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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14A
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 Section 240.14a-12
MBT FINANCIAL CORP.
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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.
[ ] 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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PERSONS WHO POTENTIALLY ARE TO RESPOND TO THE COLLECTION OF INFORMATION
CONTAINED IN THIS FORM ARE NOT REQUIRED TO RESPOND UNLESS THE FORM DISPLAYS A
CURRENTLY VALID OMB CONTROL NUMBER.
SEC 1913 (02-02)
MBT FINANCIAL CORP.
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS TO BE HELD
MAY 1, 2003
TO THE SHAREHOLDERS OF MBT FINANCIAL CORP.:
The Annual Meeting of Shareholders of MBT Financial Corp. will be held
at Monroe Bank & Trust's Executive Conference Center, 28 South Macomb Street,
Monroe, Michigan 48161 on Thursday, May 1, 2003, at 10:00 a.m. (local time), for
the following purposes:
1. ELECTION OF DIRECTORS - To elect ten directors of MBT Financial Corp.; and
2. To transact such other business as may properly come before the meeting or
any adjournment of it.
Only shareholders of record at the close of business on March 10, 2003 are
entitled to notice of and to vote at the Annual Meeting or any adjournment of
it.
By order of the Board of Directors,
Ronald D. LaBeau, Chairman and
Chief Executive Officer
YOUR VOTE IS IMPORTANT. YOU ARE CORDIALLY INVITED TO ATTEND THE MEETING.
EVEN IF YOU PLAN TO ATTEND THE MEETING, PLEASE DATE AND SIGN THE ENCLOSED PROXY
AND RETURN IT PROMPTLY IN THE ENCLOSED ENVELOPE.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT THE SHAREHOLDERS VOTE
FOR THE ELECTION AS DIRECTORS OF THE NOMINEES NAMED IN THIS PROXY STATEMENT.
MBT FINANCIAL CORP.
102 EAST FRONT STREET
MONROE, MICHIGAN 48161
PROXY STATEMENT FOR ANNUAL MEETING OF
SHAREHOLDERS TO BE HELD MAY 1, 2003
INTRODUCTION
This Proxy Statement is being furnished to shareholders of MBT
Financial Corp. ("MBT" or the "Corporation") in connection with the solicitation
of proxies by the Board of Directors of the Corporation to be used at the Annual
Meeting of Shareholders, and any adjournment of the meeting, to be held at the
time and place set forth in the accompanying notice ("Annual Meeting"). It is
anticipated that the mailing of this Proxy Statement and the enclosed proxy card
will commence on or about April 4, 2003.
At the Annual Meeting, shareholders of the Corporation will be asked to
elect ten directors.
VOTING AND REVOCATION OF PROXIES
If the enclosed form of proxy is properly executed and returned to the
Corporation in time to be voted at the Annual Meeting, the shares represented by
your proxy will be voted in accordance with your instructions marked on the
proxy. Where properly executed proxies are returned but no such instructions are
given, the shares will be voted "For" the election to the Board of Directors of
the persons nominated by the Board of Directors of the Corporation.
The presence of a shareholder at the Annual Meeting will not
automatically revoke such shareholder's proxy. However, shareholders may revoke
a proxy at any time prior to its exercise by filing with the Secretary of the
Corporation a written notice of revocation, by delivering to the Corporation a
duly executed proxy bearing a later date or by attending the Annual Meeting and
voting in person. Written notices of revoked proxies may be directed to Thomas
J. Bruck, Secretary, MBT Financial Corp., 102 East Front Street, Monroe,
Michigan 48161.
SOLICITATION OF PROXIES
The cost of soliciting proxies in the form enclosed herewith will be
borne by the Corporation. In addition to the solicitation of proxies by mail,
the Corporation, through its directors, officers and regular employees, may also
solicit proxies personally or by telephone or telecopy without additional
compensation. The Corporation will also request persons, firms and corporations
holding shares in their names or in the name of their nominees, which are
beneficially owned by others, to send proxy material to and obtain proxies from
the beneficial owners and will reimburse the holders for their reasonable
expenses in doing so.
1
MEETING INFORMATION
DATE, PLACE AND TIME
The Annual Meeting of Shareholders of the Corporation will be held on
Thursday, May 1, 2003, at 10:00 a.m., local time, at Monroe Bank & Trust's
Executive Conference Center, 28 South Macomb Street, Monroe, Michigan.
RECORD DATE; VOTING RIGHTS
Each common share entitles its record owner to one vote on all matters
at the Annual Meeting.
The close of business on March 10, 2003 (the "Record Date") has been
fixed as the record date for the determination of shareholders entitled to vote
at the Annual Meeting. There were 1,312 record holders of the Corporation's
common shares and 19,110,441 of the Corporation's common shares outstanding as
of the Record Date.
The presence in person or by proxy of a majority of the outstanding
shares of the Corporation entitled to vote at the meeting will constitute a
quorum at the Annual Meeting. Abstentions and broker non-votes will be counted
for purposes of determining the presence of a quorum.
The ten nominees for director who receive the largest number of votes
cast "For" will be elected as directors. Shares represented at the Annual
Meeting in person or by proxy but withheld or otherwise not cast for the
election of directors will have no impact on the outcome of the election of
directors.
OWNERSHIP OF VOTING SHARES
The following table sets forth the beneficial ownership of the
Corporation's common shares by each of the Corporation's directors and the
Corporation's named executive officers, and the directors and executive officers
as a group, as of December 31, 2002.
COMMON SHARES
NAME OF BENEFICIAL OWNER OWNED (1) PERCENT OF CLASS
------------------------ --------- ----------------
Thomas J. Bruck 212,612 (2) 1.1%
Connie S. Cape 9,307 (3) *
H. Douglas Chaffin 6,833 (4) *
Joseph S. Daly 0 *
Eugene D. Greutman 75,930 (5) *
Thomas M. Huner 25,707 (6) *
Gerald L. Kiser 5,407 (7) *
Ronald D. LaBeau 105,552 (8) *
2
Rocque E. Lipford 26,101 (9) *
William D. McIntyre, Jr. 71,663 (10) *
Michael J. Miller 23,457 (11) *
James E. Morr 70,091 (12) *
Richard A. Sieb 76,093 (13) *
Philip P. Swy 7,093 (14) *
All Directors and Executive 743,374 3.9%
Officers as a Group
(15 in group)
* Ownership is less than 1% of the class.
-------------
(1) Except as otherwise noted, none of the named individuals shares with
another person either voting or investment power as to the shares
reported.
(2) Includes 165,898 shares subject to shared voting and investment power
and 24,100 shares subject to options, which are presently exercisable.
(3) Includes 1,600 shares subject to shared voting and investment power and
3,407 shares subject to options, which are presently exercisable.
(4) Includes 500 shares subject to shared voting and investment power and
6,333 shares subject to options, which are presently exercisable.
(5) Includes 51,830 shares subject to shared voting and investment power
and 24,100 shares subject to options, which are presently exercisable.
(6) Includes 22,300 shares subject to shared voting and investment power
and 3,407 shares subject to options, which are presently exercisable.
(7) Includes 3,407 shares subject to options, which are presently
exercisable.
(8) Includes 11,037 shares subject to shared voting and investment power
and 50,667 shares subject to options, which are presently exercisable.
(9) Includes 400 shares subject to shared voting and investment power and
3,407 shares subject to options, which are presently exercisable.
(10) Includes 3,407 shares subject to options, which are presently
exercisable.
(11) Includes 20,050 shares subject to shared voting and investment power
and 3,407 shares subject to options, which are presently exercisable.
(12) Includes 4,388 shares subject to shared voting and investment power and
24,100 shares subject to options, which are presently exercisable.
(13) Includes 55,490 shares subject to shared voting and investment power
and 3,407 shares subject to options, which are presently exercisable.
(14) Includes 3,093 shares subject to options, which are presently
exercisable.
As of December 31, 2002, no person was known by the Corporation to be
the beneficial owner of more than 5% of the outstanding common shares of the
Corporation, except as follows:
NAME AND ADDRESS OF
BENEFICIAL OWNER COMMON SHARES OWNED PERCENT OF CLASS
Monroe Bank & Trust
102 East Front Street
Monroe, Michigan 48161 3,119,448 (1) 16.3%
3
(1) These shares are held in various fiduciary capacities in the ordinary
course of business under numerous trust relationships by Monroe Bank &
Trust. As fiduciary, Monroe Bank & Trust has sole power to dispose of
2,820,351 of these shares, shared power to dispose of 299,097 of these
shares, sole power to vote 2,820,351 of these shares, and shared power to
vote 299,097 of these shares.
ELECTION OF DIRECTORS
The number of directors of the Corporation has been fixed at ten. At
the Annual Meeting, ten directors will be elected to a one-year term, to hold
office until the annual meeting of shareholders in 2004, or until their
successors shall be duly elected.
The nominees for election at the Annual Meeting are Connie S. Cape,
Joseph S. Daly, Thomas M. Huner, Gerald L. Kiser, Ronald D. LaBeau, Rocque E.
Lipford, William D. McIntyre, Jr., Michael J. Miller, Richard A. Sieb and Philip
P. Swy, each of whom is currently a director of the Corporation.
NOMINEES
The name of the nominees for election to MBT's Board of Directors and
information about them is set forth below.
PRINCIPAL OCCUPATION FOR PAST FIVE DIRECTOR
NAME AGE YEARS SINCE
Connie S. Cape 52 Health Care Consultant 2000
(2000-present); Vice President
Finance/Chief Financial Officer,
Mercy Memorial Hospital (1998-2000)
Joseph S. Daly 43 President and General Counsel, Daly 2003
Merritt Insurance and President and
General Counsel, Daly Merritt
Properties, Inc., an investment
real estate company
Thomas M. Huner 53 General Partner, Thomas M. Huner 2000
Builders, a home building company
Gerald L. Kiser 56 President and Chief Executive 2000
Officer, La-Z-Boy Inc., a furniture
manufacturer; Director, La-Z-Boy
Inc.
Ronald D. LaBeau 59 President and Chief Executive 1998
Officer (1999 -- present),
Executive Vice President & Senior
Loan Officer (1998)
4
Rocque E. Lipford 64 Attorney and Senior Principal, 1981
Miller, Canfield, Paddock and
Stone, P.L.C.; Director, La-Z-Boy
Inc.
William D. McIntyre, Jr. 67 President and Chief Executive 1971
Officer, Allegra Network, LLC, a
franchisor of printing businesses
(2000-present); President & Chief
Executive Officer, American Speedy
Printing Centers, Inc., a printing
shop franchisor (1998-2000)
Michael J. Miller 54 Chief Executive Officer, Floral 2000
City Beverage, Inc., a wholesale
beer distributor
Richard A. Sieb 71 President, Sieb Plumbing & Heating 1993
Inc. and President, Nortel Inc., a
recreational bowling establishment
Philip P. Swy 49 President, Michigan Tube Swagers & 1997
Fabricators, Inc., a hospitality
table and chair manufacturer
marketing as MTS Seating
There were no agreements or understandings pursuant to which any of the
persons listed above was selected as a director.
The Board of Directors of MBT met 14 times in 2002. In 2002, each
director attended at least 75% of the combined total of meetings of the Board of
Directors and meetings of each committee on which such director served.
COMMITTEES OF THE BOARD
The Board of Directors of MBT has established the following standing
audit, compensation and nominating committees, with membership noted:
AUDIT COMMITTEE. (Ms. Cape, Chair, and Messrs. McIntyre and Sieb.)
The Audit Committee met 12 times during 2002. The responsibilities of
the Audit Committee include recommending the appointment of and overseeing a
firm of independent auditors whose duty it is to audit the books and records of
MBT and Monroe Bank & Trust for the fiscal year for which they are appointed;
monitoring and analyzing the results of internal and regulatory examinations;
and monitoring MBT's and Monroe Bank & Trust's financial and accounting
organization and financial reporting.
5
COMPENSATION COMMITTEE. (Mr. Huner, Chair, and Ms. Cape and
Mr. Lipford.)
The Compensation Committee met 2 times in 2002. The Compensation
Committee has the responsibility of recommending for the approval of the Board
of Directors the remuneration arrangements for the directors and executive
officers of MBT. The Compensation Committee's report on executive compensation
matters for 2002 appears under the caption "Compensation Committee Report on
Executive Compensation."
NOMINATING/GOVERNANCE COMMITTEE. (Mr. McIntyre, Chair, and Messrs.
Kiser, LaBeau, Miller, Sieb and Swy.)
The Nominating/Governance Committee met 2 times in 2002. The
Nominating/Governance Committee of MBT serves as the nominating committee of the
Board. The Nominating/Governance Committee provides reports and makes
recommendations to the Board of Directors on matters such as nominees for
director, the duties of directors, director qualifications, Board structure,
Board functions, Board committee structure and responsibilities and general
policies.
The Board has fixed the number of directors for the term beginning at
this year's Annual Meeting at ten and has nominated ten individuals for election
as director.
AUDIT COMMITTEE REPORT
The Audit Committee oversees MBT's financial reporting process on
behalf of the Board of Directors. The Committee is composed of three directors,
each of whom is independent as defined by the National Association of Securities
Dealers' listing standards and operates under a written charter adopted by the
Board of Directors. The Committee retains MBT's independent accountants.
Management has the primary responsibility for the financial statements
and the reporting process, including the system of internal control. 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 MBT's accounting
principles and such other matters as are required to be discussed with the
Committee under generally accepted auditing standards (including Statement on
Auditing Standards No. 61). In addition, the Committee has discussed with the
independent auditors the auditors' independence from management and MBT,
including the matters in the written disclosures required by the Independence
Standards Board (including Independence Standards Board Standard No. 1), and
considered the compatibility of nonaudit services with the auditors'
independence.
6
The Committee discussed with MBT's internal and independent auditors
the overall scope and plans for their 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 MBT's
internal control, and the overall quality of MBT's financial reporting.
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 audited financial statements be included in the Annual Report on Form
10-K for the year ended December 31, 2002 for filing with the Securities and
Exchange Commission.
Connie S. Cape, Chair
William D. McIntyre, Jr.
Richard A. Sieb
In accordance with rules related to auditor independence, the table
below shows fees for services rendered by MBT's independent auditors during
fiscal year 2002.
Audit Fees (including reviews of Forms 10-Q) $103,000(1)
Financial Information Systems Design and $0
Implementation Fees
All Other Fees $ 67,133(1)
(1) The amounts indicated include $60,000 in "Audit fees" and $62,433 in
"Other fees" paid to MBT's former independent auditors during 2002.
[THIS SPACE LEFT INTENTIONALLY BLANK]
7
EXECUTIVE COMPENSATION
AND OTHER INFORMATION
GENERAL. The following information relates to compensation of
management for the years ended December 31, 2002, 2001 and 2000, unless
otherwise noted below. This information includes compensation of management by
Monroe Bank & Trust. On July 1, 2000, Monroe Bank & Trust was reorganized into a
bank holding company structure, with MBT as the bank holding company for Monroe
Bank & Trust.
EXECUTIVE COMPENSATION. The following table sets forth the annual and
long-term compensation for MBT's Chief Executive Officer and the four highest
paid executive officers, as well as the total compensation paid to each
individual during the last three fiscal years.
SUMMARY COMPENSATION TABLE
LONG-TERM
COMPENSATION
ANNUAL COMPENSATION AWARDS
----------------------------- ------
SECURITIES ALL OTHER
UNDERLYING COMPENSATION
NAME AND PRINCIPAL POSITION YEAR SALARY ($) BONUS ($) OPTIONS (#) ($) (A)
--------------------------- ---- ---------- --------- ----------- -------
Ronald D. LaBeau........................... 2002 $230,000 $173,913 47,000 $27,891
Chairman and Chief Executive Officer 2001 218,400 222,359 0 25,075
2000 212,250 226,564 35,000 23,700
H. Douglas Chaffin......................... 2002 $133,700 $67,398 19,000 $8,602
President and 2001 52,885 77,861 0 0
Chief Operating Officer 2000 0 0 0 0
Thomas J. Bruck............................ 2002 $106,700 $44,823 13,500 $14,090
Executive Vice President and 2001 90,800 71,902 0 12,264
Cashier 2000 88,000 73,843 19,600 11,440
James E. Morr.............................. 2002 $106,700 $44,823 13,500 $14,072
Executive Vice President, Senior Trust 2001 90,800 71,902 0 12,249
Officer and General Counsel 2000 88,000 73,843 19,600 11,440
Eugene D. Greutman......................... 2002 $102,900 $43,226 13,500 $13,541
Senior Vice President Finance 2001 87,700 69,448 0 11,683
2000 85,000 71,326 19,600 11,050
(A) The amounts shown in this column for the most recently completed fiscal
year were derived from the following: (1) contributions by Monroe Bank
& Trust to the MBT Retirement Plan: Mr. LaBeau, $24,800; Mr. Chaffin,
$8,588; Mr.
8
Bruck, $13,871; Mr. Morr, $13,871; and Mr. Greutman, $13,377 and (2)
the economic benefit of life insurance coverage provided for the
executive officers: for the benefit of Mr. LaBeau, $3,091; for the
benefit of Mr. Chaffin, $14; for the benefit of Mr. Bruck, $219; for
the benefit of Mr. Morr, $201; and for the benefit of Mr. Greutman,
$164.
OPTION GRANTS TABLE. The following table presents information about
stock options granted during 2002 to the five named executive officers.
OPTION GRANTS IN LAST FISCAL YEAR
INDIVIDUAL GRANTS
---------------------------------------------------------------------------------
NUMBER OF PERCENT OF
SECURITIES TOTAL OPTIONS
UNDERLYING GRANTED TO EXERCISE OR
OPTIONS EMPLOYEES IN BASE EXPIRATION GRANT DATE
NAME GRANTED (#)(1) FISCAL YEAR PRICE($/SH) DATE PRESENT VALUE(2)
---- -------------- ----------- ----------- ---- ----------------
Ronald D. LaBeau 47,000 28.14% $13.85 01/02/12 $149,930
H. Douglas Chaffin 19,000 11.38% $13.85 01/02/12 $60,610
Thomas J. Bruck 13,500 8.08% $13.85 01/02/12 $43,065
James E. Morr 13,500 8.08% $13.85 01/02/12 $43,065
Eugene D. Greutman 13,500 8.08% $13.85 01/02/12 $43,065
(1) All options are nonqualified stock options which vest ratably over a
three-year period commencing December 31, 2002. All options have an
exercise price equal to the fair market value on the date of grant. The
terms of MBT's Long-Term Incentive Compensation Plan provide that all
options become exercisable in full in the event of a change in control as
defined in the Long-Term Incentive Compensation Plan, or the death or
disability of the option holder.
(2) The option value was calculated to be $3.19 per share using the
Black-Scholes stock option pricing model. In making this calculation, it
was assumed that the average exercise period was seven years, the
volatility rate was 23.9%, the risk-free rate of return was 4.6%, and the
dividend yield was 3.0%.
OPTION EXERCISES AND YEAR-END VALUE TABLE. The following table presents
information about stock options exercised during 2002 and unexercised stock
options at December 31, 2002 for the five named executive officers.
9
OPTION EXERCISES AND YEAR-END VALUE TABLE
AGGREGATED OPTION EXERCISES IN 2002 AND FISCAL YEAR-END OPTION VALUES
NUMBER OF SECURITIES
UNDERLYING UNEXERCISED VALUE OF UNEXERCISED
OPTIONS IN-THE-MONEY OPTIONS AT
DECEMBER 31, 2002(#) DECEMBER 31, 2002($)
-------------------- --------------------
SHARES ACQUIRED VALUE
NAME ON EXERCISE REALIZED EXERCISABLE/UNEXERCISABLE EXERCISABLE/UNEXERCISABLE
---- ----------- -------- ------------------------- -------------------------
Ronald D. LaBeau 0 0 50,667/31,333 0 / 0
H. Douglas Chaffin 0 0 6,333/12,667 0 / 0
Thomas J. Bruck 0 0 24,100/9,000 0 / 0
James E. Morr 0 0 24,100/9,000 0 / 0
Eugene D. Greutman 0 0 24,100/9,000 0 / 0
LONG-TERM INCENTIVE COMPENSATION PLAN. MBT and its shareholders have
adopted the Long-Term Incentive Compensation Plan. A total of 1,000,000 shares
have been reserved for issuance under the Long-Term Incentive Compensation Plan,
subject to adjustment if MBT's capitalization changes as a result of a stock
split, stock dividend, recapitalization, merger or similar event. The plan
provides for the award of stock options, stock or restricted stock to any MBT or
Monroe Bank & Trust directors, officers, other key employees and consultants
designated by a committee of MBT's Board consisting of outside directors, which
administers the plan. The committee's authority includes the power to (a)
determine who will receive awards under the plan, (b) establish the terms and
conditions of awards and the schedule on which options become exercisable (or
other awards vest), (c) determine the amount and form of awards, (d) interpret
the plan and terms of awards, and (e) adopt rules for administration of the
plan. The only awards made under the plan to date are awards of stock options.
Stock options awarded under the plan have terms of up to 10 years and
may be nonqualified stock options, meaning stock options that do not qualify
under Section 422 of the Internal Revenue Code for the special tax treatment
available for qualified, or "incentive," stock options. Nonqualified stock
options may be granted to any eligible plan participant, but incentive stock
options may be granted solely to employees of MBT or Monroe Bank & Trust. All
stock option awards made to date are nonqualified stock options. The exercise
price of incentive stock options may not be less than the fair market value of
MBT's common stock on the date of grant, which under the terms of the plan means
the average of the bid and asked prices or the fair market value determined by
MBT's Board if bid and asked prices are not available. The plan does not require
that the exercise price of nonqualified stock options be at least equal to the
fair market value on the grant date, but the exercise price of awards made to
date is the fair market value on the date of grant.
An option holder whose service terminates generally has one year after
termination within which he may exercise options, forfeiting any options not
exercised by the end of one year from termination. An option holder whose
service is terminated for cause forfeits all unexercised stock options.
10
SALARY CONTINUATION AGREEMENT. Monroe Bank & Trust entered into a
Salary Continuation Agreement with Mr. LaBeau which provides that Monroe Bank
& Trust will pay an annual salary continuation benefit of $139,600 to
Mr. LaBeau or his designated beneficiaries for 10 years after his retirement
on or after reaching the normal retirement age of 65.
For Mr. LaBeau's early retirement (before reaching age 65) or
termination before his normal retirement age as a result of disability, the
annual salary continuation benefit increases to $139,600 in the ninth year of
the Salary Continuation Agreement (but is not actually payable until he reaches
normal retirement age), as follows:
ANNUAL BENEFIT
PAYABLE AFTER
REACHING AGE 65
FOR EARLY
RETIREMENT OR
DISABILITY
SALARY CONTINUATION OCCURRING ON OR
AGREEMENT PLAN YEAR AFTER THE END OF
ENDING DECEMBER 26, THE PLAN YEAR
------------------- -------------
2001........................ $20,893
2002........................ 40,184
2003........................ 57,997
2004........................ 74,445
2005........................ 89,632
2006........................ 103,655
2007........................ 116,604
2008........................ 128,560
2009........................ 139,600
CHANGE IN CONTROL AGREEMENT. MBT has entered into a Change in Control
Agreement with Mr. Chaffin. The terms of the agreement provide that in the event
of a sale, merger or similar transaction of MBT in which MBT is not the
surviving corporation, Mr. Chaffin is entitled to a severance payment equal to
his annual compensation, which is defined to include his then current Salary
plus his previous year's cash bonus. The severance payment is payable in the
event of his involuntary termination of employment within two years of the
Change in Control or his voluntary termination during the period beginning six
months following the Change in Control and ending nine months after the Change
in Control. In addition, Mr. Chaffin is entitled under the terms of the
Agreement to receive certain health, disability, dental life insurance and
other benefits for a one-year period following a Change in Control. The
agreement provides for the reimbursement of certain excise taxes imposed upon
payments received by Mr. Chaffin, which are deemed "excess parachute" payments
under the provisions of Section 280G of the Internal Revenue Code.
11
BANK OWNED LIFE INSURANCE. MBT has split-dollar life insurance
agreements with its directors and executive officers. The economic benefit (the
imputed income amount of this insurance) for the year 2002 to MBT's Chief
Executive Officer and its other four highest paid executive officers is included
in the amounts for each of these executive officers set forth in the Summary
Compensation Table under the column "All Other Compensation." The economic
benefit (the imputed income amount of this insurance) for the year 2002 to each
director other than Mr. LaBeau is as follows: Ms. Cape, $415; Mr. Huner, $490;
Mr. Kiser, $560; Mr. Lipford, $2,730; Mr. McIntyre, $3,710; Mr. Miller, $525;
Mr. Sieb, $4,073; and Mr. Swy, $486.
The insurance policies provide death benefits to the executive's
beneficiaries of (a) twice the executive's current annual salary at the time of
death, less $50,000, if he dies before retirement or, (b) the executive's annual
salary at the time his employment terminated if he dies after retirement or if
his employment has been terminated due to disability. An additional policy
provides Mr. LaBeau's beneficiaries life insurance proceeds of $958,837 if he
dies before age 65 while in active service to MBT.
The directors' death benefits under the policy provided for them, which
also covers Mr. LaBeau, are $500,000 for director service of less than 3 years,
$600,000 for service up to 5 years, $750,000 for service up to 10 years, and
$1,000,000 for director service of 10 years or more.
DIRECTOR COMPENSATION
Directors of MBT other than Mr. LaBeau are compensated for all services
as a director in the following manner: eligible directors receive $750 per board
meeting attended and are entitled to receive a quarterly retainer fee of $1,500.
In addition, the members of the following board committees receive the
compensation indicated for each meeting attended: Audit Committee, $500 per
meeting attended; Compensation Committee, $250 per meeting attended;
Nominating/Governance Committee, $250 per meeting attended; Trust Committee,
$500 per meeting attended; and Loan Review Committee, $500 per meeting attended.
As an employee, Mr. LaBeau does not receive any compensation for his service as
a director.
Directors receive life insurance benefits as explained above under the
caption, "Bank Owned Life Insurance."
In 2003 MBT established the MBT Director Compensation Plan (the
"Director Plan.") Under the terms of the Director Plan, non-employee directors
may elect each year to have their quarterly cash retainer paid in any
combination of the following: (i) cash paid on a quarterly basis; (ii) a
deferred cash payment pursuant to the Director Plan; (iii) deferred payment in
MBT stock; (iv) MBT stock; and (v) MBT stock options valued using the
Black-Scholes stock option pricing model. Non-employee directors may elect each
year to have their meeting fees paid in any of the forgoing except MBT options.
Amounts deferred are paid either in a lump sum at termination of service as a
director, over a 2-5 year period specified by the director following termination
of service, or a specified date indicated in the director's initial election.
Options granted and MBT stock
12
issued to directors in connection with the Director Plan are made pursuant to,
and are subject to all of the terms of, the MBT Long-Term Incentive Compensation
Plan.
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
OVERVIEW AND PHILOSOPHY. The Board of Directors of MBT has established
a Compensation Committee of non-employee directors. The Compensation Committee
is responsible for developing and making recommendations to the Board with
respect to MBT's executive compensation policies. There are no interlocking
relationships between any members of the Compensation Committee.
Pursuant to authority delegated by the Board, the Compensation
Committee determines annually the compensation to be paid to the Chief Executive
Officer and each other executive officer. The Committee reviews and approves the
compensation of all other executive officers based upon the recommendation of
the Corporation's Chief Executive Officer. The Chief Executive Officer does not
participate in any discussions regarding his own compensation.
The Compensation Committee has available to it an outside compensation
consultant, and has worked with the consultant to gather comparative
compensation data from independent sources and to develop a strategy which links
pay to performance.
The objectives of MBT's executive compensation program are to:
- Support the achievement of desired goals of MBT.
- Provide compensation that will attract and retain superior talent
and reward performance.
- Align the executive officers' interests with those of shareholders
by placing a significant portion of pay at risk with payout
dependent upon corporate performance, both on a short-term and
long-term basis.
The executive compensation program provides an overall level of
compensation opportunity that is competitive within the banking industry. Actual
compensation levels may be greater or less than average competitive levels in
surveyed companies based upon annual and long-term MBT performance. The
Compensation Committee also uses its discretion to set executive compensation
based upon individual performance.
COMPENSATION MATTERS IN 2002. During 2002 the Compensation Committee
increased the levels of base salary of the Chief Executive Officer and certain
other Executive Officers. The increases in base salary were based upon an
analysis of compensation levels for management performing similar functions at
other banking companies of similar size, operations and financial performance.
The performance of MBT for the purpose of determining the annual cash
bonuses to be paid to employees, including the Chief Executive Officer and other
Executive Officers, was based on net operating income for the year 2002.
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EXECUTIVE OFFICER COMPENSATION PROGRAM. MBT's executive officer
compensation program is comprised of base salary, annual cash incentive
compensation, longer-term incentive compensation in the form of stock options
and various benefits.
BASE SALARY. Base salary levels for MBT's executive officers are set
relative to companies in the banking industry of similar size and complexity of
operations, as described above. In determining salaries, the Compensation
Committee also takes into account individual experience and performance, MBT
performance and specific issues particular to MBT.
ANNUAL INCENTIVE COMPENSATION. The Monroe Bank & Trust Annual Incentive
Plan is MBT's annual incentive program for all employees, including Executive
Officers. The purpose of the plan is to provide direct financial incentives in
the form of an annual cash bonus to executives to achieve MBT's annual goals.
For 2002, the Compensation Committee recommended and the Board of Directors
selected net operating income as the measurement of the Corporation's
performance, with threshold and target goals set for determining cash bonus
opportunities for all employees, including Executive Officers. The amount
distributed to each participant in the Annual Incentive Plan is based on his or
her base salary and is weighted to reflect each participant's ability to affect
the performance of the Corporation, with the Chief Executive Officer having the
largest weighting. For net operating income in excess of the target goal set,
each participant receives a ratable increase in his or her cash bonus and a
ratable decrease in bonus in the case of net operating income below the target
goal. MBT did not meet its target goal for net operating income in 2002.
LONG-TERM INCENTIVES. Stock options awarded under the Long-Term
Incentive Compensation Plan constitute MBT's long-term incentive plan for
executive officers. The objectives of the stock option awards are to align
executive and shareholder long-term interests by creating a strong and direct
link between executive pay and shareholder return, and to enable executives to
develop and maintain a long-term stock ownership position in MBT's common
shares.
The Long-Term Incentive Compensation Plan authorizes a committee of
outside directors to award stock options and other stock compensation to key
executives. Awards are made at levels considered to be competitive within the
banking industry.
BENEFITS. MBT provides medical and other employee benefits to its
executive officers that are generally available to all fulltime MBT employees.
CHIEF EXECUTIVE OFFICER COMPENSATION. The base salary of Mr. LaBeau,
MBT's CEO was increased to $230,000, effective January, 2002, based upon the
recommendation of an outside compensation consultant arising from its survey of
other banking companies, as described above.
In respect to the limits on deductibility for federal income tax
purposes of compensation paid an executive officer in excess of $1 million, MBT
intends to strive to
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structure components of its executive compensation to achieve maximum
deductibility, while at the same time considering the goals of its executive
compensation philosophy.
MEMBERSHIP OF THE COMPENSATION COMMITTEE. MBT Financial Corp. directors
serving on the Compensation Committee are named below:
Thomas M. Huner, Chair
Connie S. Cape
Rocque E. Lipford
COMPENSATION COMMITTEE INTERLOCKS AND
INSIDER PARTICIPATION IN COMPENSATION DECISIONS
Regulations of the Securities and Exchange Commission require the
disclosure of any related party transactions with members of the Compensation
Committee. During the past year, certain directors and officers, including
members of the Compensation Committee, and one or more of their associates may
have been customers of and had business transactions with Monroe Bank & Trust.
All loans included in such transactions were made in the ordinary course of
business and on substantially the same terms, including interest rates and
collateral, as those prevailing at the same time for comparable transactions
with other persons, and did not involve more than normal risk of collectibility
or present other unfavorable features. It is expected that similar transactions
will occur in the future. Mr. LaBeau, Chief Executive Officer of the
Corporation, does not participate in any discussions or decisions regarding his
own compensation.
[THIS SPACE LEFT INTENTIONALLY BLANK]
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MBT FINANCIAL CORP. PERFORMANCE
The SEC requires that the Corporation include in this Proxy Statement a
line-graph presentation comparing cumulative five-year shareholder returns on an
indexed basis with a broad equity market index and either a nationally
recognized industry standard or an index of peer companies selected by the
Corporation. The Corporation has selected the NASDAQ Composite Index and the
NASDAQ Bank Index for purposes of this performance comparison. The chart below
compares the value of $100 invested on December 31, 1997, in the Corporation's
stock, the NASDAQ Composite Index and the NASDAQ Bank Index.
[LINE GRAPH]
*THE ABOVE COMPARISON OF TOTAL RETURN ASSUMES REINVESTMENT OF ALL DIVIDENDS.
The graph shown above is based on the following data points:
1997 1998 1999 2000 2001 2002
---- ---- ---- ---- ---- ----
MBT Financial Corp. $100 $216 $208 $146 $141 $144
NASDAQ Composite Index 100 140 259 157 124 85
NASDAQ Bank Index 100 88 81 93 102 107
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CERTAIN TRANSACTIONS
Directors and executive officers of MBT and their associates were
customers of, or had transactions with, Monroe Bank & Trust in the ordinary
course of business during 2002. We expect additional transactions to take place
in the future. All outstanding loans to directors and executive officers and
their associates, commitments and sales, purchases and placements of investment
securities and other financial instruments included in such transactions were
made in the ordinary course of business, on substantially the same terms,
including interest rates and collateral where applicable, as those prevailing at
the time for comparable transactions with other persons, and did not involve
more than normal risk of collectibility or present other unfavorable features.
In addition, Mr. Lipford is a senior principal in the law firm of Miller,
Canfield, Paddock and Stone, P.L.C., which provides legal services to MBT and
Monroe Bank & Trust.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16 of the Securities Exchange Act of 1934 requires MBT
Financial Corp.'s executive officers, directors and more than ten percent
shareholders ("Insiders") to file with the Securities and Exchange Commission
and MBT Financial Corp. reports of their ownership of MBT Financial Corp.
securities. Based upon written representations and copies of reports furnished
to MBT Financial Corp. by Insiders, all Section 16 reporting requirements
applicable to Insiders during 2002 were satisfied on a timely basis with the
exception of Mr. Miller who filed three late reports covering three transactions
in 2002.
SHAREHOLDER PROPOSALS FOR NEXT ANNUAL MEETING
To be considered eligible for inclusion in the Corporation's Proxy
Statement for the 2004 Annual Meeting of Shareholders, a proposal must be made
by a qualified shareholder and received by the Corporation at its principal
office in Monroe, Michigan, prior to December 5, 2003. Any shareholder who
intends to propose any other matter to be acted upon at the 2004 Annual Meeting
of Shareholders must inform the Corporation not less than thirty days prior to
the meeting; provided, however, that if less than forty days' notice or prior
public disclosure of the date of the meeting is given to shareholders, notice by
the shareholder must be received not later than the close of business on the
tenth day following the day on which such notice of the date of the meeting was
mailed or such public disclosure was made. If notice is not provided by that
date, the persons named in the Corporation's proxy for the 2004 Annual Meeting
will be allowed to exercise their discretionary authority to vote upon any such
proposal without the matter having been discussed in the Proxy Statement for the
2004 Annual Meeting. Shareholder proposals should be directed to Thomas J.
Bruck, Secretary, MBT Financial Corp., 102 East Front Street, Monroe, Michigan
48161.
17
The Corporation's Bylaws establish advance notice procedures as to the
nomination, other than by the Board of Directors, of candidates for election as
directors. In order to make a director nomination, it is necessary that you
notify the Secretary of the Corporation no fewer than 30 days in advance of next
year's Annual Meeting unless the Corporation gives you less than 40 days notice
or prior public disclosure of the Annual Meeting and then notice of nominations
must be given no later than the tenth day after we mailed notice of the Annual
Meeting to you or made public disclosure of the meeting, but in no event may a
nomination be received by the Secretary of the Corporation less than seven days
prior to the Annual Meeting. Notice of nominations of directors must also meet
all other requirements contained in the Corporation's Bylaws. You may obtain the
Bylaws by written request to the Corporation's Secretary at our principal
executive offices.
SELECTION OF AUDITORS
On April 18, 2002, upon the recommendation of the Audit Committee of the
Board of Directors, the Corporation dismissed Arthur Andersen LLP, as its
independent auditors and engaged the services of Plante & Moran, PLLC, as its
new independent auditors for 2002. Plante & Moran, PLLC was engaged to provide
independent audit services for the Corporation and its subsidiaries and to
provide certain non-audit services including advice on accounting, tax, and
reporting matters. The Audit Committee has retained Plante & Moran, PLLC as
MBT's independent auditors for 2003. Representatives of Plante & Moran, PLLC
will be in attendance at the Annual Meeting of Shareholders, and such
representatives will have an opportunity to make a statement if they desire to
do so, and will be available to respond to appropriate questions.
During the two fiscal years ended December 31, 2000 and 2001, and the
subsequent interim period through April 18, 2002, there were no disagreements
between the Corporation and Arthur Andersen LLP, on any matter of accounting
principles or practices, financial statement disclosure, or auditing scope or
procedure, which disagreements, if not resolved to Arthur Andersen LLP's
satisfaction, would have caused Arthur Andersen LLP, to make a reference to the
subject matter of the disagreement in connection with its reports.
The audit reports of Arthur Andersen LLP on our consolidated financial
statements as of and for the fiscal years ended December 31, 2000 and 2001 did
not contain any adverse opinion or disclaimer of opinion, nor were they
qualified or modified as to uncertainty, audit scope or accounting principles.
During our two fiscal years ended December 31, 2000 and 2001, and the
subsequent interim period through April 18, 2002, we did not consult with Plante
& Moran, PLLC regarding any of the matters or events set forth in Item
304(a)(2)(i) and (ii) of Regulation S-K.
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OTHER BUSINESS
Management is not aware of any other matter which may be presented for
action at the meeting other than the matters set forth herein. Should any matter
other than those set forth herein be presented for a vote of the shareholders,
the proxy in the enclosed form directs the persons voting such proxy to vote in
accordance with their judgment.
WE URGE YOU TO SIGN AND RETURN THE ENCLOSED PROXY FORM AS PROMPTLY AS
POSSIBLE WHETHER OR NOT YOU PLAN TO ATTEND THE MEETING IN PERSON.
19
PROXY FOR MBT FINANCIAL CORP. SHAREHOLDERS' ANNUAL MEETING
KNOW ALL MEN BY THESE PRESENTS, That I, the undersigned holder of
__________ common shares of MBT Financial Corp. do hereby constitute and appoint
with the full power of substitution, Ronald D. LaBeau, H. Douglas Chaffin,
Thomas J. Bruck and James E. Morr my true and lawful attorneys and proxies, and
each of them my true and lawful attorney and proxy, to attend the annual meeting
of shareholders of MBT Financial Corp. to be held at 28 South Macomb Street,
Monroe, Michigan, on May 1, 2003 at 10:00 o'clock A.M., or at any adjournment
thereof, and at such meeting or any adjournment thereof, to vote the shares of
stock of MBT Financial Corp. standing in my name with respect to the following
matters.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE ELECTION AS DIRECTOR OF EACH OF
THE NOMINEES LISTED BELOW.
1. ELECTION OF DIRECTORS - To elect a Board of Directors for the ensuing year.
[ ] FOR the election as director of the nominees listed below (except as
marked to the contrary below)
[ ] WITHHOLD AUTHORITY to vote for all nominees listed below
(INSTRUCTIONS: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE,
STRIKE A LINE THROUGH THE NOMINEE'S NAME IN THE LIST BELOW.)
Connie S. Cape Rocque E. Lipford
Joseph S. Daly William D. McIntyre, Jr.
Thomas M. Huner Michael J. Miller
Gerald L. Kiser Richard A. Sieb
Ronald D. LaBeau Philip P. Swy
2. To take any action which may be necessary or proper in connection with the
foregoing matters, or any other matter legally coming before the meeting,
or any adjournments thereof.
I hereby give to said attorneys and proxies, and to each of them, or to any
substitute or substitutes, full power and authority to do any and all acts and
things which I might or could do if personally present, and hereby ratify and
confirm all that said attorneys and proxies, and each of them, or their
substitute or substitutes, might lawfully do or cause to be done by virtue
thereof.
In their discretion, the proxies are authorized to vote in their judgment upon
such other business as properly may come before the meeting or any adjournment
thereof. At the present time, the Board of Directors knows of no other business
to be presented at the meeting.
THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER DIRECTED HEREIN
BY THE UNDERSIGNED SHAREHOLDER(S). IF NO DIRECTION IS MADE, THIS PROXY WILL BE
VOTED FOR EACH OF THE NOMINEES FOR ELECTION AS DIRECTOR.
WITNESS, my hand and seal this _____________day of ______________, 2003.
__________________________________________
(L.S.)
_________________________________________
(L.S.)
1. Date this Proxy.
2. Sign your name. Each shareholder must sign. If you hold your shares as a
Trustee, Guardian, Custodian or otherwise, indicate such fiduciary capacity
after your signature.
3. Mail this Proxy in the enclosed envelope to American Stock Transfer & Trust
Company, 59 Maiden Lane, New York, NY 10038.
4. THIS PROXY IS REVOCABLE AND IS SOLICITED ON BEHALF OF THE BOARD OF
DIRECTORS.