NOTICE
OF ANNUAL MEETING OF STOCKHOLDERS
of
BNL
FINANCIAL CORPORATION
The
Annual Meeting of Shareholders of BNL Financial Corporation will be held at the
Radisson Hotel Des Moines Airport, 6800 Fleur Dr., Des Moines, Iowa, commencing
at 12:00 noon, local time, (and thereafter as it may be from time to
time adjourned) for the following purposes:
1. Election
of fourteen Directors;
2.
Ratification
of the appointment by the Board of Directors of Smith, Carney & Co., p.c.
(“Smith Carney”), as the Company's independent registered public accounting
firm for the fiscal year ending December 31, 2009;
and
3. Consideration
of such other business as may properly come before the meeting.
The close
of business on April 15, 2009, has been fixed as the record date for the
determination of shareholders entitled to notice of and to vote at the
meeting.
By Order of the Board of
Directors
Pamela Randolph,
Secretary
Sherwood,
AR
WHETHER
OR NOT YOU EXPECT TO BE PRESENT AT THE MEETING, PLEASE DATE AND SIGN THE
ENCLOSED PROXY AND RETURN IT IN THE ENCLOSED ENVELOPE. IF YOU ATTEND
THE MEETING, YOU MAY REVOKE THE PROXY AND VOTE YOUR SHARES IN
PERSON.
PROXY
STATEMENT
_____________
BNL
FINANCIAL CORPORATION
GENERAL
INFORMATION
This
Proxy Statement and accompanying proxy form are being mailed to shareholders on
May 5, 2009, in connection with the solicitation of proxies by the
Board of Directors of BNL Financial Corporation ("BNL" or the "Company") to be
voted at the Annual Meeting of Shareholders of the Company to be held at the
Radisson Hotel Des Moines Airport, 6800 Fleur Dr., Des Moines, Iowa, commencing
at 12:00 noon on May 28, 2009, and any adjournment thereof. All
expenses of this solicitation will be paid by the Company.
If a
proxy in the enclosed form is duly executed and returned, the shares of the
Company's common stock, no par value, (the "Common Stock") represented thereby,
where specification is made by the shareholder on the proxy, will be voted in
accordance with such specification. Proxies are revocable until
exercised. Proxies may be revoked by delivering either a later dated and
properly executed proxy, or a written notice of revocation to the Secretary of
the Company or in person at the Annual Meeting at any time prior to the voting
thereof.
Only
shareholders of record at the close of business on April 15, 2009, have the
right to receive notice of and to vote at the Annual Meeting and any adjournment
thereof. As of that date, 15,174,899 shares of the Company's Common
Stock were outstanding (excluding treasury shares).
Each
shareholder of record is entitled to one vote for each share of Common Stock
held. There are no cumulative voting rights.
Quorum;
Abstentions; Broker Non-Votes
The required quorum for the transaction
of business at the Annual Meeting is the presence, in person or by proxy, of a
majority of the votes entitled to be cast with respect to a matter to be acted
upon at the Annual Meeting.
The
Company will count abstentions in determining both the presence or absence of a
quorum for the transaction of business at the Annual Meeting, as well as with
respect to the total number of votes cast with respect to a matter to be acted
upon at the Annual Meeting. Accordingly, abstentions will have the
same effect as a vote against a proposal.
Broker
non-votes, if any, will be counted for purposes of determining the presence or
absence of a quorum for the transaction of business at the Annual Meeting, but
will not be counted for purposes of determining the number of votes cast with
respect to a matter to be acted upon at the Annual Meeting.
BENEFICIAL
OWNERSHIP OF COMMON STOCK
Principal
Shareholders
Title
of Class
|
|
Name
and Address of Beneficial Owner
|
|
Amount
and Nature of Beneficial Ownership(1)
|
|
Percent
of Class as of
|
Common
Stock
|
|
Wayne
E. Ahart
|
|
4,712,216(2)
|
|
31.05%
|
|
|
8017
Cobblestone
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common
Stock
|
|
Barry
N. Shamas
|
|
2,801,816(3)
|
|
18.46%
|
|
|
1095
Hidden Hills Dr
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common
Stock
|
|
C.
Don Byrd
|
|
1,852,719
(4)
|
|
12.21%
|
|
|
1725
S. 50th Unit 144
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common
Stock
|
|
Kenneth
Tobey
|
|
1,161,762
|
|
7.66%
|
|
|
23
Tennyson
|
|
|
|
|
|
|
|
|
|
|
|
(1) To
the Company's knowledge, all shares are beneficially owned by, and the sole
voting and investment power is held by the persons named, except as otherwise
indicated.
(2) This includes
133,290 shares owned directly by Wayne Ahart and Wayne Ahart’s indirect
ownership of 1,200,000 shares which are owned by National Iowa
Corporation and 649,363 shares which are owned by Arkansas National
Corporation. Wayne Ahart controls both National Iowa Corporation and
Arkansas National Corporation and votes the shares of the Company’s common stock
owned by both corporations. LeRene Ahart, as a shareholder in
National Iowa Corporation and Arkansas National Corporation, has an indirect
pecuniary interest in 1,200,000 shares of the Company’s common stock owned by
National Iowa Corporation and 649,363 shares of the Company’s common stock owned
by Arkansas National Corporation. Wayne Ahart has voting control of
all 2,400,000 shares of the Company’s common stock owned by National
Iowa Corporation and all 2,178,926 shares of the Company’s common stock owned by
Arkansas National Corporation plus the 133,290 shares which are owned directly
by Wayne Ahart. Consequently, Wayne Ahart has voting control of
4,712,216 (31.05%) shares of the Company’s common stock.
(3)
Includes 1,400,000 shares held in the name of Life Industries of Iowa, Inc., and
1,335,171 shares held in the name of Arkansas Industries Corporation, both of
which are controlled by Mr. Shamas.
(4) All
of Mr. Byrd's shares are subject to a right of first refusal of the Company to
acquire said shares on the same terms and conditions as any proposed sale or
other transfer by Mr. Byrd.
Security
Ownership of Management
The
following table sets forth, as of April 15, 2009, certain information concerning
the beneficial ownership of the Company's Common Stock by each
director (these are also director nominees) and each executive
officer of the Company and by all directors and executive officers as a
group:
Title
of Class
|
|
Name
|
|
Amount
and Nature of Beneficial Ownership(1)
|
|
|
|
Common
|
|
Wayne
E. Ahart
|
|
|
4,712,216 |
(2) |
|
31.05 |
% |
Common
|
|
Cecil
L. Alexander
|
|
|
37,088 |
|
|
0.24 |
% |
Common
|
|
Richard
L Barclay
|
|
|
48,788 |
|
|
0.32 |
% |
Common
|
|
C.
Donald Byrd
|
|
|
1,852,719 |
(3) |
|
12.21 |
% |
Common
|
|
Eugene
A. Cernan
|
|
|
37,088 |
|
|
0.24 |
% |
Common
|
|
Hayden
Fry
|
|
|
69,272 |
|
|
0.46 |
% |
Common
|
|
John
Greig
|
|
|
50,102 |
|
|
0.33 |
% |
Common
|
|
Roy
E. Ledbetter
|
|
|
37,088 |
|
|
0.24 |
% |
Common
|
|
C.
James McCormick
|
|
|
13,708 |
|
|
0.09 |
% |
Common
|
|
John
E. Miller
|
|
|
47,111 |
|
|
0.31 |
% |
Common
|
|
Robert
R Rigler
|
|
|
3,295 |
|
|
0.02 |
% |
Common
|
|
L.
Stanley Schoelerman
|
|
|
20,000 |
|
|
0.13 |
% |
Common
|
|
Barry
N. Shamas
|
|
|
2,801,816 |
(4) |
|
18.46 |
% |
Common
|
|
Kenneth
Tobey
|
|
|
1,161,762 |
|
|
7.66 |
% |
Common
|
|
All
Executive Officers and Directors as a group (14 persons)
|
|
|
10,892,053 |
|
|
71.78 |
% |
(1) To
the Company's knowledge all shares are beneficially owned by the persons named,
except as otherwise indicated, and they hold the sole voting and investment
power.
(2) This
includes 133,290 shares owned directly by Wayne Ahart and Wayne Ahart’s indirect
ownership of 1,200,000 shares which are owned by National Iowa
Corporation and 649,363 shares which are owned by Arkansas National
Corporation. Wayne Ahart controls both National Iowa Corporation and
Arkansas National Corporation and votes the shares of the Company’s common stock
owned by both corporations. LeRene Ahart, as a shareholder in
National Iowa Corporation and Arkansas National Corporation, has an indirect
pecuniary interest in 1,200,000 shares of the Company’s common stock owned by
National Iowa Corporation and 649,363 shares of the Company’s common stock owned
by Arkansas National Corporation. Wayne Ahart has voting control of
all 2,400,000 shares of the Company’s common stock owned by National
Iowa Corporation and all 2,178,926 shares of the Company’s common stock owned by
Arkansas National Corporation plus the 133,290 shares which are owned directly
by Wayne Ahart. Consequently, Wayne Ahart has voting control of
4,712,216 (31.05%) shares of the Company’s common stock.
(3) All
of Mr. Byrd's shares are subject to a right of first refusal of the Company to
acquire said shares on the same terms and conditions as any proposed sale or
other transfer by Mr. Byrd.
(4)
Includes 1,400,000 shares held in the name of Life Industries of Iowa, Inc., and
1,335,171 shares held in the name of Arkansas Industries Corporation, both of
which are controlled by Mr. Shamas.
During the last five years the stock
has not traded on any established trading market.
On March
21, 2005, the Company entered into a Stock Purchase Agreement with Universal
Guaranty Life Insurance Company (“UGL”). Wayne E. Ahart, Chairman of the
Company’s Board of Directors and the Company’s Chief Executive Officer, was also
a party to the Stock Purchase Agreement.
On April
15, 2005, the Company purchased 2,216,776 shares of its Common Stock,
approximately 11% of the Company's outstanding Common Stock, from Universal
Guaranty Life Insurance Company, at a purchase price of $2,300,000
(approximately $1.04 per share) which purchase and purchase price were
negotiated.
Mr. Ahart
was a party to an agreement dated August 16, 1986, with Commonwealth Industries,
Inc. (“CIC”) whereby if Mr. Ahart or CIC agreed to sell their shares of the
Company to a bona fide third party purchaser, the shares of both Mr. Ahart and
CIC would be sold together to such purchaser. UGL is the successor in interest
to CIC. Upon the closing of the Company’s purchase of the Shares owned by UGL,
this agreement was terminated and the Company did not purchase any of Mr.
Ahart’s shares.
Beginning
on June 8, 2006, the Company made an issuer tender offer (with a Form TO filing
with the Securities and Exchange Commission) at a purchase price of $1.00 per
share ("2006 Issuer Tender Offer"). The 2006 Issuer Tender Offer
terminated on September 8, 2006, and as a result the Company purchased 1,192,729
shares of its Common Stock for a total amount of $1,192,729. From
time to time during 2006, some shareholders requested that the Company purchase
their shares and the Company did purchase a total of 55,562 shares
from such shareholders at a price of $1.00 per share.
The
Company made an issuer tender offer effective June 8, 2007 (with a Form TO
filing with the Securities and Exchange Commission) at a purchase price of $1.25
per share ("2007 Issuer Tender Offer"). The 2007 Issuer Tender Offer
terminated on September 10, 2007, and as a result the Company purchased 420,247
shares of its Common Stock for a total amount of $525,309. The
Company purchased an additional 183,100 shares at the request of shareholders at
$1.25 per share in 2007.
During
2008 the Company purchased 16,680 shares of its common stock at the request of
shareholders at $1.25 per share.
Mr. Byrd
and the Company entered into an agreement, dated December 21, 1990, whereby the
Company acquired a right of first refusal to purchase all of the shares of the
Company's Common Stock owned by Mr. Byrd on the same terms and conditions that
would apply in any proposed sale, pledge or other transfer of the shares by Mr.
Byrd. The Company must exercise its right of first refusal within
thirty days after receiving notification from Mr. Byrd of any such proposed
transaction in the shares, and make payment for the shares within forty-five
days after acceptance. The right of first refusal may be exercised
only as to all of such shares and not as to any lesser amount. Mr.
Byrd has retained the right to transfer his shares to a trust controlled by him
or to members of his family or heirs in the event of death, but all of the
shares so transferred remain subject to the Company's right of first refusal as
to any subsequent transfer.
Section 16(a) Beneficial
Ownership Reporting Compliance
Section 16(a) of the Exchange
Act requires our directors and executive officers, and persons who own more than
10% of a registered class of our equity securities, to file with the SEC reports
of ownership and changes in ownership of our Common Stock. Based on our records
and on information provided by our directors and our executive officers, we
believe that during the fiscal year ending December 31, 2008, all of our
directors and executive officers timely met such filing
requirements. Based on filings made with the SEC, we believe that
during the fiscal year ending December 31, 2008, the Company had three
persons who were greater than 10% beneficial owners, Wayne Ahart, Don
Byrd and Barry Shamas, see charts and data above.
ELECTION
OF DIRECTORS
(ITEM
1)
Directors
and Nominees
Under the
Bylaws of the Company, the Shareholders are to elect Directors at the Annual
Meeting to hold office until the next Annual Meeting of
Shareholders. Proxies solicited by the Board of Directors, if
properly signed and returned, will be voted in favor of the election of the
nominees listed below as Directors of the Company. Although it is
expected that each of the nominees will be available for election, if a nominee
is not a candidate at the time the election occurs, the number of Directors will
be reduced accordingly with no replacement to be named. Each of the
nominees has served or currently serves as a Director of Brokers National Life
Assurance Company ("BNLAC"), the Company's wholly owned life insurance
subsidiary.
The Board
does not have a policy on Board member attendance at the annual meeting of
shareholders seven of our directors attended the 2008 Annual Meeting of
Shareholders. The following persons are nominees for election as
directors of the Company; the
Board recommends that shareholders vote FOR ALL of them:
Name
|
|
Age
|
|
First
Became Director
Or Executive Officer
|
Wayne
E. Ahart
|
|
69
|
|
1984
|
C.
Donald Byrd
|
|
68
|
|
1984
|
Kenneth
Tobey
|
|
50
|
|
1988
|
Barry
N. Shamas
|
|
62
|
|
1984
|
Cecil
Alexander
|
|
73
|
|
1989
|
Richard
Barclay
|
|
71
|
|
1989
|
Eugene
A. Cernan
|
|
75
|
|
1989
|
Hayden
Fry
|
|
80
|
|
1984
|
John
Greig
|
|
74
|
|
1984
|
Roy
Ledbetter
|
|
79
|
|
1989
|
C.
James McCormick
|
|
84
|
|
1984
|
John
E. Miller
|
|
80
|
|
1988
|
Robert
R. Rigler
|
|
85
|
|
1989
|
L
Stanley Schoelerman
|
|
84
|
|
1984
|
Background
Wayne E. Ahart has served as
Chairman of the Board of BNL since 1984 and BNLAC since 1986. He has
served as Chairman of the Board of BNLE since 1988 and served as Chairman of the
Board of United Arkansas Life from 1990 to 1994. Prior to that time,
Mr. Ahart served as Board Chairman of: Investors Trust, Inc. ("ITI")
and its subsidiary, Investors Trust Assurance Company ("ITAC"), both of
Indianapolis, Indiana (1973-1987); Liberty American Corporation
("LAC")(President since 1981) and its subsidiary Liberty American Assurance
Company ("LAAC"), both of Lincoln, Nebraska (1975-1987); and (Chairman and
President) American Investors Corporation ("AIC") and its subsidiary, Future
Security Life Insurance Company ("FSL"), both of Austin, Texas
(1980-1987). Mr. Ahart has been owner and Chairman of the Board of
Lone Star Pizza Garden Inc. from 1986 to the present.
C. Don Byrd has been Vice
Chairman of the Board of BNL, BNLE and BNLAC since August 1,
1994. Mr. Byrd was President and a Director of BNL and BNLAC since
1984 and 1986, respectively. Mr. Byrd was Agency Director of FSL from
1983 to 1984 and Regional Director of AIC 1981 to 1983. He was an
agent and Regional Director of ITI and ITAC from 1974 to 1981.
Kenneth Tobey has been
President and Director of BNLAC and BNL since August 1, 1994. Mr.
Tobey has served as President of BNLE since 1988 and served as President of
United Arkansas Life from 1990 to 1994. He served as Assistant to the
President and Training Director of BNLAC from 1986 to 1988. From 1981
to 1986, Mr. Tobey served in various capacities for AIC and FSL, including
Agent, Regional Manager, Executive Sales Director and Assistant to the
President.
Barry N. Shamas has served as
Executive Vice President, Secretary and Treasurer of BNLE since 1988 and United
Arkansas Life from 1990 to 1994. Since 1984 and 1986, respectively,
he has served as Executive Vice President and Director of BNL and BNLAC, which
positions he presently holds. He served in various capacities for ITI
and ITAC, including Executive Vice President, Senior Vice President, Treasurer
and Financial Vice President beginning in 1976 through 1987. Mr.
Shamas served as Executive Vice President, Secretary/Treasurer and as Director
of AIC and FSL from 1980 and 1983, respectively, until 1987. From
1978 through 1987, Mr. Shamas served as a Director and a member of the Executive
Committee of LAC and LAAC. Mr. Shamas has been a director of Arkansas
Life and Health Insurance Guaranty Association, an Arkansas governmental
organization, since July 2006.
Cecil L. Alexander retired
Vice President of Public Affairs for Arkansas Power & Light Company, where
he has been employed since 1980. Prior to joining the AP&L
Executive Staff, Mr. Alexander served for 16 years in the Arkansas General
Assembly, and during 1975-76, was Speaker of the House of
Representatives. Since 1971, Mr. Alexander has been involved in the
real estate business as a partner in Heber Springs Realty. He is a
past president of the Cleburne County Board of Realtors and has served on the
governmental affairs committee of the Arkansas Association of
Realtors. Alexander is currently on the Advisory Board of Directors
of V.E. Bank of Heber Springs, the Board of Directors of the Arkansas Tourism
Development Foundation, and the Board of Directors of the Baptist
Foundation.
Richard L. Barclay, a
Certified Public Accountant, recently retired as Director of Arkansas Department
of Finance and Administration and as the state's Chief Fiscal
Officer. He has returned to private practice with Beall, Barclay
& Co., Certified Public Accountants in Rogers, Arkansas. He is a member of
the Board of Directors of United Bank. He is a member and past
President and Board member of the Arkansas Society of Certified Public
Accountants and is a member of the American Institute of Certified Public
Accountants. He was a member of the Arkansas House of Representatives
from 1977 until 1992.
Eugene A. Cernan has been
President and Chairman of the Board of The Cernan Corporation since
1981. Captain Cernan retired from the U. S. Navy in 1976 after
serving 20 years as a naval aviator, 13 of which were dedicated to direct
involvement with the U. S. Space Program as a NASA Astronaut. Captain
Cernan was the pilot on the Gemini 9 mission and the second American to walk in
space; lunar module pilot of Apollo 10; and Spacecraft Commander of Apollo 17,
which resulted in the distinction of being the last man to have left his
footprints on the surface of the moon. In 1973, he served as a Senior
United States Negotiator in discussions with USSR on the Apollo-Soyuz
Mission. Mr. Cernan served as Executive Consultant of Aerospace and
Government of Digital Equipment Corporation from 1986 to 1992, and he was a
Director and Vice President-International of Coral Petroleum, Inc., Houston,
Texas from 1976 to 1981. Captain Cernan is presently a Director of
National Air and Space Museum and Smithsonian Educational Foundation.
Captain Cernan is also a member of the Board of Trustees of the U. S. Naval
Aviation Museum, NFL Alumni and Major League Baseball Players Alumni
Association. In addition, Captain Cernan has served as a consultant
commentator to ABC News.
Hayden Fry was Head Football
Coach at the University of Iowa from 1979 to 1998, now retired. He
was Head Football Coach at North Texas State University from 1973
to 1978 and at Southern Methodist University from 1962 to 1972. He
was named Football Coach of the Year in the Big Ten (1981, 1990, 1991), the
Missouri Valley Conference (1973), and the Southwest Conference (1962, 1966 and
1968). He is on the Board of Advisors of Wilson Sporting Goods (1962
to date); the Board of Trustees of Pop Warner Football (1962 to date); and the
American Football Coaches Association (1983 to date) and was the 1993 President
of the AFCA. He was President of Hawkeye Marketing Group from 1979 -
1984. He is a member of the Board of Directors of the PPI
Group.
John Greig has been President
of Greig and Co. from 1967 - 2007. He is a Director of Northstar
Bank, NW., Estherville, Iowa. He has been President of the Iowa
Cattlemen's Association (1975-1976) and a member of the Executive Committee of
the National Cattlemen'sAssociation (1975-1976). He was a member of
the Iowa Board of Regents from 1985 to 1991. He was elected as an
Iowa State Representative from 1993 to 1999.
Roy E. Ledbetter is retired as
President and Chief Executive Officer of Highland Industrial Park, a division of
Highland Resources, Inc. in East Camden, Arkansas. He holds a
Bachelor of Science Degree in Education from Southern Arkansas University at
Magnolia, a Masters Degree in Education from
Henderson State University at Arkadelphia and an AMP from
Harvard Business School at Boston. In 1966, Mr. Ledbetter
joined Highland Resources, Inc. and coordinated organization of Southern
Arkansas University Technical Branch; was promoted to Division Manager (1972),
Vice President and Division Manager (1975), Senior Vice President (1980), and
President in 1984. He is past President of the Camden Chamber of
Commerce; was 1977 Camden Jaycee's Man of the Year; was awarded first annual
Camden Area Chamber of Commerce Community Service Award in 1983; served on
Education Standards Committee of the State of Arkansas; and presently serves on
the Boards of East Camden and Highland Railroad, Shumaker Public Service
Corporation, Merchants and Planters Bank of Camden, and First United Bancshares
of El Dorado.
C. James McCormick is former
Chairman of the Board of McCormick, Inc., Best Way Express, Inc., and President
of JAMAC Corporation, all of Vincennes, Indiana. He is the owner of
CJ Leasing, LLC. Mr. McCormick is former Chairman of the Board of
Directors and CEO of First Bancorp, Vincennes, Indiana; former Chairman of the
Vincennes University board of trustees and a Life Director of the Indiana
Chamber of Commerce; and a former member of the Young President's
Organization. He is a former Chairman of the Board of the American
Trucking Associations. Mr. McCormick is a Past Chairman of the
National Board of Trustees of The Fellowship of Christian Athletes.
John E. Miller was a member of
the State of Arkansas House of Representatives from 1959 to 2000. He
has been self-employed in the insurance, abstract, real estate, heavy
construction and farming business for more than 20 years. He
presently serves on the Board of Directors of Calico Rock Medical Center, Easy K
Foundation, National Conference of Christians and Jews, State Advocacy Services,
Lions World Services for the Blind, State Board of Easter Seals, Williams
Baptist College Board of Trustees and Izard County Chapter of the American Red
Cross.
Robert R. Rigler has been
Chairman of the Board of Security State Bank, New Hampton, Iowa since 1989; he
served as its President and CEO from 1968 to 1989. Mr. Rigler was
Iowa Superintendent of Banking from 1989 to 1991. He was a member of
the Iowa Transportation Commission from 1971 to 1986 and served as its Chairman
from 1973 to 1986. He was a member of the Iowa State Senate from 1955
to 1971 and served as a Majority and Minority Floor Leader.
L. Stanley Schoelerman was
President and a Partner of Petersen Sheep & Cattle Co., Spencer, Iowa from
1964 to 2001. He was a Director of Home Federal Savings & Loan,
Spencer, Iowa, from 1969 to 1988; and Honeybee Manufacturing, Everly, Iowa, from
1974 to 1986. He was President of Topsoil-Schoenewe, Everly, Iowa,
from 1974 to 1986. Mr. Schoelerman was Commissioner of the Iowa
Department of Transportation from 1974 to 1978 and was a member of the National
Motor Carrier Advisory Board of the Federal Highway Administration from 1981 to
1985.
RATIFICATION
OF APPOINTMENT OF OUR
INDEPENDENT
REGISTERED PUBLIC ACCOUNTING FIRM
(ITEM
2)
The Board
of Directors has selected Smith, Carney & Co., p.c. (“Smith Carney”), an
independent registered public accounting firm, to audit and report on our
consolidated financial statements for the fiscal year ending December 31,
2009. In accordance with the resolution of the Board, this selection
is being presented to the Shareholders for ratification or disapproval at this
Annual Meeting. It is not presently anticipated a representative of
Smith Carney will be present at the Annual Meeting. However, should such a
representative be present he will be given an opportunity to make a statement if
he desires to do so and will be available to respond to appropriate
questions.
THE BOARD
RECOMMENDS A VOTE FOR
RATIFICATION OF THE APPOINTMENT OF SMITH CARNEY AS THE COMPANY’S
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM FOR THE FISCAL YEAR ENDING
DECEMBER 31, 2009.
Our Board
has a policy to assure the independence of its independent registered public
accounting firm. The Audit Committee reviews and discusses with Smith Carney
audit procedures as to the scope, fee and timing of the audit. The
Audit Committee may separately engage the independent registered public
accounting firm for the annual audit and quarterly reviews and also approve
various recurring audit-related and tax services on the basis of its
pre-approval policies and procedures. For services of its independent registered
public accounting firm that have not been so approved, the Company’s Chief
Operating Officer may submit a request for the performance of such services. The
Audit Committee may pre-approve the requested service as long as it is not a
prohibited non-audit service and the performance of such service would be
consistent with all applicable rules on auditor independence. The Audit
Committee may also delegate pre-approval authority to one or more of its
members.
All
services performed for us by Smith Carney in 2008 and 2007 were either
separately approved by the Audit Committee or covered by the pre-approval policy
as described above.
See the
section herein entitled AUDIT
COMMITTEE CHARTER AND REPORT and the subsection entitled Report of the
Audit Committee which sets forth, among other information, the
description of the services of Smith Carney and the amounts paid to them for the
years 2007 and 2008 for such services.
We are
not aware of any matters, other than those referred to in this Proxy Statement,
which will be presented at the Annual Meeting. If any other appropriate business
is properly presented at the Annual Meeting, the proxies named in the
accompanying form of proxy will vote the proxies in accordance with their best
judgment in the interests of the Company.
Our Board
of Directors is responsible for providing effective governance over the
Company’s affairs. Our corporate governance practices are designed to align the
interests of the Board and management with those of shareholders and to promote
honesty and integrity. Highlights of our corporate governance practices are
described below.
Board
Meetings; Committees
and Meetings
The Board
of Directors of the Company held four meetings during the year ended December
31, 2008. Of the director nominees, all attended at least 75% of such
meetings.
The
Company has an Investment Committee, consisting of Messrs. Ahart and
Shamas. This Committee manages the Company's investments, and met
periodically during fiscal year 2008 on both a formal and informal basis;
Messrs. Ahart and Shamas did not miss any meetings.
The
Company has no standing nominating committee.
The Company established a Compensation
Committee in November 2004, consisting of three members of the board of
directors: C. James McCormick, Chairman of the Compensation Committee, Roy
Ledbetter and Hayden Fry presently serve on the committee. There were two meetings
held in 2008 and all members of the
Committee were present.
Board
Member Nomination Process; No Nominating Committee
The
Company does not have a standing nominating committee or committee performing
similar functions. The Company has been involved in establishing and
growing its core business, through its wholly owned subsidiary, BNLAC, since
inception of the Company and BNLAC in the middle 1980’s. Since
inception, the Company’s Board has been comprised of most of the same
individuals. The Company believes the Board’s constituency has
materially aided the Company and its core business in making the decisions which
have been and are necessary for the growth and business plans of the
Company. All of the Board members are considered to be independent
except Messrs. Ahart, Shamas, Byrd and Tobey. Consequently, the
Company and its management believe it is not necessary for the Company to have a
nominating committee.
The
Company has 1,960 shareholders of record and 15,174,899 shares of its Common
Stock outstanding. The Company’s Common Stock is not listed on the New York
Stock Exchange and is not listed for trading through the NASD
system. The independence requirements imposed by the NYSE or NASD are
not directly applicable. The Company uses the independence
requirements of the NASD in evaluating whether a director is
independent.
All
nominees for election to the position of director at the Company’s 2009 Annual
Shareholders’ Meeting are standing for reelection and they have been reelected
since at least 1989.
The basic
director nomination process has been that the executive management group,
Messrs. Ahart, Shamas, Byrd and Toby (“Executive Management”), assess the needs
of the Board from time to time and review the appropriate skills and
characteristics to fulfill those needs. Generally, such skills and
characteristics may include personal and professional integrity; intelligence
and independent judgment; board experience; experience at the policy making
level in business; a commitment to serve on the Board for a number of years so
that the Board member may develop knowledge about the Company and its
operations, strategies and business plans; a Board member’s willingness to
evaluate Executive Management’s performance objectively; and other board
positions and committees on which a Board member serves. Each year,
Executive Management recommends the nominees to the entire Board which has
nominated and approved the nominees as candidates for which proxies are
solicited to elect such nominees at the annual meeting of
shareholders.
At the
annual meeting, the nomination process is that a shareholder in attendance
nominates the individuals who are on the slate of nominees for whom proxies were
solicited. Nominations are open from any other shareholder in
attendance. After a full opportunity for nominations from the floor,
a motion is made, seconded and voted upon for closing the
nominations. There is a full opportunity for discussion about any
Board nominee. The election of the Board members is then
held. The Company does not currently have a formal policy with
regard to the consideration of any director candidates recommended by
shareholders as the need for such a policy has never arisen.
Board
Attendance and Annual Meeting Policy
The Board does not have a policy about
directors attending the Company’s Annual Meetings of
Shareholders. Seven of the Board members attended the
2008 Annual Meeting of
Shareholders. The Board members are expected to attend Board meetings
and meetings of the committees on which they serve. In 2008, there were four meetings of the
Board. Each of the directors attended at least 75% of the meetings of the
Board. The Committee members attended all meetings of the committees
on which they served.
Code
of Ethics
The
Company has a code of ethics that applies to all employees of the
Company. To receive a copy of the Company’s code of ethics without
charge, contact:
Ms. Pam
Randolph
BNL
Financial Corporation
7530 Hwy.
107
Director
Independence
The
Company’s Common Stock is not listed on the New York Stock Exchange and is not
listed for trading through the NASD system. The independence
requirements imposed by the NYSE or NASD are not directly
applicable. The Company uses the independence requirements of the
NASD in evaluating whether a director is independent. All of the
Board members are considered to be independent except Messrs. Ahart, Shamas,
Byrd and Tobey.
Audit
Committee Financial Expert
Mr. Richard Barclay, the Audit
Committee’s chair, was determined by the Board, based on his education and
experience, to be an audit committee financial expert, as defined by applicable
federal securities law. Mr. Barclay was determined by the Board to be
independent.
The
Company’s Executive Management (Chairman of the Board, Vice Chairman of the
Board, President and Chief Operating Officer) is aware of the content of Item
404 of SEC Regulation S-K entitled “Transactions with Related Persons, Promoters
and Certain Control Persons” (“Item 404”). BNL is registered as a
holding company with the Arkansas Insurance Department and BNLAC is a life and
health insurance company
domesticated in Arkansas. The Arkansas insurance laws and regulations
of the Arkansas Insurance Department regulate and prohibit certain transactions
involving BNL, BNLAC and their affiliates including executive officers,
directors and large shareholders. The Arkansas insurance laws do permit some
affiliate transactions if approved by the Arkansas Insurance
Commissioner. Additionally, BNL and BNLAC have followed a practice of
annually obtaining conflicts of interest statements from the executive officers
and directors which require disclosure of transactions as well as other
information which may constitute a conflict with the interests of BNLAC, BNL and
the shareholders of BNL. The Arkansas insurance law, regulations of
the Arkansas Insurance Department and the Company’s use of an annual conflicts
of interest statement are different than Item 404.
During
the Company’s fiscal year 2008, it was the practice of the Executive Management
that the Company not engage in any “related person” or affiliate transactions
unless specifically approved by the Board of Directors and, if appropriate, by
the Arkansas Insurance Department. To the knowledge of the Executive
Management, there were no “related person” or affiliate transactions during 2008
as prescribed by Item 404 exceeding $120,000.
The
foregoing described practice was not in writing during 2008 except that the
practice was evidenced by the Arkansas insurance laws and regulations, the
Company’s annual conflict of interest statements obtained from the Executive
Officers and Directors and the absence of such related party
transactions.
Shareholder
and Interested Party Communications
A
proposal submitted by a shareholder for the 2010 regular Annual
Meeting of Shareholders must be received in writing by the Secretary, BNL
Financial Corporation, P. O. Box 6600, North Little Rock, Arkansas 72124, no
later than November 1, 2009, in order to be eligible to be included in the
Company's Proxy Statement for that meeting. Any shareholder who
submits such proposals must be a record or beneficial owner of at least 1% or
$2,000 in market value of securities entitled to be voted at the meeting, have
held such securities for at least one year, and continue to hold such securities
through the date on which the meeting is held.
Proposals for inclusion in the Proxy
Statement must comply with the requirements of the Securities Exchange Act of
1934, as amended (the “Exchange Act”), including Rule 14a-8.
The Board
of Directors does not have a formal process for shareholders to send written
communications directly to members of the Board of Directors. The
Board has not made any determination whether or not such a process should be
developed and adopted by the Board. At the present, if a Shareholder
sends a written communication to any individual Board member and addresses such
written communication to the Board member at P.O. Box 6600, North Little Rock,
AR 72124, or actually delivers such communication to the Corporate
Secretary at 7530 Highway 107, North Little Rock, AR 72120, the
Executive Management undertakes to timely forward such written communication to
the Board member addressee.
AUDIT COMMITTEE CHARTER
AND REPORT
The Audit Committee (the “Audit
Committee”) of the Company’s Board of Directors reports to the Board and is
responsible for overseeing and monitoring the Company’s financial accounting and
reporting process, the system of internal controls established by management and
the audit process of the Company. The Board adopted a written charter for the
Audit Committee in 2002. The charter sets out the responsibilities, authority
and specific duties of the Audit Committee. It also specifies the structure and
membership requirements of the committee, as well as the relationship of the
Audit Committee to the Company’s independent registered public accounting firm,
internal auditor and management.
Report
of the Audit Committee
The Audit Committee has submitted the
following report for inclusion in this Proxy Statement:
The
Company has an Audit Committee consisting of Messrs. Barclay, Greig and
Rigler. Mr. Barclay serves as Chairman of the Audit Committee and is
the Audit Committee financial expert. Each of the members of the
Audit Committee qualifies as an independent director in accordance with the NASD
guidelines. During fiscal years 2007, 2008 and 2009, the Audit
Committee has met with senior members of the Company’s management, as well as
the Company’s independent registered public accounting firm, Smith, Carney &
Co., p.c. (“Smith Carney”). The Audit Committee has reviewed the
audited financial statements in the Company’s Annual Report on Form
10-K.
The Audit
Committee oversees the Company’s financial reporting process on behalf of the
Board. Management has the primary responsibility for the preparation,
presentation and integrity of the Company’s financial statements and for the
Company’s reporting process, including its systems of internal
controls. Smith Carney is the Company’s independent registered
public accounting firm, responsible for auditing the Company’s annual financial
statements and performing quarterly reviews. In fulfilling its responsibilities,
the Audit Committee relies, without independent verification, on the information
provided by the Company’s management and by Smith Carney.
The Audit
Committee also discussed with the independent registered public accounting firm,
Smith Carney, matters required to be discussed by Statement on Auditing
Standards No. 114. The Committee received and discussed with Smith
Carney their annual written report on their independence from the Company and
its management, in accordance with PCAOB Rule 3526.
Based on those reviews and discussions,
and the report of Smith Carney, the Audit Committee has recommended to the Board
that the audited financial statements be included in the Company’s Annual Report
on Form 10-K for the year ended December 31, 2008, for filing with the
Securities and Exchange Commission.
The
services performed by Smith Carney in 2008 and 2007 are described
below. Smith Carney does not provide any services to the Company
which are prohibited under applicable laws and regulations. To the extent Smith
Carney provides the Company with consulting services, those services are closely
monitored and controlled by both management and the Audit Committee to ensure
that their nature and extent do not interfere with Smith Carney’s independence.
The independence of Smith Carney is also considered annually by our
Board.
The Audit
Committee reviewed the fees billed to BNL Financial Corporation and its
subsidiaries by Smith Carney for the fiscal years ended December 31, 2008 and
2007, for the following described services and fee amounts:
|
|
|
|
|
|
|
Audit
fees
|
|
$ |
242,145 |
|
|
$ |
239,160 |
|
Audit-related
fees
|
|
|
7,800 |
|
|
|
21,175 |
|
Tax
fees
|
|
|
26,665 |
|
|
|
21,210 |
|
All
other fees
|
|
|
-0- |
|
|
|
-0- |
|
TOTAL
FEES
|
|
$ |
257,610 |
|
|
$ |
281,545 |
|
Audit fees: This category
consists of fees for the audit of our annual financial statements included in
Form 10-K, the audit of our statutory financial statements, review of financial
statements included in our Form 10-Q quarterly reports and assistance with
regulatory filings.
Audit-related
fees: This category consists of fees for services that are reasonably
related to the performance of the audit or review of our financial statements,
and not reported under the caption “Audit Fees”. These services
include consultation regarding the implementation of GAAP and statutory
accounting rules, and assistance with implementation of SEC rules.
Tax
fees: This category consists of fees for federal and state tax
compliance and tax advice.
The Audit
Committee engages the independent registered public accounting firm for the
annual audit and quarterly reviews, and has adopted policies for pre-approval of
audit, audit-related, tax and other services. All of the services for
which fees are shown above were specifically approved by the Audit Committee, or
covered by the pre-approval policies established by the Audit
Committee.
In making
its recommendation to ratify the appointment of Smith Carney as the Company's
independent registered public accounting firm for the year ending December 31,
2009, the Audit Committee has considered and determined Smith Carney's
performance of services other than audit services are compatible with
maintaining independence of our outside accountants.
BNL FINANCIAL CORPORATION
Richard Barclay, Chairman
COMPENSATION
COMMITTEE CHARTER,
PURPOSES
AND PROCESSES
AND
REPORT
Compensation
Committee Charter
The
Company’s Board of Directors created a Compensation Committee (“Compensation
Committee”) and adopted a charter for the Compensation Committee. The
Compensation Committee consists of three members, C. James McCormick (Chair),
Roy Ledbetter, and Hayden Fry, all of whom are independent members of the
Board. The Compensation Committee shall meet at least once
annually and may meet at other times as the Compensation Committee
determines. The charter sets out the responsibilities, authority and
specific duties of the Compensation Committee. It also specifies the structure
and membership requirements for the Compensation Committee.
Purposes
and Processes
The
purposes of the Compensation Committee are (a) to recommend to the Company's
Board the content and amount of compensation for the Company's designated
officers, including the Company's executive officers; (b) to
review and discuss with management the Company's Compensation Discussion and
Analysis ("CD&A") to be included in the Company's annual proxy statement or
annual report on Form 10-K filed with the United States Securities and Exchange
Commission ("SEC"); and (c) and to prepare the Compensation Committee Report as
required by the rules of the SEC.
Generally, the Compensation Committee
shall proceed as follows:
--
Evaluate annually the performance of the Chief Executive Officer and Chief
Operating Officer and determine, recommend to the Board and approve the
compensation level the Chief Executive Officer and Chief Operating Officer based
on this evaluation.
--
Evaluate annually the performance of all other designated officers of the
Company and determine, recommend to the Board and approve the compensation level
of all such other designated officers of the Company.
Compensation
Committee Report
The Compensation Committee has
submitted the following report for inclusion in this Proxy
Statement:
The Compensation Committee of the
Company's Board of Directors, whose names are set forth below, state that the
Compensation Committee has reviewed and discussed with management the "Compensation
Discussion and Analysis" which is required by SEC Regulation S-K, Item
402(b), 17 CFR §229.402(b), and is set forth in this Proxy
Statement.
Based on such reviews and discussions,
the Compensation Committee recommended to the Company's Board of Directors that
the Compensation Discussion and Analysis be included in this Proxy Statement and
the Company's annual report on SEC Form 10-K for the year ended December
31, 2008, whether set forth herein or incorporated by reference.
This section, Compensation Committee
Report, shall not be deemed to be 'soliciting material' and is 'furnished' and
not 'filed' with the SEC.
The Compensation
Committee:
C. James McCormick,
Chairman
COMPENSATION
OF EXECUTIVE OFFICERS
Executive
Officers
Name
|
Age
|
Officer
Since
|
Position(s)
|
Wayne
E. Ahart
|
69
|
1984
|
Chief
Executive Officer and Chairman of the Board
|
C.
Don Byrd
|
68
|
1984
|
Vice
Chairman of the Board
|
Kenneth
Tobey
|
50
|
1988
|
President
|
Barry
N. Shamas
|
62
|
1984
|
Executive
Vice President and Treasurer,
Chief Operating
Officer
|
The
Company's executive officers serve at the pleasure of the Board of
Directors. Each of the above officers also holds the same office in
BNLAC.
Compensation
Discussion And Analysis
The Company anticipates that the
CD&A and related sections herein entitled "Compensation of Executive
Officers" and "Compensation of Directors" will change from time to
time in subsequent Forms 10-K and Proxy Statements of the Company as
interpretations and applications of the SEC Release develop by companies filing
with the SEC or as amended by the SEC.
This CD&A pertains to the
compensation of Wayne E. Ahart, CEO and Principal Executive Officer; C. Don
Byrd, Vice Chairman of the Board; Kenneth Tobey, President; and Barry N. Shamas,
Chief Operating Officer and Principal Financial Officer (collectively
the "Named Executive Officers" or "NEO's").
The Company does not have formalized
executive compensation policies, programs or plans. This CD&A
describes the practice of the Company in compensating its NEO's. The
material elements of the Company's practice for compensating its NEO's are
salary, bonuses and fringe benefits.
The Company is, and has been since
inception in 1984, in a growth and development era. The Company's
outstanding common stock, approximately 15,174,899 shares, is not traded on any
organized stock exchange or organized market. The objective of the
Company's NEO compensation practice is to compensate the NEO's for service as
officers and employees in operating the Company and to reward the NEO's for
their work in growing and developing the Company.
Salaries
and fringe benefits are the elements for compensating the NEO's for their
service as officers and employees in operating the Company. A bonus
is the element for rewarding the NEO's for the profitability, growth and
development of the Company. The Company chooses to pay salaries and
fringe benefits in order to compensate the NEO's for their service in performing
their normal and ordinary duties in operating the Company. The
Company chooses to pay bonuses in order to apply an incentive and reward for
profitability.
The
Company also pays fringe benefits in the form of life insurance premiums which
provides a benefit to the Company in the event of the death of Messrs. Ahart,
Byrd, Tobey or Shamas as they are all major stockholders and the insurance
benefits may be used by their estates for liquidity to pay various items,
including the satisfaction of estate taxes, rather than liquidating their stock
ownership in the Company. The Company has key man life insurance on
Messrs. Ahart and Shamas but such insurance is not a fringe benefit to
them.
The Company does not use specific
performance elements, formulas or benchmarking for setting compensation or
making compensation decisions except for the 2001 Incentive Bonus Plan for
the benefit of the NEO's. The 2001 Incentive Bonus Plan
provides for monthly payments of cash bonuses based on 12% of consolidated
pre-tax operating income. BNLAC bears its prorata share of the bonus expense
based on its pre-tax statutory profits. Under the 2001 Incentive Bonus Plan,
bonus expense was $404,376, $511,562, and $308,266 under this plan for 2008,
2007 and 2006, respectively.
The
Company does not have any employment contracts with the NEO's, does not have
severance agreements with the NEO's, does not have any agreements with the NEO's
in the event of a change in control and does not have any contractual buy-out
obligations to the NEO's relevant to compensation to them.
The
Company does have an agreement with Mr. Byrd which provides the Company with a
right of first refusal should Mr. Byrd have an offer to buy any of his stock of
the Company. The agreement is dated December 21, 1990, and was not
given or entered into as part of compensation to Mr. Byrd.
The
amounts of compensation are determined by suggestions from Messrs. Ahart and
Shamas and by reviewing the Company's operations, profitability, growth and
development during the year and by the general experiences and knowledge of the
members of the Board of Directors and Compensation Committee.
The
salaries and fringe benefits paid to the NEO's fit into the Company's
compensation objective of paying for normal and ordinary services and duties in
operating the Company by competent and dependable executive
officers. The cash bonuses, including portions of cash bonuses paid
to Messrs. Byrd and Tobey for them to purchase stock, fit into the compensation
objective of giving incentives and rewards for the profitability, growth and
development of the Company.
While the
Company's practice for compensating its NEO's has more than one element and more
than one objective, the decisions on the amount to pay for one element do not
affect the decision on the amount to pay for other elements.
The only
element which may have been considered as long-term compensation was a stock
bonus plan for Messrs.
Byrd and Tobey. The plan provided for a bonus based on consolidated
after-tax profits subject to specified limits. The bonus amount, net of taxes,
was used to purchase stock in the Company. Stock bonuses in the
amount of $74,866 and $100,000 were granted in 2006 and 2005
respectively. This stock bonus plan expired December 31,
2006. While such stock bonus plan did increase the stock ownership of
Messrs. Byrd and Tobey, there is no assurance that such stock ownership will
ever result in compensation to them or any other stockholder.(1)
The
Company has an Employee
Pension Plan which is a 401(k) for all employees and the NEO's, as
employees, are eligible to participate. Employees may elect to
participate and the Company makes matching contributions. Wayne E.
Ahart, while eligible, has elected not to participate in the Employee Pension
Plan. The Company does not consider the Employee Pension Plan to be
an element of NEO compensation.
In the fourth quarter of 2008, the
board of directors voted to pay a $.05 dividend per share to its shareholders,
which required approximately $760,000 of funding.
.
The Company's common stock is not
traded on any organized stock exchange and there is no established market for
the stock. Consequently, fair market value of the Company's common
stock cannot be used as any measure of the NEO's performance.
The
Company's operations, growth and development.(2) can be reviewed by normal, traditional
observations and information such as profitability, A.M. Best rating, use of
debt, investments, policyholder claims, policyholder service, certificates of
authority to do business in States, agency or broker force, type and extent of
policyholders, and trends for types of business.
The Company does not have non-cash
compensation for its NEO's except that the stock bonus plan, now expired, for
Messrs. Byrd and Tobey may have been interpreted by some to be a non-cash form
of compensation.
It has been the practice of the Board
to review NEO compensation annually for any changes.
The
Company, through its Board of Directors, exercises discretion in awarding
compensation to the NEO's. The Board’s consideration of awarding
compensation includes the amount of the compensation and the individual NEO's
performance or contribution to the Company's operations, profitability, growth
and development.
The
Company has not restated or otherwise materially adjusted its earnings or other
material aspects of the results of its operations. The Company does
not have any policy and has not made any decision about adjusting or recovering
compensation awards or payments if any such adjustments to the Company's
earnings or other material aspects of the results of its operations are ever
confronted by the Company.
Salaries for the NEO's have
increased. The factors considered in the decision for such salary
increases are the Company's operations, profitability, growth and development as
described in this CD&A.
Since the
NEO compensation is reconsidered and paid each year and since the NEO's have not
realized any gain on
stock bonus awards and since the Company is in a growth and development era,
compensation of the NEO's in prior years has not been a material element for
consideration for the compensation amounts in the current year
(2008).
The salaries, bonuses and fringe
benefits paid to the NEO's are current expenses of the Company and deductible as
expenses in both accounting and tax treatment.
The Company does not have any equity or
stock ownership requirements or guidelines for its NEO's. Please
refer to the section in this Proxy Statement entitled "Beneficial Ownership of
Common Stock.”
_____________________
1 In
2004, 2006 and 2007, the Company made issuer tender offers. While
such offers were made to all stockholders, Messrs. Ahart, Byrd, Tobey and Shamas
did not tender any shares for purchase by the Company.
2 The
Company's primary business operations, growth and development are those of its
wholly owned subsidiary, Brokers National Life Assurance
Company.
Summary
Compensation Table for 2008 and 2007 Fiscal Year
The following table sets forth
information concerning the 2008 and 2007 compensation of those persons, who were
as of December 31, 2008, our NEOs. Additional information may be found in
the narrative or supporting tables that accompany this table.
Name and
Principal
Position
(a)
|
|
Year
(b)
|
|
Salary
(c)
|
|
|
Bonus
(d)
|
|
Stock
Awards
(e)
|
|
Option
Awards
(f)
|
|
Non-Equity
Incentive
Plan
Compen-
sation
(g)
|
|
Change in
Pension Value
and Non-
Qualified
Deferred
Compensation
Earnings
(h)
|
|
All Other
Compen-
sation
(i)
|
|
|
Total
(j)
|
|
Wayne
Ahart,
|
|
2008
|
|
$ |
190,000 |
|
|
$ |
183,974 |
|
|
|
|
|
|
|
|
|
$ |
83,885 |
|
|
$ |
457,859 |
|
Chairman,
CEO (Principal Executive Officer)
|
2007
|
|
$ |
190,000 |
|
$ |
207,643 |
|
$ |
---- |
|
$ |
--- |
|
$ |
---- |
|
$ |
---- |
|
$ |
87,399 |
|
$ |
485,042 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Barry
Shamas,
|
2008
|
|
$ |
175,000 |
|
$ |
115,446 |
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
63,285 |
|
$ |
353,731 |
|
Chief
Operating Officer (Principal Financial Officer)
|
2007
|
|
$ |
162,500 |
|
$ |
173,893 |
|
|
---- |
|
|
---- |
|
|
---- |
|
|
---- |
|
$ |
63,816 |
|
$ |
400,209 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
C.
Don Byrd,
|
2008
|
|
$ |
139,200 |
|
$ |
78,856 |
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
59,810 |
|
$ |
277,866 |
|
Vice
Chairman of the Board
|
2007
|
|
$ |
129,200 |
|
$ |
133,815 |
|
|
---- |
|
|
---- |
|
|
---- |
|
|
---- |
|
$ |
56,577 |
|
$ |
319,592 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Kenny
Tobey,
|
2008
|
|
$ |
128,600 |
|
$ |
77,972 |
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
39,088 |
|
$ |
245,660 |
|
President
|
2007
|
|
$ |
118,592 |
|
$ |
140,677 |
|
|
---- |
|
|
---- |
|
|
---- |
|
|
---- |
|
$ |
44,749 |
|
$ |
304,018 |
|
The
amounts in the column “Bonus (d),” above, are inclusive of bonuses awarded
pursuant to the Company’s 2001 Incentive Bonus Plan for the named individuals,
bonuses paid to Messrs. Byrd and Tobey to purchase stock and Christmas
bonuses. It is possible that some of those bonus amounts could have,
alternatively, been included in the column “Non-Equity Incentive Plan
Compensation (g),” above, but bonus amounts should only be in one column so that
the total compensation amounts in the “Total (j)” column would not be
overstated.
The following table describes the
details and amounts of All Other Compensation which is inserted into the Summary
Compensation Table above.
Supplemental
Table of All Other Compensation for 2008 and 2007 Fiscal Year
Name
|
|
Year
|
|
Auto
|
|
|
Long
Term
Care Insurance
|
|
|
College
Tuition Allow.
|
|
|
Life
Ins. Prem.
|
|
|
Family
Portion
Health
Insur.
|
|
|
Club
Dues
|
|
|
Out
of Pocket Costs on Health Ins.
Reimbursed
|
|
|
Director
Fees
|
|
|
Total
All
Other
Compensation
|
|
Wayne
Ahart
|
|
2008
|
|
$ |
2,079 |
|
|
$ |
3,213 |
|
|
$ |
---- |
|
|
$ |
60,000 |
|
|
$ |
---- |
|
|
$ |
5,917 |
|
|
$ |
4,676 |
|
|
$ |
8,000 |
|
|
$ |
83,885 |
|
|
|
2007
|
|
$ |
1,862 |
|
|
$ |
3,213 |
|
|
$ |
---- |
|
|
$ |
60,000 |
|
|
$ |
---- |
|
|
$ |
6133 |
|
|
$ |
8,191 |
|
|
$ |
8,000 |
|
|
$ |
87,399 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Barry
Shamas
|
|
2008
|
|
$ |
5,733 |
|
|
$ |
2,303 |
|
|
$ |
---- |
|
|
$ |
27,150 |
|
|
$ |
4,175 |
|
|
$ |
---- |
|
|
$ |
15,924 |
|
|
$ |
8,000 |
|
|
$ |
63,285 |
|
|
|
2007
|
|
$ |
4,784 |
|
|
$ |
2,303 |
|
|
$ |
---- |
|
|
$ |
27,150 |
|
|
$ |
8,199 |
|
|
$ |
---- |
|
|
$ |
13,380 |
|
|
$ |
8,000 |
|
|
$ |
63,816 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
C.
Don Byrd
|
|
2008
|
|
$ |
23 |
|
|
$ |
2,677 |
|
|
$ |
10,000 |
|
|
$ |
22,305 |
|
|
$ |
4,175 |
|
|
$ |
4,399 |
|
|
$ |
8,231 |
|
|
$ |
8,000 |
|
|
$ |
59,810 |
|
|
|
2007
|
|
$ |
43 |
|
|
$ |
2,677 |
|
|
$ |
10,000 |
|
|
$ |
22,305 |
|
|
$ |
5,925 |
|
|
$ |
4,642 |
|
|
$ |
2,985 |
|
|
$ |
8,000 |
|
|
$ |
56,577 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Kenny
Tobey
|
|
2008
|
|
$ |
536 |
|
|
$ |
1,798 |
|
|
$ |
10,000 |
|
|
$ |
7,653 |
|
|
$ |
5,852 |
|
|
$ |
1,840 |
|
|
$ |
3,409 |
|
|
$ |
8,000 |
|
|
$ |
39,088 |
|
|
|
2007
|
|
$ |
559 |
|
|
$ |
1,798 |
|
|
$ |
10,000 |
|
|
$ |
6,323 |
|
|
|
8,199 |
|
|
$ |
3,357 |
|
|
$ |
6,513 |
|
|
$ |
8,000 |
|
|
$ |
44,749 |
|
The total number of executive officers
of the Company is four and the total remuneration paid to all executive officers
in 2008, as a group, was $1,335,136, including bonuses of approximately $456,248
under the executive incentive bonus plan. The Company has accrued bonuses
payable at December 31, 2008, of approximately $36,000 under the executive bonus
plan.
Other
Compensation; Benefit Plans
In 1994,
the Board of Directors and Shareholders approved the 1994 Brokers and Agents’
Nonqualified Stock Option Plan. This plan was established as an
incentive to sales persons of BNLAC. Initially 250,000 shares were
available under the plan. The Board of Directors authorized options
for an additional 1.75 million shares. The option period may not
exceed a term of five years and the duration of the plan was ten years, expiring
December 14, 2004. Of the options granted through December 2004,
there were 110,425 stock options outstanding at December 31,
2007. The number of options expiring or forfeited were 100,825 and
122,675 in 2008 and 2007, respectively. There were 9,600 options
exercised in 2008 and 12,475 options exercised in 2007. The remaining options
expired in 2008. The options do not have a dilutive effect on
earnings per share at this time.
In 2001, the Board of Directors
approved the 2001 Incentive
Bonus Plan for the benefit of certain Officers of the Company. The plan
provides for monthly payment of cash bonuses based on 12% of consolidated
pre-tax operating income. Bonus expense was $355,359,
$511,562, and $308,266 under this plan for 2008, 2007 and 2006,
respectively.
In March 2002, the Board of Directors
approved the 2002
Non-Director, Non-Executive Stock Option Plan, subject to any necessary
authorizations from any regulatory authority. The plan is intended to
assist the Company in attracting and retaining individuals of outstanding
ability and to promote concurrence of their interests with those of the
Shareholders of the Company. The Company granted options for 116,000
shares prior to 2005. No options were granted in 2008 or
2007. The fair value of options granted is estimated using a binomial
method as prescribed in SFAS No. 123(R). There were 93,050 options
outstanding at December 31, 2008. The estimated weighted average
remaining life of the options is 4.4 years and weighted average exercise price
is $.63. The options do not have a dilutive effect on earnings per
share at this time, but may have such an effect in the future.
The Company had a stock bonus plan for
the benefit of Don Byrd and Kenny Tobey, Vice Chairman of the Board and
President of the corporation. The plan provided for a bonus based on
consolidated after-tax profits subject to specified limits. The bonus
amount, net of taxes, was used to purchase stock in the
Company. Stock bonuses in the amount of $74,866, and $100,000 were
granted in 2006 and 2005, respectively. This stock bonus plan had a lifetime
limit of a total of 800,000, (400,000 shares for each participant; Messrs. Byrd
and Tobey). In 2006, the limit of 800,000 shares was reached and no
further stock bonuses will be granted under this plan.
The
Company has an Employee Pension Plan that is a qualified retirement plan under
the Internal Revenue Code. All employees who have attained age 21 and
have completed one year of service are eligible to
contribute. Employer contributions are discretionary. The
Company contributed
$65,896, $64,795,
and $61,853 in 2008, 2007 and 2006, respectively
Other
Tables Not Applicable
The
United States Securities & Exchange Commission issued its Release 33-8732A
and 34-54302A (referred to in this report as the "Release"), dated August 29,
2006, which is entitled "EXECUTIVE COMPENSATION AND RELATED PERSON
DISCLOSURE." The effective date of the Release is November 7, 2006,
and pertains to BNL’s reports and filings for the year end December 31, 2006,
and reports or filings in 2007 and thereafter. The Release is
approximately 436 pages.
The
Release significantly amended Item 402 of Regulation S-K pertaining to the
presentation of information about executive compensation and specified tables
and data for Grants of Plan-Based Awards, Outstanding Equity Awards, Option
Exercises and Stock Vested, Pension Benefits, Non-Qualified Deferred
Compensation, and Termination Payments and Change-In-Control
Agreements. The Company believes that such tables and data are not
applicable to the Company’s compensation of its NEO’s. Respectfully,
the Company has presented the material tables and information about its NEO
compensation and Director compensation, also required by the new changes to Item
402, all as prescribed by such regulations.
COMPENSATION
OF DIRECTORS
Each director
received a fee of $1000 per company, plus reasonable travel expenses for each
meeting of the Board of Directors attended. The members of the Audit
and Compensation Committees received $1000 for each meeting attended and the
Chairman of each committee received $2,000 for each meeting attended, plus
reasonable travel expenses. The following table sets forth certain
information regarding remuneration of directors during the year ended December
31, 2008, except that the compensation paid to Wayne Ahart, Barry Shamas, Don
Byrd and Kenneth Tobey as directors is included in the Summary
Compensation Table and Supplemental
Table of All Other Compensation, above.
Directors’
2008 Compensation Table
Name
(a)
|
|
Fees
Earned or Paid in Cash
(b)
|
|
|
Stock
Awards
(c)
|
|
|
Option
Awards
(d)
|
|
|
Non-Equity
Incentive Plan Compensation (e)
|
|
|
Change
in Pension Value and Nonqualified Deferred Compensation
Earnings
(f)
|
|
|
All
Other Compensation
(g)
|
|
|
Total
(h)
|
|
Cecil
L. Alexander
|
|
$ |
8,000 |
|
|
$ |
---- |
|
|
$ |
---- |
|
|
$ |
---- |
|
|
$ |
---- |
|
|
$ |
---- |
|
|
$ |
8,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Richard L. Barclay,
Member and Chair of Audit Committee
|
|
|
20,000 |
|
|
|
---- |
|
|
|
---- |
|
|
|
---- |
|
|
|
---- |
|
|
|
---- |
|
|
|
20,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Eugene
A. Cernan
|
|
|
6,000 |
|
|
|
---- |
|
|
|
---- |
|
|
|
---- |
|
|
|
---- |
|
|
|
---- |
|
|
|
6,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Hayden
Fry
|
|
|
10,000 |
|
|
|
---- |
|
|
|
---- |
|
|
|
---- |
|
|
|
---- |
|
|
|
---- |
|
|
|
10,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
John Greig, Member Audit
Committee
|
|
|
10,000 |
|
|
|
---- |
|
|
|
---- |
|
|
|
---- |
|
|
|
---- |
|
|
|
---- |
|
|
|
10,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Roy E. Ledbetter, Member
Compensation Committee
|
|
|
10,000 |
|
|
|
---- |
|
|
|
---- |
|
|
|
---- |
|
|
|
---- |
|
|
|
---- |
|
|
|
10,000 |
|
Name
(a)
|
|
Fees
Earned or Paid in Cash
(b)
|
|
|
Stock
Awards
(c)
|
|
|
Option
Awards
(d)
|
|
|
Non-Equity
Incentive Plan Compensation (e)
|
|
|
Change
in Pension Value and Nonqualified Deferred Compensation
Earnings
(f)
|
|
|
All
Other Compensation
(g)
|
|
|
Total
(h)
|
|
C. James McCormick
Member and Chair of Compensation Committee
|
|
$ |
15,000 |
|
|
|
---- |
|
|
|
---- |
|
|
|
---- |
|
|
|
---- |
|
|
|
---- |
|
|
$ |
15,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
John
E. Miller
|
|
|
8,000 |
|
|
|
---- |
|
|
|
---- |
|
|
|
---- |
|
|
|
---- |
|
|
|
---- |
|
|
|
8,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Robert R.
Rigler, Member Audit
Committee
|
|
|
13,000 |
|
|
|
---- |
|
|
|
---- |
|
|
|
---- |
|
|
|
---- |
|
|
|
---- |
|
|
|
13,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
L.
Stanley Schoelerman
|
|
|
6,000 |
|
|
|
---- |
|
|
|
---- |
|
|
|
---- |
|
|
|
---- |
|
|
|
---- |
|
|
|
6,000 |
|
FORM
10-K
Upon
written request to the Secretary, BNL Financial Corporation, P. O. Box 6600,
North Little Rock, Arkansas 72124, shareholders will be provided a copy of the
Company's Annual Report on Form 10-K for the year ended December 31, 2008,
without charge.