FIRST PULASKI NATIONAL CORPORATION
PULASKI, TENNESSEE
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO THE HOLDERS OF COMMON STOCK:
Notice is hereby given that pursuant to call of its Directors, the
regular annual meeting of the shareholders of First Pulaski National
Corporation of Pulaski, Tennessee, will be held in the Cox and Curry
Center of the First National Bank at 206 South First Street, Pulaski,
Tennessee on Thursday, April 17, 1997, at 1:00 P.M. CDT for the purpose
of considering and voting on the following matters:
(1) The election as Directors of the twenty-five (25)
persons named in the accompanying Proxy Statement dated March
27, 1997.
(2) Approval of the First Pulaski National Corporation 1997
Stock Option Plan.
(3) Ratification of the selection of the Certified Public
Accounting Firm of Putman and Hancock, Certified Public
Accountants, for professional services for the current year,
and
(4) Any other business that properly may be brought before
the meeting or any adjournment or adjournments thereof.
Only those shareholders of record at the close of business on
March 15, 1997, shall be entitled to Notice of Meeting and to vote at
the annual meeting or any adjournment thereof.
By order of the Board of Directors
/s/ Parmenas Cox /s/ William R. Horne
Senior Chairman of President
the Board
/s/ Robert M. Curry
Chairman of the Board
and Chief Executive Officer
FIRST PULASKI NATIONAL CORPORATION
PROXY STATEMENT
This proxy statement is furnished in connection with the
solicitation of proxies by the Board of Directors of the First Pulaski
National Corporation (the "Corporation") to be voted at the annual
meeting of the shareholders of the Corporation or any adjournment or
adjournments thereof, to be held on April 17, 1997, at the time and
place and for the purposes set forth in the accompanying notice. A
proxy may be revoked by the shareholder at any time prior to its use by
filing with the Secretary of the Corporation a written revocation or
duly executed proxy bearing a later date. This proxy statement and the
accompanying form of proxy have been mailed on or about March 27, 1997,
to holders of the Corporation's common stock as of March 15, 1997.
The Corporation's principal executive office is located in the
First National Bank Building at 206 South First Street, Pulaski,
Tennessee, 38478.
Proxies may be solicited by mail. All costs will be borne by the
Corporation. The Corporation does not anticipate paying any
compensation to any party other than its regular employees (and then
only regular salaries plus expenses) for the solicitation of proxies.
The shares represented by such proxies will be voted in accordance
with the choices specified therein. If no choice has been specified,
the shares will be voted for the election of the nominees named herein
as directors; to adopt the First Pulaski National Corporation 1997
Stock Option Plan; and for the ratification of the selection of Putman
and Hancock, Certified Public Accountants of Fayetteville, Tennessee,
as the Corporation's independent auditors for the current year. The
Board of Directors of the Corporation does not know of any other
matters which will be presented for action at the meeting, but the
persons named in the proxy (who are directors of the Corporation)
intend to vote or act with respect to any other proposal which may be
properly presented for action, according to their best judgment unless
the proxy provides otherwise for the withholding of discretionary
authority.
As of March 15, 1997, the Corporation had outstanding 1,532,290
shares of its $1 par value common stock, held by 1,196 shareholders of
record. Holders of the common stock are entitled to one vote for each
share of common stock held on all matters to come before the meeting.
Only shareholders of record at the close of business on March 15, 1997
are entitled to vote at the meeting or any adjournment thereof.
The affirmative vote of a plurality of the votes cast is required
for the election of the nominees as directors. The affirmative vote of
a majority of the shares represented at the meeting is required for (i)
the adoption of the First Pulaski National Corporation 1997 Stock
Option Plan; and (ii) ratification of the selection of the independent
auditors.
"Abstentions" and "Non Votes" are counted as "present" in
determining whether a quorum is present. A 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.
SECURITY OWNERSHIP OF CERTAIN
BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth information concerning (i) persons
who are the beneficial owners of more than 5% of the Corporation's
common stock (its only class of voting securities), (ii) the named
executive officers, and (iii) the beneficial ownership of the
Corporation's common stock by all directors and Executive Officers of
the Corporation as a group (26 persons). Information concerning
beneficial ownership of the Corporation's directors and nominees and
executive officers of the Corporation is set forth in the table under
the section of this Proxy Statement entitled "Election of Directors"
(the "Directors' Table"). The information shown below and in the
Directors' Table is as of March 15, 1997, and is based on the
Corporation's stock records or the ownership data filed with the Secu-
rities and Exchange Commission.
- -------------------------------------------------------------------------------------------
TITLE OF NAME OF AMOUNT AND NATURE PERCENT
CLASS BENEFICIAL OF BENEFICIAL OF CLASS
OWNER OWNERSHIP
- -------------------------------------------------------------------------------------------
Common stock First National Bank 93,558 (1) 6.11
of Pulaski, Tennessee
Profit Sharing Plan
Common stock Robert M. Curry, 40,410 2.64
Chairman of the Board
and CEO
Common stock William R. Horne 30,830 2.01
President
Common stock All Directors and
Executive Officers
(26 persons) 421,115 27.48
(1) The First National Bank of Pulaski, Tennessee Profit Sharing Plan
owns 93,558 shares of common stock. First Farmers and Merchants
National Bank of Columbia, Tennessee acts as the Trustee for the Profit
Sharing Plan and in such capacity has the authority to vote these
shares of common stock.
PROPOSAL NO. 1
ELECTION OF DIRECTORS
The By-Laws of the Corporation currently state that the Board of
Directors shall consist of not less than five (5) nor more than thirty-
five (35) members.
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 Board of Directors as listed
below.
The following table sets forth certain information concerning each
person nominated for election as a director. Management of the
Corporation believes that each of the individuals named below intends
to vote their shares of common stock in favor of election of the
nominees for director; adoption of the First Pulaski National
Corporation 1997 Stock Option Plan; and ratification of the selection
of Putman and Hancock, Certified Public Accountants as the
Corporation's auditors. Except as otherwise indicated, management of
the Corporation believes that each such person holds sole voting and
investment power with respect to the number of shares of common stock
indicated.
NOMINEES AGE SERVED SHARES OF % OF PRINCIPAL
AS COMMON STOCK CLASS OCCUPATION
DIRECTOR BENEFICIALLY OWNED OR EMPLOYMENT
SINCE OWNED AS FOR LAST FIVE
OF 3/15/97 (5) YEARS
- -------------------------------------------------------------------------------
David E. 43 4/22/93 3,950 (1) 0.26 President,
Bagley Bagley & Bagley
Ins., Inc.
Johnny 61 10/19/81 20,130 (2)* 1.31 Owner, Davis
Bevill & Eslick Market
James K. 54 4/07/83 8,480 (3)* 0.55 Owner, Lairdland
Blackburn,IV Farm and Real
Estate Broker
Wade Boggs 33 4/20/95 910 (4) 0.06 Owner, Wash Master
Car Wash and Boggs'
Properties
James H. 50 4/05/84 4,661 (5) 0.30 Real Estate
Butler Agent, Butler
Realty
Thomas L. 65 10/19/81 23,065 (6)* 1.51 President,
Cardin Cardin
Distributing Co.
Joyce F. 65 4/01/82 6,000 (7) 0.39 Retired
Chaffin Vice-President,
First National Bank
Parmenas 85 10/19/81 16,295 * 1.06 Senior Chairman
Cox of the Board,
First National Bank
Robert M. 47 10/19/81 40,410 (8)* 2.64 Chairman of the
Curry Board & CEO,
First National Bank
Gregory G. 47 4/22/93 4,580 (9) 0.30 Dentist
Dugger
Joe 73 10/19/81 9,640 (10) 0.63 Farmer, Dunavant &
Dunavant Dunavant
Charles D. 42 4/22/93 14,850 (11) 0.97 Physician
Haney
W. Gary 46 4/02/87 23,275 (12)* 1.52 Vice-President,
Harrison First National Bank
R.M. 93 10/19/81 15,180 (13) 0.99 Vice-President,
Harwell Harwell Enterprises,
Inc.
Morris Ed 66 4/07/83 12,840 (14)* 0.84 President,
Harwell Harwell Enterprises,
Inc.
James Rand 60 4/07/83 10,850 (15) 0.71 Owner,
Hayes Hayes Properties
William R. 49 10/19/81 30,830 (16)* 2.01 President,
Horne First National Bank
Glen Lamar 50 10/19/81 28,420 (17)* 1.85 Senior Vice-President
& Cashier,
First National Bank
D. Clayton 72 10/19/81 51,500 (18) 3.36 Retired, Attorney
Lee at Law
Kenneth R. 67 10/19/81 11,840 (19) 0.77 Retired, Superintendent
Lowry of Genesco
Pulaski, TN
Beatrice 10/19/81 16,705 (20) 1.09 Real Estate
McElroy Investments
William A. 64 4/04/91 500 (21) 0.03 Owner, McNairy's
McNairy Flowerama & Gifts
Farmer
W. Harwell 62 10/19/81 37,684 (22)* 2.46 Physician
Murrey
Stephen F. 51 10/19/81 23,680 (23)* 1.55 Attorney, Partner
Speer in Law Firm of Henry,
Henry, Stack, Garner
& Speer, P.C. and County
Attorney for Giles County
Bill Yancey 52 4/04/91 3,750 (24)* 0.24 Farmer
(1) Includes 500 shares held by Ameritrade, Inc. for benefit of David Bagley and
wife, 200 shares held by Ameritrade, Inc. for benefit of David Bagley as
trustee for two children, 500 shares held by Prudential Bank and Trust as
trustee for David Bagley, and 2,750 shares held by Prudential Securities, Inc.
for benefit of David Bagley.
(2) Includes 10,065 shares held by wife.
(3) Includes 1,730 shares held by wife.
(4) Includes 490 shares held with wife and 420 shares held with father.
(5) Includes 4,211 shares held jointly with wife and 450 shares held jointly with
three children.
(6) Includes 10,865 shares held by Ameritrade, Inc. for benefit of Thomas L. Cardin
IRA, 2,500 shares held by James Clarence Cardin Testamentary Trust, and 2,345
shares held by wife.
(7) Includes 2,625 shares held by husband.
(8) Includes 7,780 shares held jointly with wife, 6,180 shares held jointly with
two brothers as equal partners, and 630 shares held jointly with wife as
Trustee for four children.
(9) Includes 100 shares held jointly with wife as Trustee for child and 1,665
shares held by Ameritrade, Inc. for benefit of Gregory G. Dugger IRA.
(10) Includes 1,070 shares held jointly with wife.
(11) Includes 4,240 shares held jointly with wife, 300 shares held jointly with wife
as Trustee for three children, and 10,310 shares held in trust for employees of
Physicians and Surgeons, Inc.
(12) Includes 90 shares held by wife as Trustee for child, and 22,935 shares held
jointly with wife.
(13) Includes 650 shares held by wife and does not include shares held by his son,
Morris Ed Harwell.
(14) Includes 100 shares held by wife and does not include shares held by his
father, R. M. Harwell.
(15) Includes 10,100 shares held jointly with wife.
(16) Includes 5,260 shares held jointly with wife.
(17) Includes 23,190 shares held jointly with wife and 940 shares held as custodian
for two children.
(18) Includes 28,090 shares held by wife.
(19) Includes 3,700 shares held jointly with wife.
(20) Includes 540 shares held by husband, 1,051 shares held jointly with husband,
11,414 shares held jointly with two children and 2,640 shares held as Trustee
for two children.
(21) Held jointly with wife.
(22) Includes 10,310 shares held in trust for employees of Physicians & Surgeons,
Inc., and 17,475 shares held by wife.
(23) Includes 360 shares held by Henry, Henry, Stack, Garner & Speer, P.C.
Retirement Plan.
(24) Held jointly with wife.
* Serves on the Board of Directors of First National Bank of Pulaski, Tennessee.
The By-Laws of the Corporation restrict nomination of persons to
serve as directors as follows:
Any stockholder 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
Corporation. To be timely, a stockholder's notice shall be delivered
to or mailed and received at the principal executive offices of the
Corporation within the time periods set forth in Rule 14a-8(a)(3)
enacted pursuant to the Securities Exchange Act of 1934, as amended.
Such stockholder's notice shall set forth (a) as to each person whom
the stockholder proposes to nominate 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 the Corporation 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 Securities
Exchange Act of 1934, as amended (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
stockholder giving the notice (i) the name and address, as they appear
on the Corporation's books, of such stockholder and (ii) the class and
number of shares of the Corporation which are beneficially owned by
such stockholder. 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.
Management of the Corporation has no reason to believe at this time
that the persons so nominated will be unable or will decline to serve
if elected. As set forth in the By-Laws of the Corporation, the
President is authorized to vote shares held by the Corporation in other
corporations and in said capacity the President of the Corporation will
elect the Board of Directors of First National Bank, the Corporation's
wholly owned subsidiary.
DESCRIPTION OF THE BOARD & COMMITTEES
The Corporation does not have a standing audit, nominating or
compensation committee. Because the Corporation is a one-bank holding
company, decisions regarding audit, nomination of executive officers
and the compensation of executive officers are made by the Audit or
Compensation and Nominations Committees of the Board of Directors of
First National Bank of Pulaski, as appropriate, subject to the approval
of the Board of Directors of the Bank and of the Board of Directors of
the Corporation as a whole. The Board of Directors of the Corporation
holds regular meetings every quarter and special meetings as called.
During the fiscal year ended December 31, 1996 the Board of Directors
held four (4) regular meetings as well as an organizational meeting
held after the annual shareholders meeting. The Board of Directors has
three (3) standing committees, (1) one which administers the First
Pulaski National Corporation 1987 Stock Option Plan, (2) one which
administers First Pulaski National Corporation 1994 Employee Stock
Purchase Plan, and (3) a committee to administer the First Pulaski
National Corporation 1994 Stock Option Plan for outside directors.
Kenneth R. Lowry and Stephen F. Speer each missed two of the five
meetings held by the Board of Directors during 1996. No other
incumbent director attended fewer than 75% of the total number of
meetings of the Board of Directors. All of the Directors who serve on
the Board of Directors of the Corporation's subsidiary, First National
Bank of Pulaski, also serve on the Corporation's Board of Directors.
EXECUTIVE COMPENSATION
The following table summarizes the compensation paid or accrued by
the Corporation during the fiscal years 1996, 1995 and 1994 for (i) the
Chief Executive Officer of the Corporation and (ii) the President of
the Corporation (collectively, the "Named Executive Officers"):
SUMMARY COMPENSATION TABLE
ANNUAL COMPENSATION
NAME AND FISCAL ------------------- ALL OTHER
PRINCIPAL POSITION YEAR SALARY BONUS COMPENSATION(1)
- ---------------------------------------------------------------------------
Robert M. Curry 1996 $105,786 $ 6,904 $ 18,307
Chief Executive 1995 $102,708 $ 0 $ 16,749
Officer of the 1994 $102,708 $ 3,989 $ 17,186
Corporation
William R. Horne 1996 $105,786 $ 6,927 $ 18,278
President of the 1995 $102,708 $ 0 $ 16,755
Corporation 1994 $102,708 $ 3,996 $ 17,338
__________________________
1 Represents (i) Corporation contributions to a defined contribution plan in the
amount of $16,597, $15,110 and $15,682 for Mr. Curry in fiscal 1996, 1995 and 1994,
respectively, and $16,683, $15,181 and $15,753 for Mr. Horne in fiscal 1996, 1995 and
1994, respectively; (ii) premiums paid by the Corporation with respect to life
insurance policies on the life of the Named Executive Officers payable to
beneficiaries designated by the Named Executive Officers of $1,431, $1,410 and $1,406
in fiscal 1996, 1995 and 1994, respectively, for Mr. Curry and $1,595, $1,574 and
$1,570 in fiscal 1996, 1995 and 1994, respectively, for Mr. Horne; and (iii) interest
paid by the Bank (for which the Named Executive Officers serve as Executive Officers)
on loans to the Named Executive Officers arranged by the Bank, the proceeds of which
were used to purchase Common Stock of the Corporation, in the amount of $279, $229
and $98 in fiscal 1996, 1995 and 1994, respectively for Mr. Curry and $0, $0 and $15
in fiscal 1996, 1995 and 1994, respectively for Mr. Horne.
BOARD COMPENSATION COMMITTEE
The Corporation does not have a compensation committee. Because
the President and the Chairman and Chief Executive Officer of the
Corporation are also employees of the subsidiary, First National Bank
of Pulaski, matters of executive compensation, including bonuses, are
determined by the Compensation and Nominations 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 Corporation.
The Compensation and Nominations Committee of the Bank routinely
reviews compensation surveys conducted by Sheshunoff Information
Services and by other providers of peer group data. Decisions
regarding the compensation of the Bank's executive officers are made in
view of these sources of information, with the intention to compensate
the Corporation's executives, including the Chief Executive Officer, in
an amount that is comparable to other financial institutions of similar
size that are located in similar markets. In making compensation
decisions, the Committee will also consider the financial performance
of the Corporation.
The Board of Directors of First Pulaski National Corporation
COMPENSATION COMMITTEE INTERLOCKS
AND INSIDER PARTICIPATION
During fiscal 1996, the Nominations and Compensation Committee of
the Bank was comprised of Messrs. Bevill, Cardin and Murrey. None of
these persons has at any time been an officer or employee of the
Corporation or its subsidiary. In addition, there are no relationships
among the Corporation's executive officers, members of the Nominations
and Compensation Committee of the Bank or entities whose executives
serve on the Board of Directors or the Nominations and Compensation
Committee of the Bank that require disclosure under applicable SEC
regulations.
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 Corporation's common stock
against the cumulative total return of the S & P Composite-500 Stock
Index and The Carson Medlin Company's Independent Bank Index for the
period of five years beginning December 31, 1991 and ending December
31, 1996.
A line graph displaying the contents of the table below will be
included in the proxy statement which is mailed to our stockholders.
The cumulative total return reflected in the graph assumes that
the value of the investment in the Corporation's common stock and each
index was $100 on December 31, 1991 and that all dividends were
reinvested. The actual cumulative total return values are shown below.
VALUE OF $100 INVESTED ON DECEMBER 31, 1991 AT:
1991 1992 1993 1994 1995 1996
------ ------ ------ ------ ------ ------
First Pulaski National Corporation 100 139 186 195 221 252
Independent Bank Index 100 130 163 197 268 313
S & P 500 Index 100 108 118 120 165 203
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
----------------------------------------------
Some of the Corporation's officers and directors are at present,
as in the past, customers of the Bank, and some of the Corporation'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
1996 with the Bank, including borrowings, all of which were on
substantially the same terms, including interest rates and collateral,
as those prevailing at the time for comparable transactions with other
persons and did not involve more than normal risk of collectability or
present any other unfavorable features.
Director Stephen F. Speer and other members of the law firm of
Henry, Henry, Stack, Garner & Speer, P.C. rendered legal services to
the Corporation and its subsidiaries during the year 1996 and received
aggregate compensation of less than $27,000.00.
DIRECTOR COMPENSATION
The directors of the Corporation are compensated at the rate of
$300.00, for each Directors meeting attended. Those directors of the
Corporation who serve on the Board of Directors of the First National
Bank of Pulaski, Tennessee also serve on the Executive and Loan
Committee for the Bank and are compensated at the rate of $300.00 per
directors meeting and Executive and Loan Committee meeting.
Additionally, directors who serve on the Audit Committee of First
National Bank of Pulaski receive $100.00 per meeting. All other
directors who serve on other committees for the Bank receive $50.00 per
meeting. Inside directors (Bank employees) only receive director fees
for regular Board of Director meetings and Executive and Loan Committee
meetings.
PROPOSAL NO. 2
TO APPROVE THE FIRST PULASKI NATIONAL CORPORATION
1997 STOCK OPTION PLAN
The 1997 Stock Option Plan (the "1997 Plan") is being submitted
for approval by the stockholders of First Pulaski National Corporation
(the "Corporation") to replace the 1987 Stock Option Plan (the "1987
Plan"), which was adopted by the Board of Directors of the Corporation
on March 3, 1987, subject to shareholder approval, which was obtained
on April 2, 1987. The 1987 Plan terminated on March 3, 1997. Like the
1987 Plan, the 1997 Plan is designed to attract, retain and reward key
employees of the Corporation and its subsidiaries and affiliates and
will be administered by a committee of the Board of Directors (the
"Committee") which will be authorized to select the employees entitled
to participate in the 1997 Plan, as well as the actual terms of the
options granted. The number of employees that may participate in the
1997 Plan is not determinable at this time. A summary of the 1997 Plan
follows, but this summary is qualified in its entirety by reference to
the full text of the 1997 Plan, which is attached as Exhibit 1 to this
Proxy Statement. Terms used but not defined herein have the meanings
given to them in the 1997 Plan.
Options: The 1997 Plan authorizes the granting of options to
purchase up to 100,000 shares of common stock of the Corporation, par
value $1.00 per share (the "Common Stock"). The number of shares of
Common Stock authorized under the 1997 Plan will be subject to
adjustment upon the occurrence of certain events (including merger,
reorganization, stock dividend and the like) to prevent dilution or
enlargement of option rights. The types of options that may be granted
under the 1997 Plan include Incentive Stock Options (as defined in
Section 422 of the Internal Revenue Code of 1986, as amended) and Non-
Qualified Stock Options (those options that are not entitled to the
advantages under federal income tax laws that are afforded to Incentive
Stock Options).
Option Price: The option price will be determined by the
Committee at the time of grant, but will be at least 100% (or, for
employees owning, at the time the option is granted, stock possessing
over 10% of the total voting power of all classes of stock of the
Corporation or any subsidiary, at least 110%) of the fair market value
of the Common Stock at grant, in the case of Incentive Stock Options,
and at least 50% of the fair market value of the Common Stock at grant,
in the case of Non-Qualified Stock Options. There is no active trading
market in the Common Stock of the Corporation; however, the Board of
Directors believes that on September 30, 1996, the fair market value
was $30.00 per share. In certain cases, the option price may be paid
in the form of unrestricted shares of Common Stock already owned by the
optionee (valued at the fair market value of the Common Stock on the
date the option is exercised, as determined by the Committee). To the
extent, however, that the option price is paid with shares of Common
Stock, the Committee may award a new stock option to the employee to
replace the Common Stock that was surrendered.
Duration and Exercisability: The term of each option will be
fixed by the Committee, but no Incentive Stock Option will be
exercisable for more than ten years (or, with respect to options
granted to employees owning, at the time the option is granted, stock
possessing over 10% of the total voting power of all classes of stock
of the Corporation or any subsidiary, more than five years) after the
date of grant. Generally, no option will be exercisable before the
first anniversary of the date of grant.
Change in Control Provision: In the event of a Change in Control
or Potential Change in Control of the Corporation, any option awarded
under the 1997 Plan but not previously exercisable and vested will
become fully exercisable and vested, and all outstanding options will
be cashed out. The cash-out price for Non-Qualified Stock Options will
generally be based on the highest price per share paid in any Nasdaq-
reported trade or any bona fide transaction related to the Change in
Control or Potential Change in Control during the 60 days prior to the
Change in Control or Potential Change in Control, in each case as
determined by the Committee. The cash-out price of Incentive Stock
Options will be based on transactions reported for the date on which
the optionee exercises such option.
A "Change in Control" generally will arise (i) when a person or
entity becomes the beneficial owner of securities possessing 35% or
more of the voting power of the Corporation's outstanding securities,
(ii) when, as the result of a cash tender or exchange offer, less than
a majority of the voting power of the Corporation's outstanding
securities is held by persons who held such securities immediately
prior to the cash tender of exchange offer, or (iii) during any period
of two consecutive years, directors who at the beginning of such period
constituted the Board no longer constitute at least a majority thereof,
unless the new directors were approved by at least two-thirds of the
directors of the Company then in office. A "Potential Change in
Control" generally means (i) the approval by shareholders of any
agreement, the consummation of which would result in a Change in
Control or (ii) the acquisition of beneficial ownership of securities
of the Company representing 5% or more of the voting power of the
Corporation's outstanding securities and the adoption of a resolution
by the Committee to the effect that a Potential Change in Control has
occurred.
Federal Income Tax Consequences: Under the 1997 Plan, the
Corporation may grant both Incentive Stock Options intended to qualify
as such under Section 422 of the Code and Non-Qualified Stock Options.
No income is recognized by the optionee at the time of grant of an
option under the 1997 Plan. In addition, there are no federal income
tax consequences to the Company upon the grant of an option to an
optionee.
Incentive Stock Options. An optionee who exercises an Incentive
Stock Option is not taxed at the time he exercises such option.
Instead, when an optionee sells Common Stock purchased pursuant to an
Incentive Stock Option, he is taxed on the difference between the
exercise price and the amount for which he sells the Common Stock. The
character of the income recognized by the optionee (e.g., capital gain
or ordinary income) depends upon the amount of time the Incentive Stock
Option is held prior to the sale. If the Common Stock is not sold
prior to the later of two years from the date the option is granted or
one year from the date it is exercised, the entire gain is taxed as a
capital gain (the Corporation may not take a corresponding compensation
expense deduction). If the Common Stock is sold prior to such time,
the difference between the exercise price and the lesser of (a) the
fair market value of the Common Stock on the date of exercise or (b)
the amount for which it is sold, is taxed as ordinary income (and the
Corporation is entitled to a corresponding deduction). If the Common
Stock is sold for an amount in excess of its fair market value on the
date of exercise, the excess is taxed as capital gain.
Non-Qualified Stock Options. Upon the exercise of a Non-Qualified
Stock Option, the amount by which the fair market value of the Common
Stock on the exercise date exceeds the exercise price will generally be
taxable to the optionee as ordinary income, and that amount will be
included in the optionee's Form W-2 and, accordingly, will be reported
to the Internal Revenue Service and any appropriate state tax
authorities as additional income earned by the optionee. (The
Corporation will generally be entitled to a compensation expense
deduction upon the exercise of such an option in an amount equal to the
compensation received by the optionee as ordinary income; the deduction
is allowed to the Corporation in the same taxable year in which the
income is included by the optionee.)
The sale of shares acquired upon the exercise of a Non-Qualified
Stock Option may result in capital gain or loss, as the case may be, in
an amount equal to the difference between the amount realized upon such
sale and the optionee's tax basis in the shares. If payment of the
option exercise price is made by cash or check, the tax basis of the
shares of Common Stock will be equal to the fair market value on the
date of exercise, but not less than the option exercise price. The
holding period for determining long or short term capital gain for the
Common Stock will begin on the day after the shares are acquired
pursuant to the exercise of the option.
Cash Bonus. In the case of a Non-Qualified Stock Option or
certain Incentive Stock Options, the Committee may award the optionee
the right to receive a cash bonus calculated to pay federal and state
income tax incurred by the optionee upon exercise thereof.
PROPOSAL NO. 3
RATIFICATION OF SELECTION OF AUDITORS
The Corporation 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 Corporation for the year ending December 31, 1997. James M.
Putman and his associates, have been the Corporation'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 to have the
opportunity to make a statement and/or respond to appropriate questions
from shareholders.
Putman and Hancock in 1996 provided the following audit services:
examination of financial statements of the Corporation, 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 Corporation's interim
financial statements.
The management of the Corporation recommends a vote FOR
ratification of the selection of Putman and Hancock, Certified Public
Accountants, as the Corporation's independent audit firm. Proxies
solicited by management will be so voted unless shareholders specify a
contrary choice in their proxies.
SHAREHOLDERS' PROPOSALS
In order for any proposals by shareholders to be included in the
1997 proxy materials and to be considered at the 1998 annual meeting,
all such proposals intended for presentation at the 1998 annual meeting
must be mailed to Glen Lamar, Corporate Secretary, First Pulaski
National Corporation, 206 South First Street, Pulaski, Tennessee
38478, and must be received no later than November 29, 1997.
ANNUAL REPORT AND FORM 10-K
The annual report of the Corporation to its shareholders for the
calendar year 1996 is being delivered with this proxy statement.
Copies of the Corporation's Annual Report to the Securities and
Exchange Commission (Form 10-K) will be mailed to Shareholders without
charge, upon written request made to: Glen Lamar, First Pulaski
National Corporation, 206 South First Street, Pulaski, Tennessee,
38478.
By the order of the Board of Directors
This the 27th day of March, 1997.
[S] Parmenas Cox [S] Robert M. Curry
- ---------------------------- ---------------------------
Parmenas Cox Robert M. Curry
Senior Chairman of the Board Chairman of the Board & CEO
[S] William R. Horne
- ----------------------------
William R. Horne
President
FIRST PULASKI NATIONAL CORPORATION
PULASKI, TENNESSEE
PROXY FOR ANNUAL MEETING OF SHAREHOLDERS ON APRIL 17, 1997
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 Stephen F. Speer and D. Clayton
Lee, 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 15, 1997,
at the annual meeting of its shareholders to be held at the First
National Bank Building, 206 South First Street, Pulaski,
Tennessee 38478, on Thursday, April 17, 1997, 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 twenty-five (25) persons
listed below:
FOR [ ] AGAINST [ ]
all nominees listed except as marked all nominees listed below
to the contrary below. No mark
through will be indicated as a
vote for the named individual.
David E. Bagley Gregory G. Dugger D. Clayton Lee
Johnny Bevill Joe Dunavant Kenneth R. Lowry
James K. Blackburn, IV Charles D. Haney Beatrice J. McElroy
Wade Boggs W. Gary Harrison William A. McNairy
James H. Butler R. M. Harwell W. Harwell Murrey
Thomas L. Cardin Morris Ed Harwell Stephen F. Speer
Joyce F. Chaffin James Rand Hayes Bill Yancey
Parmenas Cox William R. Horne
Robert M. Curry Glen Lamar
IF YOU DESIRE TO VOTE AGAINST ANY ONE OR ALL OF THE INDIVIDUALS
LISTED ABOVE, SIMPLY STRIKE THROUGH HIS OR HER NAME.
(2) To approve the First Pulaski National Corporation 1997
Stock Option Plan.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
(3) Ratification of the selection of Putman and Hancock,
Certified Public Accountants, for professional services for the
current year:
[ ] FOR [ ] AGAINST [ ] ABSTAIN
(4) 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 ________________________, 1997.
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.