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
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 ss.240.14a-11(c) or ss.240.14a-12
META FINANCIAL GROUP, INC.
(Name of Registrant as Specified In Its Charter)
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of filing fee (Check the appropriate box):
|X| No fee required
|_| Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
1) Title of each class of securities to which transaction applies:
2) Aggregate number of securities to which transaction applies:
3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which
the filing fee is calculated and state how it was determined):
4) Proposed maximum aggregate value of transaction:
5) Total fee paid:
|_| Fee paid previously with preliminary materials.
|_| Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number, or
the Form or Schedule and the date of its filing.
1) Amount Previously Paid:
2) Form, Schedule or Registration Statement No.:
3) Filing Party:
4) Date Filed:
[META FINANCIAL GROUP, INC. LETTERHEAD]
December 19, 2006
Dear Fellow Shareholders:
On behalf of the Board of Directors and management of Meta Financial
Group, Inc., we cordially invite you to attend our Annual Meeting of
shareholders. The meeting will be held at 1:00 p.m. local time on Monday,
January 22, 2007, at our main office located at 121 East Fifth Street, Storm
Lake, Iowa.
The attached Notice of Annual Meeting of Shareholders and Proxy
Statement discuss the business to be conducted at the meeting. We have also
enclosed a copy of our Annual Report to Shareholders. At the meeting, we will
report on Meta Financial's operations and outlook for the year ahead.
We encourage you to attend the meeting in person. Whether or not you
plan to attend, however, please read the enclosed Proxy Statement and then
complete, sign and date the enclosed proxy card and return it in the
accompanying postpaid return envelope as promptly as possible. This will save us
the additional expense of soliciting proxies and will ensure that your shares
are represented at the meeting. Regardless of the number of shares you own, your
vote is very important. Please act today.
Your Board of Directors and management are committed to the continued
success of Meta Financial and the enhancement of your investment. As President
and Chief Executive Officer, I want to express my appreciation for your
confidence and support.
Very truly yours,
/S/ J. TYLER HAAHR
J. TYLER HAAHR
President and Chief Executive Officer
META FINANCIAL GROUP, INC.
121 East Fifth Street
Storm Lake, Iowa 50588
(712) 732-4117
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NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
To be held on January 22, 2007
------------------------------------------------------------------
Notice is hereby given that the Annual Meeting of shareholders of Meta
Financial Group, Inc. will be held at our main office located at 121 East Fifth
Street, Storm Lake, Iowa, on Monday, January 22, 2007, at 1:00 p.m. local time.
At the Annual Meeting, shareholders will be asked to:
o Elect three (3) directors, each for a term of three (3) years;
and
o Consider and act upon a proposal to amend our 2002 Omnibus
Incentive Plan (the "2002 Plan") for the following purposes:
o to increase from 200,000 shares to 400,000 shares the
aggregate number of shares that may be issued from
time to time pursuant to the 2002 Plan;
o to modify certain provisions that may cause the 2002
Plan, and the awards granted thereunder, to be
subject to Section 409A of the Internal Revenue Code
and prevent potential adverse consequences to the
participants in the 2002 Plan;
o to reflect the name change of the Company from First
Midwest Financial, Inc. to Meta Financial Group,
Inc.; and
o to effect certain other changes as set forth in the
amendment to the 2002 Plan.
A copy of the proposed amendment to the 2002 Plan (the "2002
Plan Amendment") is included as Exhibit A to this proxy
statement, and a copy of the 2002 Plan is included as Exhibit
B to this proxy statement.
Your Board of Directors recommends that you vote "FOR" the election of
each of the director nominees and "FOR" the proposal to amend the 2002 Plan.
Shareholders also will transact any other business that may properly
come before the Annual Meeting, or any adjournments or postponements thereof. We
are not aware of any other business to come before the meeting.
The record date for the Annual Meeting is November 27, 2006. Only
shareholders of record at the close of business on that date are entitled to
notice of and to vote at the Annual Meeting or any adjournment or postponement
thereof.
A proxy card and proxy statement for the Annual Meeting are enclosed.
Whether or not you plan to attend the Annual Meeting, please take the time to
vote now by signing, dating and mailing the enclosed proxy card which is
solicited on behalf of the Board of Directors. Your proxy will not be used if
you attend and vote at the Annual Meeting in person and your proxy selection may
be revoked or changed
prior to the meeting. Regardless of the number of shares you own, your vote is
very important. Please act today.
Thank you for your continued interest and support.
By Order of the Board of Directors
/S/ J. TYLER HAAHR
J. TYLER HAAHR
President and Chief Executive Officer
Storm Lake, Iowa
December 19, 2006
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Important: The prompt return of proxies will save us the expense of further
requests for proxies to ensure a quorum at the Annual Meeting. A pre-addressed
envelope is enclosed for your convenience. No postage is required if mailed
within the United States.
--------------------------------------------------------------------------------
META FINANCIAL GROUP, INC.
121 East Fifth Street
Storm Lake, Iowa 50588
(712) 732-4117
--------------------------
PROXY STATEMENT
--------------------------
ANNUAL MEETING OF SHAREHOLDERS
To be held January 22, 2007
INTRODUCTION
The Board of Directors of Meta Financial Group, Inc. ("Meta Financial"
or the "Company") is using this proxy statement to solicit proxies from the
holders of Company common stock for use at Meta Financial's Annual Meeting of
shareholders ("Annual Meeting"). We are mailing this proxy statement and the
enclosed form of proxy to our shareholders on or about December 19, 2006.
Certain information provided herein relates to MetaBank and MetaBank
West Central, both of which are wholly owned subsidiaries of Meta Financial.
MetaBank and MetaBank West Central are collectively referred to in this proxy
statement as the "Banks."
INFORMATION ABOUT THE ANNUAL MEETING
Time and Place of the Annual Meeting; Matters to be Considered at the Annual
Meeting
Time and Place of the Annual Meeting. Our Annual Meeting will be held
as follows:
Date: January 22, 2007
Time: 1:00 p.m., local time
Place: MetaBank
121 East Fifth Street
Storm Lake, Iowa
Matters to be Considered at the Annual Meeting. At the Annual Meeting,
shareholders of Meta Financial are being asked to consider and vote upon (i) the
election of three (3) directors, each for a three-year term, and (ii) a proposal
to amend our 2002 Omnibus Incentive Plan (the "2002 Plan") to (A) increase from
200,000 shares to 400,000 shares the aggregate number of shares that may be
issued from time to time pursuant to the 2002 Plan; (B) modify certain
provisions that may cause the 2002 Plan, and the awards granted thereunder, to
be subject to Section 409A of the Internal Revenue Code and prevent potential
adverse consequences to the participants in the 2002 Plan; (C) reflect the name
change of the Company from First Midwest Financial, Inc. to Meta Financial
Group, Inc.; and (D) effect certain other changes as set forth in the amendment
to the 2002 Plan. The shareholders also will transact any other business that
may properly come before the Annual Meeting. As of the date of this proxy
statement, we are not aware of any other business to be presented for
consideration at the Annual Meeting other than the matters described in this
proxy statement.
Voting Rights; Vote Required
Voting Rights of Shareholders. November 27, 2006 is the record date for
the Annual Meeting. Only shareholders of record of Meta Financial common stock
as of the close of business on that date are entitled to notice of, and to vote
at, the Annual Meeting. You are entitled to one vote for each share of Meta
Financial common stock you own. On November 27, 2006, 2,534,367 shares of Meta
Financial common stock were outstanding and entitled to vote at the Annual
Meeting.
Employee Plan Shares. We maintain the Meta Financial Employee Stock
Ownership Plan and the Meta Financial Group Profit Sharing 401(k) Plan
(collectively, the "Employee Plans"), which own approximately 15.19 percent of
the Meta Financial common stock outstanding. Subject to certain eligibility
requirements, employees of Meta Financial and the Banks participate in one or
both of the Employee Plans. Each participant in an Employee Plan is entitled to
instruct the trustee of such Employee Plan how to vote such participant's shares
of Meta Financial common stock allocated to his or her Employee Plan account. If
an Employee Plan participant properly executes the voting instruction card
distributed by the Employee Plan trustee, the Employee Plan trustee will vote
such participant's shares in accordance with the participant's instructions.
Where properly executed voting instruction cards are returned to the Employee
Plan trustee with no specific instruction as how to vote at the Annual Meeting,
the trustee may vote such shares in its discretion. In the event the Employee
Plan participant fails to give timely voting instructions to the trustee with
respect to the voting of the common stock that is allocated to the participant's
Employee Plan account, the Employee Plan trustee may vote such shares in its
discretion. The Employee Plan trustee will vote the shares of Meta Financial
common stock held in the Employee Plans but not allocated to any participant's
account in the manner directed by the majority of the participants who directed
the trustee as to the manner of voting their allocated shares.
Shares held by a Broker. If you are the beneficial owner of shares held
by a broker in "street name," your broker, as the record holder of the shares,
will vote the shares in accordance with your instructions. If you do not give
instructions to your broker, your broker will nevertheless be entitled to vote
the shares with respect to "discretionary" items, but will not be permitted to
vote your shares with respect to "non-discretionary" items. In the case of
non-discretionary items, the shares will be treated as "broker non-votes." The
election of directors is expected to be considered a "discretionary" item, in
which case your broker may vote your shares without instructions from you. The
amendment of our 2002 Omnibus Incentive Plan is expected to be considered a
"non-discretionary" item, in which case your broker will not be entitled to vote
your shares with respect to this proposal without an instruction from you.
Votes Required for Election of Directors and a Quorum. Directors are
elected by a plurality of the votes cast, in person or by proxy, at the Annual
Meeting by holders of Meta Financial common stock. This means that the three
director nominees with the most affirmative votes will be elected to fill the
three available seats. Shares that are represented by proxy which are marked
"vote withheld" for the election of one or more director nominees and broker
non-votes will have no effect on the vote for the election of directors,
although they will be counted for purposes of determining whether there is a
quorum. A quorum is necessary in order for us to conduct the Annual Meeting, and
if one-third of all the shares entitled to vote are in attendance at the
meeting, either in person or by proxy, then the quorum requirement is met.
If a director nominee is unable to stand for election, the Board of
Directors may either reduce the number of directors to be elected or select a
substitute nominee. If a substitute nominee is selected, the proxy holders will
vote your shares for the substitute nominee, unless you have withheld authority.
As of
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the date of this proxy statement, we are not aware of any reason that a director
nominee would be unable to stand for election.
Votes Required for Amendment of 2002 Omnibus Incentive Plan. The
affirmative vote of a majority of the stock present in person or by proxy and
entitled to vote at the Annual Meeting is required to approve an amendment to
our 2002 Omnibus Incentive Plan. Abstentions will be considered present and
entitled to vote with respect to the proposal to amend the 2002 Omnibus
Incentive Plan, and they will have the same effect as votes "against" the
proposal. Broker non-votes will not be considered present and entitled to vote
with respect to the proposal to amend the 2002 Omnibus Incentive Plan and,
therefore, they will have no effect on the voting for this matter.
Your Board of Directors unanimously recommends that you vote "FOR" each
of the director nominees set forth in this proxy statement, and "FOR" the
proposal to amend our 2002 Omnibus Incentive Plan.
Voting of Proxies; Revocability of Proxies; Proxy Solicitation Costs
Voting of Proxies. You may vote in person at the Annual Meeting or by
proxy. To ensure your representation at the Annual Meeting, we recommend that
you vote now by proxy even if you plan to attend the Annual Meeting. You may
change your vote by attending and voting at the Annual Meeting or by submitting
another proxy with a later date. See "-Revocability of Proxies" below.
Voting instructions are included on your proxy card. Shares of Meta
Financial common stock represented by properly executed proxies will be voted by
the individuals named in such proxy in accordance with the shareholder's
instructions. Where properly executed proxies are returned to Meta Financial
with no specific instruction as how to vote at the Annual Meeting, the persons
named in the proxy will vote the shares "FOR" the election of each of the
director nominees, and "FOR" the proposal to amend our 2002 Omnibus Incentive
Plan.
The persons named in the proxy will have the discretion to vote on any
other business properly presented for consideration at the Annual Meeting in
accordance with their best judgment. We are not aware of any other matters to be
presented at the Annual Meeting other than those described in the Notice of
Annual Meeting of Shareholders accompanying this document.
You may receive more than one proxy card depending on how your shares
are held. For example, you may hold some of your shares individually, some
jointly with your spouse and some in trust for your children -- in which case
you would receive three separate proxy cards to vote.
Revocability of Proxies. You may revoke your proxy before it is voted
by:
o submitting a new proxy with a later date,
o notifying the Corporate Secretary of Meta Financial in writing
before the Annual Meeting that you have revoked your proxy, or
o voting in person at the Annual Meeting.
If you plan to attend the Annual Meeting and wish to vote in person, we
will give you a ballot at the Annual Meeting. However, if your shares are held
in the name of your broker, bank or other nominee, you must bring an
authorization letter from the broker, bank or nominee indicating that you were
the
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beneficial owner of Meta Financial common stock on November 27, 2006, the record
date for voting at the Annual Meeting, if you wish to vote in person.
Proxy Solicitation Costs. We will pay our own costs of soliciting
proxies. In addition to this mailing, Meta Financial's directors, officers and
employees may also solicit proxies personally, electronically or by telephone.
We will also reimburse brokers, banks and other nominees for their expenses in
sending these materials to you and obtaining your voting instructions.
STOCK OWNERSHIP
The following table presents information regarding the beneficial
ownership of Meta Financial common stock as of November 27, 2006, by:
o those persons or entities (or group of affiliated persons or
entities) known by management to beneficially own more than five
percent of our outstanding common stock;
o each director and director nominee of Meta Financial;
o each executive officer of Meta Financial named in the Summary
Compensation Table appearing under "Executive Compensation" below;
and
o all of the executive officers and directors of Meta Financial as a
group.
The persons named in the table below have sole voting power for all
shares of common stock shown as beneficially owned by them, subject to community
property laws where applicable and except as indicated in the footnotes to the
table.
Beneficial ownership is determined in accordance with the rules of the
Securities and Exchange Commission (the "SEC"). In computing the number of
shares beneficially owned by a person and the percentage ownership of that
person, shares of common stock subject to outstanding options held by that
person that are currently exercisable or exercisable within 60 days after
November 27, 2006 are deemed outstanding. Such shares, however, are not deemed
outstanding for the purpose of computing the percentage ownership of any other
person. Percentage ownership is based upon 2,534,367 shares of common stock
outstanding on November 27, 2006.
4
Shares Beneficially Percent of
Beneficial Owners Owned Class
------------------------------------------------------------------------- ------------------- ----------
Tontine Financial Partners, L.P. 218,600 8.63%
Meta Financial Group, Inc. Employee Plans 384,983 (1) 15.19
E. Wayne Cooley, Director 76,220 3.01
E. Thurman Gaskill, Director 50,264 (2) 1.98
James S. Haahr, Chairman of the Board (3) 249,029 (4) 9.64
J. Tyler Haahr, Director, President and Chief Executive Officer(3) 198,728 (5) 7.55
Troy Moore, III, Executive Vice President and Chief Operating Officer(3) 73,766 (6) 2.88
Bradley C. Hanson, Director, Executive Vice President 31,382 (7) 1.23
Rodney G. Muilenburg, Director 105,801 4.17
Jeanne Partlow, Director 4,728 *
Frederick V. Moore, Director 250 *
Jonathan M. Gaiser, Senior Vice President, Secretary, Treasurer
and CFO 2,812 (8) *
Directors and executive officers of Meta Financial
and the Banks as a group (10 persons) 792,980 (9) 30.78
---------------------
* Indicates less than 1%.
(1) Represents shares held by the Meta Financial Employee Stock Ownership Plan
and the Meta Financial Group Profit Sharing 401(k) Plan (collectively, the
"Employee Plans"). An aggregate of 119,722 shares have been allocated to
accounts of Employee Plan participants Mr. James S. Haahr, Mr. J. Tyler
Haahr, Mr. Moore, Mr. Hanson and Mr. Gaiser, and such shares have been
reflected as "Shares Beneficially Owned" by such executive officers in the
above table. Pursuant to the terms of the Employee Plans, each Employee
Plan participant has the right to direct the Employee Plans' trustee how
to vote the shares of common stock allocated to his or her account under
the Employee Plans. Security National Bank, Sioux City, Iowa, as the
Employee Plans' trustee, may be deemed to beneficially own the shares held
by the Employee Plans which have not been allocated to the accounts of
participants and the Employee Plans provide that the Employee Plans'
trustee will vote those shares based on the voting instructions of the
majority of participants who directed the voting on the shares allocated
to their accounts.
(2) Includes 49,114 shares as to which Mr. Gaskill has reported shared
ownership.
(3) Mr. James S. Haahr is the father of Mr. J. Tyler Haahr and the
father-in-law of Troy Moore, III. Mr. J. Tyler Haahr is the brother-in-law
of Troy Moore, III.
(4) Includes 48,721 shares which Mr. James S. Haahr has the right to acquire
pursuant to stock options within 60 days after November 27, 2006, and
8,387 shares held by a limited liability company of which Mr. James S.
Haahr is a member.
(5) Includes 96,164 shares which Mr. J. Tyler Haahr has the right to acquire
pursuant to stock options within 60 days after November 27, 2006, and
31,307 shares held by a trust of which Mr. J. Tyler Haahr is a trustee.
(6) Includes 27,936 shares which Mr. Moore has the right to acquire pursuant
to stock options within 60 days after November 27, 2006.
(7) Includes 20,621 shares which Mr. Hanson has the right to acquire pursuant
to stock options within 60 days after November 27, 2006.
(8) All 2,812 shares consist of shares which Mr. Gaiser has the right to
acquire pursuant to stock options within 60 days after November 27, 2006.
5
(9) Includes shares held directly, as well as, jointly with family members or
held by trusts, with respect to which shares the listed individuals or
group members may be deemed to have sole or shared voting and investment
power. Included in the shares reported as beneficially owned by all
directors and executive officers are options to purchase 196,254 shares of
Meta Financial common stock.
PROPOSAL I: ELECTION OF DIRECTORS
Our Board of Directors currently consists of eight members.
Approximately one-third of the directors are elected annually to serve for a
three-year period or until their respective successors are elected and
qualified. All of our director nominees currently serve as Meta Financial
directors.
The table below sets forth information regarding our Board of
Directors, including their age, position with Meta Financial and term of office.
Mr. G. Mark Mickelson, formerly an independent director, departed from the Board
of Directors effective on January 23, 2006, the day his term expired and the
date of our 2006 Annual Meeting of Shareholders. As disclosed in our proxy
statement for the fiscal year ended September 30, 2005, Mr. Mickelson announced
his intention not to stand for reelection on November 28, 2005. In accordance
with our by-laws, and as disclosed in a Form 8-K filed on January 24, 2006, Mr.
Frederick V. Moore was appointed to a three year term as a member of the class
of 2009 to fill the vacancy created by Mr. Mickelson's departure.
If before the election it is determined that any director nominee is
unable to serve, your proxy authorizes a vote for a replacement nominee if our
Board of Directors names one. At this time, we are not aware of any reason why a
nominee might not remain on the ballot until the election. Except as disclosed
in this proxy statement, there are no arrangements or understandings between any
nominee and any other person pursuant to which such nominee was selected. The
Board of Directors recommends you vote "FOR" each of the director nominees.
Director Term to
Name Age Position(s) Held in Meta Financial Since (1) Expire
------------------------- --- ------------------------------------------------ ---------- ----------
Nominees
--------
E. Wayne Cooley 84 Director 1985 2010
J. Tyler Haahr(2) 43 Director, President and Chief Executive Officer 1992 2010
Bradley C. Hanson 42 Director, Executive Vice President 2005 2010
Directors Remaining in Office
-----------------------------
E. Thurman Gaskill 71 Director 1982 2008
Rodney G. Muilenburg 62 Director 1989 2008
James S. Haahr(2) 67 Chairman of the Board 1962 2009
Jeanne Partlow 73 Director 1996 2009
Frederick V. Moore 50 Director 2006 2009
-------------------
(1) Includes service as a director of MetaBank.
(2) James S. Haahr is the father of J. Tyler Haahr.
The principal occupation of each director of Meta Financial and each of
the nominees for director is set forth below. All directors and nominees have
held their present position for at least five years unless otherwise indicated.
E. Wayne Cooley - Dr. Cooley is Consultant Emeritus of the Iowa Girls'
High School Athletic Union in Des Moines, Iowa. He is Executive Vice President
of the Iowa High School Speech
6
Association, a member of the Buena Vista University Board of Trustees, a member
of the Drake Relays Executive Committee, and on the Board of Directors of the
Women's College Basketball Association Hall of Fame. Dr. Cooley has served as
Chairman of the Iowa Heart Association and as Vice Chairman of the Iowa Games.
He is a 1943 graduate of Buena Vista College, in Storm Lake, Iowa, and holds
honorary doctorate degrees from Buena Vista University in Storm Lake, Iowa and
Morningside College in Sioux City, Iowa.
J. Tyler Haahr - Mr. Haahr is President and Chief Executive Officer for
Meta Financial Group, Inc. and MetaBank; Chief Executive Officer of Security
State Bank; Vice President and Secretary of First Services Financial Limited;
and President of First Services Trust Company. Mr. Haahr has been employed by
Meta Financial and its affiliates since March 1997. He was previously a partner
with the law firm of Lewis and Roca LLP, Phoenix, Arizona. Mr. Haahr serves on
the board of directors of the Sioux Falls YMCA. Mr. Haahr received his B.S.
degree with honors at the University of South Dakota in Vermillion, South
Dakota. He graduated with honors from the Georgetown University Law Center,
Washington, D.C.
E. Thurman Gaskill - Mr. Gaskill has owned and operated a grain farming
operation located near Corwith, Iowa, since 1958. He has served as a
commissioner with the Iowa Department of Economic Development and also as a
commissioner with the Iowa Department of Natural Resources. Mr. Gaskill is the
past president of Iowa Corn Growers Association, past chairman of the United
States Feed Grains Council, and has served in numerous other agriculture
positions. He was re-elected to the Iowa State Senate in 2004 and represents
District 6. He has served as Chairman of the Senate Agricultural Committee and
as Assistant Majority Leader of the Iowa Senate.
Rodney G. Muilenburg - Mr. Muilenburg is a retired dairy specialist
with Purina Mills, Inc. He is currently a Consultant for TransOva Genetics Dairy
Division. Mr. Muilenburg received a B.A. degree in Biological Science from
Northwestern College, Orange City, Iowa; M.A. degree in secondary school
education from Mankato State University, Mankato, Minnesota; and a Specialist
Degree in secondary school administration from Mankato State University,
Mankato, Minnesota.
James S. Haahr - Mr. Haahr is the Chairman of the Board for Meta
Financial, Inc., MetaBank, and MetaBank West Central. Mr. Haahr has served in
various capacities since beginning his career with MetaBank in 1961. He is
Chairman of the Board of Trustees and former Chairman of the Investment
Committee of Buena Vista University. He is a former member of the Savings
Association Insurance Fund Industry Advisory Committee to the FDIC, and past
member of the Legislative Committee of Iowa Bankers Association. Mr. Haahr is
former Vice Chairman of the Board of Directors of the Federal Home Loan Bank of
Des Moines, former Chairman of the Iowa League of Savings Institutions, a former
member of the Board of Directors of America's Community Bankers and a former
director of the U.S. League of Savings Institutions. Mr. Haahr received his B.S.
degree from Buena Vista College, now Buena Vista University, in Storm Lake,
Iowa.
Jeanne Partlow - Mrs. Partlow retired in June 1998 as President of the
Iowa Savings Bank Division of MetaBank, located in Des Moines, Iowa. She was
President, Chief Executive Officer and Chairman of the Board of Iowa Savings
Bank, F.S.B., from 1987 until the end of December 1995, when Iowa Savings Bank
was acquired by and became a division of MetaBank. Mrs. Partlow is a past member
of the Board of Directors of the Federal Home Loan Bank of Des Moines with over
30 years of bank management experience.
Bradley C. Hanson - Mr. Hanson is an Executive Vice President of both
the Company and MetaBank, and he is the Division President for the Meta Payment
Systems division of MetaBank. He
7
serves on the Board of Directors and Executive Committee for the Network Branded
Prepaid Card Association. Mr. Hanson has been employed by MetaBank since May
2004. From 1991 until joining MetaBank in May 2004, Mr. Hanson was employed by
Bankfirst in Sioux Falls, South Dakota, where he served in a variety of
capacities, including Senior Vice President of Payment Systems from March 2001
to April 2004. Mr. Hanson received his B.A. degree in Economics from the
University of South Dakota in 1988. He attended the ABA School of Bankcard
Management at the University of Delaware in 1996 and the ABA Graduate School of
Bankcard Management at the University of Oklahoma in 1997.
Frederick V. Moore - Mr. Moore has served as President of Buena Vista
University in Storm Lake, Iowa since 1995. He currently serves as a director of
the Iowa Association of Independent Colleges and Universities, the Iowa College
Foundation and the Council for Adult and Experiential Learning. He previously
worked in corporate America as a strategic planner, financial analyst and
marketing executive. Mr. Moore is an attorney who received J.D. with honors,
M.B.A. and B.A degrees from the University of North Carolina at Chapel Hill.
COMMUNICATING WITH OUR DIRECTORS
Although the Company has not to date developed formal processes by
which shareholders may communicate directly with directors, it believes that the
informal process, in which any communication addressed to the Board at the
Company's offices at 121 East Fifth Street, Storm Lake, Iowa 50588, in care of
Investor Relations, the Chairman of the Board, President or other corporate
officer is forwarded to the Board, has served the Board's and shareholders'
needs. There is currently no screening process, and all shareholder
communications that are received by officers for the Board's attention are
forwarded to the Board. In view of recently adopted SEC disclosure requirements
relating to this issue, the Board may consider the development of more specific
procedures. Until any other procedures are developed, any communications to the
Board should be sent to it in care of Investor Relations.
MEETINGS AND COMMITTEES
Meetings
Meetings of the Board of Directors are generally held on a monthly
basis. The Board of Directors conducted 12 regular meetings during fiscal 2006.
Each director attended at least 75% of the Board meetings and any committees on
which he or she served.
Committees
The Board of Directors of Meta Financial has an Audit Committee,
Compensation Committee, Stock Option Committee, and Nominating Committee.
Audit Committee Compensation Committee
--------------- ----------------------
E. Wayne Cooley E. Wayne Cooley
Frederick V. Moore E. Thurman Gaskill
Jeanne Partlow Rodney G. Muilenburg
Jeanne Partlow
8
Stock Option Committee Nominating Committee
---------------------- --------------------
E. Thurman Gaskill E. Thurman Gaskill
Rodney G. Muilenburg Rodney G. Muilenburg
Jeanne Partlow
The Audit Committee met 4 times during fiscal 2006. The functions of
the Audit Committee are as follows:
o Monitor the integrity of the Company's financial reporting process
and systems of internal controls regarding finance, accounting,
and regulatory compliance;
o Monitor the independence and performance of the Company's
independent auditors and internal auditing department; and
o Provide an avenue of communication among the independent auditors,
management, the internal auditing department, and the Board of
Directors.
The Compensation Committee met one time during fiscal 2006. The
functions of the Compensation Committee are as follows:
o Make salary and bonus recommendations and determine terms and
conditions of employment of the officers of Meta Financial;
o Oversee the administration of our employee benefit plans covering
employees generally (other than stock incentive plans administered
by the Stock Option Committee); and
o Make recommendation to the Board of Directors with respect to our
compensation policies.
The Stock Option Committee met one time during fiscal 2006. The
functions of the Stock Option Committee are as follows:
o Administer our stock incentive plan; and
o Make recommendations to the Board of Directors with respect to our
stock compensation policies.
The Nominating Committee is comprised entirely of "independent
directors", meeting the criteria for independence in Rule 10A-3(b)(1) under the
Exchange Act and Rule 4200 of the NASDAQ Marketplace Rules. The Nominating
Committee operates pursuant to a written charter, a copy of which was attached
as Exhibit A to Meta Financial's proxy statement for the fiscal year ended
September 30, 2004. Nominations of persons for election to the Board of
Directors may be made only by or at the direction of the Nominating Committee,
or by any shareholder entitled to vote for the election of directors who
complies with the notice procedures set forth in the By-laws of Meta Financial.
Pursuant to the By-laws, nominations by shareholders must be delivered in
writing to the Secretary of Meta Financial at least 30 days prior to the date of
the Annual Meeting; provided, however, that in the event that less than 40 days'
notice or prior disclosure of the date of the Annual Meeting is given or made to
shareholders, to be timely, notice by the shareholder must be received at the
executive offices of Meta Financial not later than the close of business on the
10th day following the day on which such notice of the date of the meeting was
mailed or such public disclosure thereof was made. Except as may be required by
rules promulgated
9
by NASDAQ or the SEC, currently there are no specific, minimum qualifications
that must be met by each candidate for the Board of Directors, nor are there any
specific qualities or skills that are necessary for one or more of the members
of the Board of Directors to possess.
The Company is incorporated in Delaware and has held its annual
meetings in Iowa since its incorporation. Senior members of management have been
present at each annual meeting to meet with shareholders and answer any
questions. Historically, shareholder attendance has been limited, which we
attribute to our policy of regular and detailed communications with our
shareholders and investors through meeting with management and other investor
relations activities. In view of the fact that shareholders have not
historically attended our annual meetings, and that a high percentage of
directors generally are present at the annual meeting, we have not adopted a
policy regarding the attendance of directors at the annual meeting.
Audit Committee Matters
The following Report of the Audit Committee of the Board of Directors
shall not be deemed to be soliciting material or to be incorporated by reference
by any general statement incorporating by reference this proxy statement into
any filing under the Securities Act of 1933 as amended or the Securities
Exchange Act of 1934 as amended (the "Exchange Act"), except to the extent Meta
Financial Group, Inc. specifically incorporates this Report therein, and shall
not otherwise be deemed filed under such Acts.
Audit Committee Report. The Audit Committee has issued the following
report with respect to the audited financial statements of the Company for the
fiscal year ended September 30, 2006:
o The Audit Committee has reviewed and discussed with the
Company's management the Company's fiscal 2006 audited
financial statements;
o The Audit Committee has discussed with the Company's
independent auditors (McGladrey & Pullen, LLP) the matters
required to be discussed by Financial Accounting Standards
Board Statement on Auditing Standards No. 61 "Communication
with Audit Committees";
o The Audit Committee has received the written disclosures and
letter from the independent auditors required by Independence
Standards Board Standard No. 1 (which relates to the auditors'
independence from the Company and its related entities) and
has discussed with the auditors their independence from the
Company; and
o Based on the review and discussions referred to in the three
items above, the Audit Committee recommended to the Board of
Directors that the fiscal 2006 audited financial statements be
included in the Company's Annual Report on Form 10-K for the
fiscal year ended September 30, 2006.
Submitted by the Audit Committee of the Company's Board of Directors:
E. Wayne Cooley Frederick V. Moore Jeanne Partlow
Audit Committee Member Independence and Audit Committee Charter. Each
member of the Audit Committee is a non-employee director who: (1) meets the
criteria for independence set forth in Rule 10A-3(b)(1) under the Exchange Act
and Rule 4200 of the NASDAQ Marketplace Rules; (2) has not
10
participated in the preparation of the financial statements of Meta Financial or
any of its current subsidiaries at any time during the past three years; and (3)
is able to read and understand fundamental financial statements, including a
company's balance sheet, income statement and cash flow statement. Our Board of
Directors has determined that our Audit Committee has at least one member who
qualifies as an "audit committee financial expert" as that term is defined in
the rules and regulations of the SEC. The Board has determined that Ms. Partlow,
based upon her experience, training and education, qualifies as an audit
committee financial expert by virtue of the fact that she has (a) an
understanding of generally accepted accounting principles ("GAAP") and financial
statements; (b) the ability to assess the general application of GAAP in
connection with accounting for estimates, accruals and reserves; (c) experience
preparing, auditing, analyzing or evaluating financial statements that present a
breadth and level of complexity of accounting issues that are generally
comparable to the breadth and complexity of issues that can reasonably be
expected to be raised by the Company's financial statements as well as
experience actively supervising one or more persons engaged in such activities;
(d) an understanding of internal controls and procedures for financial
reporting; and (e) an understanding of audit committee functions. The Company's
Board of Directors has adopted a written audit committee charter, a copy of
which was attached as Appendix A to the Company's proxy statement for the 2004
Annual Meeting of Stockholders.
COMPENSATION OF DIRECTORS
During the fiscal year ended September 30, 2006, all directors of Meta
Financial received an annual retainer of $5,000. Each Meta Financial director
also received an award on September 29, 2006 of 250 shares of fully-vested
restricted common stock with a fair market value of $6,108. Directors of Meta
Financial do not receive any additional fees for attending Meta Financial board
or committee meetings. Each of the directors of Meta Financial also serves as a
director for each of the Banks. For fiscal 2006, non-employee directors of
MetaBank were paid an annual retainer of $6,000 and received $750 for each
meeting of the board attended, and members of the Compensation Committee and
Audit Committee of MetaBank received $200 for each meeting of such committees
attended. Board members who are employees of the Banks do not receive a retainer
for service on the MetaBank board, nor do they receive compensation for
attendance at MetaBank board or committee meetings. Directors of MetaBank West
Central were not paid an annual retainer for fiscal 2006. Each director of
MetaBank West Central received $400 for each meeting of the board attended, and
members of MetaBank West Central's Audit Committee received $100 for each Audit
Committee meeting attended.
EXECUTIVE COMPENSATION
Summary Compensation Table
The following table sets forth summary information concerning
compensation awarded to, earned by or paid to Meta Financial's chief executive
officer and its other executive officers, whose total salary and bonus exceeded
$100,000, for services rendered in all capacities during the fiscal years ended
September 30, 2006, 2005 and 2004. Each of these officers received perquisites
and other personal benefits in addition to salary and bonus during the periods
stated. The aggregate amount of these perquisites and other personal benefits,
however, did not exceed the lesser of $50,000 or 10% of the total of their
annual salary and bonus and, therefore, has been omitted as permitted by the
rules of the SEC. We will use the term "named executive officers" from time to
time in this proxy statement to refer to the officers listed in the table below.
11
Long Term Compensation
Annual Compensation Awards(7)
---------------------- ------------------------
Restricted
Options Stock All Other
Salary Bonus /SARs Awards Compensation
Name and Principal Position Year ($) ($) (#) ($) ($)
--------------------------------- ---- -------- -------- ---------- ---------- ---------------
James S. Haahr 2006 $275,600(1) $ 87,054 7,914 $ 6,108(5) $ 46,502(6)
Chairman of the Board 2005 300,800(1) -- -- -- 34,809
2004 277,000(1) 106,000 8,100 -- 47,521
J. Tyler Haahr 2006 $307,800(2) $ 98,340 8,940 $ 6,108(5) $ 45,413(6)
President and Chief Executive 2005 293,000(2) 24,000 2,160 -- 30,873
Officer 2004 270,000(2) 106,000 22,950 -- 45,009
Bradley C. Hanson 2006 $199,800(3) $ 62,700 45,700 $250,408(5) $ 30,776(6)
Executive Vice President 2005 175,000 $ 57,750 3,937 -- 5,469
Troy Moore III 2006 $160,000 $ 52,800 4,800 -- $ 26,746(6)
Executive V ice President 2005 125,000 18,750 2,812 -- 14,536
and Chief Operating Officer
Jonathan M. Gaiser 2006 $ 88,942 $ 40,938(4) 7,812 -- $ 6,614(4)(6)
Senior Vice President
Secretary, Treasurer and
Chief Financial Officer
--------------------
(1) Includes $2,000 of deferred compensation, pursuant to the deferred
compensation agreement entered into in 1980 between Mr. James S. Haahr and
MetaBank, $5,000 for service as a director of Meta Financial, and $4,800
for service as a director of MetaBank West Central.
(2) Includes $5,000 for service as a director of Meta Financial, and $4,800 for
service as a director of MetaBank West Central.
(3) Includes $5,000 for service as a director of Meta Financial and $4,800 for
service as a director of MetaBank West Central.
(4) Bonus amount includes a $10,000 signing bonus paid when Mr. Gaiser joined
Meta Financial in January 2006; the "All Other Compensation" amount
includes a $6,014 relocation expense reimbursement and $600 for cash
payment in lieu of insurance.
(5) Mr. James S. Haahr, Mr. Tyler Haahr and Mr. Hanson, as employee directors,
received awards of 250 shares of restricted common stock valued at $6,108
on September 29, 2006, the date of award. Mr. Hanson received an additional
12
grant of 10,000 shares of restricted stock valued at $244,300 on the award
date of September 29, 2006.
(6) Represents the value as of September 30, 2006 of (a) allocations under the
Employee Plans, (b) contributions under the MetaBank Profit Sharing Plan,
(c) payments under the MetaBank Benefit Equalization Plan, and (d) term
life insurance premiums paid to or on behalf of the named executive
officers, as follows: Mr. James S. Haahr - (a) $12,819, (b) $13,318, (c)
$14,085, and (d) $6,280, respectively; Mr. J. Tyler Haahr - (a) $12,819,
(b) $13,318, (c) $18,634, and (d) $642, respectively; Mr. Hanson - (a)
$12,819, (b) $13,318, (c) $4,270, and (d) $369, respectively; and Mr. Moore
- (a) $12,819, (b) $13,318, (c) $280, and (d) $329, respectively. Because
Mr. Gaiser joined Meta Financial after the beginning of fiscal year 2006,
he did not participate in any of the plans or programs referenced in this
footnote.
(7) Certain of the option awards granted on September 29, 2006 were awarded
from the pool of 200,000 additional shares authorized in the amendment to
the 2002 Omnibus Incentive Plan approved by the Board of Directors on
August 28, 2006, and for which shareholder approval is being sought
pursuant to this proxy statement. If Meta Financial's shareholders do not
approve the amendment to the 2002 Omnibus Incentive Plan, any such option
awards will be null and void. See "Proposal II: Approval of Amendment to
2002 Omnibus Incentive Plan" below.
Option Grants in Last Fiscal Year
The following table sets forth information regarding grants of stock
options under our stock option and incentive plans made during the fiscal year
ended September 30, 2006 to the named executive officers. The amounts shown for
each named executive officer as potential realizable values are based on assumed
annualized rates of stock price appreciation of five percent and ten percent
over the full ten-year term of the options, which would result in stock prices
of (1) approximately $39.79 and $63.36, respectively, for options with an
exercise price of $24.43; (2) approximately $33.25 and $52.95, respectively, for
options with an exercise price of $20.415; and (3) approximately $33.34 and
$53.09, respectively, for options with an exercise price of $20.47. No gain to
the optionees is possible without an increase in stock price, which benefits all
stockholders proportionately. Actual gains, if any, on option exercise and
common stock holdings depend upon the future performance of Meta Financial
common stock and overall stock market conditions. There can be no assurance that
the potential realizable values shown in this table will be achieved.
Potential Realizable
Value at Assumed
Annual Rates of Stock
Appreciation for
Individual Grants Option Terms
---------------------------------------------------------------------------------------- -------------------------
Number of % of Total
Securities Options Exercise
Underlying Granted to or Base
Options Granted Employees in Price Expiration 5% 10%
Name (#) Fiscal Year ($/Sh) Date ($) ($)
--------------------- --------------- ------------- ---------- ---------- ------------------------
James S. Haahr 7,914 6.89% $24.43 9/29/16 $121,559 $308,092
J. Tyler Haahr 8,940 7.78% $24.43 9/29/16 $137,318 $348,034
Bradley C. Hanson 20,000 17.41% $20.415 10/24/15 $256,700 $650,700
25,700 22.37% $24.43 9/29/16 $394,752 $1,000,501
Troy Moore, III 4,800 4.18% $24.43 9/29/16 $73,728 $186,864
Jonathan M. Gaiser 5,000 4.35% $20.47 1/27/16 $64,350 $163,100
2,812 2.45% $24.43 9/29/16 $43,192 $109,471
The option exercise price of the options granted to the named executive
officers shown above was the fair market value of Meta Financial's common stock
on the date of grant. All such options vested as
13
of the date of grant, except
for 20,000 options issued to Mr. Hanson on October 24, 2005, 20,000 options
issued to Mr. Hanson on September 29, 2006, and 5,000 options issued to Mr.
Gaiser on January 27, 2006, all of which vest over a four year period. The
options may not be transferred in any manner other than by will or the laws of
descent and distribution and may be exercised during the lifetime of the
optionee only by the optionee or following his death by his legal
representative. Certain of the above-referenced options granted on September 29,
2006, were awarded from the pool of 200,000 additional shares authorized in the
amendment to the 2002 Omnibus Incentive Plan approved by the Board of Directors
on August 28, 2006, and for which shareholder approval is being sought pursuant
to this proxy statement. If Meta Financial's shareholders do not approve the
amendment to the 2002 Omnibus Incentive Plan, any options awarded from the
additional 200,000 shares contemplated to become available by the amendment will
be null and void. See "Proposal II: Approval of Amendment to 2002 Omnibus
Incentive Plan" below.
Aggregate Option Exercises in Last Fiscal Year and Fiscal Year End Option Values
The following table summarizes for each of the named executive officers
certain information relating to stock options exercised by them during the
fiscal year ended September 30, 2006. Value realized upon exercise is the
difference between the fair market value of the underlying stock on the exercise
date and the exercise or base price of the option. The value of an unexercised,
in-the-money option at fiscal year-end is the difference between its exercise or
base price and the fair market value of the underlying stock on September 30,
2006, which was $24.43 per share. These values, unlike the amounts set forth in
the column "Value Realized," have not been, and may never be, realized. These
options have not been, and may not ever be, exercised. Actual gains, if any, on
exercise will depend on the value of Meta Financial common stock on the date of
exercise. There can be no assurance that these values will be realized.
Unexercisable options are those which have not yet vested.
Value of Unexercised
Number of Unexercised In-the-Money Options
Options at FY-End (#) at FY-End
-------------------------------- --------------------------------
Shares
Acquired
On Value
Exercise Realized Exercisable Unexercisable Exercisable Unexercisable
Name (#) ($) (#) (#) ($) ($)
------------------- ----------- ---------- ------------- --------------- ------------- ----------------
James S. Haahr 23,250 $159,300 48,721 -- $293,337 --
J. Tyler Haahr -- -- 96,164 -- $553,935 --
Bradley C. Hanson -- -- 15,621 55,000 $32,454 $105,350
Troy Moore, III -- -- 27,936 -- $169,752 --
Jonathan M. Gaiser -- -- 2,812 5,000 $0 $19,800
14
Equity Compensation Plans
The following table provides information as of September 30, 2006
related to our equity compensation plans in effect at that time.
The Company maintains the 2002 Omnibus Incentive Plan for purposes of
issuing stock based compensation to employees and directors. An amendment to
this plan, authorizing an additional 200,000 shares to be issued under this
plan, was approved by the Board of Directors on August 28, 2006, and will be
submitted for shareholder approval at the annual meeting of shareholders on
January 22, 2007. The Company also has unexercised options outstanding under a
previous stock option plan. The following table provides information about the
Company's common stock that may be issued under the Company's stock incentive
plans.
Equity Compensation Plan Information
-------------------------------------------------------------------------------------------------------------------
Number of securities
remaining available for
Number of securities to Weighted-average future issuance under
be issued upon exercise exercise price of equity compensation plan
of outstanding options, outstanding options, (excluding securities
warrants and rights warrants and right reflected in (a))
Plan Category (a) (b) (c)
-------------------------------------------------------------------------------------------------------------------
Equity compensation
plans approved by
shareholders................... 357,724 $19.42 0
-------------------------------------------------------------------------------------------------------------------
Equity compensation
plans approved by
shareholders................... 28,701 $24.43 171,299
-------------------------------------------------------------------------------------------------------------------
Total: 386,425 $19.79 171,299
-------------------------------------------------------------------------------------------------------------------
Executive Officers
The following table sets forth certain information regarding our
executive officers who are not also directors.
Name Age Position(s) Held in Meta Financial
-------------------------- --- -----------------------------------------------------------------------
Troy Moore, III(1) 38 Executive Vice President and Chief Operating Officer
Jonathan M. Gaiser 39 Senior Vice President, Secretary, Treasurer and Chief Financial Officer
---------------------------
(1) Troy Moore, III is the son-in-law of James S. Haahr and the brother-in-law
of J. Tyler Haahr.
Troy Moore, III - Mr. Moore has served as Executive Vice President and
Chief Operating Officer of Meta Financial since July 2005. From March 1997
though June 1998, he served as a Vice President of MetaBank, and from July 1998
through June 2005, he served as MetaBank's President of the Central Iowa Market.
Prior to joining Meta Financial, Mr. Moore worked for Maytag Appliance Company,
most recently as District Manager for the Southwest Region. Mr. Moore received a
BBA in Marketing from Iowa State University in Ames, Iowa, and attended the
University of Wisconsin Graduate School of Banking in Madison, Wisconsin.
Jonathan M. Gaiser - Mr. Gaiser joined Meta Financial in January 2006
to serve as its Senior Vice President, Secretary, Treasurer and Chief Financial
Officer. Prior to joining Meta Financial, Mr.
15
Gaiser served in various positions with Commercial Federal Bank in Omaha,
Nebraska from 1993 through 2005, most recently as First Vice President and
Assistant Treasurer (2003-2005), First Vice President, Financial Planning and
Risk Management (2002-2003), and Vice President and Financial Planning Manager
(1998-2002). Mr. Gaiser received a B.A., cum laude, in Chemistry, German and
Economics from St. Olaf College in Northfield, Minnesota and an M.B.A. in
International Finance from George Washington University in Washington, DC. He
also attended the National School of Banking at Fairfield University in
Fairfield, Connecticut and has earned a Chartered Financial Analyst professional
designation from the CFA Institute in Charlottesville, North Carolina.
Employment Agreements
MetaBank has an employment agreement with each of James S. Haahr, J.
Tyler Haahr, Troy Moore III and Bradley C. Hanson. The employment agreements are
designed to assist Meta Financial and the Banks in maintaining a stable and
competent management team. The continued success of Meta Financial and the Banks
depends, to a significant degree, on the skills and competence of their
officers. Each employment agreement provides for annual base salary in an amount
not less than the employee's current salary and a term of three years. Each
agreement provides for extensions of one year, in addition to the then-remaining
term under the agreement, on each anniversary of the effective date of the
agreement, subject to a formal performance evaluation performed by disinterested
members of the Board of Directors of MetaBank. The agreements terminate upon
such named executive officer's death, for cause, in certain events specified by
Office of Thrift Supervision regulations, or by such named executive officer
upon 90 days notice to MetaBank. The Board of Directors has authorized one year
extensions of the employment agreements of James S. Haahr, J. Tyler Haahr, Troy
Moore III and Bradley C. Hanson through September 30, 2007.
The employment agreements for each named executive officer provides for
payment to the named executive officer of the greater of his salary for the
remainder of the term of the agreement, or 299% of his base compensation, in the
event there is a "change in control" of Meta Financial or MetaBank where
employment terminates involuntarily in connection with such change in control or
within 12 months thereafter. This termination payment is subject to reduction by
the amount of all other compensation to the named executive officer deemed for
purposes of the Internal Revenue Code of 1986, as amended, to be contingent on a
"change in control", and may not exceed three times the named executive
officer's average annual compensation over the most recent five year period or
be non-deductible by MetaBank for federal income tax purposes. For the purposes
of the employment agreements, a change in control is defined as any event which
would require the filing of an application for acquisition of control or notice
of change in control pursuant to 12 C.F.R. ss. 574.3 or ss. 574.4, respectively.
These events may be triggered upon the acquisition or control of 10% of Meta
Financial's common stock. Each agreement also guarantees participation in an
equitable manner in employee benefits applicable to executive personnel.
Based on their current salaries, if employment of Messrs. James S.
Haahr, J. Tyler Haahr, Troy Moore III and Bradley C. Hanson had been terminated
as of September 30, 2006, under circumstances entitling them to termination
payments as described above, they would have been entitled to receive lump sum
cash payments of approximately $959,483, $962,576, $328,935, and $532,792,
respectively.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
Compensation of the executive officers of Meta Financial and the Banks
is currently determined by the Compensation Committee of MetaBank and the Stock
Option Committee of Meta Financial. Directors Cooley, Gaskill, Muilenburg and
Partlow, each of whom are non-employee directors who meets the criteria for
independence set forth in Rule 10A-3(b)(1) under the Exchange Act and Rule 4200
of the
16
NASDAQ Marketplace Rules, are the current members of the Compensation Committee.
Directors Gaskill and Muilenburg are the current members of the Stock Option
Committee. All decisions by the MetaBank Compensation Committee relating to the
cash compensation of executive officers are reviewed by the full Board of
MetaBank, except that Board members who are also executive officers do not
participate in deliberations regarding their own compensation. See "Compensation
Committee Report" below.
COMPENSATION COMMITTEE REPORT
Meta Financial has not paid any cash compensation to its executive
officers since its formation. All executive officers of Meta Financial also
currently hold positions with MetaBank and receive cash compensation from
MetaBank. The function of administering the executive compensation policies of
MetaBank is currently performed by the Compensation Committee of the Board of
Directors of MetaBank, consisting of Directors Cooley, Gaskill, Muilenburg and
Partlow. All decisions by the MetaBank Compensation Committee relating to the
cash compensation of MetaBank's executive officers are reviewed by the full
Board of MetaBank, except that Board members who are also executive officers do
not participate in deliberations regarding their respective compensation.
Stock option awards granted under Meta Financial's stock option and
incentive plans are made solely by the Meta Financial Stock Option Committee.
Overview and Philosophy
The MetaBank Compensation Committee has developed and implemented an
executive compensation program that is based on guiding principles designed to
align executive compensation with the values and objectives, business strategy,
management initiatives, and the business and financial performance of Meta
Financial and the Banks. In applying these principals, the MetaBank Compensation
Committee has established a program to:
o Support a performance-oriented environment that rewards performance
not only with respect to our goals, but also our performance as
compared to that of industry performance levels;
o Attract and retain key executives critical to our long-term success;
o Integrate compensation programs with both Meta Financial's and the
Banks' annual and long-term strategic planning and measuring
processes; and
o Reward executives for long-term strategic management and the
enhancement of shareholder value.
Furthermore, in making compensation decisions, the MetaBank
Compensation Committee focuses on the individual contributions of our executive
officers. The MetaBank Compensation Committee uses its discretion to set
executive compensation where, in its judgment, external, internal or an
individual's circumstances warrant it. The MetaBank Compensation Committee also
periodically reviews, both internally and through independent consultants, the
compensation policies of other similarly situated companies, as set forth in
various industry publications, to determine whether our compensation decisions
are competitive within our industry.
Executive Officer Compensation Program
17
The executive officer compensation program is comprised of base salary,
annual incentive bonuses, long-term incentive compensation in the form of stock
options and restricted stock awards, and various benefits, including medical and
retirement plans generally available to employees of the Banks.
Base Salary. Base salary levels for executive officers are
competitively set relative to other publicly traded banking and thrift
companies. In determining base salaries, the MetaBank Compensation Committee
also takes into account individual experience and performance and specific
issues particular to Meta Financial and the Banks.
Annual Incentive Bonuses. A program of annual incentive bonuses has
been established for executive officers of Meta Financial and the Banks to
reward those officers who provide a level of performance warranting recognition
in the form of compensation above base salary. Incentive bonuses are awarded
based on achievement of individual performance goals and overall performance
goals of Meta Financial and the Banks, which are established at the beginning of
each fiscal year. Awards are determined as a percentage of each executive
officer's base salary.
Stock Benefit Plans. The stock option and incentive plans are our
long-term incentive plans for directors, officers and employees. The objective
of the program is to align executive and shareholder long-term interests by
creating a strong and direct link between executive pay and Meta Financial's
performance, and to enable executives to develop and maintain a significant,
long-term stock ownership position in Meta Financial common stock. Awards are
made at a level calculated to be competitive with other publicly traded banking
and thrift companies.
Chief Executive Officer Compensation
Mr. J. Tyler Haahr's fiscal 2006 base salary was $298,000, subject to
such adjustments in future years as shall be determined by the MetaBank
Compensation Committee, and his base salary for the fiscal year ended September
30, 2005 was $288,000. In reviewing Mr. J. Tyler Haahr's fiscal 2006 base
salary, the MetaBank Compensation Committee noted the median base salary paid to
executive officers in comparable positions was higher than that paid to Mr. J.
Tyler Haahr. As such, the MetaBank Compensation Committee determined it
appropriate to increase Mr. J. Tyler Haahr's base salary for fiscal 2006.
The effect of Section 162(m) of the Internal Revenue Code is to
eliminate the deductibility of compensation over one million dollars, with
certain exclusions, paid to each of certain highly compensated executive
officers of publicly held corporations. Section 162(m) applies to all
remuneration, both cash and non-cash, that would otherwise be deductible for tax
years beginning on or after January 1, 1994, unless expressly excluded. Because
the current compensation of each of our named executive officers is below the $1
million threshold, we have not yet considered our policy regarding this
provision.
The foregoing report is furnished by the members of the Compensation
Committee of MetaBank and Stock Option Committee of the Board of Directors of
Meta Financial.
E. Wayne Cooley E. Thurman Gaskill Rodney G. Muilenburg Jeanne Partlow
18
SHAREHOLDER RETURN PERFORMANCE PRESENTATION
The rules and regulations of the SEC require the presentation of a line
graph comparing, over a period of five years, the cumulative total shareholder
return to a performance indicator of a broad equity market index and either a
nationally recognized industry index or a peer group index constructed by us.
The following graph compares the performance of Meta Financial's common stock
with the Hemscott Group Savings and Loan Index (formerly known as Media General
Savings and Loan Index) and the Nasdaq Stock Market Index. The comparison
assumes $100 was invested on September 30, 2001 in our common stock and in each
of the foregoing indices and assumes the reinvestment of all dividends.
Historical stock price performance is not necessarily indicative of future stock
price performance.
[GRAPH OMITTED]
Comparison of Five-year Cumulative Total Return
(Meta Financial, Hemscott Group Savings and Loan Index
and the Nasdaq Stock Market Index)
9/30/01 9/30/02 9/30/03 9/30/04 9/30/05 9/30/06
------- ------- ------- ------- ------- -------
Meta Financial ........................ $100.00 $109.57 $174.56 $180.20 $154.94 $209.03
Hemscott Group Savings and Loan Index . 100.00 104.94 140.18 163.69 170.34 195.22
Nasdaq Market Index ................... 100.00 80.46 123.30 130.73 148.72 157.54
CERTAIN TRANSACTIONS
The Banks have followed a policy of granting loans to eligible
directors, officers, employees and members of their immediate families for the
financing of their personal residences and for consumer purposes. As of
September 30, 2006, all loans or extensions of credit to executive officers and
directors were made on substantially the same terms, including interest rates
and collateral, as those prevailing at the time for comparable transactions with
the general public and do not involve more than the normal risk of repayment or
present other unfavorable features.
19
PROPOSAL II: APPROVAL OF AMENDMENT TO
2002 OMNIBUS INCENTIVE PLAN
At the Annual Meeting of shareholders for the fiscal year ended
September 30, 2002, the shareholders of Meta Financial (which was then known as
First Midwest Financial, Inc.) voted to approve the 2002 Omnibus Incentive Plan
(the "2002 Plan"), a copy of which is attached hereto as Exhibit B. The Board of
Directors recommended that the 2002 Plan be approved to promote the long-term
interests of Meta Financial and its shareholders by providing a flexible and
comprehensive means for attracting and retaining directors, advisory directors,
officers and employees of Meta Financial and its corporate affiliates and to
supplement the then-existing Stock Option and Incentive Plans, which were being
depleted of available shares.
On August 28, 2006, the Board of Directors adopted the First Amendment
to the 2002 Plan (the "2002 Plan Amendment"), a copy of which is attached hereto
as Exhibit A. The Board of Directors recommends that you vote to approve the
2002 Plan Amendment.
Purpose of the 2002 Plan Amendment
The 2002 Plan Amendment is intended to make the following changes to
the 2002 Plan:
o to increase from 200,000 shares to 400,000 shares the aggregate
number of shares that may be issued from time to time pursuant to
the 2002 Plan;
o to modify certain provisions that may cause the 2002 Plan, and the
awards granted thereunder, to be subject to Section 409A of the
Internal Revenue Code (the "Code") and prevent potential adverse
consequences to the participants in the 2002 Plan;
o to reflect the name change of the Company from First Midwest
Financial, Inc. to Meta Financial Group, Inc.; and
o to effect certain other changes as set forth in the 2002 Plan
Amendment.
Description of the 2002 Plan, as amended by the 2002 Plan Amendment
The 2002 Plan, as amended by the 2002 Plan Amendment (as so amended,
the "Amended 2002 Plan"), is designed to provide for the granting of incentive
awards in the form of stock options, stock appreciation rights, restricted stock
and performance awards (denominated in cash, securities or other property) to
any director, advisory director, officer or employee of the Company or its
corporate affiliates (including but not limited to the Banks). The awards have
been and will be granted at the discretion of the Stock Option Committee. A
total of 400,000 shares of common stock will be available under the Amended 2002
Plan (increased from 200,000 shares under the 2002 Plan) if this proposal is
approved by the Company's shareholders. As of September 30, 2006, awards with
respect to 228,701 shares have been awarded under the Amended 2002 Plan, of
which 28,701 shares are covered by awards that are contingent upon the approval
of this proposal by the Company's shareholders.
The Amended 2002 Plan provides the Stock Option Committee with broad
discretion to select the officers, employees, and advisory directors to whom
awards may be granted, as well as the type, size, and terms and conditions of
each award. The 2002 Plan permits grants of the following types of awards:
o non-qualified and incentive stock options;
20
o stock appreciation rights;
o restricted stock grants; and
o other performance-based awards.
The Stock Option Committee may grant either stock options intended to
qualify as incentive stock options under Section 422 of the Code ("ISOs") or
stock options not intended to qualify as such ("NQSOs"). ISOs may be granted
only to employees of the Company or its corporate affiliates. The term of an ISO
may not exceed ten years, provided that the term of an ISO granted to an
employee who owns stock comprising more than ten percent of the combined voting
power of all classes of stock of Meta Financial and its corporate affiliates
(defined in the Amended 2002 Plan as a "Ten Percent Holder") may not exceed five
years. The term of an NQSO granted under the plan may not exceed 15 years. The
exercise price of a stock option granted under the plan will be determined by
the Stock Option Committee, provided that (i) the exercise price may not be less
than 100% of the market value of a share of common stock on the date of grant of
such option, and (ii) the exercise price of an ISO granted to a Ten Percent
Holder may not be less than 110% of the market value of a share of common stock
on the date of grant of such option. Prior to the 2002 Plan Amendment, the
proviso in clause (i) of the preceding sentence applied only to ISOs; under the
Amended 2002 Plan, neither ISOs nor NQSOs may have an exercise price that is
less than 100% of the market value of a share of common stock on the date of
grant of such option.
The Stock Option Committee is authorized to award stock appreciation
rights ("SARs"), each of which, upon exercise thereof, will entitle the holder
thereof to receive a number of shares of the Company's common stock, cash or a
combination of stock and cash, as the Stock Option Committee shall determine,
the aggregate value of which shall equal (as nearly as possible) the amount by
which the market value per share of the Company's common stock on the date of
exercise exceeds the exercise price of the SAR, multiplied by the number of
shares underlying the SAR. A SAR may be related to an option or granted
independently of an option. The Stock Option Committee will determine the
exercise price and term of each SAR, provided that (i) the exercise price per
share subject to a SAR shall not be less than 100% of the market value of a
share of common stock on the date of grant of such SAR, (ii) the term of a SAR
may not exceed 15 years, and (iii) an option related to a SAR that is an ISO
must satisfy all requirements pertaining to ISOs (e.g., exercise price, term).
The 2002 Plan Amendment added the proviso in clause (i) of the preceding
sentence requiring that the exercise price per share subject to a SAR shall not
be less than 100% of the market value of a share of common stock on the date of
grant of such SAR.
The Stock Option Committee may grant awards of restricted stock,
subject to such restrictions as the committee may impose thereon, which
restrictions may lapse in the manner deemed appropriate by the committee. The
restrictions may include, among other things, limitations on dividend and voting
rights.
The Stock Option Committee is authorized to grant performance-based
awards to officers, employees and advisory directors under the Amended 2002
Plan, which may be denominated in cash, shares of the Company's common stock,
other securities, other awards under the plan or other property. The term of
such an award may not exceed 15 years. The specific performance goals for each
award are at the discretion of the committee. The 2002 Plan Amendment adds the
provision that any performance-based awards earned by a participant through
satisfaction of a specified performance goal shall be paid to the participant in
a lump sum no later than 60 days following the date on which such awards are
earned
21
and vested, as determined by the Stock Option Committee in its sole discretion.
The 2002 Plan Amendment adds the provision that no award granted
pursuant to the Amended 2002 Plan is intended to constitute "deferred
compensation" as defined in Code Section 409A, and that the Amended 2002 Plan
and the terms of all award agreements shall be interpreted accordingly. If any
provision of the Amended 2002 Plan or an award agreement contravenes any
regulations or guidance issued under Code Section 409A or could cause an award
to be subject to penalties and interest under Code Section 409A, such provision
of the Amended 2002 Plan or award shall be modified to maintain, to the maximum
extent practicable, the original intent of the applicable provision without
violating Code Section 409A. The 2002 Plan Amendment also provides that
determinations of fair market value under the Amended 2002 Plan will be made in
accordance with Code Section 409A and the regulations issued thereunder.
Unless the Stock Option Committee provides otherwise, in the event of a
participant's termination of service with Meta Financial and its affiliates by
reason of disability, the participant may exercise an option or SAR held by such
participant within three months after the date of termination of service in the
case of an ISO or one year from the date of termination of service in the case
of a NQSO or SAR (but in no event after the expiration date of the award). If a
participant who holds an option or SAR is terminated for cause, all rights under
such option or SAR expire immediately.
Unless the Stock Option Committee provides otherwise, in the event of
termination of service due to retirement, a participant who holds an option or
SAR may exercise such award for three months after retirement in the case of an
ISO, or two years after retirement in the case of a NQSO or a SAR (but in no
event after the expiration date of the award). In the event of the death of a
participant who holds an option or SAR, the person to whom the award is
transferred after the participant's death may exercise such award within two
years after the death of the participant (but in no event after the expiration
date of the award).
In the event of termination of service for any reason other than death,
disability or retirement of a participant who holds restricted stock, unless the
Stock Option Committee determines otherwise, all shares of restricted stock as
to which applicable restrictions have not yet lapsed will be forfeited and
returned to Meta Financial. In the event of termination of service due to death,
disability or retirement of a participant who holds restricted stock, unless the
Stock Option Committee determines otherwise, all shares subject to restrictions
at the time of termination will become free of such restrictions.
The rights of a participant who holds a performance or other award and
terminates service with Meta Financial and its affiliates will be governed by
the terms of the applicable award agreement.
In the event of a merger or other business combination of Meta
Financial in which the Company is not the surviving entity, any participant to
whom an option or SAR has been granted will, with limited exception, have the
right after consummation of such transaction and during the remaining term of
the option or SAR to receive upon exercise of such award an amount equal to the
excess of the fair market value on the date of exercise of the securities or
other consideration receivable in the merger in respect of a share of common
stock over the exercise price of the option or SAR, multiplied by the number of
shares of common stock with respect to which the option or SAR is exercised.
Upon a change in control of Meta Financial, unless otherwise provided
by the Stock Option Committee in the applicable award agreement, any
restrictions or vesting requirement applicable to any outstanding awards will
immediately lapse and all such awards will become fully vested.
22
An ISO awarded under the Amended 2002 Plan may be transferred only upon
the death of the participant to whom it has been granted, by will or the laws of
descent and distribution. An award other than an ISO may be transferred during
the lifetime of the participant to whom it was awarded pursuant to a qualified
domestic relations order or by gift to any member of the participant's immediate
family or to a trust for the benefit of any member of the participant's
immediate family.
Our Board of Directors may amend or terminate the Amended 2002 Plan
without the approval of the shareholders or consent of the participants of the
Amended 2002 Plan, except when otherwise required by law or regulation or by the
rules of any stock exchange or automated quotation system on which the shares
our common stock may be listed or quoted, and except that the Stock Option
Committee may not amend any outstanding award without the consent of the
participant.
All of the original 200,000 shares available for award under the 2002
Plan have been awarded in accordance with the terms of the 2002 Plan. Of the
200,000 additional shares authorized by the 2002 Plan Amendment approved by the
Board of Directors on August 28, 2006, 28,701 shares were awarded in option
grants made on September 29, 2006, with the understanding of the recipients
thereof that such awards are contingent upon approval of the 2002 Plan Amendment
by Meta Financial's shareholders, and absent such approval such awards are null
and void. On September 29, 2006, Meta Financial issued option grant awards with
respect to an aggregate of 68,903 shares, which included the 28,701 contingently
issued award option shares described above. The following table identifies the
recipients and classes of recipients to which the September 29, 2006 awards were
granted.
New Plan Benefits
-------------------------------------------------------------------------------------------------------------------
2002 Omnibus Incentive Plan, as Amended by Amendment No. 1
-------------------------------------------------------------------------------------------------------------------
9/29/06 Stock Option Issuances
-----------------------------------------
Dollar Number of
Name and Position Value($) Shares
---------------------------------------------------------------------- -----------------------------------------
J. Tyler Haahr, CEO, President and Director.......................... -- 8,940
James S. Haahr, Chairman of the Board................................ -- 7,914
Troy Moore, III, Executive Vice President and COO -- 4,800
Bradley C. Hanson, Executive Vice President and Director........... -- 25,700
Jonathan M. Gaiser, Senior Vice President, Secretary, Treasurer and
CFO.................................................................. -- 2,812
Executive Group...................................................... -- 50,166
Non-Executive Director Group......................................... -- --
Non-Executive Officer Employee Group................................. -- 18,737
------------------------------------------------------------------------------------------------------------------
23
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 requires Meta
Financial's directors and executive officers, and persons who own more than 10%
of a registered class of Meta Financial's equity securities, to file with the
SEC initial reports of ownership and reports of changes in ownership of Meta
Financial common stock and other equity securities of Meta Financial generally
by the second business day following a transaction. Officers, directors and
greater than 10% shareholders are required by SEC regulations to furnish Meta
Financial with copies of all Section 16(a) forms they file.
To Meta Financial's knowledge, based solely on a review of the copies
of such reports furnished to Meta Financial and written representations that no
other reports were required during the fiscal year ended September 30, 2006, all
Section 16(a) filing requirements applicable to its officers, directors and
greater than 10 percent beneficial owners were complied with.
INDEPENDENT PUBLIC ACCOUNTANTS
The Company's independent public accountants are McGladrey & Pullen,
LLP, independent certified public accountants. Representatives of McGladrey &
Pullen, LLP are expected to be present at the Annual Meeting to respond to
appropriate questions and to make a statement if they desire.
Audit Fees. The following table presents fees for professional audit
services rendered by McGladrey & Pullen, LLP for the audit of the Company's
annual financial statements for the years ended September 30, 2006 and 2005, and
fees billed for other services rendered by McGladrey & Pullen, LLP and RSM
McGladrey, Inc. (an affiliate of McGladrey & Pullen, LLP) during 2006 and 2005.
Fiscal Audit Audit-Related Tax All Other
Year Fees Fees Fees Fees
---- ---- ---- ---- ----
2006 $114,000 $32,000 $21,000 $4,000
2005 $121,000 $20,000 $17,000 --
Audit fees consist of fees for audit of the Company's annual financial
statements, review of financial statements included in the Company's quarterly
reports on Form 10-Q and services normally provided by the independent auditor
in connection with statutory and regulatory filings or engagements.
Audit related fees consist of fees for audits of financial statements
of the employee benefit plan maintained by the Company, and assistance with
accounting research matters.
Tax fees consist of fees for tax consultation and tax compliance
services for the Company and the employee benefit plan maintained by the
Company.
All other fees consist of fees for an independence consultation
regarding the hiring of an employee.
The Company's Audit Committee has considered and concluded that the
provision of all non-auditing services (and the aggregate fees billed for such
services) in the fiscal year ended September 30, 2006 by McGladrey & Pullen,
LLP, and RSM McGladrey, Inc. (an affiliate of McGladrey & Pullen, LLP), the
principal independent public accountants, is compatible with maintaining the
principal auditors' independence.
24
Pre-Approval Policy. The Audit Committee pre-approves all audit and
permissible non-audit services provided by the independent auditors. The
non-audit services include audit-related services and tax services. The Audit
Committee's policy is to pre-approve all services and fees for up to one year,
which approval includes the appropriate detail with regard to each particular
service and its related fees. In addition, the Audit Committee can be convened
on a case-by-case basis to approve any services not anticipated or services
whose costs exceed the pre-approved amounts.
During the fiscal year ended September 30, 2006, 100% of all audit and
permissible non-audit services were pre-approved by the Audit Committee.
SHAREHOLDER PROPOSALS FOR THE YEAR 2008 ANNUAL MEETING
Shareholder proposals to be presented at Meta Financial's 2008 Annual
Meeting of Shareholders must be received by our Secretary no later than August
15, 2007 to be eligible for inclusion in Meta Financial's proxy statement and
form of proxy related to the 2008 Annual Meeting. Any such proposal will be
subject to the requirements of the proxy rules adopted under the Securities
Exchange Act of 1934, as amended, and as with any shareholder proposal
(regardless of whether such proposal is included in Meta Financial's proxy
materials), Meta Financial's certificate of incorporation, by-laws and Delaware
law.
To be considered for presentation at the next Annual Meeting, but not
for inclusion in the Company's proxy statement and form of proxy for that
meeting, proposals must be received by the Company by the Deadline. The
"Deadline" means the date that is 30 days prior to the date of the next Annual
Meeting; however, in the event that less than 40 days' notice of the date of
such meeting is given to stockholders, the "Deadline" means the close of
business on the tenth day following the day on which notice of the date of the
meeting was mailed. If a stockholder proposal that is received by the Company
after the Deadline is raised at the next Annual Meeting, the holders of the
proxies for that meeting will have the discretion to vote on the proposal in
accordance with their best judgment and discretion, without any discussion of
the proposal in the Company's proxy statement for the next Annual Meeting.
ANNUAL REPORTS
A copy of the Form 10-K for the Company's fiscal year ended September
30, 2006, as filed with the SEC, will be furnished without charge to
stockholders as of the Record Date upon written request to Investor Relations,
Meta Financial Group, Inc., 121 East Fifth Street, Storm Lake, Iowa 50588.
OTHER MATTERS
The Board of Directors is not aware of any business to come before the
Annual Meeting other than those matters described above in this proxy statement.
However, if any other matter should properly come before the Annual Meeting, it
is intended that holders of the proxies will act in accordance with their best
judgment.
Exhibit A
FIRST AMENDMENT
TO THE
FIRST MIDWEST FINANCIAL, INC.
2002 OMNIBUS INCENTIVE PLAN
WHEREAS, First Midwest Financial, Inc., a Delaware corporation,
established the First Midwest Financial, Inc. 2002 Omnibus Incentive Plan (the
"Plan") to facilitate equity compensation and other incentive awards to selected
directors, officers and employees; and
WHEREAS, First Midwest Financial, Inc. changed its name to Meta
Financial Group, Inc. (the "Company") effective January 28, 2005; and
WHEREAS, the Company desires to amend the Plan to reflect the Company's
new name and to increase the number of shares available for awards under the
Plan; and
WHEREAS, the Company has identified certain provisions that may cause
the Plan, and awards granted under the Plan, to be subject to Section 409A of
the Internal Revenue Code of 1986, as amended (the "Code"); and
WHEREAS, the Company deems it to be in the best interests of the
Company and the Participants to amend the Plan to prevent the application of
Code Section 409A and the potential for adverse tax consequences to the
Participants;
NOW, THEREFORE, the Plan is hereby amended as follows:
1. Effective January 28, 2005, the Plan is amended by replacing each
reference to "First Midwest Financial, Inc." with a reference to "Meta Financial
Group, Inc."
2. Effective January 1, 2005, Section 2 of the Plan is amended by
adding the following sentence to the end of the "Market Value" definition:
"The Committee shall determine the fair market value on such date in
accordance with Code Section 409A and the regulations issued
thereunder."
3. Effective August 28, 2006, Section 4(a) of the Plan is amended by
replacing the phrase "200,000 Shares" with the phrase "400,000 Shares."
4. Effective January 1, 2005, Section 5(a)(i) of the Plan is amended to
read in its entirety as follows:
(i) Exercise Price. The exercise price per Share for an Option
shall be determined by the Committee; provided that the exercise price
per Share shall not be less than 100% of the Market Value of a Share on
the date of grant of such Option; provided further that, in the case of
an Incentive Stock Option granted
A-1
to a Ten Percent Holder, the exercise price per Share thereof shall not
be less than 110% of the Market Value of a Share on the date of grant
of such Option.
5. Effective January 1, 2005, Section 5(b)(iii) of the Plan is amended
to read in its entirety as follows:
(iii) Exercise Price and Term. The exercise price and term of
each Stock Appreciation Right shall be fixed by the Committee; provided
that the exercise price per Share subject to a Stock Appreciation Right
shall not be less than 100% of the Market Value of a Share on the date
of grant of such Stock Appreciation Right; provided further that the
term of a Stock Appreciation Right shall not exceed 15 years.
6. Effective January 1, 2005, Section 5(d) is amended by adding the
following sentence at the end thereof:
"Any Performance Awards earned by a Participant through the
satisfaction of performance goals during the performance period as
specified in the applicable Award Agreement shall be paid to the
Participant in a lump sum no later than 60 days following the date on
which such Performance Awards are earned and vested as determined by
the Committee in its sole discretion."
7. Effective January 1, 2005, Section 16 is added to the Plan to read
in its entirety as follows:
16. Code Section 409A. No Award granted pursuant to this Plan
-----------------
is intended to constitute "deferred compensation" as defined in Code
Section 409A, and the Plan and the terms of all Award Agreements shall
be interpreted accordingly. If any provision of the Plan or an Award
Agreement contravenes any regulations or Treasury guidance issued under
Code Section 409A or could cause an Award to be subject to penalties
and interest under Code Section 409A, such provision of the Plan or
Award shall be modified to maintain, to the maximum extent practicable,
the original intent of the applicable provision without violating Code
Section 409A.
8. In all other respects, the Plan shall remain unchanged and in full
force and effect.
Adopted this 28th day of August, 2006.
META FINANCIAL GROUP, INC.
By: /s/ Jonathan M. Gaiser
Its: Chief Financial Officer
A-2
Exhibit B
---------
FIRST MIDWEST FINANCIAL, INC.
2002 OMNIBUS INCENTIVE PLAN
1. Plan Purpose. The purpose of the Plan is to promote the long-term
-------------
interests of the Company and its stockholders by providing a means for
attracting and retaining directors, advisory directors, officers and employees
of the Company and its Affiliates.
2. Definitions. The following definitions are applicable to the Plan:
-----------
"Affiliate" -- means any "parent corporation" or "subsidiary
corporation" of the Company as such terms are defined in Section 424(e) and (f),
respectively, of the Code.
"Award" -- means the grant by the Committee under this Plan of an
Incentive Stock Option, a Non-Qualified Stock Option, a Stock Appreciation
Right, Restricted Stock or a Performance Award, or any combination thereof, as
provided in the Plan.
"Award Agreement" -- means the agreement evidencing the grant of an
Award made under the Plan.
"Cause" -- means termination of service by reason of personal
dishonesty, incompetence, willful misconduct, breach of fiduciary duty involving
personal profit, intentional failure to perform stated duties or gross
negligence.
"Code" -- means the Internal Revenue Code of 1986, as amended.
"Committee" -- means the Committee referred to in Section 3 hereof.
"Company" -- means First Midwest Financial Inc. and any successor
thereto.
"Continuous Service" -- means the absence of any interruption or
termination of service as a director, advisory director, officer or employee of
the Company or an Affiliate, except that when used with respect to a person
granted an Incentive Stock Option means the absence of any interruption or
termination of service as an employee of the Company or an Affiliate. Service
shall not be considered interrupted in the case of sick leave, military leave or
any other leave of absence approved by the Company or in the case of transfers
between payroll locations of the Company or between the Company, its parent, its
subsidiaries or its successor.
"ERISA" -- means the Employee Retirement Income Security Act of
1974, as amended.
"Incentive Stock Option" -- means an option to purchase Shares
granted by the Committee which is intended to qualify as an Incentive Stock
Option under Section 422 of the Code. Unless otherwise set forth in the Award
Agreement, any Option which does not qualify as an Incentive Stock Option for
any reason shall be deemed a Non-Qualified Stock Option.
B-1
"Market Value" -- means the closing high bid with respect to a
Share on the date in question on the Nasdaq Stock Market, or any similar system
then in use, or, if the Shares are not then traded on the Nasdaq Stock Market or
any similar system, the closing sales price on such date (or, if there is no
reported sale on such date, on the last preceding date on which any reported
sale occurred) of a Share on the Composite Tape for New York Stock
Exchange-Listed Stocks, or, if on such date the Shares are not quoted on the
Composite Tape, on the New York Stock Exchange, or if the Shares are not listed
or admitted to trading on such Exchange, on the principal United States
securities exchange registered under the Securities Exchange Act of 1934 (the
"Exchange Act") on which the Shares are listed or admitted to trading, or, if
the Shares are not listed or admitted to trading on any such exchange, the fair
market value on such date of a Share as the Committee shall determine.
"Non-Qualified Stock Option" -- means an option to purchase Shares
granted by the Committee which does not qualify, for any reason, as an Incentive
Stock Option under Section 422 of the Code.
"Option" -- means an Incentive Stock Option or a Non-Qualified
Stock Option awarded to a Participant pursuant to Section 5(a) hereof.
"Participant" -- means any director, advisory director, officer or
employee of the Company or any Affiliate who is selected by the Committee to
receive an Award.
"Performance Award" -- means an Award granted pursuant to Section
5(d) herein.
"Plan" -- means this 2002 Omnibus Incentive Plan of the Company.
"Related" -- means (i) in the case of a Stock Appreciation Right, a
Stock Appreciation Right which is granted in connection with, and to the extent
exercisable, in whole or in part, in lieu of, an Option or another Stock
Appreciation Right and (ii) in the case of an Option, an Option with respect to
which and to the extent a Stock Appreciation Right is exercisable, in whole or
in part, in lieu thereof.
"Restricted Stock" -- means Shares awarded to a Participant
pursuant to Section 5(c) hereof.
"Retirement" -- means retirement from employment with the Company
or an Affiliate thereof, as an employee, director, director emeritus or advisory
director thereof, having reached the age of 65.
"Shares" -- means the shares of common stock of the Company.
"Stock Appreciation Right" -- means a stock appreciation right with
respect to Shares granted by the Committee pursuant to the Plan.
"Ten Percent Holder" -- means any individual who owns stock
possessing more than ten percent of the total combined voting power of all
classes of stock of the Company and any Affiliate.
B-2
"Termination of Service" - means cessation of service, for any
reason, whether voluntary or involuntary, so that the affected individual is not
either (i) an employee of the Corporation or any Affiliate for purposes of an
Incentive Stock Option, or (ii) a director, advisory director or employee of the
Corporation or any affiliate for purpose of any other Award.
3. Administration. The Plan shall be administered by a Committee
--------------
consisting of two or more members of the Board of Directors of the Company, each
of whom (i) shall be an outside director as defined under Section 162(m) of the
Code and the regulations thereunder and (ii) shall be a Non-Employee Director as
defined under Rule 16(b) of the Securities Exchange Act of 1934 or any similar
or successor provision. The members of the Committee shall be appointed by the
Board of Directors of the Company. Except as limited by the express provisions
of the Plan or by resolutions adopted by the Board of Directors of the Company,
the Committee shall have sole and complete authority and discretion to (i)
select Participants and grant Awards; (ii) determine the number of Shares to be
subject to types of Awards generally, as well as to individual Awards granted
under the Plan; (iii) determine the terms and conditions upon which Awards shall
be granted under the Plan; (iv) prescribe the form and terms of instruments
evidencing such grants; and (v) establish from time to time regulations for the
administration of the Plan, interpret the Plan, to correct any defect or supply
an omission or reconcile any inconsistency in the Plan, and make all
determinations deemed necessary or advisable for the administration of the Plan.
A majority of the Committee shall constitute a quorum, and the acts of
a majority of the members present at any meeting at which a quorum is present,
or acts approved in writing by a majority of the Committee without a meeting,
shall be acts of the Committee.
4. Shares Subject to Plan.
----------------------
(a) Subject to adjustment by the operation of Section 7, the
maximum number of Shares with respect to which Awards may be made under the Plan
is 200,000 Shares. The Shares with respect to which Awards may be made under the
Plan may be either authorized and unissued shares or previously issued shares
reacquired and held as treasury shares. Shares which are subject to Related
Stock Appreciation Rights and Related Options shall be counted only once in
determining whether the maximum number of Shares with respect to which Awards
may be granted under the Plan has been exceeded. An Award shall not be
considered to have been made under the Plan with respect to any Option or Stock
Appreciation Right which terminates or with respect to Restricted Stock which is
forfeited, and new Awards may be granted under the Plan with respect to the
number of Shares as to which such termination or forfeiture has occurred.
(b) During any calendar year, no Participant may be granted Awards
under the Plan of more than 100,000 Shares, subject to adjustment as provided in
Section 7.
5. Awards.
------
(a) Options. The Committee is hereby authorized to grant Options to
Participants with the following terms and conditions and with such additional
terms and conditions not inconsistent with the provisions of the Plan as the
Committee shall determine, including the granting of Options in tandem with
other Awards under the Plan:
B-3
(i) Exercise Price. The exercise price per Share for
an Option shall be determined by the Committee; provided that,
in the case of an Incentive Stock Option, the exercise price
thereof shall not be less than 100% of the Market Value of a
Share on the date of grant of such Option; provided further
that, in the case of an Incentive Stock Option granted to a
Ten Percent Holder, the exercise price thereof shall not be
less than 110% of the Market Value of a Share on the date of
grant of such Option.
(ii) Option Term. The term of each Option shall be
fixed by the Committee, but shall be no greater than 15 years;
provided that, in the case of an Incentive Stock Option, the
term of such Option shall not exceed ten years; provided
further that, in the case of an Incentive Stock Option granted
to a Ten Percent Holder, the term of such option shall not
exceed five years.
(iii) Time and Method of Exercise. Except as provided
in paragraph (a) of Section 6, no Option granted hereunder may
be exercised unless at the time the Participant exercises such
Option, such Participant has maintained Continuous Service
since the date of grant of such Option. To exercise an Option
under the Plan, the Participant to whom such Option was
granted shall give written notice to the Company in form
satisfactory to the Committee (and, if partial exercises have
been permitted by the Committee, by specifying the number of
Shares with respect to which such Participant elects to
exercise such Option) together with full payment of the
exercise price, if any and to the extent notice is received by
the Company. Payment, if any is required, shall be made either
(i) in cash (including check, bank draft or money order) or,
if the Committee specifically approves in writing on an
individual basis, (ii) by delivering (A) Shares already owned
by the Participant and having a fair market value equal to the
applicable exercise price, such fair market value to be
determined in such appropriate manner as may be provided by
the Committee or as may be required in order to comply with or
to conform to requirements of any applicable laws or
regulations, or (B) a combination of cash and such Shares.
(iv) Option Agreements. At the time of an Award of an
Option, the Participant shall enter into an Award Agreement
with the Company in a form specified by the Committee,
agreeing to the terms and conditions of the Award and such
other matters as the Committee shall in its sole discretion
determine.
(v) Limitations on Value of Exercisable Incentive
Stock Options. The aggregate Market Value of the Shares with
respect to which Incentive Stock Options are exercisable for
the first time by a Participant in any calendar year shall not
exceed $100,000.
(vi) Eligible Recipients of Incentive Stock Options.
Incentive Stock Options may be granted by the Committee only
to employees of the Company or its Affiliates.
(vii) Incentive Stock Options must be granted no
later than 10 years from the date the Plan is adopted or
approved by the stockholders, whichever is earlier.
B-4
(b) Stock Appreciation Rights. The Committee is hereby authorized
to grant Stock Appreciation Rights to Participants with the following terms and
conditions and with such additional terms and conditions not inconsistent with
the provisions of the Plan as the Committee shall determine:
(i) General. A Stock Appreciation Right shall, upon
its exercise, entitle the Participant to whom such Stock
Appreciation Right was granted to receive a number of Shares
or cash or combination thereof, as the Committee in its
discretion shall determine, the aggregate value of which
(i.e., the sum of the amount of cash and/or Market Value of
such Shares on date of exercise) shall equal (as nearly as
possible, it being understood that the Company shall not issue
any fractional shares) the amount by which the Market Value
per Share on the date of such exercise shall exceed the
exercise price of such Stock Appreciation Right, multiplied by
the number of Shares with respect to which such Stock
Appreciation Right shall have been exercised.
(ii) Related Options. A Stock Appreciation Right may
be Related to an Option or may be granted independently of any
Option as the Committee shall from time to time in each case
determine. In the case of a Related Option, such Related
Option shall cease to be exercisable to the extent of the
Shares with respect to which the Related Stock Appreciation
Right was exercised. Upon the exercise or termination of a
Related Option, any Related Stock Appreciation Right shall
terminate to the extent of the Shares with respect to which
the Related Option was exercised or terminated. If the Related
Option is an Incentive Stock Option, the Related Option shall
satisfy all restrictions and the limitations imposed on
Incentive Stock Options under paragraph (a) of this Section 5
(including, without limitation, restrictions on exercise price
and term).
(iii) Exercise Price and Term. The exercise price and
term of each Stock Appreciation Right shall be fixed by the
Committee; provided that, that the term of a Stock
Appreciation Right shall not exceed 15 years.
(iv) Stock Appreciation Right Agreements. At the time
of an Award of a Stock Appreciation Right, the Participant
shall enter into an Award Agreement with the Company in a form
specified by the Committee, agreeing to the terms and
conditions of the Award and such other matters as the
Committee shall in its sole discretion determine.
(v) Time and Method of Exercise. Except as provided
in paragraph (a) of Section 6, no Stock Appreciation Right may
be exercised unless at the time the Participant exercises such
Stock Appreciation Right, such Participant has maintained
Continuous Service since the date of grant of such Stock
Appreciation Right. To exercise a Stock Appreciation Right
under the Plan, the Participant to whom such Stock
Appreciation Right was granted shall give written notice to
the Company in form satisfactory to the Committee (and, if
partial exercises have been permitted by the Committee, by
specifying the number of Shares with respect to which such
Participant elects to exercise such Stock Appreciation Right)
together with full payment of the exercise price, if any and
to the extent required. The date of exercise shall be the date
on which such notice is received by the Company. Payment, if
any is required, shall be made either (i) in cash (including
check, bank draft or money order) or with the specific written
permission of the Committee (ii) by delivering (A) Shares
already
B-5
owned by the Participant and having a fair market value equal
to the applicable exercise price, such fair market value to be
determined in such appropriate manner as may be provided by
the Committee or as may be required in order to comply with or
to conform to requirements of any applicable laws or
regulations, or (B) a combination of cash and such Shares.
(c) Restricted Stock. The Committee is hereby authorized to grant
Awards of Restricted Stock to Participants with the following terms and
conditions and with such additional terms and conditions not inconsistent with
the provisions of the Plan as the Committee shall determine:
(i) Restrictions. Shares of Restricted Stock shall be
subject to such restrictions as the Committee may impose
(including, without limitation, any limitation on the right to
vote a Share of Restricted Stock or the right to receive any
dividend or other right or property with respect thereto),
which restrictions may lapse separately or in combination at
such time or times, in such installments or otherwise as the
Committee may deem appropriate. During the period of time in
which the Shares awarded as Restricted Stock are subject to
the restrictions contemplated herein (a "Restricted Period"),
unless otherwise permitted by the Plan or by the Committee as
provided in the applicable Award Agreement, such Shares may
not be sold, assigned, transferred, pledged or otherwise
encumbered by the Participant. Except for the restrictions
which may be imposed on Restricted Stock, a Participant to
whom Shares of Restricted Stock have been awarded shall have
all the rights of a stockholder, including but not limited to
the right to receive all dividends paid on such Shares and the
right to vote such Shares.
(ii) Restricted Stock Agreements. At the time of an
Award of Shares of Restricted Stock, the Participant shall
enter into an Award Agreement with the Company in a form
specified by the Committee, agreeing to the terms and
conditions of the Award and such other matters as the
Committee shall in its sole discretion determine.
(iii) Stock Certificates. Any Restricted Stock
granted under the Plan shall be evidenced by issuance of a
stock certificate or certificates, which certificate or
certificates shall be held by the Company. Such certificate or
certificates shall be registered in the name of the
Participant and shall bear the following (or similar) legend:
"The transferability of this certificate and the
shares of stock represented hereby are subject to the
terms and conditions (including forfeiture) contained
in the Company's 2002 Omnibus Incentive Plan and an
Agreement entered into between the registered owner
and the Company. Copies of such Plan and Agreement
are on file in the offices of the Secretary of the
Company, Fifth at Erie, Storm Lake, Iowa 50588."
(iv) Removal of Restrictions. Shares representing
Restricted Stock that are no longer subject to restrictions
shall be delivered to the holder thereof promptly after the
applicable restrictions lapse or are waived.
B-6
(d) Performance Awards. The Committee is hereby authorized to grant
Performance Awards to Participants subject to the terms of the Plan and the
applicable Award Agreement. At the time of grant of a Performance Award, the
Participant shall enter into an Award Agreement with the Company in a form
specified by the Committee, agreeing to the terms and conditions of the
Performance Award and such other matters as the Committee shall in its sole
discretion determine. A Performance Award granted under the Plan (i) may be
denominated or payable in cash, Shares (including, without limitation,
Restricted Stock), other securities, other Awards or other property and (ii)
shall confer on the holder thereof the right to receive payments, in whole or in
part, upon the achievement of such performance goals during such performance
periods as the Committee shall establish. Subject to the terms of the Plan, the
performance goals to be achieved during any performance period, the length of
any performance period, the amount of any Performance Award granted and the
amount of any payment or transfer to be made pursuant to any Performance Award
shall be determined by the Committee as provided in the applicable Award
Agreement. Unless otherwise provided in the Performance Award, the term of a
Performance Award shall not exceed 15 years.
6. Termination of Service.
----------------------
(a) Options and Stock Appreciation Rights.
(i) If a Participant to whom an Option or Stock
Appreciation Right was granted shall cease to maintain
Continuous Service for any reason (including total and partial
disability but excluding Retirement, death and termination of
employment by the Company or any Affiliate for Cause), such
Participant may, but only within the period of three months,
in the case of an Incentive Stock Option, or one year, in the
case of a Non-Qualified Stock Option or Stock Appreciation
Right, immediately succeeding such cessation of Continuous
Service and in no event after the expiration date of such
Option or Stock Appreciation Right, exercise such Option or
Stock Appreciation Right to the extent that such Participant
was entitled to exercise such Option or Stock Appreciation
Right at the date of such cessation of Continuous Service. If
the Continuous Service of a Participant to whom an Option or
Stock Appreciation Right was granted by the Company is
terminated for Cause, all rights under any Option or Stock
Appreciation Right of such Participant shall expire
immediately upon the giving to the Participant of notice of
such termination.
(ii) If a Participant to whom an Option or Stock
Appreciation Right was granted shall cease to maintain
Continuous Service due to Retirement, such Participant may,
but only within the period of three months, in the case of an
Incentive Stock Option, or two years, in the case of a
Non-Qualified Stock Option or Stock Appreciation Right,
immediately succeeding such cessation of Continuous Service
and in no event after the expiration date of such Option or
Stock Appreciation Right, exercise such Option or Stock
Appreciation Right to the extent that such Participant was
entitled to exercise such Option or Stock Appreciation Right
at the date of such cessation of Continuous Service.
(iii) In the event of the death of a Participant
while in the Continuous Service of the Company or an Affiliate
or within the periods referred to in paragraphs (a)(i) and
(a)(ii) of this Section 6, the person to whom any Option or
Stock
B-7
Appreciation Right held by the Participant at the time of his
or her death is transferred by will or the laws of descent and
distribution or in the case of an Award other than an
Incentive Stock Option, pursuant to a qualified domestic
relations order, as defined in the Code or Title I of ERISA or
the rules thereunder, or as otherwise permitted to be
transferred under Section 10 of the Plan may, but only within
the period of two years immediately succeeding the date of
death of such Participant, and in no event after the
expiration date of such Option or Stock Appreciation Right,
exercise such Option or Stock Appreciation Right to the extent
that such Participant was entitled to exercise such Option or
Stock Appreciation Right immediately prior to his death.
Following the death of any Participant to whom an Option was
granted under the Plan, irrespective of whether any Related
Stock Appreciation Right shall have theretofore been granted
to the Participant or whether the person entitled to exercise
such Related Stock Appreciation Right desires to do so, the
Committee may, as an alternative means of settlement of such
Option, elect to pay to the person to whom such Option is
transferred as permitted by Section 10 of this Plan, the
amount by which the Market Value per Share on the date of
exercise of such Option shall exceed the exercise price of
such Option, multiplied by the number of Shares with respect
to which such Option is properly exercised. Any such
settlement of an Option shall be considered an exercise of
such Option for all purposes of the Plan.
(iv) Notwithstanding the provisions of subparagraphs
(i) through (iii) above, the Committee may, in its sole
discretion, establish different terms and conditions
pertaining to the effect of termination to the extent
permitted by applicable federal and state law.
(b) Restricted Stock. Except as otherwise provided in this Plan, if
a Participant ceases to maintain Continuous Services for any reason (other than
death, total or partial disability or Retirement) unless the Committee, in its
sole discretion, shall otherwise determine, all shares of Restricted Stock
theretofore awarded to such Participant and which at the time of such
termination of Continuous Service are subject to the restrictions imposed by
paragraph (c)(i) of Section 5 shall upon such termination of Continuous Service
be forfeited and returned to the Company. Unless the Committee, in its sole
discretion, shall otherwise determine, if a Participant ceases to maintain
Continuous Service by reason of death, total or partial disability or
Retirement, all shares of Restricted Stock theretofore awarded to such
Participant and which at the time of such termination of Continuous Service are
subject to the restrictions imposed by paragraph (c)(i) of Section 5 shall upon
such termination of Continuous Service be free of restrictions and shall not be
forfeited.
(c) Performance Awards. In the event that a Participant to whom a
Performance Award has been granted shall cease to maintain Continuous Service
for any reason, the rights of such Participant or any person to whom the Award
may have been transferred as permitted by Section 10 shall be governed by the
terms of the Plan and the applicable Award Agreement.
7. Adjustments Upon Changes in Capitalization. In the event of any
---------------------------------------------
change in the outstanding Shares subsequent to the effective date of the Plan by
reason of any reorganization, recapitalization, stock split, stock dividend,
combination or exchange of shares, merger, consolidation or any change in the
corporate structure or Shares of the Company, the maximum aggregate number and
class of shares and exercise price of the Award, if any, as to which Awards may
be granted under the Plan and the number and class of shares and exercise price
of the Award, if any, with respect to
B-8
which Awards have been granted under the Plan shall be appropriately adjusted by
the Committee, whose determination shall be conclusive. Any Award which is
adjusted as a result of this Section 7 shall be subject to the same restrictions
as the original Award.
8. Effect of Merger on Options and Stock Appreciation Rights. In the
-----------------------------------------------------------
case of any merger, consolidation or combination of the Company (other than a
merger, consolidation or combination in which the Company is the continuing
corporation and which does not result in the outstanding Shares being converted
into or exchanged for different securities, cash or other property, or any
combination thereof), any Participant to whom an Option or Stock Appreciation
Right has been granted shall have the additional right (subject to the
provisions of the Plan and any limitation applicable to such Option or Stock
Appreciation Right), thereafter and during the term of each such Option or Stock
Appreciation Right, to receive upon exercise of any such Option or Stock
Appreciation Right an amount equal to the excess of the fair market value on the
date of such exercise of the securities, cash or other property, or combination
thereof, receivable upon such merger, consolidation or combination in respect of
a Share over the exercise price of such Stock Appreciation Right or Option,
multiplied by the number of Shares with respect to which such Option or Stock
Appreciation Right shall have been exercised. Such amount may be payable fully
in cash, fully in one or more of the kind or kinds of property payable in such
merger, consolidation or combination, or partly in cash and partly in one or
more of such kind or kinds of property, all in the discretion of the Committee.
9. Effect of Change in Control. Each of the events specified in the
----------------------------
following clauses (i) through (iii) of this Section 9 shall be deemed a "change
of control": (i) any third person, including a "group" as defined in Section
13(d)(3) of the Securities Exchange Act of 1934, as amended, shall become the
beneficial owner of shares of the Company with respect to which 25% or more of
the total number of votes for the election of the Board of Directors of the
Company may be cast, (ii) as a result of, or in connection with, any cash tender
offer, merger or other business combination, sale of assets or contested
election, or combination of the foregoing, the persons who were directors of the
Company shall cease to constitute a majority of the Board of Directors of the
Company, or (iii) the stockholders of the Company shall approve an agreement
providing either for a transaction in which the Company will cease to be an
independent publicly-owned corporation or for a sale or other disposition of all
or substantially all the assets of the Company. Upon a change in control, unless
the Committee shall have otherwise provided in the applicable Award Agreement,
any restrictions or vesting period with respect to any outstanding Awards shall
lapse and all such Awards shall become fully vested in the Participant to whom
such Awards were awarded; provided, however, that no Award which has previously
been exercised or otherwise terminated shall become exercisable.
10. Assignments and Transfers. No Award granted under the Plan shall be
-------------------------
transferable otherwise than by will or the laws of descent and distribution,
except that an Award other than an Incentive Stock Option may be transferred
pursuant to a qualified domestic relations order or by gift to any member of the
Participant's immediate family or to a trust for the benefit of one or more of
such immediate family members. During the lifetime of an Award recipient, an
Award shall be exercisable only by the Award recipient unless it has been
transferred as permitted hereby, in which case it shall be exercisable only by
such transferee. For the purpose of this Section 10, a Participant's "immediate
family" shall mean the Participant's spouse, children and grandchildren.
11. Employee Rights Under the Plan. No person shall have a right to be
------------------------------
selected as a Participant nor, having been so selected, to be selected again as
a Participant and no officer, employee or other person shall have any claim or
right to be granted an Award under the Plan or under any other
B-9
incentive or similar plan of the Company or any Affiliate. Neither the Plan nor
any action taken thereunder shall be construed as giving any employee any right
to be retained in the employ of or serve as a director or advisory director of
the Company or any Affiliate.
12. Delivery and Registration of Stock. The Company's obligation to
-----------------------------------
deliver Shares with respect to an Award shall, if the Committee so requests, be
conditioned upon the receipt of a representation as to the investment intention
of the Participant to whom such Shares are to be delivered, in such form as the
Committee shall determine to be necessary or advisable to comply with the
provisions of the Securities Act of 1933, as amended, or any other federal,
state or local securities legislation. It may be provided that any
representation requirement shall become inoperative upon a registration of the
Shares or other action eliminating the necessity of such representation under
such Securities Act or other securities legislation. The Company shall not be
required to deliver any Shares under the Plan prior to (i) the admission of such
Shares to listing on any stock exchange on which Shares may then be listed, and
(ii) the completion of such registration or other qualification of such Shares
under any state or federal law, rule or regulation, as the committee shall
determine to be necessary or advisable.
13. Withholding Tax. Upon the termination of the restricted period with
---------------
respect to any shares of Restricted Stock (or at any such earlier time, if any,
that an election is made by the Participant under Section 83(b) of the Code, or
any successor provision thereto, to include the value of such shares in taxable
income), the Company shall have the right to require the Participant or other
person receiving such shares to pay the Company the amount of any taxes which
the Company is required to withhold with respect to such shares, or, in lieu
thereof, to retain or sell without notice, a sufficient number of shares held by
it to cover the amount required to be withheld. The Company shall have the right
to deduct from all dividends paid with respect to shares of Restricted Stock the
amount of any taxes which the Company is required to withhold with respect to
such dividend payments.
The Company shall have the right to deduct from all amounts paid in
cash with respect to the exercise of a Stock Appreciation Right under the Plan
any taxes required by law to be withheld with respect to such cash payments.
Where a Participant or other person is entitled to receive Shares pursuant to
the exercise of an Option or Stock Appreciation Right pursuant to the Plan, the
Company shall have the right to require the Participant or such other person to
pay the Company the amount of any taxes which the Company is required to
withhold with respect to such Shares, or, in lieu thereof, to retain, or sell
without notice, a number of such Shares sufficient to cover the amount required
to be withheld.
All withholding decisions pursuant to this Section 13 shall be at the
sole discretion of the Committee or the Company.
14. Amendment or Termination.
------------------------
(a) Subject to paragraph (b) of this Section 14, the Board of
Directors of the Company may amend, alter, suspend, discontinue, or terminate
the Plan at any time without the consent of shareholders or Participants, except
that any such action will be subject to the approval of the Company's
shareholders if, when and to the extent such shareholder approval is necessary
or required for purposes of any applicable federal or state law or regulation or
the rules of any stock exchange or automated quotation system on which the
Shares may then be listed or quoted, or if the Board of Directors of the
Company, in its discretion, determines to seek such shareholder approval.
B-10
(b) Except as otherwise provided herein, the Committee may waive
any conditions of or rights of the Company or modify or amend the terms of any
outstanding Award. The Committee may not, however, amend, alter, suspend,
discontinue or terminate any outstanding Award without the consent of the
Participant or holder thereof, except as otherwise herein provided.
15. Effective Date and Term of Plan. The Plan shall become effective
-------------------------------
upon its adoption by the Board of Directors of the Company, subject to the
approval of the Plan by the shareholders of the Company. It shall continue in
effect for a term of 15 years unless sooner terminated under Section 14 hereof.
B-11
REVOCABLE PROXY
META FINANCIAL GROUP, INC.
ANNUAL MEETING OF SHAREHOLDERS o JANUARY 22, 2007
This proxy is being solicited by the Board of Directors of Meta Financial Group,
Inc.
The undersigned hereby appoints the members of the Board of Directors of Meta
Financial Group, Inc. ("Meta Financial"), and its survivors, with full power of
substitution, and authorizes them to represent and vote, as designated below and
in accordance with their judgment upon any other matters properly presented at
the annual meeting, all the shares of Meta Financial common stock held of record
by the undersigned at the close of business on November 27, 2006 at the annual
meeting of shareholders, and at any and all adjournments or postponements
thereof.
--------------------------------------------------------------------------------
WITH- FOR ALL
FOR HOLD EXCEPT
--- ---- ------
I. The election of E. WAYNE COOLEY, J. |_| |_| |_|
TYLER HAAHR AND BRADLEY C. HANSON
as directors for terms of three years.
Instructions: To vote for all nominees mark the box "FOR" with an "X". To
withhold your vote for all nominees mark the box "WITHHOLD" with an "X". To
withhold your vote for an individual nominee mark the box "FOR ALL EXCEPT" with
an "X" and write the name of the nominee on the line provided below for whom you
wish to withhold your vote.
--------------------------------------------------------------------------------
FOR AGAINST ABSTAIN
--- ------- -------
II. Proposal to amend Meta Financial's 2002 Omnibus |_| |_| |_|
Incentive Plan.
--------------------------------------------------------------------------------
The Board of Directors recommends a vote "FOR" the election of the above-named
directors, and "FOR" the proposal to amend Meta Financial's 2002 Omnibus
Incentive Plan.
The undersigned acknowledges receipt from Meta Financial, prior to the execution
of this proxy, of the Notice of Annual Meeting scheduled to be held on January
22, 2007, an Annual Report to Shareholders for the year ended September 30,
2006, and a proxy statement relating to the business to be addressed 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 the election of each of the directors set forth herein and FOR our
proposal to amend Meta Financial's 2002 Omnibus Incentive Plan. Should a
director nominee be unable to serve as a director, an event that Meta Financial
does not currently anticipate, the persons named in this proxy reserve the
right, in their discretion, to vote for a substitute nominee designated by the
Board of Directors.
Dated:
---------------------
PRINTED NAME OF SHAREHOLDER
APPEARS HERE ------------------------------------
SIGNATURE OF SHAREHOLDER
------------------------------------
SIGNATURE OF SHAREHOLDER
Please sign exactly as your name appears above on this card. When signing as
attorney, executor, administrator, trustee or guardian, please give your full
title. If shares are held jointly, each holder should sign.
fold and detach here
--------------------------------------------------------------------------------
PLEASE PROMPTLY COMPLETE, DATE, SIGN AND MAIL THE ATTACHED PROXY IN
THE ENCLOSED PRE-ADDRESSED, POSTAGE-PAID ENVELOPE.
This proxy may be revoked at any time before it is voted by delivering to the
Secretary of Meta Financial, on or before the taking of the vote at the annual
meeting, a written notice of revocation bearing a later date than this proxy or
a later dated proxy relating to the same shares of Meta Financial common stock,
or by attending the annual meeting and voting in person. Attendance at the
annual meeting will not in itself constitute the revocation of a proxy. If this
proxy is properly revoked as described above, then the power of such attorneys
and proxies shall be deemed terminated and of no further force and effect.