to the completion of
five years of service. After five years of service a participant becomes fully
vested in the value of his or her employer contribution account. A participant
whose employment with Exchange National Bank terminates because of his normal
retirement, death, or permanent disability is also fully vested. Payments are
made to participants upon termination of service. If cash is distributed, any
shares of our Company's stock previously allocated to the terminating
participant's account would be reallocated among the remaining participants'
accounts. A participant may withdraw his or her own contributions, but a
participant may not borrow from the trust. Each participant may direct the
trustee with respect to the voting of shares of our Company's stock allocated to
his account on such matters upon which shareholders are entitled to vote.
Exchange National Bank serves as trustee of the trust, and the trust is
administered by a retirement committee which is appointed by the board of
directors of Exchange National Bank. As of December 31, 2000, the trust held
assets with an aggregate book value of $10,894,178.75.
As of March 15, 2001, the trust held 190,469 shares (or 6.65%) of our
Company's common stock.
CITIZENS UNION STATE BANK PROFIT-SHARING PLAN
Citizens Union State Bank established the Citizens Union State Bank &
Trust of Clinton Profit Sharing Plan (the "Plan") in 1963. The Plan was restated
in 1994. All employees who have completed one year of service and are twenty-one
years old are eligible to participate in the Plan. Eligible Plan participants
may make elective deferrals up to a maximum of 8% of such participant's
compensation. Under the terms of the Plan, a matching contribution will be made
on behalf of each participant by Citizens Union State Bank in an amount of
33.33% of the participant's elective deferrals. In addition to the employer
matching contributions, Citizens Union State Bank may make a discretionary
annual profit sharing contribution to the Plan. Both the employer matching
contribution and the discretionary employer profit sharing contribution are
subject to the Plan's vesting schedule. Under the Plan's vesting schedule, a
participant's interest in employer contributions does not begin to vest until
the participant has completed three years of service. A participant becomes
fully vested after he or she has completed seven years of
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service. Unless a participant terminates employment due to death, disability or
retirement, a participant is not eligible to receive an employer matching or
employer profit sharing contribution for a specific Plan year unless the
participant has completed 1,000 hours or more of service during the Plan year
and is employed on the last day of the Plan year. A participant may take a total
distribution of his or her vested account balance upon his or her termination
from employment. Under the terms of the Plan, in-service hardship withdrawals
are allowed. Plan loans, however, are not permitted. Citizens Union State Bank
currently serves as the trustee and plan administrator of the Plan.
As of December 31, 2000, the trust held assets with an aggregate book
value of $857,982.
STOCK OPTION PLAN
On February 29, 2000, our board of directors adopted the Exchange
National Bancshares, Inc. Incentive Stock Option Plan. The Plan is sponsored by
our Company for key employees of our Company and its subsidiaries, and is
intended to encourage such employees to participate in the ownership of our
Company, and to provide additional incentive for them to promote the success of
our business through sharing in the future growth of our business. As of March
15, 2001, our Company had granted options to purchase a total of 34,929 shares
of common stock pursuant to the Plan.
The Plan is administered by a committee composed of Messrs. Freeman,
Goller, Riley, Loyd and Wetzel. The Plan committee has the power to determine in
its discretion the persons to whom options are granted under the Plan, the
number of shares covered by those options, and the time at which an option
becomes exercisable, subject in each case to the limitations set forth in the
Plan. Options can be granted under the Plan only to key employees of our Company
or any of its subsidiary corporations. The eligibility of the persons to whom
options may be granted under the Plan is limited to those persons whom the Plan
committee determines have made, or are expected to make, material contributions
to the successful performance of our Company. The period of up to ten years
during which an option may be exercised, and the time at which it becomes
exercisable, are fixed by the Plan committee at the time the option is granted.
No option granted under the Plan is transferable by the holder other than by
will or the laws of descent and distribution.
The aggregate number of shares of our common stock that may be issued
pursuant to the exercise of options granted under the Plan is limited to 300,000
shares, subject to increase or decrease in the event of any change in our
Company's capital structure. Shares subject to options granted under the Plan
which expire or terminate without being exercised in full become available, to
the extent unexercised, for future grants under the Plan. No consideration is
paid to our Company by any optionee in exchange for the grant of an option. The
per share exercise price for an option granted under the Plan is determined by
the Plan committee but may not be less than the greater of the par value or the
fair market value of our common stock on the date that the option is granted.
The Plan provides for automatic adjustments to prevent dilution or enlargement
of the optionee's rights in the event of a stock split, stock dividend,
reorganization, merger, consolidation, liquidation, combination or exchange of
shares, or other change in the capital structure of our Company.
PENSION PLAN
Concurrently with the creation of the profit-sharing plan and trust in
1951, Exchange National Bank established a retirement plan for its employees,
which has been amended and restated from time to time, and was most recently
amended/restated on July 16, 2000. Under the plan, all full-time employees
become participants on the earlier of the first of June or the first of December
coincident with or immediately following the later to occur of (i) the
completion of one year of service or (ii) the attainment of the age of 21, and
continue to participate so long as they continue to be full-time employees,
until their retirement, death or termination of employment prior to normal
retirement date. The plan has a five-year vesting schedule under which a
participant becomes fully vested in his accrued benefit after completing five
years of service. This plan provides for the payment of retirement and death
benefits that are funded by investments which, at December 31, 2000, had an
aggregate book value of $3,172,637.07.
The normal retirement benefits provided under the plan for an employee
with at least 25 years of continuous service are based upon 45% of his/her
average compensation over a ten-year period, less 50% of his
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social security benefit. Compensation covered by the plan includes wages,
salaries and overtime pay but excludes directors' fees, commissions, bonuses,
expense allowances, and other extraordinary compensation. Amounts reported in
the compensation table include salaries, directors' fees, commissions and
bonuses. For employees with less than 25 years of continuous service, retirement
benefits are reduced proportionally. Provision is made for early or late
retirement and optional payment provisions are available.
The table below illustrates the projected amount of annual retirement
income, based on a straight line annuity, available under the plan for a person
retiring at 65 years of age at various levels of average annual compensation and
years of service classifications, with an assumed annual social security benefit
of $10,000.
AVERAGE TEN-
YEAR ANNUAL 10 YEARS 15 YEARS 20 YEARS 25 YEARS
COMPENSATION SERVICE SERVICE SERVICE SERVICE
------------ ------- ------- ------- -------
$ 50,000 $7,000 $10,000 $14,000 $17,500
100,000 16,000 24,000 32,000 40,000
150,000 25,000 37,500 50,000 62,500
200,000 34,000 51,000 68,000 85,000
The amounts shown above reflect benefits payable in the normal payment
form. For a married participant, payment is by monthly benefit to the
participant during his or her lifetime, and 50% of that amount is paid to the
spouse monthly during the spouse's life after the participant's death. For an
unmarried participant, payment is by a lifetime monthly benefit, with payments
guaranteed for the first 120 months.
Mr. Campbell and Mr. Turner have 49 years and 22 years of respective
continuous service under the plan. Mr. Smith is not a participant in the plan.
Mr. Rose has 3 consecutive years of service.
SMITH EMPLOYMENT AGREEMENT
Our Company has entered into an employment agreement with James E.
Smith. The agreement had an initial three-year term which expired on November 3,
2000, but is subject to automatic extensions of one additional year upon the
expiration of each year prior to Mr. Smith's 62nd birthday (unless either party
gives notice not to so extend the term). The agreement provides for an
annualized base salary of $110,000, and eligibility for merit-based increases.
In addition to base salary, the agreement also provides that Mr. Smith is
eligible to participate in bonus and other incentive compensation plans made
available to employees having responsibilities comparable to those of Mr. Smith.
Mr. Smith's employment is subject to early termination in the event of
his death, disability or adjudication of legal incompetence, and otherwise may
be terminated only for cause (as defined). The employment agreement prevents Mr.
Smith from competing with our Company, soliciting customers or hiring employees
during the term of the agreement and for a period of two years thereafter. In
addition, the employment agreement requires Mr. Smith to maintain the
confidentiality of our Company's confidential information prior to its
disclosure by our Company.
CHANGE OF CONTROL AGREEMENT
Our Company has entered into change of control agreements with 12
executive officers, including Messrs. Campbell, Turner, Smith and Rose. These
agreements provide that if, within two years after a change in control (as
defined below), our Company or any subsidiary that is the primary employer of
the executive terminates the executive's employment other than by reason of the
executive's death, disability or for cause (as defined) or if the executive
terminates his or her employment for good reason (as defined), the executive
will be entitled to receive:
- an amount equal to one to three years' of the executive's
salary (based on the executive's highest monthly base salary
for the preceding twelve-month period);
- an amount equal to one to three times the executive's
incentive bonus for the preceding year;
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- the proportionate amount of any incentive bonus and other
compensation, payments and benefits which would otherwise have
been received by the executive for the year in which
employment was terminated; and
- any accrued and unpaid vacation pay.
The total payments made under the change of control agreements and under any
other agreements, plans or arrangements as a result of a change in control is
not permitted to be in excess of 5% of the aggregate cash consideration that our
shareholders would receive as a result of a change of control. Our Company will
reimburse the executive for any excise taxes that result from any of such
payments being considered "excess parachute payments" under Section 280G of the
Internal Revenue Code of 1986, and will make a gross-up payment to reimburse the
executive for any income or other tax attributable to the excess parachute
payment and to the tax reimbursement payments themselves. The change of control
agreements require the executives to maintain the confidentiality of our
confidential information prior to its disclosure by our Company.
A "change in control" generally is defined to take place when (a) a
person or group (other than our Company and various affiliated persons or
entities) becomes the beneficial owner, directly or indirectly, of 50% or more
of the total voting power of our Company's outstanding securities, (b) our
shareholders approve a merger or consolidation involving our Company in which at
least 50% of the total voting power of the voting securities of the surviving
corporation is held by persons who were not previously shareholders of our
Company, or (c) our shareholders approve a plan of complete liquidation of our
Company or an agreement for the sale or disposition by our Company of all or
substantially all of its assets.
COMPANY PERFORMANCE
The following performance graph shows a comparison of cumulative total
returns for our Company, the Nasdaq Stock Market (U.S. Companies) and a peer
index of 95 financial institutions having total assets of between $500 million
and $1 billion (as calculated by SNL Securities LC) for the period from January
1, 1996, through December 31, 2000. The cumulative total return on investment
for each of the periods for our Company, the Nasdaq Stock Market (U.S.
Companies) and the peer index is based on the stock price or index at January 1,
1996. The performance graph assumes that the value of an investment in our
Company's common stock and each index was $100 at January 1, 1996 and that all
dividends were reinvested. The information presented in the performance graph is
historical in nature and is not intended to represent or guarantee future
returns.
COMPARISON OF CUMULATIVE TOTAL RETURNS
(EXCHANGE, NASDAQ, PEER INDEX)
[PERFORMANCE GRAPH]
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The comparison of cumulative total returns presented in the above graph was
plotted using the following index values and common stock price values:
1/1/96 12/31/96 12/31/97 12/31/98 12/31/99 12/31/00
------ -------- -------- -------- -------- --------
Exchange National Bancshares $100.00 $119.57 $133.04 $145.73 $259.52 $207.60
Nasdaq Stock Market (U.S.
Companies) $100.00 $123.04 $150.69 $212.51 $394.94 $237.68
Peer Index
$100.00 $125.01 $203.22 $199.81 $184.96 $177.04
OWNERSHIP OF COMMON STOCK
The following table sets forth certain information as of March 15, 2001
regarding the beneficial ownership of our Company's common stock by each person
known to the board of directors to own beneficially 5% or more of our Company's
common stock, by each director of our Company, by each executive officer named
in the Summary Compensation Table under "Executive Officers and
Compensation--Executive Compensation" and by all directors and officers of our
Company as a group. All information with respect to beneficial ownership has
been furnished by the respective directors, officers or 5% or more shareholders,
as the case may be.
AMOUNT AND NATURE OF PERCENTAGE OF
NAME BENEFICIAL OWNERSHIP(1) SHARES OUTSTANDING(1)
---- ----------------------- ---------------------
Exchange National Bank of 190,469.00 6.7%
Jefferson City Profit-Sharing
Trust/Exchange National
Bank of Jefferson City,
Trustee (2)(3)
Donald L. Campbell (2)(4) 147,890.80 5.2
Charles G. Dudenhoeffer, Jr. (5) 34,171.66 1.2
Philip D. Freeman (6) 20,000.00 *
David R. Goller (7) 40,696.00 1.4
James R. Loyd (8) 62,148.00 2.2
Kevin L. Riley (9) 4,620.00 *
James E. Smith (10) 12,002.00 *
David T. Turner (11) 15,207.66 *
Gus S. Wetzel, II (12) 41,502.00 1.4
Richard G. Rose (13) 1,010.28 *
All directors & executive officers 381,746.99 13.3
as a group (11 persons) (14)
-----------------
* Less than one percent
(1) Beneficial ownership is determined in accordance with the rules of the
Securities and Exchange Commission which generally attribute beneficial
ownership of securities to persons who possess sole or shared voting
power and/or investment power with respect to those securities. Unless
otherwise indicated, the persons or entities identified in this table
have sole voting and investment power with respect to all shares shown
as beneficially owned by them. Percentage ownership calculations are
based on 2,863,493 shares of common stock outstanding.
(2) The address for The Exchange National Bank of Jefferson City
Profit-Sharing Trust/The Exchange National Bank of Jefferson City,
Trustee and for Mr. Campbell is 132 East High Street, Jefferson City,
Missouri 65101.
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(3) Participants in The Exchange National Bank of Jefferson City
Profit-Sharing Trust have the right to vote shares which have been
allocated to such participants in the Profit-Sharing Trust.
Accordingly, the Profit-Sharing Trust/Trustee has investment power but
not voting power as to the shares shown as owned by it.
(4) Includes 103,452 shares owned of record by Campbell Family L.P.,
36,276.80 shares held in The Exchange National Bank of Jefferson City
Profit-Sharing Trust for the benefit of Mr. Campbell, and 8,162 shares
subject to options which are exercisable. Mr. Campbell has sole voting
and investment power over 103,452 shares. Mr. Campbell has the right to
vote, but has no investment power, with respect to the 36,276.80 shares
held in the Profit-Sharing Trust. Mr. Campbell would have full voting
and investment power if the 8,162 shares subject to option were to be
exercised.
(5) Includes 12,300 shares held jointly by Mr. Dudenhoeffer and his spouse
and 210.66 shares held in The Exchange National Bank of Jefferson City
Profit-Sharing Trust for his benefit. Mr. Dudenhoeffer and his spouse
share voting and investment power with respect to 12,300 shares, and
Mr. Dudenhoeffer has the right to vote, but has no investment power,
with respect to the 210.66 shares held in the Profit-Sharing Trust.
(6) Includes 12,817 shares held of record by a revocable living trust, of
which Mr. Freeman is a trustee, for the benefit of Mr. Freeman and his
wife.
(7) Includes 18,140 shares held of record by Mr. Goller as trustee of the
David R. Goller Trust. Also includes 9,160 shares held of record by the
Goller, Gardner & Feather, P.C. Profit Sharing Trust, of which Mr.
Goller is trustee, and 13,396 shares held of record by two family
trusts for which he acts as sole trustee.
(8) Includes 34,950 shares held by Mr. Loyd's spouse as trustee of a family
trust, as to which Mr. Loyd and his spouse share voting and investment
power.
(9) Includes 3,900 shares held jointly by Mr. Riley and his spouse, as to
which they share voting and investment power.
(10) Includes 12,000 shares held jointly by Mr. Smith and his spouse, as to
which they share voting and investment power.
(11) Includes 1,334 shares held jointly by Mr. Turner and his spouse and
10,123.66 shares held in The Exchange National Bank of Jefferson City
Profit-Sharing Trust for his benefit. Mr. Turner and his spouse share
voting and investment power with respect to 1,334 shares, and Mr.
Turner has the right to vote, but has no investment power, with respect
to the 10,123.66 shares held in the Profit-Sharing Trust.
(12) Includes 41,500 shares held by Wetzel Investments, Ltd.
(13) Includes 500 shares held jointly by Mr. Rose and his spouse and 510.28
shares held in The Exchange National Bank of Jefferson City
Profit-Sharing Trust for his benefit. Mr. Rose and his spouse share
voting and investment power with respect to 500 shares, and Mr. Rose
has the right to vote, but has no investment power, with respect to the
510.28 shares held in the Profit-Sharing Trust.
(14) Includes 49,419.99 shares held in The Exchange National Bank of
Jefferson City Profit-Sharing Trust and allocated to participant
accounts which the participant has the right to vote but not investment
power. Also includes 8,162 shares subject to options which are
exercisable.
TRANSACTIONS WITH DIRECTORS AND OFFICERS
As part of the consideration provided by our Company for its November
1997 acquisition of Union State Bancshares, Inc. and Union State Bank, our
Company issued a promissory note to James E. Smith in the principal amount of
$2,000,000, a promissory note to Gus S. Wetzel, II in the principal amount of
$5,000,000, and four promissory notes to Mr. Wetzel's children in the aggregate
principal amount of $892,472. The six promissory notes each matures on November
1, 2002, with quarterly installments of accrued interest to be made on each
February 1, May 1, August 1 and November 1 of the loan term at the rate of 7%
per annum. Our Company has reserved the right to prepay the promissory notes at
any time on or after November 1, 2000. The promissory notes, and one other
promissory note issued to a former shareholder of Union, are secured by Union's
pledge of the shares of Union State Bank capital stock owned by it.
In connection with our Company's acquisition of Union State Bank in
November 1997, our Company entered into noncompetition agreements with James E.
Smith and Gus S. Wetzel, II. The agreements prevent Mr. Smith and Dr. Wetzel
from competing with our Company, soliciting customers or hiring employees during
the six-
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year term of the agreement in exchange for our Company's agreement to
pay each of them six annual installments of $50,000 each (without interest), the
first of which installments was paid on November 3, 1997.
The officers and directors of our Company and of its subsidiaries, some
of their family members and our Companies with which some of the directors are
associated, were customers of, and had banking transactions with, Exchange
National Bank, Citizens Union State Bank and Osage Valley Bank in the ordinary
course of Exchange National Bank's, Citizens Union State Bank's and Osage Valley
Bank's respective businesses during 1999 and 2000. During each of these years
Exchange National Bank, Citizens Union State Bank and Osage Valley Bank each
continued its policy of making loans and loan commitments in the ordinary course
of business to its employees, officers and directors, and their affiliates, only
on substantially the same terms, including interest rates, collateral and
repayment terms, as those prevailing at the time for comparable transactions
with other persons. In the opinion of the board of directors of Exchange
National Bank, Citizens Union State Bank and of Osage Valley Bank, respectively,
none of its transactions with such persons involved more than a normal risk of
collectability or other unfavorable features.
David R. Goller, a director of our Company and Exchange National Bank,
is a member of the firm Goller, Gardner & Feather, P.C., which Exchange National
Bank has retained and expects in the future to retain as its general counsel.
During 2000, Exchange National Bank paid legal fees to Goller, Gardner &
Feather, P.C. in the amount of $976.
ITEM 2
RATIFICATION OF SELECTION OF INDEPENDENT AUDITORS
The board of directors has selected the independent certified public
accounting firm of KPMG LLP as our Company's independent auditors to audit the
books, records and accounts of our Company for the year ending December 31,
2001. Shareholders will have an opportunity to vote at the annual meeting on
whether to ratify the Board's decision in this regard.
KPMG LLP has served as our Company's independent auditors since our
Company commenced business operations in 1993. A representative of KPMG LLP is
expected to be present at the annual meeting. Such representative will have an
opportunity to make a statement if he or she desires to do so and will be
available to respond to appropriate questions.
Submission of the selection of the independent auditors to the
shareholders for ratification will not limit the authority of the board of
directors to appoint another independent certified public accounting firm to
serve as independent auditors if the present auditors resign or their engagement
otherwise is terminated. Shareholder ratification of the board of directors'
selection of KPMG LLP as our Company's independent auditors is not required by
any statute or regulation or by our Company's bylaws. Nevertheless, if the
shareholders do not ratify the selection of KPMG LLP at the annual meeting, the
selection of independent auditors for the current year will be reconsidered by
the board of directors.
THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE FOR APPROVAL OF THE
SELECTION OF KPMG LLP.
AUDIT FEES
The aggregate fees billed for professional services rendered by KPMG
LLP for the audit of our annual financial statements for the year ended December
31, 2000, and the reviews of the condensed financial statements included in our
quarterly reports on Forms 10-Q for the year ended December 31, 2000, were
$100,000.
FINANCIAL INFORMATION SYSTEMS DESIGN AND IMPLEMENTATION FEES
KPMG LLP did not render any professional services for our Company in
connection with financial information systems design and implementation.
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ALL OTHER FEES
The aggregate fees billed for tax services rendered by KPMG LLP during
the year ended December 31, 2000, were $94,555. The aggregate fees billed for
all other services, exclusive of the fees disclosed above relating to financial
statement audit services and tax services, rendered by KPMG LLP during the year
ended December 31, 2000, were $66,679. These other services included review of
SEC filings, employee benefit plan audits, compensation study, review of the
audit committee charter, mortgage collateral verification letters and review of
purchase accounting in connection with acquisitions.
AUDIT COMMITTEE REPORT TO SHAREHOLDERS
The Audit Committee of our board of directors assists the Board in
fulfilling its responsibilities with respect to accounting and financial
reporting practices and the scope and expense of audit and related services
provided by external auditors, among others. The Audit Committee is composed of
four directors, each of whom is independent as defined by the National
Association of Securities Dealers' listing standards. The Audit Committee has
adopted a written charter, which is attached to this proxy statement as appendix
A.
In connection with these responsibilities, the Audit Committee met with
management to review and discuss the December 31, 2000 financial statements. The
Audit Committee also discussed with the independent accountants the matters
required by Statement on Auditing Standards No. 61, Communication with Audit
Committees. The Audit Committee also received written disclosures from the
independent accountants required by Independence Standards Board Standard No. 1,
Independence Discussions with Audit Committees, and the Audit Committee
discussed with the independent accountants that firm's independence. The audit
committee has considered whether the services provided under financial
information systems design and implementation and other non-audit services are
compatible with maintaining the auditor's independence.
Based upon the Audit Committee's discussions with management and the
independent accountants, and the Audit Committee's review of the representations
of management and the independent accountants, the Audit Committee recommended
that the Board of Directors include the audited consolidated financial
statements in the Company's Annual Report on Form 10-K for the year ended
December 31, 2000, to be filed with the Securities and Exchange Commission.
AUDIT COMMITTEE
Philip D. Freeman David R. Goller Kevin L. Riley Gus S. Wetzel, II
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 requires our
Company's directors and executive officers, and persons who own more than 10% of
any class of equity securities of our Company registered pursuant to Section 12
of the Exchange Act, to file with the Securities and Exchange Commission initial
reports of ownership and reports of changes in ownership in such securities and
other equity securities of our Company. Securities and Exchange Commission
regulations require directors, executive officers and greater than 10%
shareholders to furnish our Company with copies of all Section 16(a) reports
they file.
To our Company's knowledge, based solely on review of the copies of
such reports furnished to our Company and written representations that no other
reports were required, during the year ended December 31, 2000, all Section
16(a) filing requirements applicable to its directors, executive officers and
greater than 10% shareholders were complied with.
OTHER BUSINESS OF THE MEETING
The board of directors is not aware of, and does not intend to present,
any matter for action at the annual meeting other than those referred to in this
proxy statement. If, however, any other matter properly comes before
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the annual meeting or any adjournment, it is intended that the holders of the
proxies solicited by the board of directors will vote on such matters in their
discretion in accordance with their best judgment.
ANNUAL REPORT
Our Company's Annual Report to Shareholders, containing consolidated
financial statements for the year ended December 31, 2000, is being mailed with
this proxy statement to all shareholders entitled to vote at the annual meeting.
Such Annual Report is not to be regarded as proxy solicitation material.
A COPY OF OUR COMPANY'S ANNUAL REPORT ON FORM 10-K FOR THE YEAR ENDED
DECEMBER 31, 2000, EXCLUDING EXHIBITS, WILL BE FURNISHED WITHOUT CHARGE TO ANY
SHAREHOLDER OF RECORD AS OF APRIL 18, 2001, UPON WRITTEN REQUEST TO DONALD L.
CAMPBELL, EXCHANGE NATIONAL BANCSHARES, INC., 132 EAST HIGH STREET, JEFFERSON
CITY, MISSOURI 65101. Our Company will provide a copy of any exhibit to the Form
10-K report to any such person upon written request and the payment of our
Company's reasonable expenses in furnishing such exhibits.
SHAREHOLDER PROPOSALS FOR 2002 ANNUAL MEETING
It is anticipated that the 2002 annual meeting of shareholders will be
held on June 12, 2002. Any shareholder who intends to present a proposal at the
2002 annual meeting must deliver the proposal to our Company at 132 East High
Street, Jefferson City, Missouri 65101, Attention: President by the applicable
deadline below:
- If the shareholder proposal is intended for inclusion in our Company's
proxy materials for that meeting pursuant to Rule 14a-8 under the
Securities Exchange Act of 1934, our Company must receive the proposal
no event later than December 5, 2001. Such proposal must also comply
with the other requirements of the proxy solicitation rules of the
Securities and Exchange Commission.
- If the shareholder proposal is to be presented without inclusion in our
Company's proxy materials for that meeting, our Company must receive the
proposal no event later than April 14, 2002 in accordance with the
advance notice provisions of our Company's articles of incorporation and
bylaws. See "Advance Notice of Shareholder Proposals."
Proxies solicited in connection with the 2002 annual meeting of shareholders
will confer on the appointed proxies discretionary voting authority to vote on
shareholder proposals that are not presented for inclusion in the proxy
materials unless the proposing shareholder notifies our Company by April 14,
2002 that such proposal will be made at the meeting.
ADVANCE NOTICE OF SHAREHOLDER PROPOSALS
Our Company's articles of incorporation and bylaws provide that advance
notice of shareholder nominations for the election of directors or other
business must be given. With respect to this annual meeting, written notice of
the shareholder's intent to make a nomination at the meeting must be received by
our Company's Secretary at our Company's principal executive offices not later
than the close of business on April 10, 2001. At future meetings of
shareholders, notice of nominations or other business to be brought before the
meeting must be delivered to our Company's Secretary at our principal executive
offices not less than 60 days (30 days in the case of nominations for the
election of directors) prior to the first anniversary of the previous year's
annual meeting. In the event that the date of the annual meeting of shareholders
is advanced by more than 30 days or delayed by more than 60 days from such
anniversary date, however, notice by the shareholder to be timely must be so
delivered not later than the close of business on the later of (i) the 60th day
(in the case of nominations, the 30th day) prior to such annual meeting or (ii)
the tenth day following the date on which public announcement of the date of
such meeting is first made.
The shareholder's notice of nomination must contain (i) the name and
address of the nominating shareholder, of each person to be nominated and of the
beneficial owner (as defined in the articles of incorporation), if any, on whose
behalf the nomination is made, (ii) a representation that the nominating
shareholder is the holder of
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record of our Company's common stock entitled to vote in the election of
directors at the meeting and intends to appear at the meeting to nominate the
person or persons specified in the notice, (iii) the number of shares of our
Company's common stock owned beneficially and of record by the nominating
shareholder and by each person to be nominated, (iv) a description of all
arrangements or understandings between the nominating shareholder and each
nominee and any other person or persons (naming such person or persons) pursuant
to which the nomination or nominations are to be made by the shareholder, (v)
the consent of each nominee to serve as a director if so elected, and (vi) such
other information regarding each nominee proposed by the nominating shareholder
as would be required to be included in a proxy statement filed pursuant to the
proxy rules of the Securities and Exchange Commission, as then in effect, if our
Company were soliciting proxies for the election of such nominees. If no such
notice has been received, the chairman of the annual meeting is entitled to
refuse to acknowledge the nomination of any person which is not made in
compliance with the foregoing procedure. The board of directors does not know
if, and has no reason to believe that, anyone will attempt to nominate another
candidate for director at this annual meeting.
By Order of the Board of Directors
Donald L. Campbell
Chairman of the Board
and President
April 4, 2001
Jefferson City, Missouri
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EXHIBIT A
EXCHANGE NATIONAL BANCSHARES, INC.
CHARTER OF THE AUDIT COMMITTEE OF THE BOARD OF DIRECTORS
I. Audit Committee Purpose
The Audit Committee is appointed by the Board of Directors to assist
the Board in fulfilling its oversight responsibilities. The Audit Committee's
primary duties and responsibilities are to:
- Monitor the integrity of the Corporation's auditing,
accounting and financial reporting processes;
- Monitor the Corporation's systems of internal controls
regarding finance, accounting, and legal compliance and ethics
that management and the Board have established;
- Monitor the independence and performance of the Corporation's
independent auditors and internal auditing department;
- Review and appraise the audit efforts of the Corporation's
independent auditors;
- Provide an avenue of communication among the independent
auditors, management, the internal auditing department, and
the Board of Directors;
- Encourage adherence to, and continuous improvement of, the
Corporation's policies, procedures, and practices at all
levels regarding auditing, accounting and financial reporting
matters;
- Review areas of potential significant financial risk to the
Corporation; and
- Report to the Board of Directors.
The Audit Committee has the authority to conduct any investigation
appropriate to fulfilling its responsibilities, and it has direct access to the
independent auditors as well as anyone in the organization. The Audit Committee
has the ability to retain, at the Corporation's expense, special legal,
accounting, or other consultants or experts it deems necessary in the
performance of its duties.
II. Audit Committee Composition
The Audit Committee shall be comprised of three or more directors as
determined by the Board, each of whom shall be independent directors. Members of
the Audit Committee shall be considered independent if they have no relationship
to the Corporation that reasonably would be expected to interfere with the
exercise of their independence from management and the Corporation. All members
of the Committee shall have a basic understanding of finance and accounting and
be able to read and understand fundamental financial statements, including a
corporation's balance sheet, income statement, and cash flow statement or will
be able to do so within a reasonable period of time after his or her appointment
to the Audit Committee. At least one member of the Committee shall have past
employment experience in finance or accounting, requisite professional
certification in accounting, or any other comparable experience or background
which results in the individual's financial sophistication. Committee members
may enhance their familiarity with finance and accounting by participating in
educational programs conducted by the Corporation or an outside consultant.
The persons described in the following categories ordinarily will not
be considered to be independent:
- Former Employees: A director being employed by the
Corporation or any of its affiliates for the current year or
any of the past three years.
- Compensated Directors: A director accepting any compensation
from the Corporation or any of its affiliates in excess of
$60,000 during the current or previous fiscal years, other
than compensation for Board service or benefits under a
tax-qualified retirement plan or non-discretionary
compensation.
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- Family Members: A director being a member of the immediate
family (which includes a person's spouse, parents, children,
siblings, mother-in-law, father-in-law, brother-in-law,
sister-in-law, son-in-law, daughter-in-law, and anyone who
resides in such person's home) of an individual who is, or has
been in any of the past three years, employed by the
Corporation or any of its affiliates as an executive officer.
- Business Relationships: A director being a partner in, or a
controlling shareholder or an executive officer of, any
for-profit business organization to which the Corporation
made, or from which the Corporation received, payments (other
than those arising solely from investments in the
Corporation's securities) that exceed five percent (5%) of the
Corporation's or business organization's consolidated gross
revenues for that year, or $200,000, whichever is greater, in
any of the past three years.
- Cross-Directorships: A director being employed as an executive
of another entity where any of the Corporation's executives
serves on that entity's compensation committee.
One director who is not an independent director (as defined above) and
is not a current employee or an immediate family member of a current employee
may be appointed to the Audit Committee if the Board, under exceptional and
limited circumstances, determines that membership on the Committee by the
individual is required by the best interests of the Corporation and its
shareholders, and the Board discloses, in the next annual proxy statement
subsequent to such determination, the nature of the relationship and the reasons
for that determination.
Audit Committee members shall be elected by the Board at the annual
organizational meeting of the Board and shall serve until their successors shall
be duly elected and qualified. If an Audit Committee Chair is not designated or
present, the members of the Committee may designate a Chair by majority vote of
the full Committee membership.
III. Audit Committee Meetings
The Committee shall meet at least four times annually, or more
frequently as circumstances dictate. The Audit Committee Chair shall prepare
and/or approve an agenda in advance of each meeting. To fulfill its
responsibility to foster open communication, the Committee should meet in
separate executive sessions at least annually with management, the director of
the internal auditing department, the independent auditors, and as a committee
to discuss any matters that the committee or each of these groups believe should
be discussed privately. In addition, the Committee, or at least its Chair,
should communicate with management and the independent auditors quarterly to
review the Corporation's financial statements and significant findings based
upon the independent auditors' limited review procedures.
IV. Audit Committee Responsibilities and Duties
Documents/Reports Review
1. Review the adequacy of this Charter, and revise if necessary,
at least annually. Submit the charter to the Board of
Directors for approval and have the document published at
least every three years in accordance with SEC regulations.
2. Review the Corporation's annual audited financial statements
and any other periodic financial reports prior to filing with
the Securities and Exchange Commission or other distribution.
Review any report rendered by the independent auditors to the
Corporation. Such review should include discussion with
management and independent auditors of significant issues
regarding accounting principles, practices, and judgments.
Discuss any significant changes to the Corporation's
accounting principles and any items required to be
communicated by the independent auditors in accordance with
SAS 61.
3. In consultation with management, the independent auditors, and
the internal auditors, consider the integrity of the
Corporation's financial reporting processes and controls
including computerized information system controls and
security. Discuss significant financial risk exposures and the
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steps management has taken to monitor, control, and report
such exposures. Review significant findings prepared by the
independent auditors and the internal auditing department
together with management's responses including the status of
previous recommendations.
4. Review with management and the independent auditors the
Corporation's quarterly financial results and/or the
Corporation's quarterly financial statements, including press
releases with respect thereto. The Chair of the Committee may
represent the entire Audit Committee for purposes of this
review.
Independent Auditors
5. The independent auditors are ultimately accountable to the
Audit Committee and the Board of Directors. The Audit
Committee shall review the independence and performance of the
audits and annually recommend to the Board of Directors the
appointment of the independent auditors or approve any
discharge of auditors when circumstances warrant.
6. The Audit Committee shall approve the fees and other
significant compensation to be paid to the independent
auditors.
7. On an annual basis, the Committee will review and discuss with
the independent auditors all significant relationships the
auditors have with the Corporation that could impair the
independent auditors' independence.
8. Review the independent auditors engagement letter and audit
plan - discuss scope, staffing, locations, reliance upon
management, and internal audit and general audit approach.
9. Prior to releasing the year-end earnings in a press release or
filing with the SEC, discuss the results of the audit with the
independent auditors. Discuss certain matters required to be
communicated to audit committees in accordance with SAS 61.
Items to be communicated include (communications may be
written or oral):
- The auditors' responsibility under Generally Accepted
Auditing Standards (GAAS);
- Significant accounting policies;
- Management judgments and accounting estimates;
- Significant audit adjustments;
- Other information in document containing audited
financial statements;
- Disagreements with management including accounting
principles, scope of audit, disclosures;
- Consultation with other accountants by management;
- Major issues discussed with management prior to
retention;
- Difficulties encountered in performing the audit,
including any restrictions on the scope of work or
access to required information; and
- Extent to which changes or improvements in financial
or accounting practices, as approved by the Audit
Committee, have been implemented.
Financial Reporting Processes
10. Consider the independent auditors' judgments about the quality
and appropriateness of the Corporation's accounting principles
as applied to its financial reporting.
11. In consultation with the independent auditors, review the
integrity of the Corporation's financial reporting processes,
both internal and external.
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12. Consider and approve, if appropriate, major changes to the
Corporation's auditing and accounting principles and practices
as suggested by management.
Internal Audit Department and Legal Compliance
The internal audit department reports directly to the Board of
Directors through the Audit Committee.
13. Review the budget, plan, and changes in plan, activities,
organization structure, and qualifications of the internal
audit department, as needed.
14. Review the appointment, performance, and replacement of the
person responsible for the Corporation's internal audit.
15. Review significant reports prepared by the internal audit
department together with management's response and follow-up
to these reports.
16. On at least an annual basis, review with the Corporation's
counsel, any legal matter that could have a significant impact
on the Corporation's financial statements, the Corporation's
compliance with applicable laws and regulations, and inquiries
received from regulators or governmental agencies.
Other Audit Committee Responsibilities:
17. Annually prepare a report to shareholders as required by the
Securities and Exchange Commission. The report is to be
included in the Corporation's annual proxy statement. The
report is to state whether the Audit Committee has:
- Reviewed and discussed the audited financial
statements with management;
- Discussed with the independent auditors the matters
required to be discussed by SAS 61; and
- Received certain disclosures from the independent
auditors regarding their independence,
and then include a statement if based on this review if the
audit committee recommended to the Board to include the
audited financial statements in the annual report filed with
the Securities and Exchange Commission.
18. Maintain minutes of meetings and periodically report to the
Board of Directors on significant results of the foregoing
activities.
19. Establish, review, and update periodically a Code of Ethics
and ensure that management has established a system to enforce
this Code.
20. Perform any other activities consistent with this Charter, the
Corporation's by-laws, and governing law, as the Committee or
the Board deems necessary or appropriate.
21. Review succession planning within the Corporation with respect
to financial and accounting personnel.
* * * *
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PROXY
ANNUAL MEETING OF THE SHAREHOLDERS
OF
EXCHANGE NATIONAL BANCSHARES, INC.
JUNE 13, 2001
The undersigned hereby appoints Charles J. Kolb and Harry F. Goldammer, and
each of them, jointly and severally, the agents and proxies of the undersigned,
each with full power of substitution, to attend the Annual Meeting of the
Shareholders of Exchange National Bancshares, Inc. (the "Company") to be held at
The Exchange National Bank of Jefferson City's facility located at 3701 West
Truman Boulevard, Jefferson City, Missouri, on Wednesday, June 13, 2001,
commencing at 9:00 a.m., local time, and any adjournment thereof (the
"Meeting"), and to vote all of the stock of the Company, standing in the name of
the undersigned on its books as of the close of business on April 18, 2001, and
which the undersigned would be entitled to vote, if present, with the same force
and effect as if voted by the undersigned and especially to vote said stock with
respect to the following matters:
1. ELECTION OF THREE CLASS III DIRECTORS.
(INSTRUCTIONS: To vote FOR, or to WITHHOLD AUTHORITY to vote for (i.e.,
AGAINST) any individual nominee named below, mark the appropriate box next
to each such nominee's name. Please mark only one box next to each such
name.)
FOR the WITHHOLD AUTHORITY
nominee to vote for the nominee
[ ] [ ] Donald L. Campbell
[ ] [ ] Kevin L. Riley
[ ] [ ] David T. Turner
2. Proposal to ratify the selection by the Board of Directors of the
Company of the accounting firm of KPMG LLP as the Company's independent
auditors for the current year.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
3. Such other matters, related to the foregoing or otherwise, as
properly may come before said Meeting or any adjournment thereof. The
Board of Directors has advised that at present it knows of no other
business to be presented by or on behalf of the Company or its management
at the Meeting.
The undersigned hereby acknowledges receipt of the Notice of Annual Meeting and
Proxy Statement, dated May 4, 2001.
Dated: , 2001
--------------- -----------------------------------------
No. of Shares: (Sign exactly as your name appears on
your stock certificate. Where shares are
held in the name of two or more persons,
all should sign individually. A
corporation should sign by authorized
officer and affix corporate seal.)
--------------------
THIS PROXY WILL BE VOTED AS DIRECTED, BUT IF NO INSTRUCTIONS ARE SPECIFIED, THIS
PROXY WILL BE VOTED FOR THE ELECTION OF THE THREE (3) PERSONS LISTED ABOVE AS
CLASS III DIRECTORS OF THE COMPANY FOR THE NEXT THREE YEARS, AND FOR THE
RATIFICATION OF THE SELECTION OF THE ACCOUNTING FIRM OF KPMG LLP AS THE
COMPANY'S INDEPENDENT AUDITORS. IN THEIR DISCRETION, THE APPOINTED PROXIES AND
AGENTS ARE AUTHORIZED TO VOTE UPON SUCH OTHER BUSINESS AS MAY PROPERLY BE
PRESENTED AT THE MEETING. THIS PROXY WILL ALSO BE USED TO PROVIDE VOTING
INSTRUCTIONS TO THE TRUSTEE FOR ANY SHARES OF THE COMPANY'S COMMON STOCK
ALLOCATED TO PARTICIPANTS UNDER THE EXCHANGE NATIONAL BANK OF JEFFERSON CITY
PROFIT SHARING TRUST. THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF
DIRECTORS AND MAY BE REVOKED PRIOR TO ITS EXERCISE.