FIRST PULASKI NATIONAL CORPORATION
206 SOUTH FIRST STREET
PULASKI, TENNESSEE 38478
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
To Be Held On April 26, 2001
NOTICE IS HEREBY GIVEN that the Annual Meeting of Shareholders of the First
Pulaski National Corporation (the "Company") will be held in the Cox & Curry
Center of the First National Bank of Pulaski, Tennessee located at 206 South
First Street, Pulaski, Tennessee 38478, on Thursday, April 26, 2001, at
1:00 p.m., local time, for the following purposes:
(1) To elect thirteen (13) directors of the Company;
(2) The ratification of the appointment of the Certified Public Accounting Firm
of Putman and Hancock, Certified Public Accountants, as the Company's
independent auditors for the fiscal year ending December 31, 2001; and
(3) To consider and act upon such other matters as may properly come before the
meeting or any adjournments thereof.
NOTE: The board of directors is not aware of any other business to come before
the meeting.
Any action may be taken on the foregoing proposals at the meeting on the
date specified above or on any date or dates to which, by original or later
adjournment, the meeting may be adjourned. Shareholders of record at the close
of business on March 19, 2001 are entitled to notice of and to vote at the
meeting and any adjournments or postponements thereof.
You are requested to complete and sign the enclosed form of proxy, which is
solicited by the board of directors, and to mail it promptly in the enclosed
postage-paid envelope. The proxy will not be used if you attend the meeting
and vote in person.
BY ORDER OF THE BOARD OF DIRECTORS
/s/Harold Bass
HAROLD BASS
CORPORATE SECRETARY
Pulaski, Tennessee
April 4, 2001
IMPORTANT: THE PROMPT RETURN OF PROXIES WILL SAVE THE COMPANY THE EXPENSE OF
FURTHER REQUESTS FOR PROXIES IN ORDER TO ENSURE A QUORUM. A SELF-ADDRESSED
ENVELOPE IS ENCLOSED FOR YOUR CONVENIENCE. NO POSTAGE IS REQUIRED IF MAILED IN
THE UNITED STATES
PROXY STATEMENT
OF
FIRST PULASKI NATIONAL CORPORATION
206 SOUTH FIRST STREET
PULASKI, TENNESSEE 38478
(931) 363-2585
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ANNUAL MEETING OF SHAREHOLDERS
APRIL 26, 2001
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This Proxy Statement is furnished in connection with the solicitation of
proxies by the board of directors of First Pulaski National Corporation (the
"Company") to be used at the Annual Meeting of Shareholders of the Company
("Meeting"). The Company is the holding company for First National Bank of
Pulaski (the "Bank") and Heritage Financial of the Tennessee Valley. The Meeting
will be held in the Cox & Curry Center of the First National Bank of Pulaski at
206 South First Street, Pulaski, Tennessee 38478, on Thursday April 26, 2001, at
1:00 p.m., local time. This Proxy Statement and the enclosed proxy card are
being first mailed to shareholders on or about April 4, 2001. The Company's
directors, executive officers and other employees, not specifically employed for
this purpose, may solicit proxies by personal interview, mail, telephone or
facsimile. They will not be paid additional remuneration for their efforts.
This proxy solicitation will be paid for by the Company.
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VOTING AND PROXY PROCEDURE
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Shareholders Entitled to Vote. Shareholders of record as of the close of
business on March 19, 2001 ("Voting Record Date") are entitled to one vote for
each share of common stock, $1.00 par value per share, (the "Common Stock") of
the Company then held. At the close of business on the Voting Record Date the
Company had 1,533,788 shares of Common Stock issued and outstanding held by
1,376 shareholders.
Quorum. The presence, in person or by proxy, of at least a majority of
the total number of outstanding shares of Common Stock entitled to vote is
necessary to constitute a quorum at the Meeting. Abstentions and broker non-
votes will be counted as shares present and entitled to vote at the Meeting for
purposes of determining the existence of a quorum.
Voting. The board of directors solicits proxies so that each shareholder
has the opportunity to vote on the proposals to be considered at the Meeting.
When a proxy card is returned to the Company properly signed and dated, the
shares represented thereby will be voted in accordance with the instructions on
the proxy card. Where no instructions are indicated, proxies will be voted FOR
the nominees for directors set forth below, and FOR the approval of the
appointment of the independent auditors. If a shareholder attends the Meeting,
he or she may revoke his or her proxy and vote by ballot.
The directors to be elected at the Meeting will be elected by a plurality
of the votes cast by shareholders present in person or by proxy and entitled to
vote. Pursuant to the Company's Charter, shareholders are not permitted to
cumulate their votes for the election of directors. Votes may be cast for or
withheld from each nominee. Votes that are withheld and broker non-votes will
have no effect on the outcome of the election because directors will be elected
by a plurality of the votes cast.
With respect to the other proposal to be voted upon at the Meeting,
shareholders may vote for or against the proposal or may abstain from voting.
Approval of the appointment of the independent auditors requires the affirmative
vote of a majority of the shares of Common Stock present in person or by proxy
and entitled to vote. Abstentions and broker non-votes will have the effect of
a vote against the outcome of this proposal.
Revocation of a Proxy. Shareholders who execute proxies retain the right
to revoke them at any time. Proxies may be revoked by written notice delivered
1
in person or mailed to the Secretary of the Company or by filing a later proxy
prior to a vote being taken on a particular proposal at the Meeting. Attendance
at the Meeting will not automatically revoke a proxy, but a shareholder in
attendance may request a ballot and vote in person, thereby revoking a prior
granted proxy.
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SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
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Persons and groups who beneficially own in excess of 5% of the Company's
Common Stock are required to file certain reports with the Securities and
Exchange Commission ("SEC"), and provide a copy to the Company, disclosing such
ownership pursuant to the Securities Exchange Act of 1934, as amended ("Exchange
Act"). Management knows of no persons who beneficially owned more than 5% of
the outstanding shares of Common Stock at the close of business on the Voting
Record Date.
The following table sets forth information regarding the beneficial
ownership of the Company's Common Stock as of March 19, 2001 (unless otherwise
noted), for:
- each of the Company's directors and nominees.
- each of the Company's executive officers named in the Summary
Compensation Table; and
- all of the Company's directors and executive officers as a group.
The percentages of shares outstanding provided in the tables are based on
1,533,788 voting shares outstanding as of March 19, 2001. Beneficial ownership
is determined in accordance with the rules of the Securities and Exchange
Commission and generally includes voting or investment power with respect to
securities. Unless otherwise indicated, each person or entity named in the
table has sole voting and investment power with respect to all shares of stock
listed as owned by that person. The number of shares shown also includes the
interest of certain persons in shares held by family members in their own right.
Shares issuable upon exercise of options that are exercisable within sixty days
of March 19, 2001 are considered outstanding for the purpose of calculating the
percentage of outstanding shares of the Company's Common Stock held by the
individual, but not for the purpose of calculating the percentage of outstanding
shares held by any other individual.
Name(1) Number of Shares Percent of Shares Outstanding
Beneficially Owned
- ---------- -------------------- ---------------------------
Directors
David E. Bagley 7,734 (2) 0.50%
Johnny Bevill 22,630 (3) 1.47%
James K. Blackburn, IV 7,643 (4) 0.50%
Wade Boggs 7,035 (5) 0.46%
James H. Butler 8,250 (6) 0.54%
Joyce F. Chaffin 8,250 (7) 0.54%
James T. Cox 13,000 (8) 0.85%
Parmenas Cox 27,869 (9) 1.82%
Gregory C. Dugger 7,080 (10) 0.46%
Charles D. Haney 15,025 (11) 0.98%
Morris Ed Harwell 21,684 (12) 1.41%
James Rand Hayes 18,580 (13) 1.21%
William A. McNairy 3,000 (14) 0.20%
W. Harwell Murrey 37,725 (15) 2.46%
Bill Yancey 6,450 (16) 0.42%
Executive Officers
Mark A. Hayes 10,575 (17) 0.69%
Edwin D. Moore 2,973 (18) 0.19%
Directors and Executive 219,378 14.01%
Officers as a group
(18 persons)
________________________
2
(1) The address of all parties shown in this table is 206 South First Street,
Pulaski, Tennessee 38478.
(2) Includes 400 shares held as custodian for children, 800 shares held
jointly with wife, 5,819 shares held by Cede & Company for Bagley Trust,
and 500 shares subject to the 1994 Stock Option Plan for Outside Directors
that are not yet exercisable but will be exercisable within 60 days of the
record date.
(3) Includes 11,065 shares held by wife and 500 shares subject to the 1994
Stock Option Plan for Outside Directors that are not yet exercisable but
will be exercisable within 60 days of the record date.
(4) Includes 3,250 shares currently exercisable under the 1994 Stock Option
Plan for Outside Directors and 500 shares subject to the 1994 Stock Option
Plan for Outside Directors that are not yet exercisable but will be
exercisable within 60 days of the record date.
(5) Includes 3,268 shares held by wife and 500 shares subject to the 1994
Stock Option Plan for Outside Directors that are not yet exercisable but
will be exercisable within 60 days of the record date.
(6) Includes 5,372 shares held jointly with wife, 570 shares held jointly with
three children and grandchildren, 1,808 shares currently exercisable under
the 1994 Stock Option Plan for Outside Directors and 500 shares subject to
the 1994 Stock Option Plan for Outside Directors that are not yet
exercisable but will be exercisable within 60 days of the record date.
(7) Includes 3,375 shares held by husband, 2,000 shares currently exercisable
under the 1994 Stock Option Plan for Outside Directors and 250 shares
subject to the 1994 Stock Option Plan for Outside Directors that are not
yet exercisable but will be exercisable within 60 days of the record date.
(8) Includes 1,111 shares held by wife, 500 shares held by Smith Barney for
benefit of James T. Cox IRA, 1,000 shares held by Raymond James &
Associates for benefit of James T. Cox IRA, and 3,000 shares currently
exercisable under the 1997 Stock Option Plan.
(9) Includes 27,369 shares held individually and 500 shares subject to the
1994 Stock Option Plan for Outside Directors that are not yet exercisable
but will be exercisable within 60 days of the record date.
(10) Includes 100 shares held jointly with wife as Trustee for child, 1,665
shares held by Raymond James & Associates for benefit of Gregory G. Dugger
IRA and 500 shares subject to the 1994 Stock Option Plan for Outside
Directors that are not yet exercisable but will be exercisable within 60
days of the record date.
(11) Includes 5,740 shares held jointly with wife, 300 shares held jointly with
wife as trustee for children, 7,985 shares in trust for employees of
Physicians & Surgeons, Inc., 500 shares currently exercisable under the
1994 Stock Option Plan for Outside Directors and 500 shares subject to the
1994 Stock Option Plan for Outside Directors that are not yet exercisable
but will be exercisable within 60 days of the record date.
(12) Includes 100 shares held by wife, 2,000 shares held by Raymond James &
Associates for benefit of Morris Ed Harwell, 1,000 shares currently
exercisable under the 1994 Stock Option Plan for Outside Directors and 250
shares subject to the 1994 Stock Option Plan for Outside Directors that
are not yet exercisable but will be exercisable within 60 days of the
record date.
(13) Includes 9,040 shares held by wife and 500 shares subject to the 1994
Stock Option Plan for Outside Directors that are not yet exercisable but
will be exercisable within 60 days of the record date.
(14) Includes 1,000 shares held jointly with wife, 1,100 shares currently
exercisable under the 1994 Stock Option Plan for Outside Directors and 500
shares subject to the 1994 Stock Option Plan for Outside Directors that
are not yet exercisable but will be exercisable within 60 days of the
record date.
(15) Includes 17,250 shares held by wife, 7,985 shares held in trust for
employees of Physicians & Surgeons, Inc., 2,091 shares currently
exercisable under the 1994 Stock Option Plan for Outside Directors and 500
shares subject to the 1994 Stock Option Plan for Outside Directors that
are not yet exercisable but will be exercisable within 60 days of the
record date.
(16) Includes 5,950 shares held jointly with wife and 500 shares subject to the
1994 Stock Option Plan for Outside Directors that are not yet exercisable
but will be exercisable within 60 days of the record date.
3
(17) Includes 1,575 shares held jointly with wife, 5,000 shares currently
exercisable under the 1987 Stock Option Plan, and 4,000 shares currently
exercisable under the 1997 Stock Option Plan.
(18) Includes 538 shares held jointly with wife, 435 shares held by Raymond
James & Associates for benefit of Edwin D. Moore, and 2,000 shares
currently exercisable under the 1997 Stock Option Plan.
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SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
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Pursuant to rules promulgated under the Exchange Act, the Company's
directors, executive officers and any person holding more than ten percent (10%)
of the Common Stock are required to report their ownership of the Common Stock
and any changes in that ownership to the SEC. These persons are also required
by SEC regulations to furnish the Company with copies of these reports. Specific
due dates for these reports have been established and the Company is required to
report any failure to file by these dates.
Based solely on a review of the reports furnished to the Company and
written representations from the Company's directors and executive officers, the
Company believes that all of these filing requirements were satisfied by the
Company's directors, executive officers and ten percent (10%) holders during the
2000 fiscal year except that the following transactions were not timely reported
on Form 4 but rather were reported on Form 5: exercises of options by Mr.
Bevill in June 2000, Mr. Parmenas Cox in July 2000, Mr. Bagley in November 2000,
Mr. James Rand Hayes in June 2000, Mr. McNairy in September 2000 and Mr. Dugger
in June 2000; a transaction by Mr. Boggs in May 2000; a transaction by Mr.
Harwell in May 2000; and transactions by Mr. McNairy in May 2000, July 2000 and
September 2000.
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PROPOSAL NO. 1 -- ELECTION OF DIRECTORS
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The Bylaws of the Company currently state that the board of directors shall
consist of not less than five (5) or more than thirty-five (35) members.
Currently, the board of directors of the Company is made up of fifteen (15)
members. One director who was elected at the 2000 shareholders' meeting, Thomas
L. Cardin, resigned from the board on June 23, 2000, due to health reasons. Due
to age limitations established in the Company's Bylaws, two (2) members of the
current board are no longer eligible for membership on the board. The board of
directors of the Company will also serve as the board of directors of the Bank.
The persons herein named will be elected to hold office until the next
annual meeting of shareholders and until their successors have been elected and
qualified. Unless otherwise directed, it is the intention of the persons named
in the proxy to vote the shares covered thereby for the nominees designated by
the Company's board of directors as listed below.
It is intended that the proxies solicited by the Company's board of
directors will be voted for the election of the nominees named in the table
below. If any nominee is unable to serve, the shares represented by all valid
proxies will be voted for the election of such substitute as the Company's board
of directors may recommend or the board of directors may adopt a resolution to
amend the Company's Bylaws and reduce the size of the board of directors. At
this time the board of directors knows of no reason why any nominee might be
unavailable to serve.
4
The table below sets forth certain information regarding the nominees for
election at the Meeting including the length that each person has been a
director and the principal occupation or employment of such person for the last
five (5) years.
Served as Principal Occupation or
Director Employment for Last
Nominees Age Since Five (5) Years
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David E. Bagley 47 4/22/93 President, Bagley &
Bagley Ins., Inc.
Johnny Bevill 65 10/19/81 Owner, Davis &
Eslick Market
James K. Blackburn, IV 58 4/07/83 Owner, Lairdland Farm,
Real Estate Broker
Wade Boggs 37 4/20/95 Owner, Wash Master Car
Washes
James H. Butler 54 4/05/84 Real Estate Agent,
Butler Realty
James T. Cox 63 3/17/99 President & CEO,
First National Bank
Parmenas Cox (1) 89 10/19/81 Retired Senior Chairman
of the Board, First
National Bank
Gregory G. Dugger 51 4/22/93 Dentist
Charles D. Haney 46 4/22/93 Physician
James Rand Hayes 64 4/07/83 Owner, Hayes Properties
William A. McNairy 68 4/04/91 Owner, McNairy's
Flowerama & Gifts,
Farmer
W. Harwell Murrey 66 10/19/81 Physician
Bill Yancey 56 4/04/91 Farmer
(1) Mr. Cox is the father of the Company's President and Chief Executive
Officer, James T. Cox.
The Company's Bylaws restrict nomination of persons to serve as directors
as follows:
Any shareholder who intends to nominate or cause to be nominated any
candidate for election to the board of directors, other than those
made by or at the direction of the board of directors, shall make such
intention known by timely notice in writing to the Secretary of the
Company. To be timely, a shareholder's notice shall be delivered to
or mailed and received at the principal executive offices of the
Company within the time periods set forth in Rule 14a-8(a)(3) enacted
pursuant to the Exchange Act. Such shareholder's notice shall set
forth (a) as to each person whom the shareholder proposes to nominate
5
for election or re-election as a director, (i) the name, age, business
and residence address of such person, (ii) the principal occupation or
employment of such person, (iii) the class and number of shares of
Common Stock which are beneficially owned by such person and (iv) any
other information relating to such person that is required to be
disclosed in solicitations of proxies for election of directors, or is
otherwise required, in each case pursuant to Regulation 14A under the
Exchange Act (including without limitation such persons' written
consent to being named in the proxy statement as a nominee and to
serving as a director if elected); and (b) as to the shareholder
giving the notice (i) the name and address, as they appear on the
Company's books, of such shareholder and (ii) the class and number of
shares of Common Stock which are beneficially owned by such
shareholder. Any nominations for directors not in accordance with
this requirement may be disregarded by the Chairman of the meeting,
and upon instruction by the Chairman, votes cast for each such nominee
shall be disregarded.
Unless directed otherwise by the shareholders, the enclosed proxy will be
voted for the election of the nominees for directors listed. The Company's
management has no reason to believe at this time that the persons so nominated
will be unable or will decline to serve if elected.
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DESCRIPTION OF THE BOARD & COMMITTEES
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In 1999, the Company established a Nominations and Compensation Committee.
Prior to this action, the functions of this committee were handled by the Bank's
Nominations and Compensation Committee. Decisions regarding the Company's audit
process are still made by the Audit Committee of the board of directors of the
Bank, subject to the approval of the board of directors of the Bank and of the
board of directors of the Company as a whole. The board of directors of the
Company holds regular meetings every quarter and special meetings as called.
Members of the Company's and the Bank's Nominations and Compensation
Committees are the same. Serving for the entire year on the two committees were
Johnny Bevill and W. Harwell Murrey. Serving until the date of the annual
organizational meeting of the board on April 27, 2000 was Thomas L. Cardin, who
was replaced at such time by James H. Butler. None of the individuals serving
on the Committees during the year were employed either by the Company or the
Bank. The Company's Nominations and Compensation Committee held one (1) meeting
during 2000, prior to the change in membership. The Bank's Nomination and
Compensation Committee held three (3) meetings during 2000, with one (1) of the
meetings being prior to the change in membership and the other two (2) occurring
after the change.
Members of the Bank's Audit Committee serving for the entire year were
David E. Bagley, Johnny Bevill, James K. Blackburn, Morris Ed Harwell and James
Rand Hayes. Appointed to the Audit Committee at the Board's organizational
meeting on April 27, 2000 was Gregory G. Dugger. Serving until his resignation
from the Board on June 23, 2000 was Thomas L. Cardin. The Audit Committee met
four (4) times during 2000, with two (2) of the meetings being prior to the
changes in membership and two (2) after the changes. The Audit Committee has a
written charter, a copy of which is attached to this Proxy Statement as Appendix
A. All of the members of the Audit Committee are independent within the
standard adopted by the New York Stock Exchange, except that Mr. Bagley has an
interest in an insurance agency that sells insurance products to the Bank.
During the fiscal year ended December 31, 2000 the board of directors held
an organizational meeting after the annual shareholders meeting, seven (7)
additional regularly scheduled meetings and five (5) specially called meetings.
Of the thirteen (13) meetings of the board of directors held during 2000,
Charles D. Haney missed two (2) regular meetings and three (3) specially called
meetings. No other incumbent director attended fewer than 75% of the total
number of meetings of the Company's or the Bank's board of directors or the
Committees upon which such director serves. All of the directors who serve on
the board of directors of the Bank also serve on the Company's board of
directors. The board of directors of the Bank has three (3) additional standing
committees, (1) one which administers the First Pulaski National Corporation
1997 Stock Option Plan, (2) one which administers the First Pulaski National
Corporation 1994 Employee Stock Purchase Plan, and (3) one which administers the
First Pulaski National Corporation 1994 Stock Option Plan for Outside Directors.
These committees meet only when needed, and the only one of them to meet during
the year 2000 was the committee responsible for the administration of the First
Pulaski National Corporation 1997 Stock Option Plan.
6
THE BOARD OF DIRECTORS OF THE COMPANY RECOMMENDS THAT YOU VOTE FOR EACH OF THE
NOMINEES.
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DIRECTOR COMPENSATION
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The directors of the Company and of the Bank, with the exception of
Parmenas Cox, are compensated under a deferred compensation plan at the rate of
$800 for each board meeting attended. Mr. Cox is paid an equivalent amount, but
is not eligible for participation in the deferred compensation plan. Those
directors of the Bank who serve on the Executive and Loan Committee of the Bank
are compensated at the rate of $300 per committee meeting. If meetings of the
Executive and Loan Committee extend considerably beyond the usual length, the
pay is at the rate of $400 per meeting, for those in attendance. The membership
of the Executive and Loan Committee consists of all but two of the members of
the Bank's board of directors. Additionally, directors who serve on the Audit
Committee of the Bank, which currently meets once each calendar quarter, receive
$225 per meeting. All other directors who serve on other committees of the
Board of Directors of the Bank receive $100.00 per meeting. James T. Cox, the
only director who is also an employee of the Bank receives director fees for
meetings of the Board of Directors and Executive and Loan Committee meetings.
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EXECUTIVE COMPENSATION
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Summary Compensation Table
The following information is provided for (i) James T. Cox, the Company's
President and Chief Executive Officer and (ii) for Mark A. Hayes and Edwin D.
Moore, the only other executive officers who received salary and bonus
compensation in excess of $100,000 in 2000.
SUMMARY COMPENSATION TABLE
Long Term
Compensation
Annual Securities
Name and Fiscal Compensation Underlying All Other
Principal Position Year Salary Bonus Options (#) Compensation (1)
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James T. Cox 2000 $143,869 $5,203 $23,281
President & CEO of 1999 $134,112 $5,052 $23,744
the Company 1988 $92,328 $3,142 5,000 $15,738
Mark A. Hayes 2000 $134,786 $4,907 $20,711
Executive Vice- 1999 $129,192 $4,763 $20,098
President of the Bank 1998 $94,830 $3,362 10,000 $14,959
Edwin D. Moore 2000 $99,938 $4,055 10,000 $15,605
Senior Vice-President 1999 $92,900 $3,434 $1,412
of the Bank 1998 $20,285 $621 $74
___________________
7
(1) Represents for the fiscal years 2000, 1999, and 1998 respectively (i)
Company contributions to a defined contribution plan in the amount of $21,102,
$20,288 and $13,983 for Mr. Cox, $19,597, $19,165 and $14,184 for Mr. Hayes, and
$14,579, $0 and $0 for Mr. Moore; (ii) premiums paid by the Company with respect
to life insurance policies on the life of Messrs. Cox, Hayes and Moore payable
to beneficiaries designated by Messrs. Cox, Hayes and Moore, of $$2,179, $3,456
and $1,755 for Mr. Cox, $732, $669 and $422 for Mr. Hayes, and $909, $1,412 and
$74 for Mr. Moore; and (iii) interest paid by the Bank (for which Messrs. Cox,
Hayes and Moore served as executive officers) on loans from which the proceeds
were used to purchase Company Common Stock, was arranged by the Bank, to Mr.
Hayes in the amount of $382, $264 and $353 and to Mr. Moore in the amount of
$117, $0 and $0.
Option Grants in 2000
The following table sets forth information about options granted to Mr.
Moore, the only named executive officer to have options granted to him in 2000.
Option Grants in 2000
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Potential Realizable Value at
Assumed Annual Rates of Stock
Individual Grants Price Appreciation for Option Term
- ---------------------------------------------------------------------------- -----------------------------------
Number of % of Total
Securities Options
Underlying Granted to
Options Employees in Exercise Price Expiration
Name Granted (#) Fiscal Year ($/Share) Date 5% ($) 10%($)
- --------------- ---------- ----------- ------------ -------------- -------- --------
Edwin D. Moore 10,000 100% 34.00 April 11, 2010 $213,824 $541,872
Aggregate Option Exercises During 2000 and Fiscal Year-End Option Values
The following table sets forth information about the number and year-end
values of exercisable and unexercisable options held by the Company's CEO and
its other named executive officers for the year ended December 31, 2000.
Number of Securities Underlying Value of Unexercised
Unexercised Options In-the-Money Options
At December 31, 2000 (#) At December 31, 2000(1)
------------------------ -----------------------
Shares Acquired on
Name Exercise (#) (2) Exercisable Unexercisable Exercisable ($) Unexercisable ($)
- -------------- ------------------ ----------- ------------- --------------- -----------------
James T. Cox (3) None 3,000 2,000 51,000 34,000
Mark A. Hayes (4) None 9,000 6,000 185,000 102,000
Edwin D. Moore (5) None 1,000 9,000 16,000 144,000
___________________
(1) The fair market value of the Common Stock on December 31, 2000 was $50.00
(which is based on information the Company has learned about trades made
near this date and which may not be indicative of what a shareholder would
receive upon the sale of his or her shares). Value is calculated on the
basis of the difference between the option exercise price and $50.00
multiplied by the number of shares of Common Stock underlying the option.
(2) The named executive officers did not exercise any stock options during
2000.
(3) Mr. Cox's options were granted to him as an executive officer pursuant to
the Company's 1997 Stock Option Plan.
(4) Mr. Hayes has been granted options under the Company's 1987 Stock Option
Plan as well as the 1997 Stock Option Plan.
(5) Mr. Moore's options were granted to him as an executive officer pursuant to
the Company's 1997 Stock Option Plan.
8
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BOARD COMPENSATION COMMITTEE REPORT
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Because the President and Chief Executive Officer of the Bank is an
employee of the Bank, matters of executive compensation, including bonuses, are
determined by the Nominations and Compensation Committee of the board of
directors of the Company, subject to the approval of the board of directors of
the Company.
In setting the 2000 compensation of James T. Cox, President and Chief
Executive Officer of both the Bank and the Company, the Nominations and
Compensation Committee of the Company (the "Committee") reviewed a Tennessee
Banking Association survey of compensation levels for Chief Executive Officers
and Presidents of Middle Tennessee banks or bank holding companies with assets
of $100-500 million and also reviewed compensation surveys conducted by other
providers of peer group data. Decisions regarding compensation were made in
view of these sources of information with the intent to compensate the President
with an amount comparable to the presidents of other financial institutions of
similar size that are located in similar markets. In determining compensation
levels, the Committee further reviewed: (1) the Bank and the Company's overall
financial performance in 1999, considering in particular, asset quality and
growth, net income, earnings per share and return on equity compared to the
previous year, and (2) the President's direct business contribution to the Bank.
The 2000 Compensation levels for the remaining executive officers, Mark
Hayes, Edwin Moore and Harold Bass, were based on similar criteria and
considerations as well as the recommendations of the President to the Committee
and the board of directors.
Executive Officers were eligible for, and received, a cash bonus as well
under the Company's Bonus Program as determined by the board of directors based
upon the Company's overall financial performance. The decision of the Committee
and the board of directors to award bonuses was based upon the Committee's and
the board of directors' belief that the Company's financial performance was
sound and consistent with the Company's past performance. No specific
quantitative performance measure (of the Company, the Bank or any individual)
was used to determine the amount of bonus awarded. Instead, bonuses for
executive officers, including the Chief Executive Officer, were given in a
manner similar to the bonuses granted to all full-time employees of the Bank or
the Company, with the amount awarded being most closely tied to that employee's
weekly salary.
Johnny Bevill
James H. Butler
W. Harwell Murrey
The foregoing report of the Compensation 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 REPORT FOR 2000
- --------------------------------------------------------------------------------
The Audit Committee reviews the Company's and the Bank'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 our 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
9
Audit Committee has discussed with the independent auditors the matters required
to be discussed by Statement on Auditing Standards No. 61 (Communications with
Audit Committees). In addition, the Audit Committee has received from the
independent auditors the written disclosures required by Independence Standards
Board 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 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 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, 2000, for filing with the
Securities and Exchange Commission.
David E. Bagley Johnny Bevill James K. Blackburn
Morris Ed Harwell James Rand Hayes Gregory G. Dugger
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.
10
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COMPARISON OF FIVE-YEAR CUMULATIVE TOTAL RETURN
- --------------------------------------------------------------------------------
Set forth below is a graph comparing the annual change in the cumulative
total shareholder 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, for the period of five years beginning December 31, 1995 and ending
December 31, 2000.
The following Performance Graph 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.
1995 1996 1997 1998 1999 2000
----- ----- ----- ----- ----- -----
FIRST PULASKI NATIONAL CORPORATION 100 114 181 151 208 230
INDEPENDENT BANK INDEX 100 128 193 204 185 191
NASDAQ INDEX 100 123 151 213 395 238
The cumulative total return reflected in the graph assumes that the value
of the investment in the Company's Common Stock and each index was $100 on
December 31, 1995 and that all dividends were reinvested.
11
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COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
- --------------------------------------------------------------------------------
During fiscal 2000, the Nominations and Compensation Committee of the
Company was comprised of Messrs. Bevill, Cardin and Murrey from January 1, 2000
through April 27, 2000 and of Messrs. Bevill, Butler and Murrey for the balance
of the year. None of these persons at any time during fiscal 2000 was an
employee of the Company or the Bank. In addition, none of these persons has at
any time been an officer of the Company or the Bank. In addition, there are no
relationships among the Company's executive officers, members of the Nominations
and Compensation Committee of the Company or entities whose executives serve on
the board of directors or the Nominations and Compensation Committee of the
Company that require disclosure under applicable SEC regulations concerning
relationships between management and the Company or the Bank or concerning
indebtedness of management to the Company or the Bank. 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 on the Nominations and
Compensation 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 Nominations and Compensation 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
Company or the Bank.
- --------------------------------------------------------------------------------
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
- --------------------------------------------------------------------------------
Some of the Company's officers and directors at present, as in the past,
are customers of the Bank, and some of the Company's officers and directors are
directors and officers of corporations or members of partnerships that are
customers of the Bank. As such customers, they had transactions in the ordinary
course of business in 2000 with the Bank, including borrowings, all of which
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 persons. In the opinion of the
board of directors, these loans did not involve more than a normal risk of
collectability or present any other unfavorable features.
- --------------------------------------------------------------------------------
PROPOSAL NO. 2
RATIFICATION OF SELECTION OF AUDITORS
- --------------------------------------------------------------------------------
The Company has appointed, subject to the ratification of the shareholders,
the firm of Putman and Hancock, Certified Public Accountants, of Fayetteville,
Tennessee, as the independent audit firm of the Company for the year ending
December 31, 2001. James M. Putman and his associates, have been the Company's
auditors since 1981 and the board of directors considers the firm of Putman and
Hancock to be well qualified. A representative of Putman and Hancock is
expected to attend the shareholder's meeting and will have the opportunity to
make a statement and/or respond to appropriate questions from shareholders.
Putman and Hancock in 2000 provided the following audit services:
examination of financial statements of the Company, its subsidiaries and related
entities, including those in the Annual Report to Shareholders and in reports
filed with the Securities and Exchange Commission and others and limited reviews
of the Company's interim financial statements.
Proxies solicited by management will be voted in favor of the ratification
of the selection of Putman and Hancock, Certified Public Accountants as the
Company's independent audit firm unless shareholders specify a contrary choice
in their proxies.
12
Fees Billed to the Company by Putman and Hancock During 2000
Audit Fees. The aggregate audit fees billed or to be billed to the Company
by Putman and Hancock for professional services rendered for the audit of the
Company's annual financial statements and for the reviews of the financial
statements included in the Company's quarterly reports on Form 10-Q totaled
$38,430.00.
Financial Information Systems Design and Implementation Fees. Putman and
Hancock did not bill any fees to the Company for professional services regarding
financial information systems design and implementation.
All Other Fees. The aggregate fees billed or to be billed to the Company
by Putman and Hancock for all services rendered to the Company, including tax
related services, but excluding audit fees and financial information systems
design and implementation fees, totaled $12,472.00
THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE FOR THE RATIFICATION OF THE
APPOINTMENT OF PUTMAN AND HANCOCK, CPA'S, AS THE COMPANY'S INDEPENDENT AUDITORS.
- --------------------------------------------------------------------------------
SHAREHOLDERS' PROPOSALS
- --------------------------------------------------------------------------------
In order for any proposals by shareholders to be included in the Company's
2002 proxy statement and to be considered at the 2002 annual meeting, all such
proposals intended for presentation at the 2002 annual meeting must be mailed to
Harold Bass, Secretary/Treasurer, First Pulaski National Corporation, 206 South
First Street, Pulaski, Tennessee 38478 and must be received no later than
December 5, 2001.
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 Securities and Exchange Commission.
For any other shareholder proposals to be timely (but not considered for
inclusion in the Company's 2002 proxy statement) a shareholder must forward such
proposal to Mr. Bass at the address set forth above prior to February 18, 2002.
- --------------------------------------------------------------------------------
ANNUAL REPORT AND FORM 10-K
- --------------------------------------------------------------------------------
The annual report of the Company to its shareholders for the calendar year
2000 is being delivered with this proxy statement.
Copies of the Company's Annual Report to the Securities and Exchange
Commission on Form 10-K will be mailed to shareholders without charge, upon
written request made to: Harold Bass, Secretary/Treasurer, First Pulaski
National Corporation, 206 South First Street, P.O. Box 289, Pulaski, Tennessee,
38478, (931) 363-2585.
By order of the Board of Directors
Harold Bass
Corporate Secretary
13
APPENDIX A
AUDIT CHARTER
FOR
AUDIT COMMITTEE OF THE BOARD OF DIRECTORS
FIRST NATIONAL BANK OF PULASKI
________________________________________________________________________________
A. Title
The title of this Committee shall be the Audit Committee of the Board of
Directors of First National Bank of Pulaski (the Bank).
B. Composition
The Board of Directors of the Bank shall elect annually an Audit Committee
comprised of not fewer than four directors, and the Audit Committee's
composition will meet the applicable definition of the New York Stock
Exchange (the "NYSE") with respect to independence of its members. One of
the members shall be appointed Chairman of the Audit Committee.
As required by the NYSE definitions, all of the members will be directors
who have no relationship to the Bank that may interfere with the exercise
of their independent judgment in carrying out the responsibilities of a
director (unless as to one non-independent member the Board under
exceptional and limited circumstances determines that membership is
required by the best interests of the Bank and its shareholders).
C. Duties and Responsibilities
The Audit Committee is a standing committee of the Board of Directors. The
Committee provides a liaison between the Board of Directors, management,
regulatory examiners, external auditors, the internal auditors, loan review
officer, and compliance officer. The purposes of the Committee are to
provide assistance to the Board of Directors in fulfilling its statutory
and fiduciary responsibilities for examination of the Bank and to determine
that the Bank has adequate administrative, operating, and internal
accounting controls and is operating in accordance with its prescribed
procedures and codes of conduct. The Audit Committee's monitoring
responsibility recognizes that the Bank's management is responsible for
preparing the Bank's financial statements in accordance with generally
accepted accounting principles and that the outside auditors are
responsible for auditing those financial statements. Additionally, the
Audit Committee recognizes that the Bank's financial management, as well as
its outside auditors, have more time, knowledge and more detailed
information on the Bank and its financial reports than do the Audit
Committee members; consequently, in carrying out its responsibilities, the
Audit Committee is not providing any expert or special assurance as to the
Bank's financial statements and is not conducting an audit or investigation
of the financial statements or determining that the Bank's financial
statements are true and complete or are in accordance with generally
accepted accounting principles. The primary duties and responsibilities of
the Committee shall be to:
1. Review reports prepared by the Internal Auditing Department
related to overall auditing activities, significant findings and
recommendations and to monitor management's responses thereto.
1
2. Review and approve the annual audit plan of the Internal Auditing
Department for the conduct of audits and other reviews of the Bank
and monitor adherence to the plan.
3. Review reports prepared by the Loan Review Officers related to
loans reviewed and exceptions noted during the reviews.
4. Review reports of compliance reviews and findings by the
Compliance Officer.
5. Review of the internal quarterly evaluation of the Allowance for
Loan and Lease Losses.
6. Supervise the engagement of the external auditor and review any
comments included in the external auditor's "Management Letter"
related to internal controls of the Bank.
7. Review all regulatory examination reports of the Bank and monitor
management's response to said reports.
8. Review details of all known or suspected defalcations involving
any Director, officer, or employee of the Bank. Review details of
all robberies, mysterious disappearances or defalcations exceeding
$1,000.
9. Assure the adequacy of the audit and loan review staffing,
independence, and training.
10. Report to the Board of Directors summarizing the work performed in
fulfilling the Audit Committee's primary responsibilities.
Written minutes shall be taken of all Committee meetings by a
secretary appointed by the Committee for such purposes.
11. Review with management and the outside auditors the annual audited
financial statements to be included in the Bank's Annual Report on
Form 10-K (or the Annual Report to Shareholders if distributed
prior to the filing of Form 10-K) and review and consider with the
outside auditors the matters required to be discussed by
Statements of Auditing Standards ("SAS") No. 61 and No. 90.
12. Review with the outside auditors the Bank's interim financial
results to be included in the Bank's quarterly reports to be filed
with Securities and Exchange Commission on Form 10-Q and the
matters required to be discussed by SAS No. 61 and No. 90; this
review will occur prior to the Bank's filing of the Form 10-Q.
13. Request from the outside auditors annually a formal written
statement delineating all relationships between the outside
auditors and the Bank that may impact the objectivity and
independence of the outside auditors, consistent with Independence
Standards Board Standard Number 1;
14. Discuss with the outside auditors in an active dialogue any such
disclosed relationships and their impact on the outside auditors'
independence; and
15. If determined appropriate by the Committee, recommend that the
Board take appropriate action in response to the outside auditor's
report to ensure the outside auditor's independence.
The Committee shall review annually and submit for inclusion in the Bank's
annual meeting proxy statement an Audit Committee Report setting forth the
information required by the proxy rules of the Securities and Exchange
Commission, including the fact that the Committee has discussed with the
outside auditors matters relating to their independence and matters
relating to SAS No. 61 and No. 90 and the fact that the Committee has
recommended to the Board that the audited financial statements be included
in the Bank's Form 10-K.
D. Meetings
The Audit Committee shall meet during the first month of each quarter or
more often if necessary to discharge the responsibilities established by
this Charter. The Committee may request the presence of management at any
committee meeting it deems prudent.
E. Legal Counsel
The Bank's legal counsel shall be available to the Audit Committee for
advice or counsel at any time that the committee deems necessary. The
Committee shall also have the authority to retain outside legal counsel
without prior permission of the Board of Directors or management. Such
counsel shall be independent of First National Bank.
Revised January 30, 2001 2 Audit Charter
FIRST PULASKI NATIONAL CORPORATION
PULASKI, TENNESSEE
PROXY FOR ANNUAL MEETING OF SHAREHOLDERS ON APRIL 26, 2001
SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF THE CORPORATION
PLEASE SIGN AND RETURN
----------------------
Know all men by these presents that I, the undersigned shareholder of the
First Pulaski National Corporation, do hereby nominate, constitute and appoint
Parmenas Cox, Johnny Bevill and Harold Bass, or any one of them (with full power
to act alone), my true and lawful attorney(s) with full power of substitution
for me and in my name, place and stead to vote all the Common Stock of said
Corporation standing in my name on its books on March 19, 2001, at the annual
meeting of its shareholders to be held at the First National Bank of Pulaski
building, 206 South First Street, Pulaski, Tennessee 38478, on Thursday, April
26, 2001, at 1:00 P.M., CDT or any adjournment or adjournments thereof, with all
power the undersigned would possess if personally present as follows:
(1) Election as Directors of the thirteen (13) persons listed below:
FOR [ ] AGAINST [ ] ABSTAIN [ ]
all nominees listed except all nominees
as marked to the contrary listed below
below. No mark through
will be indicated as a vote
for the named individual.
David E. Bagley Johnny Bevill James K. Blackburn, IV
Wade Boggs James H. Butler James T. Cox
Parmenas Cox Gregory G. Dugger Charles D. Haney
James Rand Hayes William A. McNairy W. Harwell Murrey
Bill Yancey
IF YOU DESIRE TO VOTE AGAINST ANY ONE OF THE INDIVIDUALS LISTED ABOVE, SIMPLY
STRIKE THROUGH HIS OR HER NAME.
(2) Ratification of the selection of Putman and Hancock, Certified Public
Accountants, for professional services for the current year:
[ ] FOR [ ] AGAINST [ ] ABSTAIN
(3) Whatever other business may be brought before the meeting or any
adjournment or adjournments thereof. Management at present knows of
no other business to be presented at the meeting.
THIS PROXY CONFERS AUTHORITY TO VOTE "FOR" EACH PROPOSITION LISTED ABOVE
UNLESS "AGAINST" OR "ABSTAIN" IS INDICATED. IF ANY OTHER BUSINESS IS PRESENTED
AT SAID MEETING, THIS PROXY SHALL BE VOTED IN ACCORDANCE WITH THE RECOMMENDATION
OF MANAGEMENT UNLESS OTHERWISE INDICATED BELOW.
TO WITHHOLD DISCRETIONARY AUTHORITY TO VOTE ON OTHER MATTERS AT ANNUAL
MEETING, CHECK BLOCK. [ ]
The management recommends a vote of "FOR" each of the listed propositions.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF THE
CORPORATION AND MAY BE REVOKED PRIOR TO ITS EXERCISE.
IN WITNESS WHEREOF, I have hereunto set my hand this the _____ day of
________________________, 2001.
Number of shares:________
______________________________________________
______________________________________________
Signature of Shareholder(s), including title
when signing as attorney, executor,
administrator, trustee, guardian or corporate
officer. All co-owners must sign.