-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, FY1gpvTisFFwHObLOIliLsqjXjVeRQqaTGHIkMauJP2rtN+OFDhXOPdf2n6nL6B2 gW8EDNXZ8EVePTD13jc85Q== 0001068800-02-000064.txt : 20020415 0001068800-02-000064.hdr.sgml : 20020415 ACCESSION NUMBER: 0001068800-02-000064 CONFORMED SUBMISSION TYPE: DEF 14A PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 20020417 FILED AS OF DATE: 20020315 FILER: COMPANY DATA: COMPANY CONFORMED NAME: MISSISSIPPI VALLEY BANCSHARES INC CENTRAL INDEX KEY: 0000809352 STANDARD INDUSTRIAL CLASSIFICATION: STATE COMMERCIAL BANKS [6022] IRS NUMBER: 431336298 STATE OF INCORPORATION: MO FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: DEF 14A SEC ACT: 1934 Act SEC FILE NUMBER: 000-22008 FILM NUMBER: 02575756 BUSINESS ADDRESS: STREET 1: 700 CORPORATE PLZ DR CITY: ST LOUIS STATE: MO ZIP: 63105 BUSINESS PHONE: 3142682580 DEF 14A 1 missprox.txt MISSISSIPPI VALLEY BANCSHARES, INC. PROXY STATEMENT 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 /X/ Definitive Proxy Statement Commission Only (as permitted / / Definitive Additional Materials by Rule 14a-6(e)(2)) / / Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12 MISSISSIPPI VALLEY BANCSHARES, INC. (NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER) (Name of Person(s) Filing Proxy Statement, if other than the Registrant) PAYMENT OF FILING FEE (CHECK THE APPROPRIATE BOX): /X/ No fee required. / / Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11. (1) TITLE OF EACH CLASS OF SECURITIES TO WHICH TRANSACTION APPLIES: - ------------------------------------------------------------------------------ (2) AGGREGATE NUMBER OF SECURITIES TO WHICH TRANSACTION APPLIES: - ------------------------------------------------------------------------------ (3) PER UNIT PRICE OR OTHER UNDERLYING VALUE OF TRANSACTION COMPUTED PURSUANT TO EXCHANGE ACT RULE 0-11 (SET FORTH THE AMOUNT ON WHICH THE FILING FEE IS CALCULATED AND STATE HOW IT WAS DETERMINED): - ------------------------------------------------------------------------------ (4) PROPOSED MAXIMUM AGGREGATE VALUE OF TRANSACTION: - ------------------------------------------------------------------------------ (5) TOTAL FEE PAID: - ------------------------------------------------------------------------------ / / Fee paid previously with preliminary materials. / / Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing. (1) Amount Previously Paid: - ------------------------------------------------------------------------------ (2) Form, Schedule or Registration Statement No.: - ------------------------------------------------------------------------------ (3) Filing Party: - ------------------------------------------------------------------------------ (4) Date Filed: - ------------------------------------------------------------------------------ MISSISSIPPI VALLEY BANCSHARES, INC. NOTICE OF ANNUAL MEETING OF STOCKHOLDERS To be held on April 17, 2002 TO THE STOCKHOLDERS: The Annual Meeting of Stockholders of Mississippi Valley Bancshares, Inc. will be held at the St. Louis Marriott West, 660 Maryville Centre Drive, St. Louis, Missouri, 63141 on April 17, 2002, at 9:00 A.M., St. Louis time, for the following purposes: 1. To elect five Directors, each to serve for a three-year term; 2. To consider and act upon a proposal to approve an amendment to the Company's Articles of Incorporation to increase the Company's authorized common shares from 20,000,000 to 30,000,000; 3. To consider and act upon a proposal to approve the Company's 2002 Stock Option Plan (Five-Year Options), as described in the proxy materials; 4. To consider and act upon ratification of the selection of Ernst & Young LLP as independent auditors for 2002; and 5. To transact such other business as may properly come before the meeting. Only Stockholders whose names appear of record at the Company's close of business on March 1, 2002 are entitled to receive notice of and to vote at the Annual Meeting or any adjournments thereof. By Order of the Board of Directors, Carol B. Dolenz Secretary and Treasurer March 15, 2002 St. Louis, Missouri ALL STOCKHOLDERS ARE CORDIALLY INVITED TO ATTEND THE ANNUAL MEETING. WHETHER OR NOT YOU INTEND TO BE PRESENT, PLEASE COMPLETE, DATE, SIGN AND RETURN THE ENCLOSED PROXY CARD IN THE STAMPED AND ADDRESSED ENVELOPE ENCLOSED FOR YOUR CONVENIENCE. STOCKHOLDERS CAN HELP THE COMPANY AVOID UNNECESSARY EXPENSE AND DELAY BY PROMPTLY RETURNING THE ENCLOSED PROXY CARD. THE PRESENCE, IN PERSON OR BY PROPERLY EXECUTED PROXY, OF A MAJORITY OF THE COMMON STOCK OUTSTANDING ON THE RECORD DATE IS NECESSARY TO CONSTITUTE A QUORUM AT THE ANNUAL MEETING. MISSISSIPPI VALLEY BANCSHARES, INC. 13205 MANCHESTER ROAD ST. LOUIS, MISSOURI 63131 PROXY STATEMENT ANNUAL MEETING OF STOCKHOLDERS TO BE HELD APRIL 17, 2002 This Proxy Statement is being furnished to the holders of common stock of Mississippi Valley Bancschares, Inc. (the "Company") on or about March 15, 2002 in connection with the solicitation of proxies on behalf of the Board of Directors (the "Board") of the Company for use at the annual meeting of Stockholders (the "Annual Meeting") to be held on April 17, 2002 at the time and place and for the purposes set forth in the accompanying Notice of Annual Meeting of Stockholders, and at any adjournment or postponement of that meeting. Holders of shares of common stock, par value $1.00 per share ("Shares" or the "Common Stock"), of the Company at its close of business on March 1, 2002 (the "Record Date") will be entitled to receive notice of and vote at the Annual Meeting. On the Record Date, 9,416,462 shares of Common Stock were outstanding. Holders of Common Stock (the "Stockholders") are entitled to one vote per share of Common Stock they held of record on the Record Date on each matter that may properly come before the Annual Meeting. Stockholders of record on the Record Date are entitled to cast their votes in person or by properly executed proxy at the Annual Meeting. The presence, in person or by properly executed proxy, of a majority of the Common Stock outstanding on the Record Date is necessary to constitute a quorum at the Annual Meeting. If a quorum is not present at the time the Annual Meeting is convened, the Company may adjourn or postpone the Annual Meeting. A plurality of the votes of Stockholders cast at the Annual Meeting is required for the election of each director. Approval of the proposed amendment to the Articles of Incorporation requires the affirmative vote of holders of a majority of Shares entitled to vote at the meeting. Approval of the 2002 Stock Option Plan (Five-Year Options) and ratification of the selection of independent auditors each requires the affirmative vote of holders of a majority of the Shares voted on the proposal. Abstentions are counted in the number of shares present for purposes of determining whether a quorum is present, and are counted as having voted on each matter presented for vote. As a result, an abstention has the same effect as a vote against a proposal. Broker non-votes are counted in the number of Shares present for purposes of determining whether a quorum is present, but as not being present as to matters for which voting instructions are not given. As a result, broker non-votes will have the same effect as a vote against the proposal to amend the Articles of Incorporation, but will have no effect on voting on each other matter voted on at the meeting. Management of the Company ("Management"), together with members of the Board of Directors of the Company, in the aggregate, directly or indirectly controls approximately 38.4% of the Shares outstanding on the Record Date. All Common Stock represented at the Annual Meeting by properly executed proxies received prior to or at the Annual Meeting and not properly revoked will be voted at the Annual Meeting in accordance with the instructions indicated in such proxies. If no instructions are indicated, such proxies will be voted FOR the election of the Board's director nominees --- and FOR proposals 2, 3 and 4. The Board of Directors of the Company does not --- know of any matters, other than the matters described in the Notice of Annual Meeting attached to this Proxy Statement, that will come before the Annual Meeting. Any proxy given pursuant to this solicitation may be revoked by the person giving it at any time before it is voted. Proxies may be revoked by (i) filing with the Secretary of the Company, at or before the Annual Meeting, a written notice of revocation bearing a date later than the date of the proxy, (ii) duly executing and dating a subsequent proxy relating to the Common Stock and delivering it to the Secretary of the Company at or before the Annual Meeting, or (iii) attending the Annual Meeting and voting in person (although attendance at the Annual Meeting will not in and of itself constitute a revocation of a proxy). Any written notice revoking a proxy should be sent to: Corporate Secretary, Mississippi Valley Bancshares, Inc., 13205 Manchester Road, St. Louis, Missouri 63131 (telephone number (314) 543-3512). 2 The proxies are solicited by the Board of Directors of the Company. In addition to the use of the mails, proxies may be solicited personally or by telephone or facsimile transmission, by directors, officers or employees of the Company or persons employed by the Company for the purpose of soliciting proxies. It is contemplated that brokerage houses, custodians, nominees and fiduciaries will be requested to forward the soliciting material to the beneficial owners of Common Stock held of record by such persons, and will be reimbursed by the Company for expenses incurred therewith. The cost of solicitation of proxies will be borne by the Company. ---------------------- The date of this Proxy Statement is March 15, 2002. ELECTION OF DIRECTORS Pursuant to the By-Laws of the Company, the Company's Board of Directors is divided into three classes of approximately equal numbers of directors. Each of the 16 directors is elected for a three-year term, and the term of each class of directors expires in a different year. All of the current directors (including the nominees for re-election as director) were first elected in 1984, except Mr. Levy, who was first elected in 1987, Mrs. Behan, who was first elected in 1989, Mr. Bush, who was first elected in 1991, Mr. Andrew S. Baur, who was first elected in 1999 and Mr. Humphrey who was first elected in 2000. Directors of the Company receive fees of $6,000 annually, $1,000 for each meeting of the Board and $550 for each committee meeting of the Board attended, plus reimbursement of travel expenses incurred in attending Board or committee meetings. The Company's Board of Directors meets at least quarterly. The nominees for election to the Board of Directors are: Andrew N. Baur, Louis N. Goldring, Richard T. Grote, Mont S. Levy, and Lewis B. Shepley, each of whom is a current director of the Company. The members of the Company's Board of Directors whose terms will continue after the meeting, including the nominees for reelection to the Board, with certain information about each of them, including their principal occupations for the past five years, are listed below:
Term Principal Occupation Director Age Expires During Past 5 Years -------- --- ------- ------------------- John T. Baumstark ............ 57 2004 President, Archway Sales, Inc. (Chemical distributor); President, Jade Leasing (leasing & warehousing); President, Jaruba Corp. (leasing). Andrew N. Baur ............... 57 2002 Chairman and Chief Executive Officer of the Company and the Company's Subsidiary, Southwest Bank of St. Louis (the "Missouri Bank"); Director, Rawlings Sporting Goods Company, Inc. Mr. Baur is a nominee for reelection to the Board. Andrew S. Baur................ 34 2003 Senior Vice President of the Missouri Bank; Director, Southwest Bank, Belleville (the "Illinois Bank"). Linn H. Bealke ............... 57 2004 President of the Company and Vice Chairman of the Missouri Bank; Chairman and Director of the Illinois Bank; Chairman and Director of Southwest Bank of Phoenix (the "Arizona Bank"); Director, Zoltek Companies, Inc. Alice C. Behan .................. 56 2003 Private Investor. 3 Term Principal Occupation Director Age Expires During Past 5 Years -------- --- ------- ------------------- William H.T. Bush ............ 63 2003 Chairman, Bush-O'Donnell & Co., Inc. (Investments and Insurance) Director, D T Industries, Inc.; Director, Lord Abbett Family of Mutual Funds; Director, Right Choice Managed Care, Inc., Director, Engineered Support Systems, Inc. Franklin J. Cornwell, Jr. ...... 59 2003 Private Investor. Theodore P. Desloge, Jr. ..... 62 2004 Private investor since February, 1999. President, Bloom & Desloge Enterprises, Inc. (investments); Vice Chairman and Director, Valley Forge Corp. (holding company) through February 1999. Louis N. Goldring ............... 60 2002 President, AVCORP, inc. (aircraft leasing); Retired Vice Chairman and Chief Executive Officer, Franklin Equity Leasing Co. (automobile and equipment leasing) 1979-1997. Mr. Goldring is a nominee for reelection to the Board. Richard T. Grote ................. 56 2002 Chairman, American Medical Claims, Inc. (claims filing service). Mr. Grote is a nominee for reelection to the Board. Frederick O. Hanser ............ 59 2003 Chairman, St. Louis Cardinals, L.P. (National League baseball club) since January, 1996; Of counsel since April, 1996 and Partner for more than five years prior thereto, Armstrong Teasdale LLP (law firm). G. Watts Humphrey, Jr......... 57 2003 President, GWH Holdings, Inc. (private investment company); Chairman and CEO of The Conair Group, Inc.; The Techs; and Centria. Director, Churchill Downs, Incorporated. Donna D. Lambert ............. 62 2004 Private Investor. Michael D. Latta ............. 60 2004 Chairman & CEO of Universe Corporation (fabricator and installer of architectural siding materials) since December 1996; President & CEO of Res Q Tek, Inc. (a manufacturer and distributor of hydraulic and pneumatic rescue equipment) since December 1995. Mont S. Levy ................. 50 2002 Principal, Buckingham Asset Management, RIA; Member BAM Advisor Services, LLC. Mr. Levy is a nominee for reelection to the Board. Lewis B. Shepley ............. 62 2002 Consultant. Director, Siboney Corporation. President, Johnson Research & Capital, Inc., June to October 1999; Senior Vice President and Chief Financial Officer, The Reliable Life Insurance Company to June, 1999. Mr. Shepley is a nominee for reelection to the Board.
THE BOARD OF DIRECTORS RECOMMENDS THAT STOCKHOLDERS VOTE FOR THE BOARD OF DIRECTORS' SLATE OF NOMINEES STANDING FOR ELECTION. 4 COMMITTEES The Company's Board of Directors has standing Executive, Audit and Compensation and Employee Benefits Committees. The Executive Committee is composed of Mr. A.N. Baur (Chairman), Mr. A.S. Baur, Mr. Bealke, Mr. Goldring, Mr. Grote, Mr. Hanser and Mr. Humphrey. The Audit Committee is composed of Mr. Baumstark (Chairman), Mr. Bush, Mr. Cornwell, Mr. Latta, Mr. Levy and Mrs. Lambert, several members of the Board of Directors of the Missouri Bank, one member of the Board of Directors of the Illinois Bank, and one member of the Board of Directors of the Arizona Bank. The Compensation and Employee Benefits Committee is composed of Mrs. Behan, Mr. Bush, Mr. Cornwell, Mr. Desloge, Mr. Goldring, Mr. Shepley (Chairman) and one member of the Board of Directors of the Missouri Bank. The Board does not have a nominating committee. The Audit Committee, which met 4 times during 2001, recommends to the Board independent auditors to perform audit and non-audit services, reviews the scope and results of such services, reviews with management and the independent auditors any recommendations of the auditors regarding changes and improvements in the Company's accounting procedures and controls and management's response thereto, and reports to the Board after each Audit Committee meeting. A formal "Report of the Audit Committee" is included in this proxy statement. The Audit Committee is governed by a written charter approved by the Board. The Compensation and Employee Benefits Committee, which met 3 times during 2001, reviews and recommends to the Board the salaries and all other forms of compensation of the officers of the Company, the Missouri Bank, the Illinois Bank, and the Arizona Bank (collectively the "Banks") and Mississippi Valley Capital Company (collectively with the Banks, the "Affiliates"). During 2001, there were 4 regular meetings of the Board of Directors. All of the Company's directors, except Mrs. Lambert, attended 75% or more of the aggregate number of meetings of the Board and committees on which they served. REPORT OF THE AUDIT COMMITTEE The Audit Committee oversees the Company's financial reporting process on behalf of the Board of Directors. Management has the primary responsibility for the financial statements and the reporting process including the systems of internal controls. In fulfilling its oversight responsibilities, the Committee reviewed the audited financial statements in the Annual Report with management including a discussion of the quality, not just the acceptability, of the accounting principles, the reasonableness of significant judgments, and the clarity of disclosures in the financial statements. The Committee reviewed with the independent auditors, who are responsible for expressing an opinion on the conformity of those audited financial statements with generally accepted accounting principles, their judgments as to the quality, not just the acceptability, of the Company's accounting principles and such other matters as are required to be discussed with the Committee under generally accepted auditing standards. In addition, the Committee has discussed with the independent auditors the auditors' independence from management and the Company including the matters in the written disclosures required by the Independence standards Board and considered the compatibility of nonaudit services with the auditors' independence. The Committee discussed with the Company's internal and independent auditors the overall scope and plans for the respective audits. The Committee meets with the internal and independent auditors, with and without management present, to discuss the results of their examinations, their evaluations of the Company's internal controls, and the overall quality of the Company's financial reporting. The Committee held four meetings during 2001. In reliance on the reviews and discussions referred to above, the Committee recommended to the Board of Directors (and the Board has approved) that the Company's audited financial statements be included in its Annual Report on Form 10-K for the year ended December 31, 2001 for filing with the Securities and Exchange Commission. The Committee and the Board have also recommended, subject to shareholder approval, the selection of the Company's independent auditors. John T. Baumstark, Audit Committee Chairman William H. T. Bush Franklin J. Cornwell, Jr. Donna D. Lambert Michael D. Latta Mont S. Levy William F. Holekamp Charles W. Hrebec, Jr. Richard G. Millman Charles A. Zone Ronald J. Ortyl, Sr. Stephen A. Wood February 12, 2002 5 EXECUTIVE OFFICERS The executive officers of the Company and key executive officers of the Banks, their ages as of December 31, 2001, and their positions with the Company and the Banks are set forth below. All officers serve at the pleasure of the Company's Board of Directors. Each of the executive officers has served in their current or other executive positions with the Company or the Banks for more than five years.
Name Age Positions ---- --- --------- Andrew N. Baur ................. 57 Chairman and Chief Executive Officer of the Company and the Missouri Bank since 1984. Linn H. Bealke ................. 57 President of the Company and Vice Chairman and Chief Operating Officer of the Missouri Bank since 1984; Chairman of the Illinois Bank since 1998; Chairman of the Arizona Bank since 2000. Carol B. Dolenz ................ 49 Secretary and Treasurer of the Company since 1989; Secretary and Vice President of the Missouri Bank since 1990. Stephen P. Marsh ............... 46 President of the Missouri Bank and Senior Loan Officer of the Banks since 1999. Mary P. Sherrill................ 47 Vice Chairman and Chief of Bank Operations of the Missouri Bank since 1999. Paul M. Strieker ............... 50 Executive Vice President, Controller and Chief Financial Officer of the Company since 1990; Executive Vice President of the Missouri Bank since 1992.
EXECUTIVE COMPENSATION The following table summarizes compensation earned or awarded to the Company's Chief Executive Officer and each of the other four most highly paid executive officers whose aggregate annual salary and bonuses exceeded $100,000 during 2001. These officers are referred to as the named executive officers.
Long Term Compensation ------------ All Other Annual Compensation Securities Compensation ------------------- Underlying ------------ Name and Principal Positions Year Salary ($) Bonus ($) Options (#) ($)(1) - ---------------------------- ---- ---------- --------- ----------- ------------ Andrew N. Baur 2001 $325,702 $200,000 -- $33,248 Chairman and Chief Executive 2000 314,510 225,000 14,000 31,048 Officer of the Company and the 1999 304,085 250,000 6,000 33,578 Missouri Bank. Linn H. Bealke President of the Company and 2001 $225,822 $200,000 -- $40,321 Vice Chairman and Chief Operating 2000 213,823 180,000 13,000 35,426 Officer of the Missouri Bank; 1999 207,295 200,000 5,000 33,762 Chairman of the Illinois Bank and Chairman of the Arizona Bank. Stephen P. Marsh 2001 $168,272 $ 45,000 -- $20,825 President of the Missouri Bank 2000 160,682 85,000 11,000 18,125 and Senior Loan Officer of the Banks. 1999 166,194 100,000 5,000 15,342 Mary P. Sherrill 2001 $119,000 $ 28,000 -- $17,747 Vice Chairman and Chief of Bank 2000 113,166 27,000 10,000 15,255 Operations of the Missouri Bank. 1999 108,166 40,000 10,000 12,368 Paul M. Strieker 2001 $116,250 $ 22,000 -- $ 6,732 Executive Vice President, Controller 2000 111,883 20,000 3,000 6,507 and Chief Financial Officer of the 1999 107,500 40,000 3,000 6,180 Company and Executive Vice President of the Missouri Bank - ---------- (1) Consists of Company matching contributions to its 401(k) Plan, imputed value of life insurance benefit, and director's fees; amounts paid in 2001 are as follows: 401(k) Plan Life Ins. Director's Contributions Benefits Fees ------------- --------- ---------- Mr. A.N. Baur ............ $4,250 $1,548 $ 27,450 Mr. Bealke ............... 4,250 2,521 33,550 Mr. Marsh ................ 4,250 900 15,675 Mrs. Sherrill............. 3,577 970 13,200 Mr. Strieker ............. 2,365 1,117 3,250
6 OPTION GRANTS IN 2001 The Company did not grant options to the named executive officers during 2001. OPTIONS EXERCISED IN 2001 AND YEAR-END OPTION VALUES The following table summarizes options exercised during 2001 and the values of options outstanding on December 31, 2001 for the named executive officers.
Number of Securities Value of Underlying Unexercised Unexercised In-the-Money Options at Options at Shares Fiscal Year-End Fiscal Year-End Acquired on Value Exercisable/ Exercisable/ Name Exercise # Realized $ Unexercisable # Unexercisable $ ---- ----------- ---------- --------------- --------------- Mr. A.N. Baur ... -- -- 45,500/16,500 $515,675/$180,075 Mr. Bealke ...... -- -- 27,700/14,900 $272,450/$165,388 Mr. Marsh ....... 8,000 $157,380 16,000/12,250 $151,284/$143,306 Mrs. Sherrill.... 12,000 $183,825 13,500/14,500 $ 75,688/$152,313 Mr. Strieker .... 5,750 $ 64,125 3,000/ 4,750 --/$ 44,063
CONSULTING AGREEMENTS The Company and the Missouri Bank have entered into Consulting Agreements ("Consulting Agreements") with Messrs. A.N. Baur and Bealke providing for certain benefits in the event of termination of employment for any reason after a "Change in Control" (as defined in the Consulting Agreements), or for any reason other than voluntarily by the executive or by the Missouri Bank or the Company for "Cause" (as defined in the Consulting Agreements) prior to a Change in Control. Benefits, provided until the executive attains the age of 65 or dies, would include (i) a monthly consulting fee of $2,000; (ii) specified levels of medical insurance for the executive and his dependents; (iii) disability insurance coverage; and (iv) to the extent medical insurance or disability insurance benefits are taxable to the executive, additional compensation equal to the taxes on such benefits and on the additional compensation provided to cover such taxes. Such benefits would be subject to reduction or termination under certain circumstances. Prior to the executive's 60th birthday, he would be required to provide certain consulting services to the Company or the Bank if requested. 7 EMPLOYMENT AGREEMENTS The Company and the Missouri Bank have entered into Management Retention Agreements ("Retention Agreements") with eleven of their respective officers, including Mr. Marsh, Mrs. Sherrill and Mr. Strieker but excluding Mr. A.N. Baur and Mr. Bealke, pursuant to the terms of which, if the employment with the Company or the Missouri Bank of an officer party to such a Retention Agreement is terminated for any reason other than for "Cause" (as defined in the Retention Agreements) within one year after a "Change in Control" (as defined in the Retention Agreements), the officer or his or her personal or legal representative will continue to receive compensation for one year after the date of such termination at a rate equal to the officer's base compensation in effect on either the effective date of such Change of Control or the date of termination of the officer's employment, whichever rate is greater. Current base compensation is $167,000 per annum for Mr. Marsh, $120,000 per annum for Mrs. Sherrill and $117,000 per annum for Mr. Strieker. In addition, the Company agrees to pay all costs and expenses, including reasonable attorney's fees, incurred by the officer in enforcing his or her rights under the Retention Agreement. PENSION AND SUPPLEMENTAL PENSION PLANS The Company sponsors the Southwest Bank of St. Louis Employees Retirement Plan (the "Retirement Plan"), a qualified defined benefit plan, and the Southwest Bank of St. Louis Supplemental Retirement Plan (the "Supplemental Plan"), a non-qualified defined benefit plan. The Retirement Plan credits benefits to participants based upon years of service and compensation at the time of retirement. For purposes of the Retirement Plan, compensation means the average salary over the highest five consecutive years in the most recent ten year period prior to retirement. Benefits are reduced by the amount of Social Security benefits required to be recognized (offset) under the pension formula, and are payable as life annuities at age 65, with no death benefit. Benefits under the Retirement Plan are restricted by certain statutory limits on the amount of compensation which may be considered in calculating benefits and other statutory limitations. A participant's benefit under the Supplemental Plan equals his or her benefit as calculated under the Retirement Plan, without regard to statutory limitations contained in the Retirement Plan, reduced by his or her actual benefit under the Retirement Plan. Benefits are payable commencing at age 65, with no death benefit. The following table sets forth the estimated annual benefits under both the Retirement and Supplemental Plans based upon various assumed levels of compensation and years of service: RETIREMENT AND SUPPLEMENTAL PLANS TABLE
YEARS OF SERVICE -------------------------------------------------------------------------------------- COMPENSATION 10 15 20 25 30 35 - ------------ ---------- ---------- ---------- ---------- ---------- ---------- $ 75,000 ............. $ 9,000 $ 13,000 $ 18,000 $ 22,000 $ 27,000 $ 31,000 100,000 ............. 13,000 19,000 25,000 32,000 38,000 45,000 125,000 ............. 16,000 25,000 33,000 41,000 49,000 58,000 150,000 ............. 20,000 30,000 40,000 51,000 61,000 71,000 250,000 ............. 35,000 53,000 70,000 88,000 106,000 123,000 350,000 ............. 50,000 75,000 100,000 126,000 151,000 176,000 450,000 ............. 65,000 98,000 130,000 163,000 196,000 228,000 550,000 ............. 80,000 120,000 160,000 201,000 241,000 281,000
For purposes of determining Retirement and Supplemental Plan benefits, the current compensation for the above-named executive officers is as shown under "Annual Compensation" in the executive compensation table above. Mr. A.N. Baur and Mr. Bealke currently have 17 years of service and would have 25 years of service at age 65. Mr. Marsh currently has 17 years of service and would have 36 years of service at age 65. Mrs. Sherrill currently has 16 years of service and would have 34 years of service at age 65. Mr. Strieker currently has 14 years of service and would have 29 years of service at age 65. 8 BOARD COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION The Compensation and Employee Benefits Committee of the Board of Directors (the "Committee"), composed of six independent directors and one independent director of the Missouri Bank, administers the executive compensation program. None of the Committee's members is or has been an officer or employee of the Company or of the Banks. The Committee passes on all material issues relating to executive compensation. The philosophy of the Committee as it relates to executive compensation is that the Chief Executive Officer ("CEO") and other executive officers should be compensated at competitive levels sufficient to attract, motivate and retain talented executives who are capable of leading the Company and the Banks in achieving their business objectives in an industry facing increasing regulation, competition and change. Annual compensation for the Company's senior management consists of base salary and, when appropriate, bonus compensation. Salary levels of Company executives are reviewed, and are normally adjusted, annually, and any bonuses are normally awarded annually. In determining appropriate salaries, the Committee considers: (1) the CEO's recommendations as to compensation for all other executive officers; (2) the scope of responsibility, experience, time in position and individual performance of each officer, including the CEO; and (3) compensation levels at other banking institutions in the St. Louis metropolitan area and in other metropolitan areas. The Committee's analysis is a subjective process which utilizes no specific weighting or formula of the aforementioned factors in determining executives' base salaries. The Committee considers bonus compensation to be its primary motivational method for encouraging and rewarding outstanding individual performance, especially for the Banks' senior officers, and overall performance by the Company and the Banks. Awards under the Company's bonus plan are granted by the Committee based primarily upon: (1) performance of the Banks, (2) performance of the individual officer and (3) recommendation of the CEO. The purpose of the bonus plan is to provide a special incentive to each executive to maximize his or her individual performance and the overall performance of the Banks. Especially for most senior officers, bonus-to-salary ratios are sufficiently high so that an executive who is not awarded a bonus will be compensated near the bottom of his industry peer group. Bonuses are not based upon formulas or other objective criteria. In setting salaries and bonuses, the Committee utilizes data reflecting peer compensation within the banking industry. Periodically, the Committee has received reports from Hay Management Consultants concerning the compensation of the CEO and of the president of the Company, especially in relation to the compensation of similar executives in the banking industry, and making recommendations in respect of compensation and benefit levels. Such reports were received during 2000, 1999, 1997, 1994 and 1991. It is the Committee's present intention to seek advice from outside experts every few years. Annually, the Committee reviews statistical data provided by the Company concerning compensation levels at other banks and bank holding companies in the St. Louis metropolitan area, although useful data is becoming more difficult to acquire because of changes in the local banking market. In determining total compensation for officers for 2001, the Committee reviewed the Company's performance in its principal areas of activity. The Committee felt that the Company had had an excellent year with the exception of the commercial and industrial loan area at its main bank, and it awarded bonuses accordingly. Lewis B. Shepley, Chairman Alice C. Behan William H.T. Bush Franklin J. Cornwell, Jr. Theodore P. Desloge, Jr. Louis N. Goldring Zsolt Rumy 9 CERTAIN TRANSACTIONS Some of the directors and officers of the Company and of the Banks, and members of their immediate families and firms and corporations with which they are associated, have had transactions with the Banks, including borrowings and investments in certificates of deposit and repurchase agreements. All such loans and investments have been made in the ordinary course of business, have been made on substantially the same terms, including interest rates paid or charged and collateral required, as those prevailing at the time for comparable transactions with unaffiliated persons, and did not involve more than the normal risk of collectibility or present other unfavorable features. As of December 31, 2001, the aggregate outstanding amount of all loans to officers and directors of the Company and to firms and corporations in which they have at least a 10% beneficial interest was approximately $94 million, which represented approximately 61% of the Company's consolidated shareholders' equity at that date. Frederick O. Hanser, a director and Stockholder of the Company, is of counsel to the law firm of Armstrong Teasdale LLP, counsel to the Company and the Banks. PERFORMANCE GRAPH The following five-year graph compares the percentage change in the Company's cumulative total shareholder return on Common Stock as quoted on the Nasdaq National Market System beginning with January 1, 1997 with the cumulative total return, assuming reinvestment of dividends, of (i) the Nasdaq Stock Market Index for United States companies, and (ii) the Nasdaq Bank Stocks Index. MISSISSIPPI VALLEY BANCSHARES, INC. Cumulative Total Return 12/31/96 - 12/31/01 [GRAPH]
12/31/96 12/31/97 12/31/98 12/31/99 12/31/00 12/31/01 -------- -------- -------- -------- -------- -------- Mississippi Valley Bancshares, Inc....... 100.0 153.5 162.1 131.3 145.3 196.4 NASDAQ Composite (US).................... 100.0 122.5 172.7 320.9 193.0 153.2 NASDAQ Bank Stocks....................... 100.0 167.4 166.3 159.9 182.4 197.4
10 PRINCIPAL STOCKHOLDERS The following table sets forth as of December 31, 2001, certain information concerning the ownership of Common Stock by each person who is known by the Company to own beneficially more than 5% of such stock, by each director of the Company, by each of the executive officers named in the Summary Compensation Table, and by all directors and officers of the Company as a group:
SHARES OF COMMON PERCENT NAME OF BENEFICIAL OWNER STOCK OF CLASS - ------------------------ --------- -------- John T. Baumstark................................. 68,284 * Andrew N. Baur (1)(2)(3) ......................... 1,163,421 11.8% Andrew S. Baur (1)(2)(4).......................... 218,705 2.2% Linn H. Bealke (1)(2)(5) ......................... 343,847 3.5% Alice C. Behan ................................... 100,000 1.0% William H.T. Bush (6) ............................ 32,000 * Franklin J. Cornwell, Jr. ........................ 127,800 1.3% Theodore P. Desloge, Jr..... ..................... 10,060 * Louis N. Goldring ................................ 310,325 3.2% Richard T. Grote ................................ 32,046 * Frederick O. Hanser (7) .......................... 64,410 * G. Watts Humphrey, Jr. (8)........................ 531,960 5.4% Donna D. Lambert.... ............................. 117,360 1.2% Michael D. Latta (9).............................. 162,860 1.7% Mont S. Levy (10) ................................ 141,840 1.4% Stephen P. Marsh (1)(2)(11) ...................... 86,453 * Lewis B. Shepley ................................ 79,413 * Mary P. Sherrill (1)(2)(12) ...................... 33,606 * Paul M. Strieker (1)(2)(13)....................... 47,718 * All Directors and Executive Officers as a Group (20 individuals) (1)(2)(3)(4)(5) (8)(9)(10)(11).............................. 3,713,123 37.8% - ---------------------------- * less than one percent (1) Assumes the exercise of Options outstanding and exercisable as of December 31, 2001 or within 60 days thereafter, including those beneficially owned by the named person as follows: Mr. A.N. Baur, 45,500; Mr. A.S. Baur, 20,500; Mr. Bealke, 27,700; Mr. Marsh, 19,750; Mrs. Sherrill, 13,500; Mr. Strieker, 3,000; all directors and executive officers as a group, 137,200 shares. (2) Includes Shares held in the Company's 401(k) Retirement Savings Plan for the benefit of the named person, as to which the named person has sole dispositive power, but no voting power, as follows: Mr. A.N. Baur 27,501; Mr. A.S. Baur 2,363; Mr. Bealke 27,839; Mr. Marsh 15,473; Mrs. Sherrill 14,506, Mr. Strieker 12,718; and all directors and officers as a group, 111,715 shares. (3) Includes 10,456 shares held in a trust of which Mr. Baur is one of two co-trustees and as to which he has shared voting and dispositive power. (4) Excludes 624 shares held directly by spouse but includes 850 shares as Co-Trustee of spouse's trust and 800 shares as Trustee of children's trusts. (5) Excludes 13,120 shares held by Mr. Bealke's spouse, and includes 9,640 shares in his spouse's IRA Plan in which Mr. Bealke has investment power. Also includes 4,400 shares held by the Bealke Family Trust of which Mr. Bealke is one of two trustees and as to which he has shared voting and investment power. (6) Excludes 5,500 shares held by Mr. Bush's spouse. 11 (7) Excludes 26,400 shares held by Mr. Hanser's spouse. (8) Shares held by Humphrey family trusts whose Trustees have entered into an agreement with Mr. Humphrey granting him sole voting and investment power. (9) Includes 11,000 shares held in a Charitable Trust of which Mr. Latta has shared voting and investment power. (10) Includes 92,200 shares, held in two trusts as to which Mr. Levy serves as a co-trustee and has shared voting and dispositive power. Excludes 200 shares held by Mr. Levy's spouse and 4,000 shares held in Trusts for Mr. Levy's children. (11) Includes 1,864 shares held as Custodian for minor children, and 24,040 shares held in his spouse's Revocable Trust in which Mr. Marsh has investment power. (12) Excludes 3,114 shares held by Mrs. Sherrill's spouse. (13) Excludes 2,000 shares held by Mr. Strieker's spouse.
For purposes of the table, a person is deemed to be a beneficial owner of Shares if the person has or shares the power to vote or to dispose of them. Unless otherwise indicated in the footnotes, each person had sole voting and dispositive power over the Shares listed in the beneficial ownership table. The shareholders disclaim beneficial ownership in the Shares described in the footnotes as being "held by" or "held for the benefit of" other persons. The address of each person in the table is in care of the Company, 13205 Manchester Road, St. Louis, Missouri, 63131. COMPLIANCE WITH SECTION 16(a) OF THE SECURITIES EXCHANGE ACT OF 1934 Directors and Executive Officers of the Company are required by Section 16(a) of the Securities Exchange Act of 1934 to file certain reports with the Securities and Exchange Commission detailing their beneficial ownership of common stock and reporting changes in such beneficial ownership. To the Company's knowledge, based solely on review of copies of such reports furnished to the Company and written representations that no other reports were required, during 2000 all Section 16(a) filing requirements were complied with on a timely basis. 12 PROPOSED AMENDMENT TO THE ARTICLES OF INCORPORATION TO INCREASE AUTHORIZED SHARES OF COMMON STOCK The Company's Articles of Incorporation currently authorize the issuance of 20,000,000 shares of Common Stock, $1.00 par value and 100,000 shares of preferred stock, $1.00 par value. In January 2002, the Board of Directors adopted a resolution proposing that the Articles of Incorporation be amended to increase the authorized number of shares of Common Stock to 30,000,000, subject to Stockholder approval of the amendment. VOTE REQUIRED Approval of the proposal requires the affirmative vote of the majority of shares of Common Stock entitled to vote at the meeting. PROPOSED AMENDMENT As of March 1, 2002, the Company had 9,416,462 Shares of Common Stock outstanding and 755,800 Shares reserved for future issuance under the Company's employee stock plans, of which 561,100 Shares are covered by outstanding options and 194,700 Shares are available for future option grants or for issuance under the Company's 401(k) Plan. Based upon the foregoing number of outstanding and reserved Shares, the Company currently has 9,827,738 Shares remaining available for other purposes. The following is the text of Section A of Article 3 of the Articles of Incorporation of the Company as proposed to be amended: "A. CLASSES AND NUMBER OF SHARES. The total number of shares of all classes of stock which the Corporation shall have authority to issue is 30,100,000 shares consisting of 30,000,000 shares of Common Stock, $1.00 par value, and 100,000 shares of Preferred Stock, $1.00 par value." PURPOSE AND EFFECT OF THE PROPOSED AMENDMENT The Board of Directors believes that the availability of additional authorized but unissued Shares will provide the Company with the flexibility to issue Common Stock for a variety of corporate purposes, such as to raise equity capital, to adopt additional employee benefit plans or to reserve additional Shares for issuance under such plans, to effect future stock splits in the form of stock dividends and to make acquisitions through the use of Common Stock. Because of the limited number of authorized shares of Common Stock which are not issued or reserved for future issuance, the Board of Directors currently is limited in its ability to authorize the issuance of additional Shares for any purposes. The Board of Directors believes that the proposed increase in authorized Common Stock would facilitate the Company's ability to accomplish business and financial objectives in the future without the necessity of delaying such activities for further Stockholder approval, except 13 as may be required in particular cases by the Company's charter documents, applicable law or the rules of any stock exchange or national securities association trading system on which the Company's securities may then be listed. The Company's Common Stock is currently listed on The Nasdaq National Market, which requires Stockholder approval for certain stock issuances. Under the Company's Articles of Incorporation, the Company's Stockholders do not have preemptive rights with respect to Common Stock. Thus, should the Board of Directors elect to issue additional Shares of Common Stock, existing Stockholders would not have any preferential rights to purchase such Shares. If the Board of Directors elects to issue additional Shares, such issuance could have a dilutive effect on the earnings per Share, book value per Share, voting power and shareholdings of current Stockholders. The proposal could have an anti-takeover effect by rendering it more difficult or by discouraging a merger, tender offer, proxy contest or the assumption of control and the removal of incumbent management by a holder of a large block of Common Stock although that is not its intention. For example, if the Company were the subject of a hostile takeover attempt, it could try to impede the takeover by issuing Shares of Common Stock, thereby diluting the voting power of the other outstanding Shares and increasing the potential cost of the takeover. The availability of this defensive strategy to the Company could discourage unsolicited takeover attempts, thereby limiting the opportunity for the Company's Stockholders to realize a higher price for their Shares than is generally available in the public markets. The Board of Directors is not aware of any attempt, or contemplated attempt, to acquire control of the Company, and this proposal is not being presented with the intent that it be utilized as a type of anti-takeover device. In addition to the Company's Common Stock, the Company's Articles of Incorporation currently empower the Board of Directors to authorize the issuance of one or more series of preferred stock without Stockholder approval. Currently, no shares of preferred stock of the Company are issued or outstanding. No change to the Company's preferred stock authorization is requested by the Amendment. If the proposed amendment is adopted, it will become effective upon filing of a Certificate of Amendment to the Company's Articles of Incorporation with the Secretary of State of the State of Missouri. However, if the Company's Stockholders approve the proposed amendment, the Board retains discretion under Missouri law not to implement the proposed amendment. If the Board exercised such discretion, the number of authorized shares would remain at current levels. THE BOARD OF DIRECTORS RECOMMENDS THAT THE STOCKHOLDERS VOTE FOR APPROVAL OF THE AMENDMENT TO THE COMPANY'S ARTICLES OF INCORPORATION. 14 APPROVAL OF THE MISSISSIPPI VALLEY BANCSHARES, INC. 2002 STOCK OPTION PLAN (FIVE-YEAR OPTIONS) At the Annual Meeting, the Stockholders will be presented with a proposal to approve the Company's 2002 Stock Option Plan (Five-Year Options) (the "2002 Plan"). The Company's 1991 Stock Option Plan (Five-Year Options) (the "1991 Plan"), which has heretofore (together with amendments thereto) been approved by the Company's Stockholders, is still in effect. The 2002 Plan was adopted by the Board of Directors in January, 2002 subject to Stockholder approval. As of March 1, 2002, there were 194,700 shares remaining available for grant of options under the 1991 Plan. The Board believes that, in order to retain, motivate and attract key personnel essential to the continued success of the Company, it is necessary to maintain its current practice of providing meaningful option grants to officers of the Company and its subsidiaries. The Board believes that stock options have played a critical role in recent years in motivating Company management to build a growing, highly competitive business, while also delivering a consistently strong financial performance record. The 2002 Plan is designed to help stimulate a deeper commitment to the Company, minimize management turnover and reward continuous improvement in its financial performance. The Board believes that providing management with this program of consistent stock option grants is an appropriate method for aligning the interest of management with its Stockholders. The issuance of optioned Shares should only occur if management has delivered increased value to the Stockholders in the form of an appreciation in the price of the Company's Common Stock during the term of the options granted under the 2002 Plan. The following is a brief description of the material features of the 2002 Plan. GENERAL The 2002 Plan authorizes the granting of non-qualified stock options. Options may be granted under the 2002 Plan through December 31, 2011, unless it is earlier terminated. The 2002 Plan may, subject to rights under options previously granted, be wholly or partially amended or otherwise modified, suspended or terminated at any time by the Board or its Executive Committee, but Stockholder approval is required to increase the number of Shares that may be issued under the 2002 Plan. Options granted may not be subsequently amended to reduce their exercise prices. The 2002 Plan is not subject to the provisions of the Employee Retirement Income Security Act of 1974, as amended ("ERISA"), and is not a qualified plan under Section 401(a) of the Internal Revenue Code of 1986, as amended (the "Code"). Proceeds received by the Company from the sale of Common Stock pursuant to the exercise of options granted under the 2002 Plan will be used for general corporate purposes. 15 SECURITIES SUBJECT TO THE 2002 PLAN The aggregate number of Shares which may be issued upon exercise of options granted under the 2002 Plan shall not exceed 500,000. If an option expires or is canceled without having been fully exercised, the number of Shares as to which such option was not exercised prior to its expiration or cancellation may again be optioned under the 2002 Plan. ADMINISTRATION OF THE 2002 PLAN The 2002 Plan provides for administration by the Compensation and Employee Benefits Committee of the Board (the "Committee"). In addition to administering the 2002 Plan, the Committee is also authorized to interpret the 2002 Plan and the Stock Option Agreements (defined below), to adopt such rules for the administration, interpretation and application of the 2002 Plan as are consistent therewith and to interpret, amend or revoke any such rules. Members of the Committee receive such compensation for their services as is determined by the Board. All expenses and liabilities that the members of the Committee incur in connection with the administration of the 2002 Plan will be borne by the Company. ELIGIBILITY AND PARTICIPATION Any officer of the Company or of any of its subsidiaries is eligible to be granted options under the 2002 Plan. Directors of the Company are eligible to be granted options if they are also employees of the Company or one of its subsidiaries. The Committee is authorized to select the individuals to whom options are to be granted, to determine the number of Shares to be subject to each option and to establish the terms and conditions of the options, consistent with the 2002 Plan. In this respect, the Committee may consider recommendations of the Company's Chairman. The Company will enter into a written agreement ("Stock Option Agreement") with each optionee specifying the terms of the option. TERMS OF OPTIONS GRANT OF OPTIONS. Each option will be for the number of Shares prescribed by the Committee, subject to a maximum of 15,000 Shares. EXERCISABILITY OF OPTIONS. Each option will be exercisable at such times and in such installments (which may be cumulative) as the Committee may provide in the terms of each individual option; provided, however, that an option may not be exercised for more than twenty-five percent of the Shares subject to the option for each full year elapsed since the grant of the option. An option may be exercised for all Shares subject to it in the event of a change in control of the Company. Options will be exercisable by written notice to the Company, specifying the number of Shares being purchased and accompanied by payment of the purchase price for such Shares. The option price may be paid in cash or by check. The Committee may, as a condition to the exercise of any option, require that the optionee deliver such representations and documents as it deems necessary to effect compliance with applicable federal and state securities laws and regulations. 16 The Committee may also take whatever additional action it deems appropriate to effect such compliance. PURCHASE PRICE OF SHARES SUBJECT TO OPTIONS. The price of the Shares subject to each option shall be set by the Committee, provided, however, that the price per Share of an option shall not be less than 100% of the closing sale price of a Share of the Company's Common Stock as quoted on the Nasdaq National Market on the day the option is granted. If Shares are not traded on such date, then the closing price will be determined as of the next preceding trading date during which a sale occurred. NON-ASSIGNABILITY. Options may be transferred only by will or by the laws of descent and distribution. During a participant's lifetime, options are exercisable only by the participant. No option or interest or right therein will be subject to disposition by transfer, alienation, pledge, encumbrance, assignment or any other means, whether voluntary, involuntary or by operation by law. EXPIRATION OF OPTIONS. No option may be exercised to any extent after the first to occur of the following events: (1) the expiration of five years from the date the option was granted or (2) the termination of the optionee's employment for any reason other than death, disability or incapacity or (3) the expiration of ninety days from the date of termination of the optionee's employment by reason of disability or incapacity or (4) the expiration of ninety days from the date of the optionee's death. To the extent an option is exercisable at the time of an optionee's death or termination of an optionee's employment by reason of disability or incapacity, the optionee's personal or legal representative may exercise the option on the optionee's behalf for ninety days thereafter. No portion of an option that is unexercisable at termination of employment may thereafter become exercisable. Subject to the foregoing, the Committee will provide, in the terms of each individual Stock Option Agreement, when such option expires and becomes unexercisable. ADJUSTMENTS UPON CHANGE IN CAPITALIZATION. In the event of a stock dividend on, split-up or combination of, or other change in the Common Stock, the number and kind of Shares available for option under the 2002 Plan or subject to options outstanding thereunder will be correspondingly added to, increased, diminished or changed, without increase or decrease in the aggregate purchase price of all Shares subject to options outstanding prior to such change. TRANSFER RESTRICTIONS. Unless otherwise approved in writing by the Committee, no Shares acquired upon exercise of any option by any officer (as defined in Rule 16a-1(f) of the Securities and Exchange Commission) or director may be sold, assigned, pledged, encumbered or otherwise transferred until at least six months have elapsed from (but excluding) the date that such option was granted. The Committee, in its discretion, may impose such other restrictions on the transferability of the Shares purchasable upon the exercise of an option as it deems appropriate. Any such other restriction shall be set forth in the Stock Option Agreement and may be referred to on the certificates evidencing such Shares. CONTINUED EMPLOYMENT. Nothing in the 2002 Plan or in any Stock Option Agreement will confer upon any optionee any right to continue in the employ of the Company or any subsidiary of the Company, or will interfere with or restrict in any way the rights of the 17 Company, or any subsidiary of the Company, to discharge any optionee at any time for any reason whatsoever, with or without cause. NO RIGHTS AS A STOCKHOLDER. No holder of an option will be, nor have any rights or privileges of, a Stockholder of the Company as to Shares covered by such option until such Shares are issued by the Company and delivered to such holder. CONFORMITY TO SECURITIES LAWS. The 2002 Plan is intended to conform to the extent necessary with all provisions of the Securities Act of 1933, as amended, and the Securities Exchange Act of 1934, as amended, and any and all regulations and rules promulgated by the Securities and Exchange Commission thereunder, including without limitation Rule 16b-3. The 2002 Plan will be administered, and options will be granted and may be exercised, only in such a manner as to conform to such laws, rules and regulations. FEDERAL INCOME TAX CONSEQUENCES The following discussion is a general summary of the material federal income tax consequences to participants in the 2002 Plan. The discussion is based on the Code ruling and decisions now in effect, all of which are subject to change. The summary does not discuss all aspects of federal income taxation that may be relevant to a particular participant in light of such participant's personal investment circumstances. Also, state and local income taxes are not discussed and may vary from locality to locality. A holder of an option does not realize income as a result of the grant of such option, but normally realizes compensation income taxable at ordinary income rates upon the option's exercise to the extent the fair market value of the Shares acquired on the date of the exercise of such option exceeds the option exercise price paid. The Company (or other employer corporation) will be entitled to a tax deduction in an amount equal to the amount the optionee is required to include in ordinary income at the time of such inclusion, and will be required to withhold taxes on such ordinary income. At the time the option is exercised, the optionee (or his or her successor) must make full payment to the Company of all amounts that must be withheld by the Company for federal, state or local tax purposes. The optionee's initial tax basis for Shares acquired upon the exercise of a non-qualified stock option will be the option exercise price paid plus the amount of ordinary income realized by the optionee. Any appreciation in the value of such Shares will qualify for long-term capital gains treatment if the optionee holds the Shares for one year or longer. THE BOARD OF DIRECTORS RECOMMENDS THAT THE STOCKHOLDERS VOTE FOR APPROVAL OF THE COMPANY'S 2002 STOCK OPTION PLAN (FIVE-YEAR OPTIONS). 18 SELECTION OF AUDITORS Ernst & Young LLP has served as the Company's independent auditors since 1984 and has been selected by the Board of Directors to serve as auditors for the present year. Should the selection of Ernst & Young LLP be disapproved by the Stockholders, the Board of Directors will review its selection. Fees for the last year were annual audit and audit-related services $113,000, and all other nonaudit services, primarily tax consulting $29,000. A representative of Ernst & Young LLP is expected to be present at the Meeting, will have an opportunity to make a statement if he or she desires to do so, and is expected to be available to respond to appropriate questions of Stockholders. THE BOARD OF DIRECTORS RECOMMENDS THAT THE STOCKHOLDERS VOTE FOR RATIFICATION OF ITS SELECTION OF ERNST & YOUNG LLP AS INDEPENDENT AUDITORS TO AUDIT THE ACCOUNTS OF THE COMPANY AND ITS SUBSIDIARIES FOR 2002. OTHER MATTERS Management does not intend to present to the Annual Meeting any business other than the items stated in the "Notice of Meeting of Stockholders" and does not know of any matters to be brought before the Meeting other than those referred to above. If, however, any other matters properly come before the Meeting, the persons designated as proxies will vote on each such matter in accordance with their best judgment. Whether or not you expect to be at the Meeting in person, please sign, date and return promptly the enclosed Proxy. No postage is necessary if the Proxy is mailed in the United States. STOCKHOLDER PROPOSALS Any proposal to be included in the proxy materials for next year's Annual Meeting must be received at the principal executive offices of the Company at 13205 Manchester Road, St. Louis, Missouri, 63131 not later than November 16, 2002. Any such proposals should be directed to the attention of the Secretary for consideration for inclusion in the Company's Proxy Statement and Form of Proxy relating to the next Annual Meeting. Any such proposals must comply in all respects with the rules and regulations of the Securities and Exchange Commission and it is suggested that proponents of any proposals submit such proposals to the Company sufficiently in advance of the deadline by Certified Mail-Return Receipt Requested. 19 In addition, if a Stockholder fails to notify the Company on or before February 1, 2003 of a proposal which such Stockholder intends to present at next year's Annual Meeting other than through inclusion of such proposal in the Company's proxy materials for the meeting, then management proxies may use their discretionary voting authority with respect to such proposal if it is presented at the meeting. By Order of the Board of Directors CAROL B. DOLENZ Secretary and Treasurer March 15, 2002 St. Louis, Missouri 20 PLEASE MARK YOUR VOTES AS INDICATED IN THIS EXAMPLE / X / 1. ELECTION OF DIRECTORS: FOR all nominees WITHHOLD listed at right AUTHORITY (except as marked to vote for all nominees to the contrary) listed at right / / / / (Instructions: To withhold authority to vote for any individual nominee, strike a line through the nominee's name.) 01 Andrew N. Baur, 02 Louis N. Goldring, 03 Richard T. Grote, 04 Mont S. Levy, 05 Lewis B. Shepley 2. To consider and act upon a proposal to approve an amendment to the Articles of Incorporation to increase the Company's authorized Common shares from 20,000,000 to 30,000,000, as described in the accompanying Proxy materials. FOR AGAINST ABSTAIN / / / / / / 3. To consider and act upon a proposal to approve the 2002 Stock Option Plan, as described in the accompanying Proxy materials. FOR AGAINST ABSTAIN / / / / / / 4. Proposal to ratify the selection of Ernst & Young LLP as independent accountants for 2002. FOR AGAINST ABSTAIN / / / / / / 5. In their discretion, the Proxies are authorized to vote upon such other business as may properly come before the meeting. This proxy when properly executed, will be voted in the manner directed herein by the Stockholders. If no direction is made, this Proxy will be voted FOR the proposals set forth in Items 2, 3 and 4 and FOR the management nominees for Directors set forth in Item 1, and in accordance with the best judgment of the Proxies on any other business which properly comes before the meeting. Dated: , 2002 -------------------------------------- - -------------------------------------------------- - -------------------------------------------------- Signature(s) (This Proxy must be signed exactly as the name appears hereon. If acting as attorney, executor, or trustee, or in a corporate or representative capacity, please sign name and title.) PLEASE MARK, SIGN, DATE AND RETURN THIS PROXY CARD PROMPTLY USING THE ENCLOSED ENVELOPE - -------------------------------------------------------------------------------- * FOLD AND DETACH HERE * MISSISSIPPI VALLEY BANCSHARES, INC. 13205 MANCHESTER ROAD SAINT LOUIS, MISSOURI 63131 (314) 543-3512 Dear Shareholder: The annual meeting of Stockholders of Mississippi Valley Bancshares, Inc. will be held at the St. Louis Marriott West, 660 Maryville Centre Drive, St. Louis, Missouri 63141 on April 17, 2002 at 9:00 a.m., St. Louis time. At the meeting Stockholders will elect five directors. It is important that your shares are represented at this meeting. Whether or not you plan to attend the meeting, please review the enclosed proxy material, complete the attached proxy form below and return it promptly in the envelope provided. MISSISSIPPI VALLEY BANCSHARES, INC. THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS The undersigned hereby constitutes and appoints Andrew N. Baur and Linn H. Bealke, and either of them, attorneys with full power of substitution, with the powers the undersigned would possess if personally present, to vote all shares of Common Stock of the undersigned in MISSISSIPPI VALLEY BANCSHARES, INC. at the Annual Meeting of Stockholders to be held at 9:00 A.M., April 17, 2002, and at any adjournments thereof on all matters properly coming before the meeting. (PLEASE SIGN AND DATE ON THE REVERSE SIDE) - -------------------------------------------------------------------------------- * FOLD AND DETACH HERE * YOU CAN NOW ACCESS YOUR MISSISSIPPI VALLEY ACCOUNT ONLINE. Access your Mississippi Valley stockholder account online via Investor ServiceDirect(SM) (ISD). Mellon Investor Services LLC, agent for Mississippi Valley, now makes it easy and convenient to get current information on your shareholder account. After a simple, and secure process of establishing a Personal Identification Number (PIN), you are ready to log in and access your account to: o View account status o View payment history for dividends o View certificate history o Make address changes o View book-entry information o Obtain a duplicate 1099 tax form o Establish/change your PIN VISIT US ON THE WEB AT HTTP://WWW.MELLONINVESTOR.COM AND FOLLOW THE INSTRUCTIONS SHOWN ON THIS PAGE. STEP 1: FIRST TIME USERS - ESTABLISH A PIN You must first establish a Personal Identification Number (PIN) online by following the directions provided in the upper right portion of the web screen as follows. You will also need your Social Security Number (SSN) available to establish a PIN. INVESTOR SERVICEDIRECT(SM) IS CURRENTLY ONLY AVAILABLE FOR DOMESTIC INDIVIDUAL AND JOINT ACCOUNTS. o SSN o PIN o Then click on the Establish PIN button Please be sure to remember your PIN, or maintain it in a secure place for future reference. STEP 2: LOG IN FOR ACCOUNT ACCESS You are now ready to log in. To access your account please enter your: o SSN o PIN o Then click on the Submit button If you have more than one account, you will now be asked to select the appropriate account. STEP 3: ACCOUNT STATUS SCREEN You are now ready to access your account information. Click on the appropriate button to view or initiate transactions. o Certificate History o Book-Entry Information o Issue Certificate o Payment History o Address Change o Duplicate 1099 FOR TECHNICAL ASSISTANCE CALL 1-877-978-7778 BETWEEN 9AM-7PM MONDAY-FRIDAY EASTERN TIME APPENDIX Page 10 of the printed proxy statement contains a Cumulative Total Shareholder Return Graph. The information contained in the graph has been presented in a tabular format that may be processed by the EDGAR system. -----END PRIVACY-ENHANCED MESSAGE-----