DEFINITIVE PROXY MATERIAL
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE
SECURITIES EXCHANGE ACT OF 1934
Filed by the Registrant [ ]
Filed by a Party other than the Registrant [ X ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ X ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-11(c) or
Rule 14a-12
GUARANTY BANCSHARES HOLDING CORPORATION
(Name of Registrant as Specified In Its Charter)
CARI INVESTMENT COMPANY
(Name of Person(s) Filing Proxy Statement,
if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[ ] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-
6(i)(1), 14a-6(i)(2) or Item 22(a)(2) of Schedule
14A.
[ ] $500 per each party to the controversy pursuant to
Exchange Act Rule 14a-6(i)(3).
[ ] Fee computed on table below per Exchange Act Rules
14a-6(i)(4) and 0-11.
TITLE OF EACH
CLASS OF PROPOSED
SECURITIES AGGREGATE NUMBER MAXIMUM
TO WHICH OF SECURITIES TO PRICE AGGREGATE AMOUNT
TRANSACTION WHICH TRANSACTION PER VALUE OF OF FILING
APPLIES APPLIES SHARE TRANSACTION FEE
- ----------- ----------------------- ---------- ----------- -----------
[ X ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by
Exchange Act Rule 0-11(a)(2) and identify the filing for
which the offsetting fee was paid previously. Identify the
previous filing by registration statement number, or the Form
or Schedule and the date of its filing.
(1) Amount Previously Paid:
(2) Form, Schedule or Registration Statement No.:
(3) Filing Party:
(4) Date Filed:
June 7, 1996
To Our Fellow Shareholders in
Guaranty Bancshares Holding Corporation
Cari Investment Company is seeking your Proxy to elect a new Board of
Directors of Guaranty Bancshares Holding Corporation (the "Company"), and to
defeat the proposed Recapitalization of the Company. We are writing to explain
why we believe these actions must be taken.
First, Cari Investment Company is a SHAREHOLDER JUST LIKE YOU. We are
spending good money in an attempt to help all shareholders. We have taken these
actions after repeated attempts to work with the current Board of Directors have
failed. Over the past two years, we have become more and more concerned about
the way the Company has performed and the lack of response by the Company to the
concerns we expressed regarding shareholder value. This situation is confirmed
by the proposed Recapitalization of the Company and certain actions taken by the
Company as discussed by Cari in the accompanying proxy statement under the
headings "Reasons for the Solicitation - Management's Unwillingness to Entertain
Acquisition Proposals" and "-the GBHC Board's Actions have Entrenched
Management".
WHY SHOULD THE PROPOSED RECAPITALIZATION BE REJECTED?
. The Company says the Recapitalization is needed "to eliminate the
impediments to the Company's ability to raise capital and its ability to
expand and grow." However, the Company does not have any Plan that
requires the raising of capital.
. To pay the proposed dividend, the Company will have to borrow $1,000,000.
Its not a sound business practice to borrow to pay yourself money you do
not have! Also, if the Company believes it will need to raise capital to
achieve its growth plans, it should not payout $1,500,000 of its capital.
. The Recapitalization authorizes approximately 600,000 common shares more
than required to accomplish the proposal. There is no assurance that these
shares will not be used for management stock grants or options, which will
further dilute the existing shareholders' value. We believe the Board
should
To Our Fellow Shareholders
in Guaranty Bancshares Holding Corporation
June , 1996
Page 2
demonstrate its plans for growth and expansion before we are asked to
forfeit our substantial rights as preferred shareholders.
WHY SHOULD THE BOARD OF DIRECTORS BE CHANGED?
The Board of Directors primary functions include the supervision of management
performance and its representation of the shareholders' interests in the
development of the Company's plans and goals. The following summarized areas
evidencing the need for changing the Board of Directors:
. The Company has been a substantial performer. It has not performed as well
as other Morgan City banks or as well as its Louisiana bank peers.
. Current management acknowledges it does not have a long-term plan for the
Company. All well managed companies have long-term goals to enhance their
performance and shareholder value.
. Management represents 1/3 of the current Board, and would represent 1/4 of
the proposed Board. Cari believes the GBHC Board should be comprised of
non-management shareholders.
. Management's domination of the Board has allowed them to obtain GOLDEN
PARACHUTES, which give them 15% of the Company's value.
. The Company has turned down a cash purchase offer of $7,500,000 and, Cari
believes, has refused to seriously solicit other offers during a period of
intense bank acquisition and merger activity. Cari believes that, if the
Company does not act quickly and decisively, this market will pass and the
Company's value will decline.
. The Company has informed Cari that it is pursuing a strategy of buying
large participations in syndicated loans, and not loaning money to growing
businesses in the Morgan City area. These are not the actions of a
community bank, which management want us to believe they are running.
___________________
For the above reasons and the additional reasons disclosed in its Proxy
Statement dated June 7, 1996, Cari is soliciting your proxy. If successful,
Cari and the new slate of directors commit their best efforts to improve the
Company's performance and to
To Our Fellow Shareholders
in Guaranty Bancshares Holding Corporation
June 7, 1996
Page 3
enhance the value of your investment. I want to thank you for your support,
and, if you have any questions, please do not hesitate contacting Richard Cryar
or me at (504) 585-7730.
Very truly yours,
Christian G. Vaccari
President
- --------------------------------------------------------------------------------
________________________
PROXY STATEMENT OF CARI INVESTMENT COMPANY
IN OPPOSITION TO
THE BOARD OF DIRECTORS
OF GUARANTY BANCSHARES HOLDING CORPORATION
_______________________
_______________________
ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD JUNE 17, 1996
_________________________
To our fellow Guaranty Bancshares Shareholders:
This Proxy Statement and the enclosed Proxy Card are being furnished by
Cari Investment Company ("CIC") to holders of Class A common stock, par value
$5.00 per share (the "Class A Common Stock"), Class B common stock, no par value
(the "Class B Common Stock" and, collectively with the Class A Common Stock, the
"Common Stock"), $2.70 Cumulative Preferred Stock (the "$2.70 Preferred") and
$.50 Cumulative Preferred Stock (the "$.50 Preferred") of Guaranty Bancshares
Holding Corporation, a Louisiana corporation (the "Company" or "GBHC"), in
connection with the solicitation of proxies for use at the Annual Meeting of
Shareholders and at any and all adjournments or postponements thereof (the
"Meeting"). According to the proxy statement filed by the Company with the
Securities and Exchange Commission on May 24, 1996 ("Management's Proxy
Statement"), the Meeting will be held on June 17, 1996, at 1:00 p.m., in the
Board of Directors Room located on the second floor of the Guaranty Bank & Trust
Building, 1201 Brashear Avenue, Morgan City, Louisiana 70381, and the record
date for determining shareholders of the Company (the "Shareholders") entitled
to notice of and to vote at the Meeting is May 15, 1996 (the "Record Date"). As
of the Record Date, CIC and its nominees for election were the beneficial owners
of an aggregate of 55,303 shares of Common Stock, representing approximately
14.52% of the total outstanding shares, 17,914 shares of $2.70 Preferred,
representing 12.35% of the total outstanding shares, and 4,977 shares of $.50
Preferred, representing 22.73% of the total outstanding shares.
THIS SOLICITATION IS BEING MADE BY CIC AND NOT ON BEHALF OF THE BOARD OF
DIRECTORS OF THE COMPANY.
At the Meeting, twelve persons will be elected as directors of the Company
to hold office for a term of one year and until their successors have been duly
elected and qualified. In opposition to the solicitation of proxies by the Board
of Directors of GBHC (the "GBHC Board"), CIC is proposing a slate of six
nominees for election as directors of the Company (the "Shareholder Nominees"),
1
and is seeking a proxy to vote for such nominees. CIC is also soliciting proxies
to vote for six of the Company's nominees (the "Management Nominees"), EXCLUDING
Messrs. Bourgeois, Cullom, Dutreix, Ringeman, Webster and Ms. Vinson. The
Company is also proposing at the Meeting the approval of a recapitalization and
certain amendments to its Articles of Incorporation necessary to implement the
recapitalization (collectively, the "Recapitalization"). Reference is made to
Management's Proxy Statement and any final proxy statement submitted to
Shareholders for a discussion of the Recapitalization. CIC is soliciting proxies
to vote AGAINST the Recapitalization. The reasons for such vote are explained in
further detail in this Proxy Statement.
This Proxy Statement and the Proxy Card are first being mailed or furnished
to the Shareholders on or about June 7, 1996.
YOUR VOTE IS IMPORTANT, NO MATTER HOW MANY OR HOW FEW SHARES YOU OWN. IN
ORDER TO VOTE IN FAVOR OF THE MATTERS SET FORTH HEREIN, PLEASE SIGN AND DATE THE
ENCLOSED PROXY AND REVOCATION. SUCH PROXY AND REVOCATION ALLOWS CIC TO VOTE AS
SET FORTH HEREIN AND REVOKES ANY EARLIER DATED AND ANY UNDATED PROXY THAT YOU
MAY HAVE PREVIOUSLY GRANTED TO GBHC OR ANY OTHER PERSON. IF YOU DID NOT DATE ANY
PROXY THAT YOU PREVIOUSLY GRANTED TO GBHC OR ANOTHER PERSON, YOU SHOULD ALSO
SEND A NOTICE OF REVOCATION TO THE SECRETARY OF GBHC, STATING THAT YOU REVOKE
SUCH PROXY AND NAMING THE HOLDER OF SUCH PROXY (IN THE CASE OF A PROXY GRANTED
TO GBHC, THE PROXY HOLDERS ARE FRANK J. DOMINO, SR. AND WILEY MAGEE) AT 1201
BRASHEAR AVENUE, MORGAN CITY, LOUISIANA 70381. IF YOU CHANGE YOUR MIND AND DO
NOT WANT TO GRANT CIC YOUR PROXY, YOU MAY REVOKE THE ENCLOSED PROXY (OR ANY
OTHER PROXY) BY (i) DELIVERING WRITTEN NOTICE OF REVOCATION TO THE SECRETARY OF
THE COMPANY, OR (ii) EXECUTING A LATER DATED PROXY, OR (iii) ATTENDING THE
MEETING AND VOTING IN PERSON. IF YOU DECIDE TO REVOKE A PROXY GRANTED TO CIC,
PLEASE CALL RICHARD CRYAR AT (504) 585-7730.
IF YOUR SHARES OF COMMON STOCK, $2.70 PREFERRED OR $.50 PREFERRED
(COLLECTIVELY, THE "CAPITAL STOCK") ARE REGISTERED IN YOUR OWN NAME, PLEASE
SIGN, DATE AND MAIL THE ENCLOSED PROXY CARD TO CIC IN THE POST-PAID ENVELOPE
PROVIDED. IF YOUR SHARES OF CAPITAL STOCK ARE HELD IN THE NAME OF A BROKERAGE
FIRM, BANK NOMINEE, TRUSTEE OR OTHER INSTITUTION, ONLY IT CAN SIGN A PROXY CARD
WITH RESPECT TO YOUR SHARES OF CAPITAL STOCK AND ONLY UPON RECEIPT OF SPECIFIC
INSTRUCTIONS FROM YOU. ACCORDINGLY, YOU SHOULD CONTACT THE PERSON RESPONSIBLE
FOR YOUR ACCOUNT AND GIVE INSTRUCTIONS FOR A PROXY CARD TO BE SIGNED
REPRESENTING YOUR SHARES OF CAPITAL STOCK. CIC URGES YOU TO CONFIRM IN WRITING
YOUR INSTRUCTIONS TO THE PERSON RESPONSIBLE FOR YOUR ACCOUNT AND TO PROVIDE A
COPY OF SUCH INSTRUCTIONS TO CIC AT THE ADDRESS INDICATED BELOW SO THAT CIC WILL
BE AWARE OF ALL INSTRUCTIONS GIVEN AND CAN ATTEMPT TO ENSURE THAT SUCH
INSTRUCTIONS ARE FOLLOWED.
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IF YOU HAVE ANY QUESTIONS ABOUT EXECUTING YOUR PROXY OR REQUIRE ASSISTANCE,
PLEASE CONTACT RICHARD W. CRYAR AT (504) 585-7730 OR AT CARI INVESTMENT COMPANY,
1100 POYDRAS STREET, SUITE 2000, NEW ORLEANS, LOUISIANA 70163.
REASONS FOR THE SOLICITATION
BACKGROUND AND SUMMARY
CIC is a substantial shareholder of GBHC, but does not serve in of GBHC or
its subsidiary, Guaranty Bank & Trust Company (the "Bank"). As a substantial
Shareholder, CIC is fully and unequivocally committed to increasing Shareholder
value and providing a means to currently realize that value. Of the twelve
persons nominated for the position of director of the Company, the three
nominees serving in management and the three nominees who have not previously
served on the GBHC Board hold, in the aggregate, less than 1% of the outstanding
shares of Common Stock and less than 1% of the outstanding shares of $2.70
Preferred. These are the six directors that CIC would replace with its nominees.
Further, due to the recent performance of GBHC and the Bank, CIC has become
concerned that GBHC is not doing enough to maximize the value of its stock.
Consequently, over the past two years, CIC has held numerous discussions with
the GBHC Board regarding the enhancement of Shareholder value. Such discussions
have included discussions relating to (i) the Company's business plan for the
growth and expansion of the Bank, (ii) the Recapitalization of the Company as
set forth in Management's Proxy Statement, (iii) the sale or merger of the Bank
or the Company, and (iv) the market for the Company's capital stock. In
addition, when CIC learned that GBHC was expanding the size of the GBHC Board,
CIC requested that the GBHC Board fill such vacancies with nominees of CIC.
CIC's actions in this regard were to persuade the GBHC Board to adopt a course
of action for the Company that would best serve the interests of the Company's
Shareholders. Not only did the GBHC Board not respond to CIC's concerns, but
they also adopted "golden parachutes," refused to solicit acquisition proposals
and proposed the Recapitalization, which Cari believes is not in the best
interests of the Shareholders . CIC believes such actions were designed to
entrench and perpetuate management to the detriment of Shareholder value.
Being unable to persuade the GBHC Board to take action to maximize
Shareholder value, CIC has determined to solicit proxies for the election of the
Shareholder Nominees because it is convinced that the Company must develop a
comprehensive business plan to increase Shareholder value and bring liquidity to
the stock of the Company so that each Shareholder can realize such increased
value. CIC believes that such business plan should consider and study a number
of alternatives, including without limitation, (i) the growth of the Bank
through expansion or acquisition, (ii) strategic alliances, and (iii) the sale
or merger of the Company or the Bank to or with an unaffiliated third party. CIC
believes that the significant and unprecedented consolidation currently underway
in the banking industry means that now is the time to actively consider and
pursue such alternatives, and to ignore such alternatives is to risk missing
possible opportunities to realize
3
the value of your shares. Because of the current level of interest on the part
of potential acquirors, recent bank acquisitions have been announced and
completed at attractive earnings and book value multiples. CIC is concerned that
the Company's ability to effect a transaction on such attractive terms may
diminish as the consolidation matures or if the Bank's financial performance
deteriorates in the hands of current management. Additionally, as a result of
industry consolidation, CIC believes the Bank may in the future be competing
against banks with larger assets, higher levels of service, more attractive
products and more experienced management. If this occurs, CIC believes the value
of the Company and the Bank could be severely diminished.
CIC has further decided to solicit proxies against the Recapitalization
because it believes that the Company has totally failed to demonstrate that the
Recapitalization is in the best interests of the Shareholders. First, if you
hold $2.70 Preferred or $.50 Preferred, your rights as such will disappear. You
will suffer immediate dilution as to the number of votes that you have within
your class of stock, and will no longer be entitled to accrued dividends and
preferences upon liquidation. CIC questions the advisability of relinquishing
these preferred rights solely upon the Company's belief that preferred stock
arrearages are an impediment to the Bank's "ability to raise capital and to its
ability to expand and grow". (See page 14 of Management's Proxy Statement). This
conclusory statement fails to set forth any comprehensive plan for growth or
value enhancement, much less any specific reason why arrearages are an
impediment to such growth. In addition, the Recapitalization calls for the Bank
to borrow $1,000,000 and to reduce capital by $500,000. Based on the Company's
reasoning, those actions will similarly impede the Bank's ability to raise
capital, expand and grow. Further, the Company provides no discussion of the
methodology or components of its valuation analysis, other than to state it was
based on a valuation performed by an accounting firm. Moreover, the Company has
not explained its plans for 593,370 shares of common stock authorized but
unissued after the Recapitalization. CIC is concerned that these shares may be
used to further dilute the value of your shares. Finally, the Company fails to
address the reduction in the value of the Company (for the sole and exclusive
benefit of management) caused by the "golden parachutes" granted to management.
CIC believes that before the Company requests the Shareholders' approval of
the Recapitalization, the Company should demonstrate a detailed business plan
for growth and expansion, the reasons why the Recapitalization is necessary to
the implementation of the business plan and a detailed analysis of how it
arrives at the values attributed to the various classes of Capital Stock.
Without this information, CIC believes it is impossible to determine whether the
proposed Recapitalization is fair to all Shareholders.
4
CIC CONCERNS WITH CURRENT MANAGEMENT
POOR PERFORMANCE OF THE BANK. Based on publicly available information, CIC
believes that the Bank's performance has been significantly below that of a
selected group of peer banks of similar size and those in its geographic
region. The peer banks were selected by a nationally recognized, independent
bank consulting firm based upon (i) local market comparability, (ii) strategic
focus and (iii) returns on assets greater than 1.10%. As a result, not all peer
banks in Louisiana are included in the table below. Over each of the last three
fiscal years ending December 31, 1995, the Bank has earned approximately an
average 1% return on total assets and an average 8% return on equity from
operations (before extraordinary earnings). Over the same period, CIC believes
that banks with similar capitalizations, operating strategies and regional focus
earned approximately an average 1.72% return on total assets and an average
14.42% on equity from operations (before extraordinary earnings).
The following represents a comparative analysis of the Bank and a selected
peer group over the three-year period ending December 31, 1995:
Louisiana Texas Guaranty
American Central State Bank & Trust Richland Guaranty
Bank of Bank of Bank of Company of State Bank &
Welsh Ferriday Newellton Delhi Bank Trust
--------- --------- ---------- ------------- --------- ---------
Total Assets $53,431 $45,883 $49,686 $51,379 $79,130 $60,244
Return on Assets 1.88% 1.17% 1.54% 1.25% 1.70% 1.00%
Return on Equity(1) 18.87% 15.98% 10.03% 10.88% 13.34% 8.00%
_______________
(1)Before Extraordinary Items
Additionally, as is set forth below, the Bank's net interest margin is
below most of its competitors in the Morgan City region even though the Bank's
loan to deposit ratio is substantially higher. In other words, on a percentage
basis the Bank is earning less profit with more capital at risk than its
competitors. The following represents a comparative analysis of the Bank and all
other banks with offices or brances in Morgan City that are headquartered in St.
Mary Parish for the fiscal year ending December 31, 1995:
5
First
National Bank St. Mary Patterson Morgan City Guaranty Bank
of St. Mary (1) Bank & Trust Bank & Trust Bank & Trust & Trust
--------------- ------------ ------------ ------------ --------------
Total Assets $225,000 $103,000 $83,000 $91,000 $60,000
Return on Assets 1.33% 1.00% .65% 1.36% 1.00%
Return on Equity(2) 15.20% 10.20% 10.65% 9.77% 8.00%
Net Interest Margin 66.80% 66.30% 53.90% 66.00% 57.00%
Loan to Deposit Ratio 62.00% 61.00% 64.00% 55.00% 67.00%
-------- -------- ------- ------- -------
- -------------
(1)Year ended December 31, 1994
(2)Before Extraordinary Items
CIC believes that the Bank's poor performance is the result of the absence
of any long-term plan for growth and the failure of the Bank's management to
maintain a business presence in the Morgan City area. CIC believes that
Shareholder value may be enhanced through improving the Bank's performance, and
that the Shareholder Nominees are committed to developing a comprehensive plan
to achieve such goals.
MANAGEMENT'S UNWILLINGNESS TO SOLICIT OR ENTERTAIN ACQUISITION PROPOSALS.
CIC has reviewed the minutes of the Board of Directors of the Company provided
to it by Management dated March 14, 1994 through and including February 12,
1996. During such period, the Company has received solicitations of interest in
transactions regarding the sale or merger of the Company or the Bank with
unaffiliated third parties, including Whitney National Bank, Morgan City Bank
and City Bank & Trust in New Orleans. Only one of such solicitations resulted in
an offer to the Company, which culminated in an all cash offer to purchase all
of the issued and outstanding capital stock of the Bank for $7,500,000. This
amount represents a multiple of approximately 16.5 times the Bank's 1995 net
earnings. CIC believes such an offer is well within the range of recent
transactions in Louisiana and, while it does not have sufficient information to
fully evaluate such a transaction, it believes the GBHC Board should have
considered whether it should seek additional offers or higher bids to sell the
Bank, or that management should at least inform Shareholders of the offer and
explain why they rejected it.
CIC recently became aware of the interest of MidSouth Bancorp, Inc.
("MidSouth") in discussing a possible merger transaction with the Company.
MidSouth has announced its intention to become a presence in Morgan City, has
opened a loan production office and, CIC believes, is planning to construct or
acquire a permanent location in Morgan City. MidSouth's stock is publicly traded
on
6
the American Stock Exchange. By letter dated September 7, 1995, CIC informed the
GBHC Board of MidSouth's interest and requested the GBHC Board to contact
MidSouth about a possible merger. Assuming a transaction with MidSouth could be
effected on attractive terms, such a combination could provide Shareholders with
liquidity in their investment, while maintaining an interest in Southern
Louisiana banking for those Shareholders that desire such an investment. CIC
believes the GBHC Board should have at least investigated the possibility of
such a transaction. Instead, according to minutes dated September 11, 1995, the
GBHC Board unanimously approved a resolution that the Bank not continue to
actively solicit potential acquisition inquiries, but rather that it continue to
operate as an independent unit.
CIC believes that the GBHC Board's efforts to date to maximize Shareholder
value, including through a sale and merger, have been haphazard at best, and
their communication of such efforts to Shareholders have been non-existent. In
the meantime, the GBHC Board has approved various agreements that could pay
management large amounts of money if the Company is sold or if a majority of the
directors are changed, money that will not be shared with the Shareholders. Such
actions make it very difficult to effect a sale of the Company, and provide no
benefit to the Company. CIC believes that such actions were taken so that
management could perpetuate its own existence despite poor performance.
CIC believes that the Company has not engaged in the solicitation of
proposals, but has merely reviewed and rejected proposals that have been
presented to them, without attempting to negotiate a higher price or seek higher
offers. Further, based upon the adoption of the "golden parachutes," it appears
that management is attempting to ensure that unsuccessful Management is
perpetuated. CIC believes that until such time as the Company actively solicits
such proposals, there can be no reasonable determination as to the value that
others may place on the Company in a friendly transaction.
Any sale of the bank or merger or consolidation of the Company would be
subject to regulatory approvals from the appropriate regulatory agencies. In
addition, all terms and conditions of any such transaction would be subject to
your approval as Shareholders of the Company. CIC's intent is to make it
possible to explore the possibilities of such a transaction and, if appropriate,
to cause such a transaction to be submitted to you in all of its detail for your
future consideration. If it is ultimately determined that such a sale is not in
the best interests of the Shareholders, then CIC's nominees intend to develop
and implement a short-term and long-term strategy to make the Bank a significant
competitor, and thus benefit all Shareholders.
THE GBHC BOARD'S ACTIONS HAVE ENTRENCHED MANAGEMENT. CIC believes the GBHC
Board has taken certain actions that have entrenched management to the detriment
of the Shareholders. The entrenchment is illustrated by the following:
7
. The GBHC Board has granted certain "golden parachutes" and retirement
benefits to at least three of its executive officers. Based upon a schedule
provided to CIC by the Company, these arrangements provide for the payment
to such executive officers of approximately $1,000,000 upon the termination
of such executive officers' employment within twenty-four (24) months of a
change in control of the Company. No payments are due as a result of the
"golden parachutes" if a termination of an executive officer is the result
of cause. If the Company or the Bank were sold, the new owners would be
responsible for making these payments, and such purchaser might take the
possibility of these payments into account in setting the purchase price
for such acquisition. To the extent that the purchase price is reduced by
an amount to reflect any possible "golden parachute" payments, such
payments would in effect be transferred from Shareholders to the holders of
the "golden parachutes". If the price were reduced by the amount of all of
the "golden parachutes", such amount would represent a transfer to the
executive officers of over $1,000,000, or approximately 15% of the value of
the Company (based upon management's valuation). Any such shift of value
comes directly from the pockets of Shareholders, and may never be
recovered; however, it should be noted that an acquiror may decide not to
trigger such payments, and thus not reduce the value of any offer.
. As part of the Recapitalization, management has arranged to borrow
approximately $1,000,000 from an unaffiliated bank lender. Based upon
conversations with management, CIC believes that the loan is conditioned
upon the absence of any changes in management without approval of the
lender. In other words, the Company would be in default of a $1,000,000
loan if the GBHC Board or any Shareholder is successful in changing
management personnel. CIC believes this will certainly discourage
management changes, and many Shareholder actions to enhance Shareholder
value. Consequently, it believes the Company should not enter into such
loan or should renegotiate the specific terms of the loan.
. The Bank is actively soliciting high-rate 18-month jumbo certificates of
deposit. CIC believes that the addition of this type of capital (sometimes
referred to as "hot" money because of its higher rate and temporary nature)
diminishes the Bank's value and delays any potential sales negotiations.
While CIC does not have enough information to assess the impact of such
high-cost capital, it believes that it may diminish the Bank's value
because of its terms and maturity and delay any potential sales
negotiations until such time as the cost of replacement capital can be
determined. In light of the Company's net interest margin and loan to
deposit
8
ratio, CIC believes such a strategy could also adversely affect the Bank's
financial results.
CIC believes that these GBHC Board actions, when coupled with its
unwillingness to solicit acquisition proposals, illustrate management's
dominance on the GBHC Board and its desire to remain in control of the Company
to the detriment of the Shareholders. The Shareholder Nominees will use their
best efforts to reverse these actions and return the Company to the
Shareholders.
THE COMPANY HAS FAILED TO DEMONSTRATE THAT THE RECAPITALIZATION IS IN THE
BEST INTERESTS OF THE SHAREHOLDERS. CIC believes that the Company has failed to
demonstrate that the Recapitalization is in the best interests of the
Shareholders. The Company states in its proxy statement that the
Recapitalization is being proposed "to eliminate the impediments to the
Company's ability to raise capital and to its ability to expand and grow." (See
page 14 of Management's Proxy Statement). However, the Company fails to
articulate any strategic plan, much less any strategic plan that requires for
its execution the raising of capital, or how it intends to use such capital to
grow the Bank. Further, the Company provides no discussion of the methodology or
components of its valuation analysis, other than to state it was based on a
valuation performed by an accounting firm. Until the Company is able to
demonstrate a detailed business plan for growth and expansion, the reasons why
the Recapitalization is necessary to the implementation of the business plan and
a detailed analysis of how it arrives at the values attributed to the various
classes of Capital Stock, CIC believes it is in its best interests, as well as
in the interests of all Shareholders, to retain its significant rights as a
preferred Shareholder by opposing the Recapitalization.
Even assuming that some form of recapitalization is in the best interests
of the Company and its Shareholders, CIC believes the Company's Recapitalization
plan is deficient in the following respects:
9
. The Recapitalization amends the Articles of Incorporation to increase the
number of authorized shares of capital stock of the Company to 1,500,000
shares. After the Recapitalization, the Company will have outstanding
906,630 shares of its common stock and 593,370 shares of authorized but
unissued common stock, or approximately 40% of the authorized class. CIC is
concerned that the Company may grant options or warrants to Company
officers or directors, or may make dilutive issuances of shares. CIC is
similarly concerned the Recapitalization does not discuss management's
plans with respect to or provide any safeguards against these or dilutive
issuances. As a result, the holders of preferred stock cannot be assured
that upon a liquidating event they will receive the value of their
holdings.
. The Recapitalization does not provide liquidity to the Shareholder's
holdings in the Company. CIC believes that the Company's strategic plan
should consider not only value enhancement, but also the means for the
Shareholders to realize such value. In other words, it does not matter how
much management believes shares are worth if a Shareholder cannot sell his
shares. Management's Recapitalization does not address the issue of
liquidity.
CIC believes that management should communicate its specific plans to
Shareholders prior to taking any action that may reduce Shareholder value. The
Company has already taken certain actions when it adopted the "golden
parachutes" without Shareholder approval or prior notification. While
Shareholder approval or prior notification is not required under state law, CIC
believes that these actions are harmful to the Company because of the possible
reduction in the value of the Company to a third-party acquiror. However, in
this instance, the Company must seek Shareholder approval, and CIC believes we
should withhold such approval. Until the Company is able to demonstrate a
detailed business plan for growth and expansion, the reasons why the
Recapitalization is necessary to the implementation of the business plan and a
detailed analysis of how it arrives at the values attributed to the various
classes of Capital Stock, CIC believes it is in its best interest, as well as in
the interest of all Shareholders, to retain its significant rights as preferred
Shareholders by opposing the Recapitalization.
10
CIC PLAN
CIC believes that Shareholder interests will be maximized, and the
financial condition of the Company will be improved, by implementing certain
actions. If the Shareholder Nominees are elected, such nominees intend to (i)
direct management to develop a comprehensive strategic business plan, which may
include the growth of the Bank, the sale of the Bank, or some other event so
that Shareholders may realize the value of their holdings, (ii) appoint a
committee of independent directors to actively consider and solicit acquisition
and merger proposals for the Company and the Bank, (iii) determine the validity
of the "golden parachute" provisions and the Company's ability to invalidate
such provisions and any other entrenchment devices that transfer value away from
Shareholders and to management, (iv) declare and pay a dividend to the full
extent deemed advisable given the Bank's capital structure (but in no event
would such dividend be less than the $500,000 proposed to declared and paid in
the Recapitalization) to the holders of $2.70 Preferred, and establish a regular
dividend policy and (v) explore all available options to enhance Shareholder
value and provide a means for Shareholders to realize such value.
CIC believes that the election of its six Shareholder Nominees and six
Management Nominees as directors of the Company would make it more likely that
the CIC strategic plan would be implemented. However, because the Shareholder
Nominees will fill only six of the twelve seats on the GBHC Board if elected,
and because the GBHC Board has previously rejected CIC's recommendation to
develop and implement a strategic plan, there can be no assurance that the
Shareholder Nominees will be able to implement the CIC Plan referred to above.
CIC only nominated six nominees because it believes that the Shareholders'
interests can best be protected by electing directors with significant
shareholdings. Consequently, we have recommended that you vote for the
Management Nominees with significant shareholdings. Further, we believe that
some continuity on the board will be beneficial to the on-going operations of
the Company. Neither CIC nor its nominees are working on behalf of or as a
representative of any potential acquiror of the Company. CIC and its nominees
are merely committed to maximizing the value of the investment of all of the
Shareholders of GBHC. CIC intends to communicate with potential acquirors of
GBHC and their financial advisors with a view towards encouraging potential
acquirors to submit merger and acquisition proposals to the GBHC Board and, if
deemed acceptable, the Shareholders of GBHC.
CERTAIN EFFECTS ON THE COMPANY
IF THE SHAREHOLDER NOMINEES ARE ELECTED
The employment agreements with Messrs. Cullom, Ringeman and Dutreix (the
"Employment Agreements") include "golden parachute" provisions that are
triggered by a change in control of the Company. According to Management's Proxy
Statement, the election
11
of the Shareholder Nominees would constitute a "change in control" of the
Company under the Employment Agreements. The Employment Agreements provide that
if a participant's employment is terminated within twenty-four (24) months
following a "change in control" of the Bank, the participant is entitled to
receive the actuarial equivalent of his annual retirement benefit plus 50% of
such amount. The election of the Shareholder Nominees may be deemed to
constitute a "change in control" under the Employment Agreements and, if a
participant's employment is terminated within twenty-four (24) months of such
change in control, the Company may have a severance liability to such
individuals. CIC estimates the amount currently approximates $1,000,000.
The Shareholder Nominees are not able to cause the termination of
employment of any officers of the Company without the vote of one or more of the
Management Nominees, and have no present intention of requesting the GBHC board
to do so if elected. However, the Shareholder Nominees intend to perform a
review and evaluation of management to determine whether any changes are
necessary and justified to achieve the fulfillment of any strategic plan adopted
by the GBHC Board. As stated above, the Shareholder Nominees additionally intend
to review the Employment Agreements and the "golden parachutes" to determine if
there are any legal bases available to minimize or eliminate the payments under
such agreements.
GENERAL PROXY INFORMATION
PROXY CARD VOTING
The enclosed Proxy Card may be executed only by holders of record at the
close of business on the record date, currently anticipated to be May 15, 1996.
As of the Record Date, CIC and the Shareholder Nominees were the beneficial
owners of an aggregate of 29,021 shares of Class A Common Stock and 26,282
shares of Class B Common Stock, representing approximately 14.52% of the Common
Stock outstanding on the Record Date. CIC and the Shareholder Nominees are the
beneficial owners of 17,914 shares of $2.70 Preferred, representing
approximately 12.35% of the total shares outstanding, and 4,977 shares of $.50
Preferred, representing approximately 22.73% of the total shares outstanding.
According to Management's Proxy Statement as of the Record Date, there were
373,025 shares of Common Stock outstanding, 145,001 shares of $2.70 Preferred
outstanding and 21,900 shares of $.50 Preferred outstanding. In December, 1995,
Mr. Ordogne purchased 6,250 shares of Class A Common Stock from his father,
Murray P. Ordogne, for $75,000. Subsequent to January 1, 1994, Mr. Guarisco, Jr.
transferred, by gift, 508 shares of Common Stock to his father, Anthony
Guarisco, Sr. Other than as set forth herein, there have been no transactions in
the Common Stock or the preferred stock by CIC or, to the best knowledge of CIC,
the Shareholder Nominees during the prior two years.
12
The shares of stock represented by each Proxy Card which is properly
executed and returned to CIC will be voted at the Meeting in accordance with the
instructions marked thereon. Executed but unmarked Proxy Cards will be voted FOR
the election of the Shareholder Nominees and the Management Nominees as
directors of the Company, and AGAINST the Recapitalization.
With the exception of the election of directors and the proposed
Recapitalization, CIC is not aware at the present time of any other matter which
is scheduled to be voted upon by Shareholders at the Meeting. However, if any
other matter properly comes before the Meeting, the persons named as proxies on
the enclosed Proxy Card will vote all shares covered by such proxies in
accordance with what they consider to be the best interest of the Shareholders
and the Company.
If you hold your shares in the name of one or more brokerage firms, banks
or nominees, only they can vote your shares and only upon receipt of your
specific instructions. Accordingly, you should contact the person responsible
for your shares or account and give instructions to vote the Proxy Card.
PROXY REVOCATION
Whether or not you plan to attend the Meeting, CIC urges you to vote FOR
the Shareholder Nominees and the Management Nominees and AGAINST the
Recapitalization by signing, dating and returning the Proxy Card in the
enclosed, self-addressed and stamped envelope. You can do this even if you have
already voted on the proxy card solicited by the GBHC Board, because the
enclosed Proxy also revokes any such proxy that you may have granted.
Execution of a Proxy Card will not affect your right to attend the Meeting
and to vote in person. Any shareholder granting a proxy (including a proxy given
to CIC or the Company) may revoke it at any time before it is voted by (a)
submitting a duly executed new proxy bearing a later date, (b) attending and
voting at the Meeting in person, or (c) at any time before a previously executed
proxy is voted, giving written notice of revocation to the Company, Guaranty
Bank & Trust Building, 1201 Brashear Avenue, Morgan City, Louisiana, Attention:
Corporate Secretary. Merely attending the Meeting will not revoke any previous
proxy which has been duly executed by you; you must also vote at such Meeting.
The Proxy Card furnished to you by CIC, if properly executed and delivered, will
revoke all undated and all earlier dated proxies.
IF YOU PREVIOUSLY EXECUTED AND RETURNED A PROXY CARD TO THE COMPANY, CIC
URGES YOU TO REVOKE IT BY SIGNING, DATING AND MAILING THE PROXY CARD IN THE
ENCLOSED ENVELOPE. NO POSTAGE IS REQUIRED FOR MAILING WITHIN THE UNITED STATES.
13
GBHC ANNUAL REPORT AND MANAGEMENT'S PROXY STATEMENT
An Annual Report to Shareholders (the "Annual Report") covering GBHC's
fiscal year ended December 31, 1995, including financial statements, and a
quarterly report on Form 10-Q (the "Quarterly Report") for the period ended
March 31, 1996, are required to be furnished to Shareholders by the Company.
Such Annual Report and Quarterly Report to Shareholders do not form any part of
the material for the solicitation of proxies by CIC.
The GBHC Board will also solicit proxies for use at the Annual Meeting and
will furnish a definitive proxy statement to each Shareholder in connection
therewith. Neither CIC nor any of its affiliates is presently an officer or
director, or otherwise engaged in the management, of GBHC. Consequently, CIC
does not have current information concerning the stock of the Company, the
beneficial ownership of such stock by the principal holders thereof, other
information concerning the Company's management, the procedures for submitting
proposals for consideration at the next Annual Meeting of Shareholders of the
Company and certain other matters regarding the Company and the Meeting required
by the rules of the Securities and Exchange Commission to be included in a proxy
statement. Accordingly, reference is made to Management's Proxy Statement for
such information.
CIC does not make any representation as to the accuracy or completeness of
the information contained in the Annual Report, the Quarterly Report and
Management's Proxy Statement.
QUORUM AND VOTING
Management's Proxy Statement is required to provide information about the
number of shares of GBHC's stock outstanding and entitled to vote, the number of
record holders thereof and the Record Date for the Meeting, and reference is
made thereto for such information. Only Shareholders of record at the close of
business on the Record Date are entitled to notice of and to vote on matters
that come before the Meeting.
The presence in person or by proxy of the holders of a majority of the
outstanding shares of Common Stock entitled to vote at the Meeting is necessary
to constitute a quorum at the Meeting. If a quorum is not present or represented
by proxy, the Shareholders entitled to vote, present or represented by proxy,
have the power to adjourn the meeting from time to time, without notice other
than an announcement at the meeting, until a quorum is present or represented.
CIC has only nominated six persons for election to the GBHC Board.
According to Management's Proxy Statement, the GBHC Board has nominated twelve
persons for the twelve positions being filled at the Meeting. Therefore there
will be eighteen nominees for twelve seats on the GBHC Board, and the twelve
nominees who receive
14
the greatest number of votes will be elected. Shareholders who use the Proxy
Card furnished by CIC will be able to vote for the six Shareholder Nominees and
the six Management Nominees. Shareholders who use GBHC's proxy card will not be
able to vote for any of the Shareholder Nominees. Shareholders are not permitted
to use both proxy cards. Any shareholder who wishes to vote for one or more of
the Shareholder Nominees and one or more of the Company's nominees (other than
the Management Nominees) will be required to vote by ballot at the Meeting.
ITEM ONE - ELECTION OF DIRECTORS
The Company's bylaws authorize the Board of Directors or the Shareholders
to fix the size of the Board at not less than five nor more than thirty. The
Board of Directors has set the total number of directors at twelve. Twelve
directors will be elected for a term of one year at the Meeting and until their
successors have been elected and qualified. CIC proposes that the Shareholders
elect the Shareholder Nominees and the Management Nominees as the twelve
directors of GBHC at the Meeting.
The nominees of CIC for election by stockholders to the GBHC Board at the
Meeting are Messrs. Virgil Allen, Vincent A. Cannata, Jr., Richard Cryar, Paul
Ordogne, Anthony Guarisco, Jr. and Christian Vaccari. Each of these nominees has
consented to serve as a director if elected, and it is not contemplated that any
of them will be unavailable for election as a director. If any nominee at the
time of election is unable to serve or is otherwise unavailable for election,
the persons named on the enclosed Proxy Card will vote for substitute nominee(s)
selected by CIC.
The information below is provided with respect to the Shareholder Nominees
for directors of the Company. Each Shareholder Nominee is a United States
citizen. Unless otherwise indicated, each nominee has been engaged in his
current principal occupation for more than the past five years.
VIRGIL ALLEN, age 42, is an Engineer/Safety Director with Athena
Construction. He has served in this position since 1980. Mr. Allen graduated
magna cum laude from Louisiana Tech University in 1980 with a Bachelor of
Science degree in Civil Engineering. He has a Professional Engineering (P.E.)
certification in Civil and Environmental Engineering, and is a Certified Safety
Professional (CSP). Mr. Allen is Founder, President and Chairman of the Board of
Directors of the International Petroleum Museum and Exposition, Inc. (The Rig
Museum), and is a member of the American Society of Civil Engineers, American
Society of Safety Engineers, Louisiana Engineering Society, National Society of
Professional Engineers, World Safety Organization, and the Morgan City Job
Service Employer Committee.
VINCENT A. CANNATA, JR., age 34, is currently President of Cannata's
Supermarket, Inc. and Cannata Corporation of Morgan City,
15
Louisiana. He graduated from Loyola University of the South in 1983 with a
Bachelor of Science degree in Accounting. During his college career, he was
inducted into Beta Alpha Psi Honors Accounting Society and was on the Dean's
List for academic achievement. Mr. Cannata is a member of the Board of
Directors, Lakewood Hospital Foundation, the Board of Directors of the Houma-
Terrebonne Chamber of Commerce, the Board of Directors of the Bayou Chapter,
Education Foundation of Louisiana, and a member of Rotary International. In
addition, he has served on the Board of Directors of the East St. Mary Chamber
of Commerce and the Bayou Chapter of the American Cancer Society. Mr. Cannata is
the son of Vincent A. Cannata, Sr.
RICHARD W. CRYAR, age 48, is currently, and has been since 1990, Executive
Vice President of CIC and Cari Capital Company. His primary areas of emphasis
are focused on those companies' merchant and investment banking activities. In
addition to these duties, he has been responsible for establishing CIC's
financial policies, and has served as President of LEEVAC Marine, Inc., its
marine transportation subsidiary. Mr. Cryar, a CPA, began his career with Price
Waterhouse, where he was a Senior Manager specializing in mergers and
acquisitions, and private equity investments in middle market companies.
ANTHONY GUARISCO, JR., age 57, is currently an attorney and Principal in
Dispute Resolution Associates in Baton Rouge, a legal mediation firm. He served
Louisiana as a State Senator for twelve years. Anthony graduated from Nicholls
State University with a Bachelor of Science degree in Business Administration in
1963 and received his Juris Doctor degree from Loyola University in 1966. Mr.
Guarisco is the son of Anthony Guarisco, Sr.
PAUL M. ORDOGNE, age 44, is currently Treasurer and Controller of Cari
Investment Company. He served as Controller and Assistant Treasurer from 1988 to
1994. Prior to that, Paul was a Financial Analyst with CIC from 1984-1988, and
served as Administrative Manager and Accounting Manager for LEEVAC Petroleum, a
CIC affiliated company. Paul joined LEEVAC in 1980 as Operations Accountant and
moved to Accounting Manager for LEEVAC Petroleum in 1981. He graduated from
Nicholls State University in 1974 with a degree in Psychology, and from Loyola
University in 1978 with a degree in Business Administration and Accounting. Paul
qualified and received his license as a Certified Public Accountant in 1985. He
is a member of the AICPA and Society of Louisiana CPAs.
CHRISTIAN VACCARI, age 36, is currently and has been since 1990 the
President of CIC and Cari Capital Company. CIC is a diversified holding company
with interests in, through its investee companies, merchant banking, investment
advisory, financial services, shipbuilding and repair, marine transportation,
and food processing. Mr. Vaccari began his career as an investment advisor with
the investment banking firm Thomson McKinnon, Inc. where he was responsible for
the marketing and placement of numerous private and public investment products
with both institutional and
16
individual investors. Subsequently, he served as Director of Corporate
Development and Marketing for a market-leading building materials company
located in the Southeast. He graduated from Louisiana State University in 1981
with a Bachelors of Science degree in Marketing, and from Louisiana State
University in 1984 with a Masters of Business Administration degree.
If the six Shareholder Nominees are elected to the GBHC Board, six of
twelve members of the GBHC Board will be management nominees, and CIC will not
be in control of the GBHC Board. Since GBHC's bylaws provide that action by the
GBHC Board requires a majority vote of the directors present at a meeting at
which a quorum is present, the Shareholder nominees ordinarily will not be able
to cause any action to be taken or not taken by the GBHC Board unless at least
one (assuming all directors are present at a meeting of the GBHC Board) other
director agrees with the position of the Shareholder Nominees. Nevertheless, the
Shareholder Nominees may, because of their different backgrounds and expertise,
be able to inform and persuade other directors sufficiently to cause the GBHC
Board to take or not take various actions. If the six Shareholder Nominees are
elected, and such nominees vote against the six Management Nominees on any
matter that requires GBHC Board approval, the GBHC Board will be deadlocked on
such matter and such matter will not be implemented. Cari believes that its
nominees will be able to work with the six Management Nominees to avoid any such
deadlock from occurring but cannot assure such will be the case.
If elected, the Shareholder Nominees intend to seek to persuade the GBHC
Board to take action aimed at maximizing Shareholder value, which may include
the growth of the Bank or the sale or merger of the Company or the Bank to or
with another financial institution. However, the Shareholder Nominees will only
seek to persuade the GBHC Board to approve such a transaction if they believe
that the value of the transaction is fair to the Shareholders of the Company.
CIC and the Shareholder Nominees believe that the election of the Shareholder
Nominees would send a strong message to the GBHC Board that the Shareholders
want to maximize the value of their investment in the Company, and would make it
likely that a strategic plan to maximize Shareholder value will be implemented
by the Company. However, because the CIC nominees will fill only six of the
twelve seats on the GBHC Board if elected and because the Management Nominees
have previously rejected CIC's suggestions for the Company, there can be no
assurance that the GBHC Board will seek to implement a strategic plan to
increase Shareholder value, including the sale or merger of the Company or the
Bank, even if the Shareholder Nominees and the Management Nominees are elected.
None of CIC or its nominees is working on behalf of or as a representative of
any potential acquiror of the Company or the Bank. CIC and its nominees are
merely committed to maximizing the value of the investment of all of the
Shareholders of GBHC. CIC intends to communicate with potential acquirors of
GBHC and their financial advisors with a view towards encouraging potential
acquirors to submit merger and
17
acquisition proposals to the GBHC Board, if deemed desirable, and the
Shareholders of GBHC.
ITEMS TWO AND THREE - PLAN OF RECAPITALIZATION
As part of a plan of recapitalization, the Company is proposing that
amendments to its Articles of Incorporation will be effected to (i) increase the
authorized number of shares of Class B Common stock from 200,000 shares to
1,500,000 shares; (ii) reclassify the outstanding 145,001 shares of $2.70
Preferred as Class B Common Stock, at the rate of $27.80 in value of Class B
Common Stock per share of $2.70 Preferred; (iii) exchange the outstanding 21,900
shares of $.50 Preferred for shares of Class B Common Stock, at the rate of
$5.00 in value of Class B Common Stock per share of $.50 Preferred; (iv)
reclassify the outstanding 210,000 shares of Class A Common Stock as Class B
Common Stock and (v) redesignate the Class B Common Stock and any authorized but
unissued preferred stock as Common Stock. The Recapitalization also provides
that the holders of the $2.70 Preferred will be entitled to receive a dividend
in the amount of approximately $1,500,000 ($1,000,000 of which will be
borrowed). The holders of $.50 Preferred will not receive a dividend on their
shares in the Recapitalization.
The effect of the Recapitalization will be to provide for one class of
stock and to eliminate all of the rights of the holders of the two classes of
preferred stock currently provided in the Company's Articles of Incorporation,
including the right to annual accrual of dividends and rights to dividend
preferences, as well as preferences upon liquidation, dissolution and winding-up
of the Company. The Company states in its proxy statement that adoption of the
Recapitalization requires the approval of (i) 80% of the Class A Common Stock
and Class B Common Stock, considered as a single class, of the votes entitled to
be cast or, alternatively, two-thirds of the votes entitled to be cast other
than the votes of Shareholders holding 10% or more of the stock in each class,
and (ii) 80% of the $2.70 Preferred and 80% of the $.50 Preferred, each voting
as a separate class, of the votes entitled to be cast or, alternatively, two-
thirds of the votes entitled to be cast other than the votes of Shareholders
holding 10% or more of the stock in each class.
CIC has further decided to solicit proxies against the Recapitalization
because it believes that the Company has failed to demonstrate that the
Recapitalization is in the best interests of the Shareholders. First, if you
hold $2.70 Preferred or $.50 Preferred, your rights as such will disappear. You
will suffer an immediate reduction as to the percentage of votes that you have
within your class of stock, and will no longer be entitled to accrued dividends
and preferences upon liquidation. CIC questions the advisability of
relinquishing these preferred rights solely upon the Company's belief that
preferred stock arrearages are an impediment to the Bank's "ability to raise
capital and to its ability to expand and grow". (See page 14 of Management's
Proxy
18
Statement). This conclusory statement fails to set forth any comprehensive plan
for growth or value enhancement, much less any specific reason why arrearages
are an impediment to such growth. In addition, the Recapitalization calls for
the Bank to borrow $1,000,000 and to reduce capital by $500,000. Based upon the
Company's reasoning, those actions will similarly impede the Bank's ability to
raise capital. Further, the Company provides no discussion of the methodology or
components of its valuation analysis, other than to state it was based on a
valuation performed by an accounting firm. Moreover, the Company has not
explained its plans for 593,370 shares of common stock authorized but unissued
after the Recapitalization. CIC is concerned that these shares may be used to
further dilute the value of your shares. Finally, the Company also fails to
address the reduction in the value of the Company (for the sole and exclusive
benefit of management) caused by the "golden parachutes" granted to management.
CIC believes that before the Company requests Shareholders' approval of the
Recapitalization, the Company should demonstrate a detailed business plan for
growth and expansion, the reasons why the Recapitalization is necessary to the
implementation of the business plan and a detailed analysis of how it arrives at
the values attributed to the various classes of Capital Stock. Without this
information, CIC believes it is impossible to determine whether the proposed
Recapitalization is fair to all Shareholders.
CIC STRONGLY RECOMMENDS A VOTE AGAINST THE APPROVAL OF ITEM TWO -THE PLAN
OF RECAPITALIZATION AND ITEM THREE - THE ADOPTION OF AMENDMENTS TO THE ARTICLES
OF INCORPORATION TO IMPLEMENT THE PLAN OF RECAPITALIZATION.
OTHER MATTERS TO BE CONSIDERED AT THE ANNUAL MEETING
It is expected that the GBHC Board will send to you Management's Proxy
Statement discussing, in addition to the election of directors and approval of
the Recapitalization, any other matter that may properly come before the Annual
Meeting. With the exception of the election of directors and approval of the
Recapitalization, CIC is not aware at the present time of any other matter which
is scheduled to be voted upon by Shareholders at the Meeting. However, if any
other matter properly comes before the Meeting, the persons named as proxies on
the enclosed Proxy Card will vote all shares covered by such proxies in
accordance with their best judgment with respect to such matter.
SHAREHOLDINGS OF CIC AND THE SHAREHOLDER NOMINEES
The following table sets forth, as of May 15, 1996, the number and percent
of outstanding shares of Common Stock, $2.70 Preferred and $.50 Preferred
beneficially owned by CIC and each of Messrs. Allen, Cannata, Jr., Cryar,
Guarisco, Jr., Ordogne and Vaccari:
19
$2.70 Percent of $.50 Percent of
Name and Common Percent of Preferred Class of Preferred Class of
Address of Shares Class of Shares $2.70 Shares $.50
Beneficial Beneficially Common Beneficially Preferred Beneficially Preferred
Owner Owned (1) Shares Owned (1) Shares Owned (1) Shares
- ----------------------------- ------------ ---------- ------------ --------- ------------ ---------
Cari Investment Company 17,979 4.72% 8,046 5.55% 1,887 8.62%
1100 Poydras Street
Suite 2000
New Orleans, LA 70163
Virgil Allen (2) 5,478 1.44% 1,256 0.87% ----- -----
P. O. Box O
Morgan City, LA 70381
Vincent A. Cannata, Jr. (3) 6,910 1.81% 3,455 2.38% ----- -----
P. O. Box 2543
Morgan City, LA 70381
Richard W. Cryar ------ ----- ----- ----- ----- -----
1100 Poydras St.
Suite 2000
New Orleans, LA 70163
Anthony Guarisco, Jr. ------ ----- ----- ----- ----- -----
7018 Whithow St.
Baton Rouge, LA 70808
Paul M. Ordogne (4) 24,936 6.55% 5,157 3.56% 3,090 14.11%
1100 Poydras St.
Suite 2000
New Orleans, LA 70163
Christian G. Vaccari(5) 17,979 4.72% 8,046 5.55% 1,887 8.62%
1100 Poydras St.
Suite 2000
New Orleans, LA 70163
_______________
(1) Unless otherwise stated, beneficial ownership is sole voting and investment
power.
(2) Including 56 shares of Common Stock and 56 shares of $2.70 Preferred shares
held by Katherine Allen over which Mr. Allen shares voting power.
(3) All shares represent shares owned by Cannata's Supermarket, Inc. over which
Mr. Cannata shares voting and investment power.
(4) Including 16,556 shares of Common Stock, 3,392 shares of $2.70 Preferred and
3,090 shares of $.50 Preferred in the Estate of Murray P. Ordogne, of which
Mr. Ordogne is executor and a beneficiary.
(5) All shares represent shares owned by Cari Investment Company (formerly Cari
Corporation) over which Mr. Vaccari shares voting and investment power.
20
Management's Proxy Statement is expected to set forth information as to the
number and percentage of outstanding shares beneficially owned by (i) each
person known by GBHC to own more than 5% of the outstanding Common Stock, $2.70
Preferred and $.50 Preferred, (ii) each director of GBHC, (iii) each of the five
most highly paid executive officers of GBHC, and (iv) all executive officers and
directors of GBHC as a group, and reference is made thereto for such
information.
INFORMATION ABOUT PARTICIPANTS IN CIC PROXY SOLICITATION
The proxies solicited hereby are sought by CIC. The Shareholder Nominees
may also be deemed "participants" in this solicitation, as that term is defined
in Schedule 14A under the Securities and Exchange Act of 1934, as amended.
CIC is a privately-held diversified holding company which, through its
various operating subsidiaries, is involved in the following industries:
merchant banking, investment advisory, financial services, metal fabrication of
marine vessels, marine transportation and food processing. In 1994, CIC created
the merchant banking subsidiary, Cari Capital Company, whose business focus
primarily includes two areas: (i) providing professional investment banking and
corporate finance advisory services to middle market companies and their owners,
and (ii) participating in the direct investment in, and acquisition and
strategic management of middle market companies.
As described above, as of the date of this Proxy Statement, CIC and the
Shareholder Nominees beneficially owned 55,303 shares of Common Stock,
representing 14.52% of the outstanding shares, 17,914 shares of the $2.70
Preferred, representing 12.35% of the outstanding shares and 4,977 shares of the
$.50 Preferred, representing 22.73% of the outstanding shares.
Except as set forth above, to the best knowledge of CIC, none of CIC, the
Shareholder Nominees nor any of their respective affiliates or associates,
directly or indirectly, beneficially own any shares of Common Stock, $2.70
Preferred or $.50 Preferred of the Company or any securities of any parent or
subsidiary of the Company, has had any relationship with the Company in any
capacity other than as a Shareholder, nor is or has been a party to any
transactions, or series of similar transactions, since January 1, 1995, nor is
any currently proposed transaction known to any of them, or series of similar
transactions, to which the Company or any of its subsidiaries was or is to be a
party, in which the amount involved exceeds $60,000 and in which any of them or
their respective affiliates or associates had, or will have, a direct or
indirect material interest, nor has any nominee, nor CIC, nor any of their
respective affiliates or associates, entered into any agreement or understanding
with any person respecting any future employment by the Company or its
affiliates or any future transactions to which the Company or any of its
affiliates will or
21
may be a party. Other than the agreements by the Shareholder Nominees to serve
as directors of the Company if elected, there are no contracts, arrangements or
understandings by any nominee, CIC or any of their respective affiliates or
associates within the past year with any person with respect to the Company's
securities.
PROXY SOLICITATION; EXPENSES
CIC will bear the entire expense of preparing, assembling, printing and
mailing this Proxy Statement and the Proxy Card and the cost of soliciting
proxies.
The total cost of this proxy solicitation (including fees of attorneys,
solicitors and advertising and printing expenses) is estimated to be
approximately $40,000. CIC has incurred to date approximately $7,500 in proxy
solicitation expenses. To the extent legally permissible, CIC will seek
reimbursement from the Company for the costs of this solicitation. CIC does not
currently intend to submit approval of such reimbursement to a vote of
Shareholders of the Company at a subsequent meeting unless required by law.
In addition to this initial solicitation by mail, proxy solicitations may
be made by phone or in person by CIC and its officers and employees and the
Shareholder Nominees without compensation, except for reimbursement of
reasonable out-of-pocket expenses. CIC will pay to banks, brokers and other
fiduciaries their reasonable charges and expenses incurred in forwarding proxy
materials to their principals and in obtaining authorization for execution of
proxies.
CARI INVESTMENT COMPANY
1100 Poydras Street
Suite 2000
New Orleans, Louisiana 70163
Christian G. Vaccari
President
June 7, 1996
____________________
IF YOU HAVE ANY QUESTIONS OR REQUIRE ASSISTANCE, PLEASE CONTACT RICHARD CRYAR IN
MORGAN CITY AT (504) 384-6711 OR AT (504) 585-7730
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[FORM OF PROXY CARD]
PROXY CARD
PROXY SOLICITED BY CARI INVESTMENT COMPANY ("CIC")
IN OPPOSITION TO THE BOARD OF DIRECTORS
OF GUARANTY BANCSHARES HOLDING CORPORATION
The undersigned hereby appoints Christian G. Vaccari and Richard W. Cryar,
and each of them, the proxy or proxies of the undersigned, with full power of
substitution, to vote all shares of Class A Common Stock, par value $5.00 per
share, Class B Common Stock, no par value, $2.70 Cumulative Preferred Stock and
$.50 Cumulative Preferred Stock of Guaranty Bancshares Holding Corporation (the
"Company") which the undersigned would be entitled to vote if personally present
at the Annual Meeting of Shareholders (the "Meeting") of the Company to be held
on June 17, 1996, and at any and all adjournments or postponements thereof.
CIC RECOMMENDS A VOTE FOR PROPOSALS 1 AND 2.
---
Item 1. Election of Shareholder Nominees to the Board of Directors of Company
(check one box only)
/ / FOR all nominees / / WITHHOLD AUTHORITY
listed below: to vote for all
nominees listed
below:
Virgil Allen Richard W. Cryar Paul M. Ordogne
Vincent A. Cannata, Jr. Anthony Guarisco, Jr. Christian G. Vaccari
(To withhold authority to vote for any individual nominee, check the "FOR" box
above and draw a line through that nominee's name above.)
Item 2. CIC intends to use this proxy to vote for persons nominated by the
Company's Board to serve as directors, other than the Company nominees listed
below. You may withhold authority to vote for one or more additional Company
nominees by writing the name of the nominee(s) below. You should refer to the
Company's proxy statement and form of proxy for the Meeting for the names,
background, qualifications and other information concerning the Company's
nominees. There is no assurance that any of the Company's nominees will serve as
directors if any of CIC's nominees are elected to the Board.
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Company nominees with respect to whom CIC is NOT seeking authority to vote
for and WILL NOT exercise any such authority:
Robert M. Bourgeois Lee A Ringeman Randolph Cullom
Conley J. Dutreix Kay S. Vinson J. Cameron Webster
Write in the line below any additional Company nominees for which authority
to vote is withheld:
______________________________ ______________________________
______________________________ ______________________________
______________________________ ______________________________
Item 3. A proposal to approve the Recapitalization.
/ / AGAINST / / FOR / / ABSTAIN
CIC RECOMMENDS THAT YOU VOTE AGAINST PROPOSAL 3.
-------
Item 4. A proposal to amend the Articles of Incorporation to implement the
Recapitalization.
/ / AGAINST / / FOR / / ABSTAIN
CIC RECOMMENDS THAT YOU VOTE AGAINST PROPOSAL 4.
-------
The proxies are hereby authorized to vote in their discretion upon all
other matters which may properly come before the Meeting or any adjournments or
postponements thereof.
[REVERSE] THIS PROXY WILL BE VOTED AS DIRECTED, BUT IF NO DIRECTION IS
INDICATED, IT WILL BE VOTED FOR THE ELECTION OF THE SHAREHOLDER NOMINEES LISTED
IN PROPOSAL 1, AS SET FORTH IN PROPOSAL 2, AND AGAINST THE ITEMS SET FORTH IN
PROPOSALS 3 and 4.
THIS PROXY CARD HEREBY REVOKES ANY PROXY DATED PRIOR TO THE DATE HEREOF, OR NOT
DATED AND GRANTED IN FAVOR OF FRANK J. DOMINO, SR. OR WILEY MAGEE, OR EITHER OF
THEM, OR GRANTED TO ANY PERSON WHO SERVES AS A PROXY PURSUANT TO A SOLICITATION
BY OR ON BEHALF OF THE COMPANY.
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The undersigned hereby acknowledges receipt of the Proxy Statement of CIC
dated __________ __, 1996.
DATED: ___________________, 1996
_______________________________________
Signature
_______________________________________
Signature, if held jointly
_______________________________________
Title or Authority
Please sign exactly as your name
appears on this proxy. Joint owners
should each sign personally. If
signing as attorney, executor,
administrator, trustee or guardian,
please include your full title.
Corporate proxies should be signed by
an authorized officer.
PLEASE SIGN, DATE AND RETURN THIS PROXY CARD PROMPTLY USING THE
ENCLOSED SELF-ADDRESSED AND STAMPED ENVELOPE.
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