INFORMATION REQUIRED IN PROXY STATEMENT
of the Securities Exchange Act of 1934
Filed by the Registrant [X]
x
Check the appropriate box:
[X] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only
(as permitted by Rule 14a-6(e)(2))
[ ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
WILSON BANK HOLDING COMPANY
- --------------------------------------------------------------------------------
(Name
| x Preliminary Proxy Statement | ||
| o Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2)) | ||
| o Definitive Proxy Statement | ||
| o Definitive Additional Materials | ||
| o Soliciting Material under Rule 14a-12 | ||
Wilson Bank Holding Company
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ]
| x | No fee required. |
| o | 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: |
| o | Fee paid previously with preliminary materials. |
| o | 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: |
[Wilson Bank Holding Company Letterhead]
March _____, 2004
Dear Shareholder:
In connection with the Annual Meeting of Shareholders of Wilson Bank Holding Company to be held April 13, 2004, we enclose a Notice of Annual Meeting of Shareholders, a proxy statement, and a form of proxy.
You are being asked (1) and 0-11.
(1) Titleto approve an amendment to the Company’s Charter to provide for staggered terms for the members of the Company’s Board of Directors; (2) to elect the members of each class of securitiesthe three classes of the Company’s Board of Directors created as a result of the amendment to which transaction applies:serve for various terms of one to three years or until their successors are duly elected and qualified if the Amendment is approved or to serve until the next Annual Meeting of Shareholders in 2005 or until their successors are duly elected and qualified, if the amendment is not approved and (3) to approve an amendment to the Company’s Charter to increase the number of authorized shares of the Company’s Common Stock par value $ per share.
(2) Aggregate numberfrom five million (5,000,000) shares to ten million (10,000,000) shares. Information about these matters is contained in the attached proxy statement.
You are invited to attend the Annual Meeting of securitiesShareholders in person. We would appreciate your completing the enclosed proxy card so that your shares can be voted in the event that you are unable to which transaction applies: N/A.
(3) Per unit price or other underlying value of transaction computed
pursuantattend the meeting. If you are present at the meeting and desire to Exchange Act Rule 0-11: __.
(4) Proposed maximum aggregate value of transaction: $______________.
(5) Total fee paid: $__________.
[ ] Feevote your shares personally, your proxy may be revoked and you may vote in person. We urge you to return your proxy card in the enclosed, postage paid previously with preliminary materials:
----------------------------------------------------------------------------
[ ] Check box if any part of the fee is offsetenvelope 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:
------------------------------------------------------------------------
2
soon as possible.Sincerely, President and Chief Executive Officer
Wilson Bank Holding Company
WILSON BANK HOLDING COMPANY
LEBANON, TENNESSEE
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
To the Shareholders of Wilson Bank Holding Company:
The Annual Meeting of Shareholders (the "Annual Meeting"“Annual Meeting”) of Wilson Bank Holding Company (the "Company"“Company”) will be held on Tuesday, April 13, 19992004 at 7:00 p.m., (CDT), at the main office of the Company, located at 623 West Main Street, Lebanon, Tennessee 37087, for the following purposes:
(1) To approve an amendment to the Company’s Charter to classify the Company’s Board of Directors into three classes of directors with staggered three year terms of office;
(2) To elect four (4) Class I directors to hold office for a term of one (1) year and until their successors are elected and qualified; to elect four (4) Class II directors for a term of two (2) years and until their successors are elected and qualified and to elect five (5) Class III directors to serve for three (3) years and until their successors are elected and qualified or to elect those same thirteen (13) directors to hold officeserve until the next Annual Meeting and until their successors are duly elected and qualified;
(2) To approvequalified, if the 1999 Stock Option Plan;
(3) ToCompany’s shareholders do not approve the amendment to the Company'sCompany’s Charter to removeclassify the grantCompany’s Board of preemptive rightsDirectors;
(3) To approve an amendment to shareholders;the Company’s Charter to increase the number of authorized shares of Common Stock from five million (5,000,000) to ten million (10,000,000); and
(4) To ratify the appointment of Maggart & Associates, P.C. as auditors
for the Company for 1999; and
(5) To transact such other business as may properly come before the Annual Meeting or any adjournment(s) thereof.
Only shareholders of record at the close of business on March 15, 1999
will be1, 2004 are entitled to notice of and to vote at the Annual Meeting or any adjournment(s) thereof.
Your attention is directed to the Proxy Statement accompanying this Notice for a more complete statement regarding the matters proposed to be acted upon at the Annual Meeting.
Shareholders who comply with Chapter 23 of the Tennessee Business
Corporation Act (the "TBCA") will have the right to dissent from the removal of
preemptive rights to shareholders and to obtain payment of the fair value of
their shares. A copy of Chapter 23 of the TBCA is attached as Appendix A to the
accompanying Proxy Statement. Please see the Section entitled "Dissenters'
Appraisal Rights" in the attached Proxy Statement for a discussion of the
procedures to be followed in asserting these dissenters' rights.
By Order of the Board of Directors,
/s/
--------------------------------------------
Jerry L. Franklin, Secretary
March ______, 1999
| By Order of the Board of Directors, | ||
| Jerry L. Franklin, Secretary | ||
| March _____, 2004 |
YOUR REPRESENTATION AT THE ANNUAL MEETING IS IMPORTANT. TO ENSURE YOUR REPRESENTATION, WHETHER OR NOT YOU PLAN TO ATTEND THE ANNUAL MEETING, PLEASE COMPLETE, DATE, SIGN AND RETURN THE ENCLOSED PROXY. SHOULD YOU SUBSEQUENTLY DESIRE TO REVOKE YOUR PROXY, YOU MAY DO SO AS PROVIDED IN THE ACCOMPANYING PROXY STATEMENT AT ANY TIME BEFORE IT IS VOTED. 3
1
WILSON BANK HOLDING COMPANY
LEBANON, TENNESSEE
PROXY STATEMENT FOR ANNUAL MEETING OF SHAREHOLDERS
This Proxy Statement is furnished in connection with the solicitation by the Board of Directors of Wilson Bank Holding Company (the "Company"“Company”) of proxies for the Annual Meeting of Shareholders of the Company to be held on Tuesday, April 13, 1999,2004, at the Company'sCompany’s main office, 623 West Main Street, Lebanon, Tennessee 37087, at 7:00 p.m. (CDT)., local time. This proxy material was first mailed to shareholders on or about March 15, 1999.___, 2004.
All valid proxies which are received will be voted in accordance with the recommendations of the Board of Directors unless otherwise specified thereon.thereon and will be voted “For” the amendment of the Company’s charter to establish a classified board, “For” election of the director nominees set out below and "For” approval of the amendment of the Company’s Charter to increase the number of authorized shares of Common Stock (as defined below) from 5,000,000 shares to 10,000,000 shares. A proxy may be revoked by a shareholder at any time prior to its use by filing with the Secretary of the Company a written revocation or a duly executed proxy bearing a later date, or by attending the Annual Meeting and voting in person.
Only holders of record of the Company'sCompany’s common stock, par value $2.00 per share (the "Common Stock"“Common Stock”), at the close of business on March 15, 19991, 2004 (the "Record Date"“Record Date”) are entitled to notice of and to vote at the Annual Meeting. As of the Record Date, the Company had 1,455,2894,320,606 shares of Common Stock issued and outstanding, the holders of which are entitled to one vote for each share held on each of the matters to be voted upon at the Annual Meeting. The representation in person or by proxy of at least a majority of the outstanding shares entitled to vote is necessary to provide a quorum at the meeting. The directors shall be elected by a plurality of the votes cast in the election by the holders of Common Stock represented and entitled to vote at the Annual Meeting. The approval of the amendments to the Company’s Charter require the approval of a majority of the shares of Company Common Stock outstanding and entitled to vote at the Annual Meeting as of the Record Date. Any other matters submitted to the shareholders besides thosebut not proposed in this Proxy Statement, shall be approved by the affirmative vote of a majority of the votes cast by the holders of Common Stock represented and entitled to vote at the Annual Meeting. The Board of Directors of the Company does not know of any other matters which will be presented for action at the Annual Meeting besidesother than those proposed in this Proxy Statement, but the persons named in the proxy (who are directors of the Company) intend to vote or act with respect to any other proposal which may be presented for action according to their best judgment. Abstentions and "non-votes"“non-votes” are accounted as "present"“present” in determining whether a quorum is present. A "non-vote"“non-vote” occurs when a nominee holding shares for a beneficial owner votes on one proposal, but does not vote on another proposal because the nominee does not have discretionary voting power and has not received instructions from the beneficial owner. A “non vote” will have no effect on the approval of the nominees to the Company’s board of directors but will have the effect of a vote against the amendments to the Company’s charter. Abstentions will have the same effect as a vote against these proposals.
The cost of solicitation of proxies will be borne by the Company, including expenses in connection with preparing, assembling, and mailing this Proxy Statement. Such solicitation will be made by mail, and may also be made by the Company'sCompany’s regular officers or employees personally or by telephone or telegram.other form of electronic communication. The Company may reimburse brokers, custodians and nominees for their expenses in sending proxies and proxy materials to beneficial owners.
Wilson Bank and Trust (the "Bank"“Bank”) is located in Lebanon, Tennessee and is a wholly-owned 1
4
subsidiary of the Company. The Bank has a wholly-owned subsidiary, Hometown
Finance, Inc. (the "Finance Company"), a finance company organized under The
Tennessee Industrial Loan and Thrift Companies Act. The Company also owns 50% of DeKalb Community Bank ("DCB"(“DCB”), located in Smithville, Tennessee and 50% of Community Bank of Smith County ("CBSC"(“CBSC”), located in Carthage, Tennessee. Except as otherwise stated, or as the context otherwise requires, the information contained herein relates to the Company and the Bank.
SECURITY
STOCK OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
There are no persons who are the beneficial owners of more than 5% of the Company'sCompany’s Common Stock, its only class of voting securities.
The following table showssets forth information regarding the beneficial ownership of the Company'sCompany’s Common Stock by all directors, as of March 1, 2004 (unless otherwise noted), for:
2
The percentages of 18 persons) on March 15, 1999.
| Amount and Nature | ||||||||
| Name and Address of Beneficial Owner(1) | of Beneficial Owner(2) | Percent of Class(%) | ||||||
Directors: | ||||||||
| Charles Bell | 95,143 | 2.20 | % | |||||
| Jack W. Bell | 58,505 | (3) | 1.35 | % | ||||
| Mackey Bentley | 38,466 | .89 | % | |||||
J. Randall Clemons(4) | 67,346 | (5) | 1.56 | % | ||||
| James F. Comer | 26,073 | (6) | .60 | % | ||||
| Jerry L. Franklin | 63,282 | (7) | 1.46 | % | ||||
| John B. Freeman | 37,935 | (8) | .87 | % | ||||
| Marshall Griffith | 24,681 | .59 | % | |||||
| Harold R. Patton | 42,590 | (9) | .98 | % | ||||
| James Anthony Patton | 32,815 | .76 | % | |||||
H. Elmer Richerson(4) | 19,786 | (10) | .45 | % | ||||
| John R. Trice | 82,818 | (11) | 1.91 | % | ||||
| Robert T. VanHooser | 15,288 | (12) | .35 | % | ||||
Named Executive Officers: | ||||||||
| Gary Whitaker | 10,052 | (13) | .23 | % | ||||
| Larry Squires | 1,830 | (14) | .00 | % | ||||
| John D. Goodman | 327 | (15) | .00 | % | ||||
| Executive Officers and Directors as a group (20 persons) | 676,567 | (16) | 15.69 | % | ||||
| (1) | The address for each of the directors and executive officers set forth in the table above is 623 West Main Street, Lebanon, Tennessee 37087. | |
| (2) | Each person has sole voting and investment power with respect to the shares listed unless otherwise indicated. | |
| (3) | Includes 3,321 shares held by or on behalf of Mr. J. Bell’s children and/or other dependents. | |
| (4) | Messrs. Clemons and Richerson are also Named Executive Officers. | |
| (5) | Includes 4,702 shares held by or on behalf of Mr. Clemons’ children and/or other dependents, 2,289 shares held by Mr. Clemons’ wife, 3,200 shares issuable upon exercise of options granted under the Company’s 1999 Stock Option Plan and 26,869 shares held by the Clemons Family Limited Partnership. | |
| (6) | Includes 5,388 shares held by or on behalf of Mr. Comer’s children and/or other dependents. | |
| (7) | Includes 1,953 shares held by or on behalf of Mr. Franklin’s children and/or other dependents. | |
| (8) | Includes 5,244 shares held by or on behalf of Mr. Freeman’s children and/or other dependents. | |
| (9) | Includes 21,660 shares held by Mr. H. Patton’s wife and 606 shares held by or on behalf of Mr. Patton’s children and/or other dependents. | |
| (10) | Includes 2,132 shares issuable upon exercise of options granted under the Company’s 1999 Stock Option Plan. | |
| (11) | Includes 18,472 shares held as trustee by Mr. Trice. | |
| (12) | Includes 10,269 shares held jointly by Mr. VanHooser’s wife and children. |
3
| (13) | Includes 906 shares issuable upon exercise of options granted under the Company’s 1999 Stock Option Plan. | |
| (14) | Includes 1,066 shares issuable upon exercise of options granted under the Company’s 1999 Stock Option Plan. | |
| (15) | Includes 200 shares issuable upon exercise of options granted under the Company’s 1999 Stock Option Plan. | |
| (16) | Includes 11,170 shares issuable upon exercise of options granted under the Company’s 1999 Stock Option Plan. |
ITEM 1 — AMENDMENT OF CHARTER TO CLASSIFY BOARD OF DIRECTORS
The Company’s Board of Mr. Clemons' children
and/or other dependents,Directors has approved and 366 shares heldrecommended that the shareholders approve an amendment to the Company’s Charter (the “Charter”) to provide for the classification of the Company’s Board of Directors into three classes of directors with staggered three-year terms of office (the “Proposed Amendment”). The description of the Proposed Amendment set forth below is qualified in its entirety by Mr. Clemons' wife.
(5) Includes 1,210 shares held by or on behalfreference to the text of Mr. Comer's children
and/or other dependents.
(6) Includes 886 shares held by or on behalfthe Proposed Amendment as set forth in Appendix A, attached hereto.
The Company’s bylaws currently provide that all of Mr. Franklin's children
and/or other dependents.
(7) Includes 897 shares held by Mr. the Company’s directors are to be elected annually to serve until their successors have been elected and qualified. Tennessee law provides that a Company’s charter may provide for the staggering of the terms of its directors. The Proposed Amendment, along with a proposed related amendment to the Company’s bylaws, provides that the Company’s directors will be classified into three classes, as nearly equal in number as possible with each class to serve for staggered three year terms. The Company intends for the three classes to initially contain the following directors:
Class I Directors (Term to Expire at 2005 Annual Meeting)
Jack W. Bell
Mackey Bentley
Harold R. Patton
H. Patton's wife.
(8) Includes 6,094 shares held as trustee by Mr. Trice.
(9) Includes 2,309 shares held jointly by Mr. VanHooser's wifeElmer Richerson
Class II Directors (Term to Expire at 2006 Annual Meeting)
Charles Bell
J. Randall Clemons
Jerry L. Franklin
James Anthony Patton
Class III Directors (Term to Expire at 2007 Annual Meeting)
James F. Comer
John B. Freeman
Marshall Griffith
John R. Trice
Robert T. VanHooser, Jr.
At each annual meeting of the Company’s shareholders following this initial classification and children.
2
5
PROPOSAL NO.1: ELECTION OF DIRECTORS
Directors areelection, the successors to the class of directors whose terms expire at that meeting would be elected each yearfor a term of office to hold office untilexpire at the next Annual
Meetingthird succeeding annual meeting of shareholders of the Company after their election and until their successors are duly elected and have qualified. By way of example, the Class I directors, Messrs. Bell, Bentley, Patton and Richerson would serve until the 2005 annual meeting at which time their successors would be elected for a term of three years. Similarly, the Class II and Class III directors would serve until the 2006 and 2007 annual meetings, respectively, at which time their successors would be elected for three year terms ending in 2009 and 2010, respectively.
The Company's
by-lawsProposed Amendment also includes a provision which would require the affirmative vote of the holders of at least two-thirds of the voting power of the shares of Company Common Stock entitled to vote on the election of directors to amend, alter, change or repeal, or to adopt any provisions as part of the Charter or bylaws that is inconsistent with the purpose and intent of the Proposed Amendment. This portion of the Proposed Amendment, if adopted, would require a shareholder to acquire two-thirds of the voting power of the shares of Company Common Stock in order to amend the Charter to remove the article establishing the classified board. This
4
super majority requirement will make it difficult for a shareholder, including a shareholder that acquires more than a majority of the Company’s Common Stock, to abolish the Company’s staggered board through the amendment of the Charter and as such would work to protect the members of the Company’s Board of Directors from removal.
The Proposed Amendment will significantly extend the time required to effect a change in control of the Company’s Board of Directors and may discourage takeover bids for the Company. Currently, the Company’s entire board of directors can be replaced at a single meeting by the shareholders holding a majority of the Company’s outstanding shares. If the Proposed Amendment is approved by the shareholders, it would take at least two annual meetings for shareholders holding a majority of the Company’s outstanding shares to effect a change in control of the Company’s Board of Directors.
Other than the protections afforded by Tennessee corporate law and laws and regulations applicable to banks and bank holding companies, the Company does not have in place any anti-takeover measures. The Proposed Amendment is designed to assure continuity and stability in the Company’s Board of Directors and in the Company’s management and policies since a majority of the Company’s directors at any given time will have prior experience with the Company. The Board of Directors further believes that this continuity and stability will facilitate long-range planning. Generally, as a result of the beneficial ownership by the executive officers and directors of the Company of approximately 15.69% of the outstanding shares of the Company’s Common Stock, management has not experienced any problems with continuity of ownership in the past. As the ownership of the Company becomes more broad based, however, the Company wishes to ensure that this experience will continue.
The Board of Directors also believes that its classification will enhance the Company’s ability to attract and retain well-qualified individuals who are able to commit the time and resources to understand the Company, its business affairs and operations. The continuity and quality of leadership that results from a classified Board of Directors should, in the opinion of the Board of Directors, promote the long-term value of the Company.
The Board of Directors also believes that the Proposed Amendment will assist the Board of Directors in protecting the interests of the Company’s shareholders in the event of an unsolicited offer for the Company. Because of the additional time required to change control of the Board of Directors, the Proposed Amendment will tend to perpetuate present management. Without the ability to obtain immediate control of the Board of Directors, a takeover bidder will not be able to take action to remove other impediments to an acquisition of the Company.
Because the classified board proposal will increase the amount of time required for a takeover bidder to obtain control of the Company without the cooperation of the Board of Directors, even if the takeover bidder were to acquire a majority of the Company’s outstanding stock, it will tend to discourage certain tender offers, perhaps including some tender offers that shareholders may feel would be in their best interests. The Proposed Amendment is not being recommended in response to any pending or threatened attempt to acquire control of the Company.
If the number of directors is increased by the Board of Directors and the resultant vacancies are filled by the Board of Directors, those additional directors will serve only until the next annual meeting of shareholders, at which time they will be subject to election and classification by the shareholders.
THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE “FOR” APPROVAL OF THE PROPOSED AMENDMENT.
ITEM 2 — ELECTION OF DIRECTORS
The Board of Directors of the Company currently consists of thirteen (13) members. The Company’s bylaws provide for a minimum of five and maximum of fifteen directors, the exact number to be set by the Company’s Board of Directors. Pursuant to recommendation of
the Board of Directors, the exact number of directors has been increased from
twelve to thirteen and theThe Company’s Board of Directors has nominated thirteen individuals to stand for election at the 19992004 Annual Meeting. Proxies may not be voted for a greater number of directors than thirteen.
Unless contrary instructions are received, the enclosed proxy will be voted in favor of the election as directors of the nominees listed below. Each nominee has consented to be a candidate and to serve, if elected. All the nominees currently are serving as directors of the Company. Mr. Richerson
currently is an executive vice president ofWhile the Bank and was appointed to the
Board of Directors of the Company in the fall of 1998. This is the first time
that Mr. Richerson has stood for election to the Board of Directors. While theCompany’s Board of Directors has no reason to believe that any nominee will be unable to accept nomination or election as a director, if such event should
5
occur, proxies will be voted with discretionary authority for a substitute or substitutes who will be designated by the Company’s current Board of Directors.
3
6
In the event that the Proposed Amendment is approved by the Company’s shareholders, the directors will be divided into three classes and the shares represented by the proxy will be voted for the election as directors of the thirteen (13) nominees named below for the class and for the terms identified or until their successors are duly elected and qualified. If the Proposed Amendment is not approved by the Company’s shareholders, the shares represented by the enclosed proxy will be voted for the election of the thirteen (13) nominees listed below to serve until the 2005 annual meeting of shareholders or until their successors are duly elected and qualified. The thirteen (13) nominees receiving the highest number of votes cast will be elected.
Information Concerning Nominees
The following table contains certain information concerning the nominees, which information has been furnished to the Company by the individuals named.
| Current Position; Business Experience | ||||||||||||
| Nominee | Age | Director Since | During Past Five Years(1) | |||||||||
| Class I Directors (Term to Expire at 2005 Annual Meeting of Shareholders) | ||||||||||||
Jack W. Bell(2)(3) | 45 | 1987 | Director; Owner — Jack W. Bell Builders, Inc.; Vice President of Operations – Lebanon Aluminum Products, Inc. (until 1995) | |||||||||
| Mackey Bentley | 59 | 1987 | Director; President — Bentley’s Electric Company, Inc. | |||||||||
Harold R. Patton(4) | 68 | 1987 | Director; Retired; General Manager – Wilson Farmers’ Cooperative prior thereto | |||||||||
| H. Elmer Richerson | 51 | 1998 | Vice President and Director of the Company; President of the Bank (since 2002); Vice President of the Bank from 1989 until 1994; Executive Vice President of the Bank 1994-2002 | |||||||||
| Class II Directors (Term to Expire at 2006 Annual Meeting of Shareholders) | ||||||||||||
Charles Bell(2)(5) | 65 | 1993 | Director; Consultant (1995-Present) and President (until 1995) – Lebanon Aluminum Products, Inc. | |||||||||
J. Randall Clemons(3)(5) | 51 | 1987 | President, Chief Executive Officer and Director of the Company (since 1992); Chairman (since 2002), Chief Executive Officer and Director of the Bank | |||||||||
| Jerry L. Franklin | 66 | 1987 | Director; Owner as franchisee of Ponderosa Restaurants | |||||||||
James Anthony Patton(4) | 43 | 1987 | Director; Salesman-Mid Tenn Chemical; Co-Owner – Container Service, Inc; Salesman – Custom Packaging, Incorporated prior to 2001 | |||||||||
| Class III Directors (Term to Expire at 2007 Annual Meeting of Shareholders) | ||||||||||||
James F. Comer(5) | 45 | 1996 | Director; Owner — Comer Farms; Vice President - Lending and Account Executive of Farm Credit Services of America (1980-1995) | |||||||||
| John B. Freeman | 66 | 1987 | Director, Retired Businessman; Chairman — Auto Parts and Service Company, Inc. (until 2000) | |||||||||
| Marshall Griffith | 65 | 1987 | Director; Businessman – Evergreen Company; Senior Vice President – Fidelity Federal Savings and Loan of Nashville, Tennessee prior thereto | |||||||||
John R. Trice(3) | 71 | 1991 | Director; Owner – Trice Appraisal Services | |||||||||
Robert T. VanHooser, Jr.(3) | 74 | 1991 | Director (Chairman of the Company’s Board of Directors); Retired Business Development Officer - Wilson Bank and Trust 1991-96; President and CEO of Lebanon Bank, Lebanon, TN prior thereto | |||||||||
6
| (1) | All directors serve on the Boards of | |
| (2) | Charles Bell is the father of Jack W. Bell. | |
| (3) | Messrs. J. Bell, Clemons, Trice and VanHooser serve on the | |
| (4) | Harold R. Patton | |
| (5) | Messrs. C. Bell, Clemons and Comer serve on the Board of |
Description of the Company, the BankBoard and the Finance Company.
(2) Charles Bell is the fatherCommittees of Jack W. Bell.
(3) Harold R. Patton is the father of James Anthony Patton.
(4) Messrs. Clemons, Comer and Charles Bell serve on the Board of Directors
of CBSC.
(5) Messrs. Clemons, Trice, VanHooser and J. Bell serve on the Board of
Directors of DCB.
4
7
DESCRIPTION OF THE BOARD AND COMMITTEES OF THE BOARD
Each of the Company's directors is elected at the Annual Meeting and
serves until the next Annual Meeting and until his successor has been duly
elected and qualified.
The Company does not have an executive compensation or nominating committee. The Board of Directors of the Company also serves as the Board of Directors of the Bank. Through July 1, 1998, each director received
$1,100 per month for his services as a director of the Company and received $650
for each Board of Directors' meeting of the Bank and $350 for each committee
meeting of the Bank he attended, not to exceed $1,350 per month. From July 1,
1998 through December 31, 1998, each director received $1,350 per month for his
services as a director of the Company and $750 for each Board of Directors'
meeting of the Bank and $400 for each committee meeting of the Bank he attended,
not to exceed $1,350 per month. In addition, a one-time fee was paid of
$1,000.00 to directors of the Company plus $1,317.50 to directors of the Bank
for the two planning retreats held during 1998.
The Company does not have an executive compensation or nominating
committee. The respective Board of Directors of the Company and the Board of Directors of the Bank, based upon recommendations by the Personnel Committee, establish general compensation policies and programs for the Company and the Bank and determine annually the compensation to be paid to Company and Bank employees, including executive officers. The Board of Directors does not believe it is necessary to have a nominating committee because the Boards of Directors of the Company and the Bank also actsact as a nominating committee for directors and officers forof the Company and the Bank by
developingand develop general criteria concerning the qualifications and selection of directors and officers (including recommendations made by shareholders of the Company) and recommendsrecommending candidates for such positions. Shareholder
recommendations
Each potential director nominee is evaluated on the same basis regardless of whether he or she is recommended by management, by a director or by a shareholder. The Board of Directors has not adopted a policy with respect to minimum qualifications for directors. Rather, the Board of Directors annually reviews and determines the specific qualifications and skills that one or more directors must bepossess in writing to the attentioncontext of the then needs of the Board of Directors with respect to experience, expertise and age. Each of the nominees for director to be elected at the Meeting was nominated and recommended by the Board of Directors.
The Company has not received director nominee recommendations from any shareholders for the term commencing in 2004 and expiring in 2005 or 2006 or 2007 if the Proposed Amendment is approved. The Board of Directors will consider nominees recommended by shareholders, provided that such recommendations are submitted to the Board of Directors in writing and describe the reasons why he or shethe shareholder finds the recommended person to be a qualified candidate.
The Board of Directors of the Company has no standing committees. The Board of Directors of the Bank has ten standing committees consisting of the Audit, Executive, Personnel, Finance, Marketing, Building, Investment, Long Range Planning, Data Processing and Trust Committees. The Chairman of the Board of Directors of the Bank (Mr. Clemons) and Mr. Richerson are members of all of the committees with the exception that Mr. Clemons and Mr. Richerson are not on the Personnel Committee or the Audit Committee. The members of each committee are generally appointed in May of each year, and serve until the following May. Therefore, the committee members identified below may not have been on each identified committee for the entire 2003 fiscal year. Unless otherwise provided below, the members identified below are the current members of the applicable committees.
Audit Committee. The Company does not have an Audit Committee. The Bank, however, does have an Audit Committee, composed of Messrs. Trice, H. Patton,C. Bell, Franklin and VanHooser and T. Patton with Mr. FreemanGriffith serving as Chairman. The Audit Committee reviews annual and interim reports of the independent auditors and provides advice and assistance regarding the accounting, auditing and financial reporting practices of the Company and the Bank. The Audit Committee does not have a written charter. All of the Audit Committee’s members are independent under the current listing standards of the New York Stock Exchange, except for Mr. C. Bell, whose son, Jack Bell, is the owner of Jack Bell Builders, a company to which the Bank and the Community Bank of Smith County paid $1,844,000 in the aggregate for construction projects in 2003 as described in more detail below. While the Board of Directors believes that certain of its audit committee members are financially literate and have a level of financial sophistication necessary to serve on the Audit Committee, it has determined that the Company does not have an “audit committee financial expert” as defined by the SEC’s rules and regulations serving on the Audit Committee. The Board of Directors believes that at least one of the current members of the Audit Committee has a level of experience regarding banking operations and the application of generally accepted accounting principles as to provide valuable service to the Audit Committee in its role of overseeing the financial reporting process of the Company and the Bank. The Board of Directors further believes that the current members of the Company’s Board of Directors provide a breadth of experience and level of community relationships that are important to the
7
Company and that the Company does not believe that it could attract an additional director that meets the requirements of an “audit committee financial expert” who also has those similar relationships. In making its determination, the Board of Directors particularly considered the size and nature of the Company’s business and the importance of knowledge of the local communities served by the Bank. The Audit Committee held four meetings during 1998.
In addition to the Audit2003.
Executive Committee the Board of Directors of the Bank
has ten standing committees consisting of the Executive, Personnel, Finance,
Marketing, Building, Investment, Long Range Planning, Data Processing, and Trust
Committees. The Chairman of the Board of Directors of the Bank (Mr. VanHooser)
and the President of the Bank (Mr. Clemons) are members of all the committees
with the exception that Mr. Clemons is not on the Personnel Committee or Audit
Committee.. The Executive Committee is composed of Messrs. Franklin, H. Patton,
GriffithC. Bell, Bentley and TriceVanHooser with Mr. ComerTrice serving as Chairman. The Executive Committee reviews corporate activities, makes recommendations to the Board of Directors on policy matters and makes executive decisions on matters that do not require a meeting of the full Board of Directors. The Executive Committee held ninetwelve meetings during 1998.
5
82003.
Personnel Committee. The Personnel Committee, composed of Messrs. Bentley, H.VanHooser, Freeman and J.A. Patton and
Comer with Mr. J. Bell serving as Chairman, considers and recommends to the Board of Directors the salaries of all Bank personnel.personnel, including the Named Executive Officers. This committee held five meetings during 1998.2003.
Finance Committee. The Finance Committee is the credit review board of the Bank. This committee reviews loan applications meeting certain criteria and approves those found creditworthy. In addition, this committee reviews all loans that are funded. The committee is comprised of fiveseven permanent members, Messrs. C. Bell, J. Bell, Bentley, Comer, Griffith and Griffith,VanHooser with T.Mr. H. Patton serving as ChairmanChairman. Serving as “temporary members” of the committee in 2003 were Messrs. J.A. Patton, Franklin and two
"temporary" members, who served for two quarters. During 1998, Messrs. Bentley,
Freeman, H. Patton and Franklin eachFreeman. In addition, Mr. Trice served as temporary membersan advisory member for two
quarters. In addition, Messrs. Trice and VanHooser served as advisory members.the entire fiscal year. The Finance Committee held twenty-twoseventeen meetings during 1998.2003.
Marketing Committee. The Marketing Committee is composed of Messrs. Bentley, Franklin, H. Patton and GriffithTrice with Mr. H.J.A. Patton serving as Chairman. The Marketing Committee recommends the direction of the marketing efforts of the Company and the Bank. This committee held four meetings during 1998.2003.
Building Committee. The Building Committee is composed of Messrs. C. Bell, J. Bell, Bentley, Griffith and T.J.A. Patton with Mr. BentleyFreeman serving as Chairman. This committee makes recommendations to the Company'sCompany’s and the Bank's BoardBank’s Boards of Directors on the immediate and future building needs of the Company and the Bank. This committee held sevenfour meetings during 1998.2003.
Investment Committee. The Investment Committee is composed of Messrs. Freeman, GriffithC. Bell, Comer and TriceH. Patton with Mr. C. BellBentley serving as Chairman. The Investment Committee reviews and directs the investment portfolio of the Bank. This committee held twelvefour meetings during 1998.2003.
Long Range Planning Committee. The Long Range Planning Committee is composed of Messrs. C. Bell, J. Bell, Freeman, H. Patton and ComerVanHooser with Mr. TriceComer serving as Chairman. This committee explores strategic opportunities available to the Company and recommends the direction the Company should take on these matters. This committee held three meetings in 1998.2003.
Data Processing Committee. The Data Processing Committee is composed of Mr.Messrs. Comer, J.A. Patton and Richerson with Mr. Franklin serving as Chairman. The Data Processing Committee reviews the computer hardware and software needs of the Company and makes recommendations regarding purchases thereof to the Board of Directors. This committee held fourten meetings during 1998. Mr. Comer and Mr. Franklin also serve as the Company's Year 20002003.
Trust Committee a sub-committee of the Data Processing Committee. The Company's Year
2000 Committee is charged with investigating the Company's Year 2000 readiness,
and making recommendations to the Company regarding solutions to Year 2000
issues. In 1998, the Year 2000 Committee held seven meetings.. The Trust Committee, composed of Messrs. Franklin, FreemanJ. Bell, Comer and T.
PattonGriffith with Mr. GriffithC. Bell serving as Chairman, is charged with the oversight of the Bank'sBank’s trust activities. This committee held elevenfour meetings during 1998.
6
92003.
During the fiscal year ended December 31, 1998,2003, the Board of Directors of the Bank held nineteensixteen meetings while the Board of Directors of the Company met thirteenfifteen times. All incumbent directorsEach director attended more than 90%99% of the aggregate number of meetings of both the Bank'sBank’s and the Company's BoardCompany’s Boards of Directors and the committees on which such director served. The Company encourages each member of the Board of Directors to attend the Annual Meeting of Shareholders. All of the Company’s directors attended the 2003 Annual Meeting of Shareholders.
8
The Company’s Board of Directors has established procedures for the Company’s shareholders to communicate with members of the Board of Directors. Shareholders may communicate with any of the Company’s directors, including the chairperson of any of the committees of the Board of Directors, by writing to a director c/o Wilson Bank Holding Company, 623 West Main Street, Lebanon, Tennessee 37087.
Compliance with Section 16(a) of the Securities Exchange Act of 1934
Section 16(a) of the Exchange Act requires the Company’s executive officers and directors and persons who beneficially own more than ten percent of the Common Stock to file reports of ownership and changes in ownership with the SEC. Officers, directors and greater than ten percent beneficial owners are required by federal securities regulations to furnish the Company with copies of all Section 16(a) forms they served.
file.
Based solely on the Company’s review of the copies of such forms and written representations from certain reporting persons furnished to the Company, the Company believes that its officers, directors and greater than ten percent beneficial owners were in compliance with all applicable filing requirements.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR EACH OF THE NOMINEES LISTED ABOVE.
ITEM 3 | — | AMENDMENT OF CHARTER TO INCREASE THE NUMBER OF AUTHORIZED SHARES OF COMMON STOCK |
The Company’s Charter currently authorizes the issuance of 5,000,000 shares of Common Stock. As of December 31, 2003, 4,320,606 shares of Common Stock were issued and outstanding. On January 26, 2004, the Board unanimously approved and adopted, subject to shareholder approval, a proposed amendment to the Company’s Charter, providing for an increase in the authorized number of shares of Common Stock from 5,000,000 to 10,000,000. The affirmative vote of the holders of a majority of the shares of Common Stock outstanding and entitled to vote is required to approve the amendment to the Company’s Charter.
If this proposal is approved by the Company’s shareholders at the Meeting, the amendment to the Charter will become effective upon the filing of Articles of Amendment with the Secretary of State of Tennessee, which filing is expected to take place shortly after the Annual Meeting. The Board believes that it is in the best interests of the Company and all of its shareholders to amend the Charter.
Except as set forth below, the relative rights of the holders of Common Stock under the Charter would remain unchanged. Article 6 of the Charter, as amended by the proposed amendment, is set forth below:
“6. The total number of shares of stock which the corporation is authorized to issue is one hundred (100) shares of Organizational Stock, no par value per share and ten million (10,000,000) shares of Common Stock, $2.00 par value per share.”
The Board believes that with the current level of authorized capital stock, the Company is constrained in its ability to pursue strategies intended to support its planned growth and to enhance shareholder value. The Board considers the proposed increase in the number of authorized shares of Common Stock desirable because it would give the Company the necessary flexibility to issue Common Stock in connection with stock dividends and splits, acquisitions, equity financings and for other general corporate purposes. The Company currently has no oral or written plans, arrangements or understandings for the issuance of the additional shares of Common Stock to be authorized pursuant to this proposal.
The amendment to the Company’s Charter will ensure that the Company will continue to have an adequate number of authorized and unissued shares of Common Stock available for future use. As is the case with the shares of Common Stock which are currently authorized but unissued, if this amendment to the Company’s Charter is adopted by the shareholders, the Board will have authority to issue the additional shares of Common Stock from time to time without further action on the part of shareholders except as may be required by applicable law or by the rules of any stock exchange or market on which the Company’s securities may then be listed or authorized for quotation.
9
The additional number of authorized shares could have the effect of making it more difficult for a third party to take over the Company in a transaction not approved by the Board of Directors. Shareholders do not have any preemptive or other rights to subscribe for any shares of Common Stock which may in the future be issued by the Company.
THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE “FOR” APPROVAL OF THE PROPOSED AMENDMENT.
ITEM 4 — OTHER MATTERS
The Board of Directors is not aware of any other matters which may be brought before the Annual Meeting. However, if any matter other than the proposed matters properly comes before the meeting for action, proxies will be voted for such matters in accordance with the best judgment of the persons named as proxies.
INDEPENDENT PUBLIC ACCOUNTANT INFORMATION
The Board of Directors has selected Maggart & Associates, P.C. to serve as independent auditors for the current fiscal year upon the recommendation of the Audit Committee. Maggart & Associates, P.C. has served in this capacity for the Company since 1987. A representative of Maggart & Associates is expected to be present at the Annual Meeting, will have an opportunity to make a statement if he or she so desires and is expected to be available to respond to appropriate questions.
During the fiscal years ended December 31, 2003 and December 31, 2002, the Company incurred the following principal independent auditor fees:
| 2003 | 2002 | |||||||
Audit Fees:(a) | $ | 127,090 | $ | 101,400 | ||||
Audit-Related Fees:(b) | $ | 14,665 | $ | 10,522 | ||||
Tax Fees:(c) | $ | 11,625 | $ | 5,040 | ||||
| Other Fees: | — | — | ||||||
| (a) | Includes fees related to the annual independent audit of the Company’s financial statements and reviews of the Company’s annual report on Form 10-K and quarterly reports on Form 10-Q. | |
| (b) | Includes fees related to the audit of the Company’s 401(k) plan and data office and investment center reviews. | |
| (c) | Includes fees related to the preparation of the Company’s tax returns and other tax related assistance. |
The Audit Committee considered these fees and concluded that the performance of these services was consistent with Maggart & Associates’ independence.
The Audit Committee also has adopted a formal policy concerning approval of audit and non-audit services to be provided by the independent auditor to the Company. The policy requires that all services Maggart & Associates, the Company’s independent auditor, may provide to the Company, including audit services and permitted audit-related and non-audit services, be pre-approved by the Audit Committee. The Audit Committee approved all audit and non-audit services provided by Maggart & Associates during fiscal 2003.
EXECUTIVE COMPENSATION
Summary Compensation Table
The following table provides information as to annual, long-term or other compensation during fiscal years 1998, 19972003, 2002, and 19962001 for Mr. Clemons, the Company'sCompany’s Chief Executive Officer, andMr. Richerson, the one otherBank’s President, Gary Whitaker, the Bank’s Senior Vice President, Larry Squires, the Bank’s Senior Vice President, and
10
John Goodman, the Bank’s Senior Vice President-Western Division, the four most highly compensated executive officerofficers of the Company or the Bank with total compensationannual salary and bonus over $100,000.
SUMMARY COMPENSATION TABLE
Annual Compensation
$100,000 for the year ended December 31, 2003.
| Long-Term Compensation | ||||||||||||||||||||||||
| Annual Compensation | Securities Underlying | All Other | ||||||||||||||||||||||
| Name and Principal Position | Year | Salary | Bonus(1) | Options/SARS (#) | Compensation(2) | |||||||||||||||||||
| J. Randall Clemons, President and Chief | 2003 | $ | 263,502 | $ | 156,000 | -0- | $ | 44,460 | ||||||||||||||||
| Executive Officer of the | 2002 | 228,502 | 136,000 | -0- | 46,922 | |||||||||||||||||||
| Company and Chief Executive Officer of the Bank | 2001 | 213,533 | 106,000 | -0- | 40,421 | |||||||||||||||||||
| H. Elmer Richerson, | 2003 | $ | 200,130 | $ | 78,000 | -0- | $ | 31,687 | ||||||||||||||||
| President of the Bank | 2002 | 170,130 | 68,000 | -0- | 31,991 | |||||||||||||||||||
| 2001 | 156,000 | 53,000 | -0- | 27,461 | ||||||||||||||||||||
| Gary Whitaker, | 2003 | $ | 117,000 | $ | 40,224 | -0- | $ | 18,372 | ||||||||||||||||
| Senior Vice President of | 2002 | 106,000 | 37,930 | -0- | 17,506 | |||||||||||||||||||
| the Bank | 2001 | 100,000 | 34,126 | -0- | 15,727 | |||||||||||||||||||
| Larry Squires, | 2003 | $ | 100,200 | $ | 15,361 | -0- | $ | 14,730 | ||||||||||||||||
| Senior Vice President of | 2002 | 95,400 | 14,531 | -0- | 14,370 | |||||||||||||||||||
| the Bank | 2001 | 80,000 | 24,495 | -0- | 12,738 | |||||||||||||||||||
| John Goodman, Senior Vice President - | 2003 | $ | 90,000 | $ | 14,079 | 2,000 | (3) | $ | 3,519 | |||||||||||||||
| Western Division of the | 2002 | 29,847 | 7,000 | -0- | -0- | |||||||||||||||||||
| Bank | 2001 | -0- | -0- | -0- | -0- | |||||||||||||||||||
| (1) | Perquisites and | |
| (2) | Represents for fiscal years 2003, 2002 and 2001, respectively, (i) the Company’s matching grants under the Company’s 401(k)/profit sharing plan in the amounts of $19,200, $19,200 and $16,421 for Mr. Clemons; $19,200, $19,200 and $16,421 for Mr. Richerson; $15,094, $13,817 and $12,955 for Mr. Whitaker; $9,881, $9,234 and $7,743 for Mr. Squires; and $3,519, $0 and $0 for Mr. Goodman; and (ii) accruals by the Company with respect to the Company’s obligations under the Executive Salary Continuation Agreements described below in the amounts of 25,260, $27,722 and $24,000 for Mr. Clemons; $12,487, $12,791 and $11,040 for Mr. Richerson; $3,278, $3,689 and $2,772 for Mr. Whitaker; and $4,850, $5,136 and $3,504 for Mr. Squires. | |
| (3) | The number of securities underlying options have been adjusted to reflect the |
Option Grants in 2003
The following table summarizes certain information regarding stock options issued to the Named Executive Officers during fiscal 2003. No stock appreciation rights (“SARs”) have been granted by the Company.
| Individual Grants | ||||||||||||||||||||||||
| Number of | Percent of Total | Potential Realizable Value at | ||||||||||||||||||||||
| Securities | Options Granted to | Assumed Annual Rates of Stock | ||||||||||||||||||||||
| Underlying Options | Employees in Fiscal | Exercise Price | Expiration | Price Appreciation For Option Term | ||||||||||||||||||||
| Name | Granted(#)(1) | 2003(%) | ($/Share) | Date | 5%($) | 10%($) | ||||||||||||||||||
John Goodman(2) | 2,000 | (3) | 20 | % | $ | 22.50 | 1/02/13 | $ | 28,300 | $ | 71,718 | |||||||||||||
| (1) | The options were granted to Mr. Goodman on January 2, 2003 pursuant to the Company’s 1999 Stock Option Plan. | |
| (2) | The option award information has been adjusted to reflect the Company’s two-for-one stock split paid by the Company on October 30, 2003. | |
| (3) | The options vest 10% per year beginning with the first anniversary of the |
11
Aggregate Option Exercises During 2003 and Fiscal Year End Option Values
The following table provides information related to options exercised by the Company'snamed executive officers during the 2003 fiscal year and the number and value of options held at fiscal year end and has been adjusted to reflect the two-for-one stock split authorized by the Company and paid to the Company’s shareholders in the form of a 100% stock dividend on October 30, 2003. The Company has not issued stock appreciation rights or warrants to its executive officers.
| Shares | Number of Securities | Value of Unexercised In-the-Money | ||||||||||||||||||||||
| Acquired on | Value | Underlying Unexercised Options(#) | Options at Fiscal Year End ($)(1) | |||||||||||||||||||||
| Name | Exercise (#)(2) | Realized ($) | Exercisable | Unexercisable | Exercisable | Unexercisable | ||||||||||||||||||
| J. Randall Clemons | — | — | 3,200 | 4,800 | $ | 39,040 | $ | 58,500 | ||||||||||||||||
| H. Elmer Richerson | — | — | 2,132 | 3,200 | 26,011 | 39,040 | ||||||||||||||||||
| Gary Whitaker | 200 | $ | 3,530 | 906 | 1,360 | 11,054 | 16,592 | |||||||||||||||||
| Larry Squires | — | — | 1,066 | 1,601 | 13,006 | 19,532 | ||||||||||||||||||
| John Goodman | — | — | 200 | 1,800 | 1,000 | 9,000 | ||||||||||||||||||
| (1) | The closing price for the common stock as of December 31, 2003 was $27.50. Value is calculated on the basis of the difference between the option exercise price and $27.50, multiplied by the number of shares of Common Stock underlying the option. | |
| (2) | Gary Whitaker was the only named executive officer that exercised any stock options during 2003. |
Executive Salary Continuation Agreements
The Company has entered into Executive Salary Continuation Agreements with certain of its senior executive officers, including Messrs. Clemons, Richerson, Whitaker and Squires, pursuant to which each such executive officer (or his or her beneficiaries) are entitled, if certain performance targets for the Bank are met, to receive annual payments for 15 years, upon retirement at age 65 or, if sooner, the death or disability of such executive officer. In the event that the executive officer resigns or is terminated without cause prior to age 65, he or she is entitled to receive the vested portion of such benefits, with vesting occurring at the rate of 6%, 6%, 6% and 6% per year from March 30, 1995, March 30, 1995, March 16, 1998 and August 21, 1996 for each of Messrs. Clemons, Richerson, Whitaker and Squires, respectively, if the required performance targets are met. As of December 31, 2003, Messrs. Clemons, Richerson, Whitaker and Squires were vested 42%, 42%, 24% and 36%, respectively. The performance target for each agreement is average return on assets for the Bank over the vesting period for each executive officer, as follows: 1.0% or better (100% of vested benefit); .9-.99% (90%); ..8-.89% (80%); .7-.79% (70%) and below .7%, no benefit.
The amounts paid to a named executive officer are dependent on the then current compensation for each such person at the time of retirement or termination and will also be reduced by a percentage of social security payments and 401(k) benefits paid to the named executive officer during the time when the benefits are being paid and, as such, cannot be calculated with certainty at this time. By way of example, if a named executive officer is employed by the Company for a period of 10 years and the average return on assets in each of those ten years is 0.99, then the named executive officer would be entitled to receive fifty-four percent (54%) of his or her then current salary at termination, less (i) fifty percent of social security benefits paid to the named executive officer and (ii) one hundred percent of the employer contributed 401(k) benefits paid to the named executive officer.
Payment of the benefits is contingent on the executive officer not competing with the Bank for three years after termination of employment. In the event there is a change in control of the Bank or the Company, the benefits become fully vested without regard to the performance target or the non-competition agreement. A “change in control” is the acquisition of 50% or more of the shares of the Bank or the Company, or a merger, consolidation or similar transaction involving the Bank or the Company, or the cessation by either of their business activities or existence.
12
DIRECTORS’ COMPENSATION
Each of the Company’s directors is elected at the Annual Meeting and serves until the next Annual Meeting and until his successor has been duly elected and qualified. If the Proposed Amendment is approved the directors will be classified in three classes, with directors in each class serving for three year terms. The Board of Directors of the Company also serves as the Board of Directors of the Bank. In 2003, each director received $1,650 per month for his services as a director of the Company. In addition, each director of the Bank received $800 per month for his services as a director of the Bank and $450 for each committee meeting of the Bank he attended, not to exceed $1,350 per month, as a member of the various committees on which he serves. In addition, fees of $1,683 and $1,390 were paid to each of the directors of the Company and the directors of the Bank, respectively, for attendance at Company and Bank planning retreats held during 2003.
PERSONNEL COMMITTEE REPORT ON EXECUTIVE COMPENSATION
Decisions with respect to compensation of the Company’s and the Bank’s executive officers, including the Chief Executive Officer and the other named executive officers, for fiscal year 2003 were made by the Board of Directors of the Bank based upon recommendations by the Personnel Committee. Compensation of executive officers consists of a base salary, an annual bonus and matching grantsand profit-sharing contributions under the Company'sCompany’s 401(k) plan.
PERSONNELplan (as well as health and disability insurance and other non-cash benefits similar to those of all employees of the Bank or Company). No member of the Personnel Committee served as an officer or employee of the Company or of any of its subsidiaries during 2003.
The overarching policy of the Personnel Committee and the Board of Directors in determining executive compensation, including the compensation of the Chief Executive Officer, is to attract and retain the highest quality talent to lead the Company and to reward key executives based upon their individual performance and the performance of the Bank and the Company. The Personnel Committee believes that providing incentives to and rewarding the performance of the Company’s executive officers enhances the profitability of the Company.
In recommending the 2003 base salary of J. Randall Clemons, the Company’s and the Bank’s Chief Executive Officer, the Personnel Committee reviewed a Tennessee Banking Association (“TBA”) 2002 survey of compensation levels for Chief Executive Officers of Middle Tennessee banks or bank holding companies with assets of $500- 1 billion. Decisions regarding compensation were made in view of these sources of information with the intent to compensate the Chief Executive Officer with a comparable base salary.
The Personnel Committee further considered the Bank’s and the Company’s overall financial performance in 2002 in recommending Mr. Clemons’ base salary (including asset quality and growth, net income, earnings per share and return on equity compared to the previous year). For example, total assets for fiscal year 2002 for the Company increased 12.72% compared with 2001, net income increased 28.2% and earnings per share increased 25.15% compared with 2001. Mr. Clemons’ base salary was increased 15.3% for the 2003 fiscal year. Notwithstanding disclosure of certain performance measures in this paragraph, the Personnel Committee’s recommendations concerning Mr. Clemons’ base salary were not based upon the attainment of any specific quantitative performance objectives.
The base salary for Mr. Richerson, Mr. Whitaker, Mr. Squires and Mr. Goodman were based on similar criteria and considerations.
Executive officers are eligible for an annual cash bonus pursuant to a formula determined by the Board of Directors that is based upon the Company’s net income for the fiscal year. In 2003, Mr. Clemons was eligible for, and received, $6,000 for the first $1.25 million of net income earned by the Company and $5,000 for each additional $250,000 of net income earned. Mr. Richerson was eligible for, and received, $3,000 for the first $1.25 million of net income earned by the Company and $2,500 for each additional $250,000 of net income earned. Mr. Whitaker, Mr. Squires and Mr. Goodman were eligible for, and received, a bonus determined by the return of assets performance of the Bank which bonus was calculated on a basis consistent with the Bank’s other employees. Messrs. Whitaker, Squires and Goodman were also eligible to receive monthly cash payments under the Company’s cash-based incentive plan upon the attainment of certain performance goals.
13
Employees, including executive officers, also receive a matching grant of $.35 from the Company for each one dollar ($1) up to a maximum of 6% of the amount contributed each year by the employee to his or her 401(k) account. No employee is entitled to contribute more than $13,000. The Company contributes additional funds into each employee’s 401(k) account under a profit-sharing arrangement based upon each employee’s base salary as a percentage of the Company’s total payroll.
The compensation levels for fiscal year 2003 for members of management other than Mr. Richerson, Mr. Clemons, Mr. Whitaker and Mr. Squires were established by the Personnel Committee based upon the recommendation of the Company’s Chief Executive Officer, J. Randall Clemons. Mr. Clemons’ recommendations regarding these salaries were based on considerations and criteria similar to those described above.
Jack W. Bell, Chairman | John Freeman | |
James Anthony Patton | Robert VanHooser |
The foregoing report of the Personnel Committee shall not be deemed incorporated by reference by any general statement incorporating by reference the Proxy Statement into any filing under the Securities Act of 1933 or the Securities Exchange Act of 1934, except to the extent that the Company specifically incorporates this information by reference, and shall not otherwise be deemed filed under such acts.
AUDIT COMMITTEE INTERLOCKS AND INSIDER PARTICIPATIONREPORT FOR 2003
The Audit Committee reviews the Company’s financial reporting process on behalf of the Board of Directors. Management has the primary responsibility for the financial statements and the reporting process. The Company’s independent auditors are responsible for expressing an opinion on the conformity of the Company’s audited financial statements to generally accepted accounting principles.
In this context, the Audit Committee has reviewed and discussed with management and the independent auditors the audited financial statements. The Audit Committee has discussed with the independent auditors the matters required to be discussed by Statement on Auditing Standards No. 61. In addition, the Audit Committee has received from the independent auditors the written disclosures and letter required by Independence Standards Board Standard No. 1 (Independence Discussions with Audit Committees) and discussed with them their independence from the Company and its management. The Audit Committee has considered whether the independent auditors provision of non-audit services to the Company is compatible with maintaining the auditor’s independence.
In reliance on the reviews and discussions referred to above, the Audit Committee recommended to the Board of Directors, and the Board of Directors has approved, that the audited financial statements be included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2003, for filing with the SEC.
Marshall Griffith, Chairman | Charles Bell | |
Robert T. VanHooser, Jr. | Jerry Franklin |
The foregoing report of the Audit Committee shall not be deemed incorporated by reference by any general statement incorporating by reference the Proxy Statement into any filing under the Securities Act of 1933 or the Securities Exchange Act of 1934, except to the extent that the Company specifically incorporates this information by reference, and shall not otherwise be deemed filed under such acts.
Personnel Committee Interlocks and Insider Participation
During fiscal 1998,2003, the Personnel Committee of the Board of Directors of the Bank was composed of Messrs. H.Freeman, J.A. Patton Bentley,and VanHooser and Comer with Mr. J. Bell serving as Chairman. With the exception of Mr. VanHooser who was an officer of the Bank until 1996, none of these persons has at any time been an officer or employee of the Company or any of its subsidiaries. Mr. J. Bell is
the owner of Jack W. Bell Builders, Inc., a construction company that received
$1,281,000 from the Company in 1998 for the construction of two new buildings
for the Company. Otherwise, thereThere are no relationships among the Company'sCompany’s executive officers, members of the Personnel Committee or entities whose executives serve on the Board of Directors or the Personnel Committee that require disclosure under applicable regulations of the Securities and Exchange
Commission (the "SEC").
7
10
PERSONNEL COMMITTEE REPORT ON EXECUTIVE COMPENSATION
Decisions with respect to compensationSEC, except that Jack Bell, Builders, a company owned by Mr. Jack Bell, a member of the Company'sPersonnel Committee, was paid an aggregate of $1,884,000 by the Bank and the Bank's executive officers, includingCommunity Bank of Smith County for the Chief Executive Officer, for fiscal
1998 were made by the Board of Directorsconstruction of the Gordonsville office
14
of the Community Bank based upon recommendations
byof Smith County and the Personnel Committee. NoneBank’s Leeville — 109 office and the renovation of these persons served as anthe Bank’s Hartsville and Mt. Juliet offices. Mr. Charles Bell is the father of Mr. Jack Bell.
No executive officer or
employee of the Company or any of its subsidiaries during 1998.
The overall objectivesthe Bank has served as a member of the Company'scompensation committee of another entity, one of whose executive compensation
program, includingofficers served on the Personnel Committee. No executive officer of the Company or the Bank has served as a director of another entity, one of whose executive officers served on the Personnel Committee. No executive officer of the Company or the Bank has served as a member of the compensation committee of another entity, one of whose executive officers served as a director of the Chief Executive Officer, for fiscal
1998 were to:
- AttractCompany or the Bank.
Certain Relationships and retain the highest quality talent to lead the
Company;
- Reward key executives based on business performance; and
- Assure that objectives for corporate and individual
performance are measured.
The philosophy upon which these objectives was based is that of
providing incentive to the Company's officers to enhance the profitability of
the Company. The compensation levels for fiscal 1998 for members of senior
management, except for Mr. Richerson and Mr. Clemons, were established by the
Personnel Committee based upon the recommendation of the Company's Chief
Executive Officer, J. Randall Clemons.
The Personnel Committee set annual salaries for the executive officers
within competitive levels but relies to a significant degree on annual cash
bonuses to attract and retain senior management of outstanding ability and to
motivate them to perform to the fullest extent of their abilities. In
establishing compensation levels, the Personnel Committee considers compensation
levels of executives in other financial institutions of similar size in similar
markets as well as the overall performance of the Company.
Jack W. Bell, Chairman
William Mackey Bentley
Harold Patton
Robert T. VanHooser, Jr.
James F. Comer
8
11
SHAREHOLDER RETURN PERFORMANCE GRAPH
The following graph compares the percentage change in the unaudited
total return on the Company's Common Stock against the cumulative total return
of the NASDAQ Index and The Carson Medlin Company's Independent Bank Index
between December 31, 1993 and December 31, 1998. The graph assumes the value of
the investment in the Company's Common Stock and each index was $100 at December
31, 1993 and that all dividends were reinvested.
[GRAPHIC OMITTED]
1993 1994 1995 1996 1997 1998
---- ---- ---- ---- ---- ----
WILSON BANK HOLDING COMPANY 100 111 123 138 156 174
INDEPENDENT BANK INDEX 100 119 151 191 280 296
NASDAQ INDEX 100 98 138 170 209 293
9
12
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONSRelated Transactions
Some directors and principal officers of the Company at present, as in the past, are customers of the Bank and have had and expect to have loan transactions with the Bank in the ordinary course of business. In addition, some of the directors and officers of the Bank are at present, as in the past, affiliated with businesses which are customers of the Bank and which have had and expect to have loan transactions with the Bank in the ordinary course of business. These loans were made in the ordinary course of business and were made on substantially the same terms, including interest rates and collateral, as those prevailing at the time for comparable transactions with other parties. In the opinion of the Board of Directors, these loans do not involve more than a normal risk of collectability or present other unfavorable features.
During 1998,2003, John R. Trice Appraisals, Inc. was paid an aggregate of $273,000$493,818 for 7761,309 appraisals and inspections performed in connection with loans originated by the Bank. This company is owned by John R. Trice, a director of the Company and the Bank. The payments made by the Bank were reimbursed in full by the persons and/or entities whose properties were appraised.
COMPLIANCE WITH SECTION 16(a) OF THE SECURITIES EXCHANGE ACT OF 1934
Section 16(a)
During 2003 Jack Bell, Builders was paid an aggregate of $1,844,000 by the Bank and the Community Bank of Smith County for the construction of the Exchange Act requiresGordonsville office for the Company's officersCommunity Bank of Smith County and directors,the Bank’s Leeville — 109 office and persons who beneficially own more than ten percent of a
registered classthe renovation of the Company's equity securities, to file reports of
ownershipBank’s Hartsville and changes in ownership with the SEC. Officers, directors, and
greater than ten percent stockholders are requiredMt. Juliet offices. This Company is owned by federal securities
regulations to furnish the Company with copies of all Section 16(a) forms they
file.
Based solely on the Company's review of the copies of such forms, or
written representations from certain reporting persons furnished to the Company,
the Company believes that its officers, directors and greater than ten percent
beneficial owners were in compliance with all applicable filing requirements.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR EACH OF THE NOMINEES
LISTED ABOVE.
10
13
PROPOSAL NO 2:
1999 STOCK OPTION PLAN
On January 25, 1999, the Board of DirectorsJack Bell, a director of the Company adoptedand the 1999 Stock Option Plan (the "1999 Plan"), subject to approval byBank. Mr. Jack Bell is the shareholders. Under the 1999 Plan, the Company may grant options with respect to
the Company's Common Stock to officers and other key employeesson of Mr. Charles Bell, another director of the Company.
Shareholder Return Performance Graph
The following is a summary ofgraph compares the 1999 Plan. This summary is qualified in its
entirety by the actual terms of the 1999 Plan. Capitalized terms not otherwise
defined herein are defined in the 1999 Plan.
The number of shares of Common Stock reserved for issuance under the
1999 Plan will be 75,000 initially. Also, additional shares may be issued under
the 1999 Plan in order that the total number of shares that may be issued during
the term of the 1999 Plan will be equal to 5.0% of the shares of Common Stock
then issued and outstanding, including those shares of Common Stock issued
pursuant to the 1999 Plan.
In order for compensation under options granted to the Chief Executive
Officer and certain other executive officers to be exempt from the $1,000,000
limitation on the deductibility of executive compensation under Section 162(m)
of the Internal Revenue Code of 1986, as amended, (the "Code") a plan must
specify, and shareholders must approve, a limitation on the number of shares
that may be granted to any executive officers in any year. Under the 1999 Plan,
no officer of the Company or other person whose compensation may be subject to
the limitations on deductibility under the Section 162(m) of the Code will be
eligible to receive awards under the 1999 Plan relating to more than 10,000
shares of Common Stock in any fiscal year (the "Section 162(m) Maximum"). See
"Section 162(m) Provisions" below.
In the event of any merger, reorganization, consolidation,
recapitalization, extraordinary cash dividend, stock dividend, stock split or
otherpercentage change in the Company's corporate structure affectingunaudited total return on the Company’s Common Stock an
appropriate substitution or adjustment will be madeagainst the cumulative total return of the NASDAQ Index and The Carson Medlin Company’s Independent Bank Index between December 31, 1998 and December 31, 2003. The graph assumes the value of the investment in the maximum number of
sharesCompany’s Common Stock and each index was $100 at December 31, 1998 and that may be awarded under the 1999 Plan, in the number and option price
of options then outstanding under the 1999 Plan and in the Section 162(m)
Maximum.all dividends were reinvested.
The 1999 Plan will be administered by a committee (the "Plan
Committee") consisting of not less than two Non-Employee Directors. Actions
taken by the Plan Committee regarding persons to whom stock options may be
granted, the type of stock option, and the number of shares to be covered by
each such award, among other actions specified in the 1999 Plan, will be subject
to ratification by the Board of Directors. The initial Plan Committee will be
the Personnel Committee of the Board of Directors.
Awards under the 1999 Plan may be made to officers and other key
employees of the Company or any of its subsidiaries or affiliates. The
approximate number of employees who would potentially be eligible for awards
under the 1999 Plan is fifty (50), based on the actual number of
11
14
officers and an estimated number of key employees eligible for awards, but
actual awards will be made only at the discretion of the Plan Committee as
ratified by the Board of Directors.
The Plan Committee shall have the authority to grant stock options,
upon ratification of the Board of Directors. All decisions made by the Board of
Directors and the Plan Committee pursuant to the 1999 Plan shall be final and
binding on all persons, including the Company and participants in the 1999 Plan.
The Board of Directors may delegate some or all of its authority under the 1999
Plan to the Plan Committee, consistent with the terms of the 1999 Plan.
Stock Options. Incentive stock options ("ISOs") and non-qualified stock
options may be granted for such number of shares as the Board of Directors and
the Plan Committee will determine and may be granted alone, in addition to or in
tandem with other awards granted under or outside of the 1999 Plan, but subject
to the per person limitation on awards; provided, however, that ISOs may be
granted only to employees of the Company, its subsidiaries or affiliates.
A stock option will be exercisable, in whole or in part, at such times
and subject to such terms and conditions as the Board of Directors and the Plan
Committee may determine and over a term to be determined by the Board of
Directors and the Plan Committee, which term will be no more than ten years
after the date of grant, or no more than five years in the case of an ISO
awarded to certain 10% shareholders. The option price for any ISOfollowing Performance Graph shall not be less than 100%, or 110% indeemed incorporated by reference by any general statement incorporating by reference the case of certain 10% shareholders, of the fair
market value of the Common Stock as of the date of grant, and forproxy statement into any non-qualified stock option will not be less than 100% of the fair market value
of the Common Stock as of the date of grant. Payment of the option price may be
by check, note or such other instrument as the Board of Directors may accept or,
in the case of a non-qualified stock option, in shares of Common Stock or shares
of restricted stock or shares subject to such option or another awardfiling under the 1999 Plan having a fair market value equalSecurities Act of 1933 or the Securities Exchange Act of 1934, except to the option price.
Upon termination of an optionholder's employment for cause, any stock
options held will thereupon terminate. If an optionholder voluntarily terminates
employment, stock options held will thereupon terminate; provided, however,extent that the Plan Committee, upon approval of the Board of Directors at the time of grant
or (except in the case of ISOs) thereafter, may extend the exercise period for
three months following termination or the balance of the option period,
whichever is shorter. If an optionholder's employment is involuntarily
terminated without cause, stock options willCompany specifically incorporates this information by reference, and shall not otherwise be exercisable for three months
following termination or until the end of the option period, whichever is
shorter. On the disability of an employee, stock options will be exercisable
within the lesser of the remainder of the option period or, in the case of a
non-qualified stock option, three years, and in the case of an ISO, one year
from the date of disability. Upon the retirement of an employee, stock options
will be exercisable within the lesser of the remainder of the option period or,
in the case of a non-qualified stock option, three years, and in the case of an
ISO, three months from the date of retirement. Upon the death of an employee,
stock options will be exercisable by the deceased employee's legal
representative or legatee within the lesser of the remainder of the option
period or one year from the date of death. Only options which are exercisable on
the date of termination, death, disability or retirement may be subsequently
exercised or, except for an ISO, on
12
15deemed filed under such accelerated basis as determined by the Board of Directors and the Plan
Committee at or after grant.
FEDERAL INCOME TAX ASPECTS OF THE 1999 PLAN
The following is a brief summary of the federal income tax aspects of
awards made under the 1999 Plan based upon the federal income tax laws in effect
on the date hereof. This summary is not intended to be exhaustive and does not
describe state or local tax consequences.
1. Incentive Stock Options. No taxable income is realized by the
participant upon the grant or exercise of an ISO. If Common Stock is
issued to a participant pursuant to the exercise of an ISO, and if no
disqualifying disposition of the shares is made by the participant
within two years of the date of grant or within one year after the
transfer of the shares to the participant, then: (i) upon the sale of
the shares, any amount realized in excess of the option price will be
taxed to the participant as long-term capital gain, and any loss
sustained will be a capital loss; and (ii) no deduction will be allowed
to the Company for federal income tax purposes. The exercise of an ISO
will give rise to an item of tax preference that may result in an
alternative minimum tax liability for the participant unless the
participant makes a disqualifying disposition of the shares received
upon exercise.
If Common Stock acquired upon the exercise of an ISO is
disposed of prior to the expiration of the holding periods described
above, then generally: (i) the participant will realize ordinary income
in the year of disposition in an amount equal to the excess, if any, of
the fair market value of the shares at exercise (or, if less, the
amount realized on the disposition of the shares) over the option price
paid for such shares, and (ii) the Company will be entitled to deduct
any such recognized amount. Any further gain or loss realized by the
participant will be taxed as short-term or long-term capital gain or
loss, as the case may be, and will not result in any deduction by the
Company.
Subject to certain exceptions for disability or death, if an
ISO is exercised more than three months following the termination of
the participant's employment, the option will generally be taxed as a
non-qualified stock option.
2. Non-Qualified Stock Options. Except as noted below, with respect to
non-qualified stock options: (i) no income is realized by the
participant at the time the option is granted; (ii) generally upon
exercise of the option, the participant realizes ordinary income in an
amount equal to the difference between the option price paid for the
shares and the fair market value of the shares on the date of exercise,
and the Company will be entitled to a tax deduction in the same amount;
and (iii) at disposition, any appreciation (or depreciation) after the
date of exercise is treated either as short-term or long-term capital
gain or loss, depending upon the length of time that the participant
has held the shares.
13
16
SECTION 162(m) PROVISIONS
Section 162(m) of the Code imposes a limitation on the deductibility of
certain compensation paid to the chief executive officer and certain other
executive officers of publicly traded companies. Compensation paid to these
officers in excess of $1,000,000 cannot be claimed as a tax deduction by such
companies unless such compensation qualifies for an exemption as
performance-based compensation under Section 162(m) of the Code. It is
anticipated that compensation in respect of stock options granted under the 1999
Plan will qualify for an exemption as performance-based compensation under
Section 162(m) of the Code, if the exercise price per share for such options is
at least equal to the fair market value per share of Common Stock on the date of
grant.
OTHER PROVISIONS OF THE 1999 PLAN
Options that may be granted under the 1999 Plan will vest and become
immediately exercisable (to the extent not theretofore vested and exercisable)
if:
1. any person or entity (including a "group" as defined in Section
13(d) of the Exchange Act), other than the Company or a
wholly-owned subsidiary thereof or an employee benefit plan of the
Company or any of its subsidiaries, becomes the beneficial owner
of the Company's securities having 50% or more of the combined
voting power of all securities of the Company that may be cast in
the election of directors of the Company;
2. as a result of, or in connection with, a cash tender or exchange
offer, merger or other business combination, sale of assets or
contested election, or any combination of the foregoing
transactions, less than a majority of the combined voting power of
the then outstanding securities of the Company, or any successor
entity entitled to vote generally in the election of directors of
the Company or any such successor, are held in the aggregate by
holders of the Company's securities entitled to vote generally in
the election of directors of the Company immediately prior to such
transaction;
3. during any period of two consecutive years, individuals who at the
beginning of such period constitute the Board of Directors cease
for any reason to constitute the majority thereof, unless the
election or nomination for election by the Company's shareholders
of such individuals first elected during such period was approved
by a vote of at least two-thirds of the directors then still in
office who were directors at the beginning of such period; or
4. the Board of Directors, upon recommendation from the Plan
Committee, determines that a potential change in control has
occurred as a result of either (a) shareholder approval of an
agreement that would result in one of the events described above
or (b) the acquisition of beneficial ownership, directly or
indirectly, by any person, entity or group (other than the
Company, any of its subsidiaries or any employee benefit plans of
the
14
17
Company) of securities of the Company representing 5% or more of
the combined voting power of the Company's outstanding securities.
Following the occurrence of any event that would result in the
acceleration of vesting and exercisability as described above, the holders of
stock options and other rights will, unless otherwise determined by the Board of
Directors, receive cash equal to the difference between the highest price paid
per share of Common Stock in any transaction reported on the Nasdaq stock
market, or paid or offered in a bona fide transaction, during the 60 days
immediately prior to the change in control or potential change in control event
(the determination of such price to be determined by the Board of Directors
except that, in the case of ISOs such price will be based only on transactions
reported for the date on which the optionee exercises such option) and the
exercise price of the option or other right.
In addition to any other restrictions on transfer that may be applicable
under the terms of the 1999 Plan or the applicable award agreement, no stock
option granted under the 1999 Plan is transferrable by the participant without
the prior written consent of the Board of Directors, or the Plan Committee if so
delegated, other than (a) transfers by a participant to a member of his or her
Immediate Family or a trust for the benefit of the participant or a member of
his or her Immediate Family (except in the case of ISOs) or (b) transfers by
will or by the laws of descent and distribution (the designation of a
beneficiary will not constitute a transfer).
The 1999 Plan is intended to constitute an "unfunded" plan for incentive
and deferred compensation. With respect to any payments not yet made to an
optionee by the Company, nothing contained herein shall give any such optionee
any rights that are greater than those of a general creditor of the Company. The
Board of Directors, or the Plan Committee if so delegated, will be authorized to
create trusts or make other arrangements to meet the Company's obligations under
the 1999 Plan to deliver Common Stock or payments in lieu of; provided, however,
that, unless the Board of Directors otherwise determines with the consent of the
affected optionee, the existence of such trusts or other arrangements is
consistent with the 1999 Plan's "unfunded" status.
The 1999 Plan may be amended, altered or discontinued by the Board of
Directors to the fullest extent permitted by the Exchange Act and the rules and
regulations promulgated thereunder, provided, however, that without the approval
of the Company's shareholders, no amendment, alteration or discontinuation may
be made which would (i) except as a result of the provisions of Section 3(c) of
the 1999 Plan, increase the maximum number of shares that may be issued under
the 1999 Plan or increase the Section 162(m) Maximum, (ii) change the provisions
governing ISOs except as required or permitted under the provisions governing
ISOs in the Code, or (iii) make any change for which applicable law or
regulatory authority (including the regulatory authority of the Nasdaq National
Market or any other market or exchange on which the Common Stock is traded)
would require shareholder approval or for which shareholder approval would be
required to secure full deductibility of compensation received under the 1999
Plan under Section 162(m) of the Code. No amendment, alteration or
discontinuation shall be made which would impair the rights of an optionee
without his consent.
acts.
| 1998 | 1999 | 2000 | 2001 | 2002 | 2003 | |||||||||||||||||||
| WILSON BANK HOLDING COMPANY | 100 | 123 | 140 | 157 | 181 | 234 | ||||||||||||||||||
| INDEPENDENT BANK INDEX | 100 | 94 | 89 | 110 | 136 | 176 | ||||||||||||||||||
| NASDAQ INDEX | 100 | 185 | 112 | 89 | 61 | 92 | ||||||||||||||||||
15 18
The 1999 Plan will expire on the tenth anniversary of its effective date,
but awards granted prior to such tenth anniversary may be extended beyond that
date.
A majority of the votes entitled to be cast by the holders of the
Company's Common Stock is necessary for approval of the adoption of the 1999
Plan. THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE ADOPTION OF THE 1999
PLAN.
16
19
PROPOSAL NO. 3:
ELIMINATION OF PREEMPTIVE RIGHTS
The Board of Directors recommends that the Company's Charter be amended to
delete Section 7, which provides that shareholders have "preemptive rights."
Preemptive rights means that, except in certain circumstances, if the Board of
Directors decides to issue additional shares of Company Common Stock, it must
first provide all shareholders the right to purchase such shares on the same
terms and conditions. There are no preemptive rights as to the shares issued as
compensation to employees, directors or officers, or issued pursuant to stock
options granted to such persons, or as to shares issued in acquisition
transactions or other than for cash. Approval by shareholders of this proposal
would eliminate preemptive rights to all of the 1,455,689 shares of Common Stock
of the Company presently issued and outstanding.
The Board of Directors believes it would be desirable to have greater
flexibility to issue shares than currently allowed by the preemptive rights
provision of the Charter. In particular, the Board of Directors believes that
making stock available in new markets where offices are being opened by the
Company would promote a more rapid growth of the Bank in such new markets,
therefore being an advantage to present shareholders. In addition, the Board of
Directors may utilize a portion of available shares to sell shares at fair
market value to key employees, whose ownership of the Company's Common Stock is
believed in the best interests of shareholders. In the event of an offering to
the public generally, however, the Board of Director's intention is to continue
to give all the Company's shareholders the right to acquires shares on a
preemptive basis prior to making sales to the general public.
DISSENTERS' APPRAISAL RIGHTS
Shareholders of the Company have the right to dissent from the Charter
amendment abolishing preemptive rights and obtain in cash the fair value of
their shares of Company Common Stock.
In order to perfect his or her dissenters' rights with respect to the
Charter amendment, a shareholder must:
- deliver to the Company before the vote is taken, written notice of his
or her intent to demand payment for his or her shares of Common Stock
if the amendment to the Company's Charter eliminating preemptive rights
is approved; and
- not vote his or her shares of Common Stock in favor of the proposal to
amend the Company's Charter to eliminate preemptive rights.
A vote AGAINST this proposal eliminating preemptive rights, by itself, is
insufficient to satisfy a shareholder's requirement to give the Company notice
under Chapter 23 of the TBCA. A shareholder is not required to vote AGAINST the
proposal, but is required to "not vote the
17
20
shareholder's shares in favor" of the proposal. Failure to follow the two steps
disclosed above constitutes a waiver of a shareholder's appraisal rights.
Subsequent to shareholder approval of the amendment to the Company's
Charter, the Company would be required under Tennessee law to send to each of
the shareholders who has perfected dissenters' rights in accordance with the
steps disclosed above, written notice setting forth instructions for receipt of
payment for their shares of Common Stock. Upon receipt of such notice,
dissenting shareholders would become entitled to receive payment of their shares
of Common Stock when they:
- demand payment;
- certify that they have received their shares of Common Stock prior to
date on which this Proxy Statement was first mailed to shareholders of
the Company; and
- deposit with the Company certificates representing their shares of
Common Stock in accordance with the instructions set forth in the
notice.
A copy of Chapter 23 of the TBCA, the Tennessee statutory provisions governing
dissenters' rights, is attached as Appendix A to this Proxy Statement.
The foregoing is only a summary of the rights of dissenting holders of
Common Stock. Any holder of Common Stock who intends to dissent should carefully
review the text of the Tennessee statutory law set forth in Appendix A to this
Proxy Statement and should consult with such holder's attorney. The failure of a
shareholder to follow precisely the procedure summarized above and set forth in
Appendix A to this Proxy Statement may result in the loss of appraisal rights.
No further notice of the events giving rise to appraisal rights or any steps
associated therewith will be furnished to holders of Common Stock, except as
indicated above or otherwise required by law.
In general, any dissenting shareholder who perfects such holder's rights
to be paid the "fair value" of such holder's Common Stock in cash will recognize
taxable gain or loss for federal income tax purposes upon receipt of such cash.
A majority of the votes entitled to be cast by the holders of the
Company's Common Stock is necessary for approval of the amendment to the Charter
eliminating preemptive rights. THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE
AMENDMENT TO THE CHARTER TO DELETE SECTION 7 AND ELIMINATE SHAREHOLDERS'
PREEMPTIVE RIGHTS.
18
21
PROPOSAL NO. 4: RATIFICATION OF INDEPENDENT AUDITORS
The Board of Directors of the Company has selected Maggart and Associates,
P.C. to serve as independent auditors for the current fiscal year upon the
recommendation of the Audit Committee and considers it desirable that the
selection of Maggart & Associates, P.C. be ratified by the shareholders. Maggart
and Associates, P.C. has served in this capacity for the Company since 1987. A
representative of Maggart & Associates is expected to be present at the Annual
Meeting, will have an opportunity to make a statement if he or she so desires
and is expected to be available to respond to appropriate questions.
SHAREHOLDERS'
SHAREHOLDERS’ PROPOSALS AND OTHER MATTERS
Shareholders intending to submit proposals for presentation at the next Annual Meeting and inclusion in the Proxy Statement and form of proxy for such meeting should forward such proposals to J. Randall Clemons, Wilson Bank Holding Company, 623 West Main Street, Lebanon, Tennessee 37087. Proposals must be in writing and must be received by the Company prior to November [27], 1999___, 2004 in order to be included in the Company'sCompany’s Proxy Statement and form of proxy relating to the 20002005 Annual Meeting of Shareholders. Proposals should be sent to the Company by certified mail, return receipt requested, and must comply with Rule 14a-8 of Regulation 14A of the proxy rules of the SEC.
For any other shareholder proposals to be timely (but not considered for inclusion in the Company'sCompany’s Proxy Statement), a shareholder must forward such proposal to Mr. Clemons at the Company'sCompany’s main office (listed above) prior to January [28], 2000.
OTHER MATTERS
The Board of Directors is not aware of any other matters which may be
brought before the Annual Meeting. However, if any matter other than the
proposed matters properly comes before the meeting for action, proxies will be
voted for such matters in accordance with the best judgment of the persons named
as proxies.___, 2005.
GENERAL
In addition to solicitation by mail, certain directors, officers and regular employees of the Company and the Bank may solicit proxies by telephone, telegram or personal interview for which they will receive no compensation other than their regular salaries. The Company may request brokerage houses and custodians, nominees and fiduciaries to forward soliciting material to the beneficial owners of the Company'sCompany’s Common Stock held of record by such persons and may reimburse them for their reasonable out-of-pocket expenses in connection therewith.
19
22
The Company's 1998Company’s 2002 Annual Report is mailed herewith. A shareholder may obtain a copy of the Company'sCompany’s Annual Report to the SEC on Form 10-K for the year ended December 31, 1998, is available2003 without charge by writing to any shareholder upon request.
Becky Taylor, Wilson Bank Holding Company, 623 West Main Street, Lebanon, Tennessee 37087.
| By order of the Board of Directors, | ||
| Jerry L. Franklin Secretary | ||
| Lebanon, Tennessee March ___ , 2004 |
16
Appendix A
ARTICLES OF AMENDMENT
TO THE CHARTER
OF
WILSON BANK HOLDING COMPANY
In accordance with the provisions of Section 48-20-106 of the Tennessee Business Corporation Act, the undersigned corporation adopts the following Articles of Amendment (the “Articles of Amendment”) to its Charter (the “Charter”):
1. Name of Corporation. The name of the Corporation is Wilson Bank Holding Company.
2. Section 6 of the Charter is hereby deleted in its entirety and replaced with the following:
“6. The number of shares of stock the corporation is authorized to issue is one hundred (100) shares of Organizational Stock, no par value per share and ten million (10,000,000) shares of Common Stock, $2.00 par value per share.”
3. Except as amended by these Articles of Amendment, the Charter of the Corporation shall remain in full force and effect.
4. Adoption. These Articles of Amendment were duly adopted by the Board of Directors on January 26, 2004, and by the shareholders of the Corporation on ____________ , 2004.
5. Effective Date. These Articles of Amendment will be effective when filed with the Secretary of State.
| Date: __________ , 2004 | ||||
| WILSON BANK HOLDING COMPANY | ||||
J. Randall Clemons, Chief Executive Officer | ||||
A-1
Form of Proxy
WILSON BANK HOLDING COMPANY
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
This proxy is solicited upon behalf of the Board of Directors /s/
----------------------------------------
Jerry L. Franklin
Secretary
Lebanon, Tennessee
March ______, 1999
20
23
APPENDIX A
CHAPTER 23 OF THE TENNESSEE BUSINESS CORPORATION ACT
DISSENTERS' RIGHTS
TENNESSEE CODE ANNOTATED
TITLE 48. CORPORATIONS AND ASSOCIATIONS
CHAPTER 23. BUSINESS CORPORATIONS -- DISSENTERS' RIGHTS
PART 1 -- RIGHT TO DISSENT AND OBTAIN PAYMENT FOR SHARES
SS. 48-23-101. DEFINITIONS
As used in this chapter, unless the context otherwise requires:
(1) "Beneficial shareholder" means the person who is a beneficial owner of
shares held by a nominee as the record shareholder;
(2) "Corporation" means the issuer of the shares held by a dissenter before
the corporate action, or the surviving or acquiring corporation by
merger or share exchange of that issuer;
(3) "Dissenter" means a shareholder who is entitled to dissent from
corporate action under ss. 48-23-102 and who exercises that right when
and in the manner required by part 2 of this chapter;
(4) "Fair value", with respect to a dissenter's shares, means the value of
the shares immediately before the effectuation of the corporate action
to which the dissenter objects, excluding any appreciation or
depreciation in anticipation of the corporate action;
(5) "Interest" means interest from the effective date of the corporate
action that gave rise to the shareholder's right to dissent until the
date of payment, at the average auction rate paid on United States
treasury bills with a maturity of six (6) months (or the closest
maturity thereto) as of the auction date for such treasury bills
closest to such effective date;
(6) "Record shareholder" means the person in whose name shares are
registered in the records of a corporation or the beneficial owner of
shares to the extent of the rights granted by a nominee certificate on
file with a corporation; and
(7) "Shareholder" means the record shareholder or the beneficial
shareholder.
48-23-102. RIGHT TO DISSENT
(a) A shareholder is entitled to dissent from, and obtain payment of the
fair value of the shareholder's shares in the event of, any of the
following corporate actions:
(1) Consummation of a plan of merger to which the corporation is a
party:
A-1
24
(A) If shareholder approval is required for the merger by
ss. 48-21-104 or the charter and the shareholder is
entitled to vote on the merger; or
(B) If the corporation is a subsidiary that is merged
with its parent under ss.48-21-105;
(2) Consummation of a plan of share exchange to which the
corporation is a party as the corporation whose shares will be
acquired, if the shareholder is entitled to vote on the plan;
(3) Consummation of a sale or exchange of all, or substantially
all, of the property of the corporation other than in the
usual and regular course of business, if the shareholder is
entitled to vote on the sale or exchange, including a sale in
dissolution, but not including a sale pursuant to court order
or a sale for cash pursuant to a plan by which all or
substantially all of the net proceeds of the sale will be
distributed to the shareholders within one (1) year after the
date of sale;
(4) An amendment of the charter that materially and adversely
affects rights in respect of a dissenter's shares because it:
(A) Alters or abolishes a preferential right of the
shares;
(B) Creates, alters, or abolishes a right in respect of
redemption, including a provision respecting a
sinking fund for the redemption or repurchase, of the
shares;
(C) Alters or abolishes a preemptive right of the holder
of the shares to acquire shares or other securities;
(D) Excludes or limits the right of the shares to vote on
any matter, or to cumulate votes, other than a
limitation by dilution through issuance of shares or
other securities with similar voting rights; or
(E) Reduces the number of shares owned by the shareholder
to a fraction of a share, if the fractional share isAnnual Meeting to be acquired for cash under ss. 48-16-104; or
(5) Any corporate action taken pursuant to a shareholder vote to
the extent the charter, bylaws, or a resolution of the board
of directors provides that voting or nonvoting shareholders
are entitled to dissent and obtain payment for their shares.
(b) A shareholder entitled to dissent and obtain payment for the
shareholder's shares under this chapter may not challenge the corporate
action creating the shareholder's entitlement unless the action is
unlawful or fraudulent with respect to the shareholder or the
corporation.
(c) Notwithstanding the provisions of subsection (a), no shareholder may
dissent as to any shares of a security which, as of the date of the
effectuation of the transaction which would otherwise give rise to
dissenters' rights, is listed on an exchange registered under ss. 6 of
the Securities Exchange Act of 1934, as amended, or is a "national
market system security," as defined in rules promulgated pursuant to
the Securities Exchange Act of 1934, as amended.
A-2
25
SS. 48-23-103. DISSENT BY NOMINEES AND BENEFICIAL OWNERS
(a) A record shareholder may assert dissenters' rights as to fewer than all
the shares registered in the record shareholder's name only if the
record shareholder dissents with respect to all shares beneficially
owned by any one (1) person and notifies the corporation in writing of
the name and address of each person on whose behalf the record
shareholder asserts dissenters' rights. The rights of a partial
dissenter under this subsection are determined as if the shares as to
which the partial dissenter dissents and the partial dissenter's other
shares were registered in the names of different shareholders.
(b) A beneficial shareholder may assert dissenters' rights as to shares of
any one (1) or more classes held on the beneficial shareholder's behalf
only if the beneficial shareholder:
(1) Submits to the corporation the record shareholder's written
consent to the dissent not later than the time the beneficial
shareholder asserts dissenters' rights; and
(2) Does so with respect to all shares of the same class of which
the person is the beneficial shareholder or over which the
person has power to direct the vote.
SS. 48-23-201. NOTICE OF DISSENTERS' RIGHTS
(a) If proposed corporate action creating dissenters' rights under ss.
48-23-102 is submitted to a vote at a shareholders' meeting, the
meeting notice must state that shareholders are or may be entitled to
assert dissenters' rights under this chapter and be accompanied by a
copy of this chapter.
(b) If corporate action creating dissenters' rights under ss. 48-23-102 is
taken without a vote of shareholders, the corporation shall notify in
writing all shareholders entitled to assert dissenters' rights that the
action was taken and send them the dissenters' notice described in ss.
48-23-203.
(c) A corporation's failure to give notice pursuant to this section will
not invalidate the corporate action.
SS. 48-23-202. NOTICE OF INTENT TO DEMAND PAYMENT
(a) If proposed corporate action creating dissenters' rights under ss.
48-23-102 is submitted to a vote at a shareholders' meeting, a
shareholder who wishes to assert dissenters' rights must:
(1) Deliver to the corporation, before the vote is taken, written
notice of the shareholder's intent to demand payment for the
shareholder's shares if the proposed action is effectuated;
and
(2) Not vote the shareholder's shares in favor of the proposed
action. No such written notice of intent to demand payment is
required of any shareholder to whom the corporation failed to
provide the notice required by ss. 48-23-201.
(b) A shareholder who does not satisfy the requirements of subsection (a)
is not entitled to payment for the shareholder's shares under this
chapter.
A-3
26
SS. 48-23-203. DISSENTERS' NOTICE
(a) If proposed corporate action creating dissenters' rights under ss.
48-23-102 is authorized at a shareholders' meeting, the corporation
shall deliver a written dissenters' notice to all shareholders who
satisfied the requirements of ss. 48-23-202.
(b) The dissenters' notice must be sent no later than ten (10) days after
the corporate action was authorized by the shareholders or effectuated,
whichever is the first to occur, and must:
(1) State where the payment demand must be sent and where and when
certificates for certificated shares must be deposited;
(2) Inform holders of uncertificated shares to what extent
transfer of the shares will be restricted after the payment
demand is received;
(3) Supply a form for demanding payment that includes the date of
the first announcement to news media or to shareholders of the
principal terms of the proposed corporate action and requires
that the person asserting dissenters' rights certify whether
or not the person asserting dissenters' rights acquired
beneficial ownership of the shares before that date;
(4) Set a date by which the corporation must receive the payment
demand, which date may not be fewer than one (1) nor more than
two (2) months after the date the subsection (a) notice is
delivered; and
(5) Be accompanied by a copy of this chapter if the corporation
has not previously sent a copy of this chapter to the
shareholder pursuant to ss. 48-23-201.
SS. 48-23-204. DUTY TO DEMAND PAYMENT
(a) A shareholder sent a dissenters' notice described in ss. 48-23-203 must
demand payment, certify whether the shareholder acquired beneficial
ownership of the shares before the date required to be set forth in the
dissenters' notice pursuant to ss. 48-23-203(b)(3), and deposit the
shareholder's certificates in accordance with the terms of the notice.
(b) The shareholder who demands payment and deposits the shareholder's
share certificates under subsection (a) retains all other rights of a
shareholder until these rights are canceled or modified by the
effectuation of the proposed corporate action.
(c) A shareholder who does not demand payment or deposit the shareholder's
share certificates where required, each by the date set in the
dissenters' notice, is not entitled to payment for the shareholder's
shares under this chapter.
(d) A demand for payment filed by a shareholder may not be withdrawn unless
the corporation with which it was filed, or the surviving corporation,
consents thereto.
A-4
27
SS. 48-23-205. SHARE RESTRICTIONS
(a) The corporation may restrict the transfer of uncertificated shares from
the date the demand for their payment is received until the proposed
corporate action is effectuated or the restrictions released under ss.
48-23-207.
(b) The person for whom dissenters' rights are asserted as to
uncertificated shares retains all other rights of a shareholder until
these rights are cancelled or modified by the effectuation of the
proposed corporate action.
SS. 48-23-206. PAYMENT
(a) Except as provided in ss. 48-23-208, as soon as the proposed corporate
action is effectuated, or upon receipt of a payment demand, whichever
is later, the corporation shall pay each dissenter who complied with
ss. 48-23-204 the amount the corporation estimates to be the fair value
of each dissenter's shares, plus accrued interest.
(b) The payment must be accompanied by:
(1) The corporation's balance sheet as of the end of a fiscal year
ending not more than sixteen (16) months before the date of
payment, an income statement for that year, a statement of
changes in shareholders' equity for that year, and the latest
available interim financial statements, if any;
(2) A statement of the corporation's estimate of the fair value of
the shares;
(3) An explanation of how the interest was calculated;
(4) A statement of the dissenter's right to demand payment under
ss. 48-23-209; and
(5) A copy of this chapter if the corporation has not previously
sent a copy of this chapter to the shareholder pursuant to ss.
48-23-201 or ss. 48-23-203.
SS. 48-23-207. FAILURE TO TAKE ACTION
(a) If the corporation does not effectuate the proposed action that gave
rise to the dissenters' rights within two (2) months after the date set
for demanding payment and depositing share certificates, the
corporation shall return the deposited certificates and release the
transfer restrictions imposed on uncertificated shares.
(b) If, after returning deposited certificates and releasing transfer
restrictions, the corporation effectuates the proposed action, it must
send a new dissenters' notice under ss. 48-23-203 and repeat the
payment demand procedure.
SS. 48-23-208. AFTER-ACQUIRED SHARES
(a) A corporation may elect to withhold payment required by ss. 48-23-206
from a dissenter unless the dissenter was the beneficial owner of the
shares before the date set forth in the dissenters' notice
A-5
28
as the date of the first announcement to news media or to shareholders
of the principal terms of the proposed corporate action.
(b) To the extent the corporation elects to withhold payment under
subsection (a), after effectuating the proposed corporate action, it
shall estimate the fair value of the shares, plus accrued interest, and
shall pay this amount to each dissenter who agrees to accept it in full
satisfaction of the dissenter's demand. The corporation shall send with
its offer a statement of its estimate of the fair value of the shares,
an explanation of how the interest was calculated, and a statement of
the dissenter's right to demand payment under ss. 48-23-209.
SS. 48-23-209. PROCEDURE IF SHAREHOLDER DISSATISFIED WITH PAYMENT OR OFFER
(a) A dissenter may notify the corporation in writing of the dissenter's
own estimate of the fair value of the dissenter's shares and amount of
interest due, and demand payment of the dissenter's estimate (less any
payment under ss. 48-23-206) or reject the corporation's offer under
ss. 48-23-208 and demand payment of the fair value of the dissenter's
shares and interest due, if:
(1) The dissenter believes that the amount paid under ss.
48-23-206 or offered under ss. 48-23-208 is less than the fair
value of the dissenter's shares or that the interest due is
incorrectly calculated;
(2) The corporation fails to make payment under ss. 48-23-206
within two (2) months after the date set for demanding
payment; or
(3) The corporation, having failed to effectuate the proposed
action, does not return the deposited certificates or release
the transfer restrictions imposed on uncertificated shares
within two (2) months after the date set for demanding
payment.
(b) A dissenter waives the dissenter's right to demand payment under this
section unless the dissenter notifies the corporation of the
dissenter's demand in writing under subsection (a) within one (1) month
after the corporation made or offered payment for the dissenter's
shares.
SS. 48-23-301. COURT ACTION
(a) If a demand for payment under ss. 48-23-209 remains unsettled, the
corporation shall commence a proceeding within two (2) months after
receiving the payment demand and petition the court to determine the
fair value of the shares and accrued interest. If the corporation does
not commence the proceeding within the two-month period, it shall pay
each dissenter whose demand remains unsettled the amount demanded.
(b) The corporation shall commence the proceeding in a court of record
having equity jurisdiction in the county where the corporation's
principal office (or, if none in this state, its registered office) is
located. If the corporation is a foreign corporation without a
registered office in this state, it shall commence the proceeding in
the county in this state where the registered office of the domestic
corporation merged with or whose shares were acquired by the foreign
corporation was located.
(c) The corporation shall make all dissenters (whether or not residents of
this state) whose demands remain unsettled, parties to the proceeding
as in an action against their shares and all parties must
A-6
29
be served with a copy of the petition. Nonresidents may be served by
registered or certified mail or by publication as provided by law.
(d) The jurisdiction of the court in which the proceeding is commenced
under subsection (b) is plenary and exclusive. The court may appoint
one (1) or more persons as appraisers to receive evidence and recommend
decision on the question of fair value. The appraisers have the powers
described in the order appointing them, or in any amendment to it. The
dissenters are entitled to the same discovery rights as parties in
other civil proceedings.
(e) Each dissenter made a party to the proceeding is entitled to judgment:
(1) For the amount, if any, by which the court finds the fair
value of the dissenter's shares, plus accrued interest,
exceeds the amount paid by the corporation; or
(2) For the fair value, plus accrued interest, of the dissenter's
after-acquired shares for which the corporation elected to
withhold payment under ss. 48-23-208.
SS. 48-23-302. COURT COSTS AND COUNSEL FEES
(a) The court in an appraisal proceeding commenced under ss. 48-23-301
shall determine all costs of the proceeding, including the reasonable
compensation and expenses of appraisers appointed by the court. The
court shall assess the costs against the corporation, except that the
court may assess costs against all or some of the dissenters, in
amounts the court finds equitable, to the extent the court finds the
dissenters acted arbitrarily, vexatiously, or not in good faith in
demanding payment under ss. 48-23-209.
(b) The court may also assess the fees and expenses of counsel and experts
for the respective parties, in amounts the court finds equitable
against:
(1) The corporation and in favor of any or all dissenters if the
court finds the corporation did not substantially comply with
the requirements of part 2 of this chapter; or
(2) Either the corporation or a dissenter, in favor of any other
party, if the court finds that the party against whom the fees
and expenses are assessed acted arbitrarily, vexatiously, or
not in good faith with respect to the rights provided by this
chapter.
(c) If the court finds that the services of counsel for any dissenter were
of substantial benefit to other dissenters similarly situated, and that
the fees for those services should not be assessed against the
corporation, the court may award to these counsel reasonable fees to be
paid out of the amounts awarded to the dissenters who were benefited.
A-7
30
Form of Proxy
WILSON BANK HOLDING COMPANY
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
NAME AND ADDRESS LABEL
THIS PROXY IS SOLICITED UPON BEHALF OF THE BOARD OF DIRECTORS FOR THE
ANNUAL MEETING TO BE HELD ON APRILApril 13, 1999.2004.
The undersigned hereby appoints [HAROLDHarold R. PATTON AND MACKEY BENTLEY],Patton and Mackey Bentley, or either of them, with full power of substitution, as proxies, and hereby authorizes them to vote, as designated, all shares of common stock of Wilson Bank Holding Company, held by the undersigned on March 15, 19991, 2004 at the Annual Meeting of Shareholders to be held Tuesday, April 13, 19992004, at 7:00 p.m., (CST), at the main office of Wilson Bank and Trust located at 623 West Main Street, Lebanon, Tennessee 37087, and any adjournment(s) thereof.
1. PROPOSAL TO AMEND THE COMPANY’S CHARTER,to divide the Board of Directors into three classes and to require a supermajority vote to amend the provisions in the Charter establishing a classified board.
FOR AGAINST ABSTAIN
2. ELECTION OF DIRECTORS
____
| FOR all nominees (except as marked to the contrary below) | ||
| CLASS I (term expiring in 2005): Jack W. Bell, Mackey Bentley, Harold R. Patton, H. Elmer Richerson | ||
| CLASS II (term expiring in 2006): Charles Bell, J. Randall Clemons, Jerry L. Franklin, James Anthony Patton | ||
| CLASS III (term expiring in 2007): James F. Comer, John B. Freeman, Marshall Griffith, John R. Trice, Robert T. VanHooser, Jr. | ||
| Withhold authority to vote for all thirteen nominees; | ||
| Withhold authority to vote for the following nominee(s), write that nominee’s name on the line below: | ||
| 3. PROPOSAL TO AMEND THE COMPANY’S CHARTER,to increase the number of authorized shares of common stock from five million (5,000,000) to ten million (10,000,000). | ||
FOR all nominees (except as marked to the contrary below)
Charles Bell James F. Comer Harold R. Patton
Jack W. Bell Jerry L. Franklin James Anthony Patton
Mackey Bentley John B. Freeman H. Elmer Richerson
J. Randall Clemons Marshall Griffith John R. Tice
Robert T. VanHooser, Jr.
____ Withhold authority to vote for all thirteen nominees;
____ Withhold authority to vote for the following nominee(s), write that
nominee's name on the line below:
-----------------------------------------------------------------------
2. APPROVAL OF 1999 STOCK OPTION PLAN
____ FOR ____ AGAINST ____ ABSTAIN
3. APPROVAL OF AMENDMENT TO CHARTER REMOVING SHAREHOLDER PREEMPTIVE RIGHTS
____ FOR ____ AGAINST ____ ABSTAIN
4. RATIFICATION OF MAGGART AND ASSOCIATES, P.C. AS INDEPENDENT AUDITORS FOR THE
CURRENT FISCAL YEAR.
____ FOR ____ AGAINST ____ ABSTAIN
In their discretion, the proxies are authorized to vote upon such business as may properly come before this 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 PROPOSALS 1, 2 3 AND 4.
Signature _______________________ Date ___________________
Signature (if held jointly) _______________________ Date ___________________3.
| Signature | Date | |||||
| Signature (if held jointly) | Date |
Please sign exactly as your name appears on your share certificates. Each joint owner must sign. When signing as attorney, executor, administrator, trustee or guardian, please give full title as such. If a corporation, please sign in full corporate name as authorized. If a partnership, please sign in partnership name by an authorized person.
BE SURE TO MARK, SIGN, DATE AND RETURN THIS PROXY PROMPTLY
IN THE ADDRESSED POSTAGE PAID ENVELOPE PROVIDED