PROXY STATEMENT
SCHEDULE 14A
(RULE 14A-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a)
OF THE SECURITIES EXCHANGE ACT OF 1934
(AMENDMENT NO.______)
FILED BY THE REGISTRANT [X]
FILED BY A PARTY OTHER THAN THE REGISTRANT [ ]
CHECK THE APPROPRIATE BOX:
[ ] PRELIMINARY PROXY STATEMENT
[ ] CONFIDENTIAL, FOR USE OF THE COMMISSION ONLY (AS PERMITTED BY
RULE 14A-6(e)(2))
[X] DEFINITIVE PROXY STATEMENT
[ ] DEFINITIVE ADDITIONAL MATERIALS
[ ] SOLICITING MATERIAL PURSUANT TO SEC. 240.14a-12
FIRST MCMINNVILLE CORPORATION
(NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
(NAME OF PERSON(S) FILING PROXY STATEMENT, IF
OTHER THAN THE REGISTRANT)
PAYMENT OF FILING FEE (CHECK THE APPROPRIATE BOX):
[X] NO FEE REQUIRED
[ ] FEE COMPUTED ON TABLE BELOW PER EXCHANGE ACT RULES 14a-6(i)(1) AND 0-11.
(1) TITLE OF EACH CLASS OF SECURITIES TO WHICH TRANSACTION APPLIES:
(2) AGGREGATE NUMBER OF SECURITIES TO WHICH TRANSACTION APPLIES:
(3) PER UNIT PRICE OR OTHER UNDERLYING VALUE OF TRANSACTION COMPUTED
PURSUANT TO EXCHANGE ACT RULE 0-11 (SET FORTH THE AMOUNT ON WHICH THE
FILING FEE IS CALCULATED AND STATE HOW IT WAS DETERMINED):
(4) PROPOSED MAXIMUM AGGREGATE VALUE OF TRANSACTION:
(5) TOTAL FEE PAID:
[ ] FEE PAID PREVIOUSLY WITH PRELIMINARY MATERIALS.
[ ] CHECK BOX IF ANY PART OF THE FEE IS OFFSET AS PROVIDED BY
EXCHANGE ACT RULE 0-11(a)(2) AND IDENTIFY THE FILING
FOR WHICH THE OFFSETTING FEE WAS PAID PREVIOUSLY.
IDENTIFY THE PREVIOUS FILING BY REGISTRATION
STATEMENT NUMBER, OR THE FORM OR SCHEDULE AND THE
DATE OF ITS FILING.
(1) AMOUNT PREVIOUSLY PAID:
(2) FORM, SCHEDULE OR REGISTRATION STATEMENT NO.:
(3) FILING PARTY:
(4) DATE FILED:
FIRST MCMINNVILLE CORPORATION
200 EAST MAIN STREET
MCMINNVILLE, TENNESSEE 37110
A LETTER TO OUR SHAREHOLDERS
March 8, 2002
Dear Shareholder:
You are cordially invited to attend the 2002 Annual Meeting of
Shareholders of First McMinnville Corporation (the "Company") to be held on
April 9, 2002, at 2:30 o'clock p.m., local time, in the Board Room of First
National Bank of McMinnville, 200 East Main Street, McMinnville, Tennessee. At
the Annual Meeting, Shareholders of record as of March 1, 2002, will be entitled
to vote upon the election of Directors who will serve until their successors
have been elected and duly qualified. In addition, the Shareholders will vote
upon the ratification of the Directors' appointment of Maggart & Associates,
P.C. as the Company's independent auditors for the fiscal year ending December
31, 2002, as well as any other business that may properly come before the Annual
Meeting.
I know that you will notice the different format and the greatly
increased amount of information that is included in these materials. As you
know, our shareholder base has been growing, which we take as a real compliment
to our excellent Staff and the Bank's continued strong results of operation. The
size of our shareholder base now makes it necessary for us to report to you lots
of different kind of information. If you have any questions about any of this,
or any other matter related to our Company or the Bank, I trust that you know
that I and the other members of the Staff will be delighted to discuss it with
you and to try to answer any of your questions.
The enclosed Proxy Statement describes the proposed election of
Directors and ratification of appointment of independent auditors, and it
contains other information about the Annual Meeting. Please read these materials
carefully. IT IS IMPORTANT THAT YOUR SHARES BE REPRESENTED WHETHER OR NOT YOU
PLAN TO ATTEND THE ANNUAL MEETING. PLEASE COMPLETE THE ENCLOSED PROXY CARD AND
RETURN IT IN THE ENCLOSED ENVELOPE WITHOUT DELAY. IF YOU ATTEND THE ANNUAL
MEETING, YOU MAY WITHDRAW YOUR PROXY AND VOTE IN PERSON IF YOU WISH AS SET FORTH
IN THE ACCOMPANYING PROXY STATEMENT BY GIVING APPROPRIATE NOTICE ANY TIME BEFORE
YOUR PROXY IS VOTED.
On behalf of your Board of Directors, I urge you to vote FOR Proposals
1 and 2 which are described in the Proxy Statement and set forth on the Proxy
Card. I look forward to seeing you at the Annual Meeting.
Sincerely,
FIRST MCMINNVILLE CORPORATION
/s/ Charles C. Jacobs
-----------------------------
Charles C. Jacobs,
Chairman of the Board
FIRST MCMINNVILLE CORPORATION
200 EAST MAIN STREET
MCMINNVILLE, TENNESSEE 37110
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO: Our Shareholders
DATE: Tuesday, April 9, 2002
TIME: 2:30 p.m., Local Time in McMinnville, Tennessee (Central Time)
PLACE: First National Bank's Board Room (Second Floor)
200 East Main Street
McMinnville, Tennessee 37110
ITEMS OF BUSINESS: 1) to elect four "Class III" Directors for a term of
three years each and one "Class I" Director until
Class I Directors stand for election for three
year terms in 2003;
2) to ratify the selection of Maggart & Associates,
P.C., as the Company's independent auditors for
the year ending December 31, 2002; and
3) to conduct other business properly brought before
the meeting. Execution of a proxy, however,
confers on the designated proxy holder
discretionary authority to vote the shares
represented by such proxy in accordance with their
best judgment on such other business, if any, that
may properly come before the Annual Meeting or any
postponement or adjournment thereof.
WHO MAY VOTE: You can vote if you were a Shareholder of record at the close
of the Company's business on March 1, 2002.
ADJOURNMENT: If necessary, your proxy will be voted to adjourn the Annual
Meeting to a later date (and/or to postpone it to a later
time) to permit further solicitation of proxies if there are
insufficient votes at the time of the meeting to constitute a
quorum.
DATE OF MAILING: This Proxy Statement and the Company's Annual Report for the
year ended December 31, 2001, together with the form of proxy
for the Annual Meeting, are first being mailed to Shareholders
on or about March 8, 2002.
By Order of the Board of Directors
/s/ Carol Locke
Carol Locke
Secretary
McMinnville, Tennessee
March 8, 2002
TABLE OF CONTENTS
SUMMARY OF VOTING MATTERS......................................................1
FIRST PROPOSAL - ELECTION OF DIRECTORS.........................................4
THE COMPANY'S BOARD OF DIRECTORS AND COMMITTEES................................6
EXECUTIVE OFFICERS.............................................................8
EXECUTIVE COMPENSATION.........................................................9
STOCK OWNERSHIP OF MANAGEMENT AND CERTAIN BENEFICIAL OWNERS...................17
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE.......................18
CERTAIN TRANSACTIONS..........................................................19
SECOND PROPOSAL - RATIFICATION OF INDEPENDENT AUDITORS........................19
PROXY SOLICITATION............................................................20
SHAREHOLDER PROPOSALS FOR 2003 ANNUAL MEETING.................................20
OTHER BUSINESS................................................................20
AVAILABILITY OF FORM 10-K.....................................................20
PROXY STATEMENT
OF
FIRST MCMINNVILLE CORPORATION
200 EAST MAIN STREET
MCMINNVILLE, TENNESSEE 37110
2002 ANNUAL MEETING OF SHAREHOLDERS
APRIL 9, 2002
2:30 O'CLOCK P.M.
THIS PROXY IS BEING SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS.
INTRODUCTION
This Proxy Statement is being furnished to the Shareholders of First McMinnville
Corporation (the "Company") who hold shares of record at the close of the
Company's business on March 1, 2002 in connection with the 2002 Annual Meeting
of Shareholders of the Company (the "Annual Meeting"). The Annual Meeting is
scheduled to be held in the Board Room on the Second Floor of The First National
Bank of McMinnville, 200 East Main Street, McMinnville, Tennessee 37110, on
Tuesday, April 9, 2002, at 2:30 o'clock p.m. local time. (All times are Central
Time.) The enclosed Notice of Annual Meeting and this Proxy Statement are being
first mailed to Shareholders on or about March 8, 2002.
Each copy of this Proxy Statement mailed to Shareholders is accompanied by a
form of proxy solicited by the Board of Directors of the Company for use at the
Annual Meeting and at any postponement(s) or adjournment(s) thereof. The proxy
will be used for the items of business described in these materials and, if
necessary, to adjourn the meeting to a later date (and/or postpone it to a later
time) to permit further solicitation of proxies if there are insufficient votes
at the time of the meeting to constitute a quorum.
No person is authorized to give any information or to make any representation
not contained in this Proxy Statement and, if given or made, such information or
representation should not be relied upon as having been authorized by the
Company. This Proxy Statement does not constitute the solicitation of a proxy in
any jurisdiction from any person to whom it is unlawful to make such proxy
solicitation in such jurisdiction. The delivery of this Proxy Statement shall
not, under any circumstances, imply that there has not been any change in the
information set forth herein since the date of mailing this Proxy Statement.
SUMMARY OF VOTING MATTERS
WHAT AM I VOTING ON?
You will be voting on the following:
- - to elect four "Class III" Directors to serve for a term of three years
each and one "Class I" Director to serve until Class I Directors stand for
election to three year terms in 2003;
- - to ratify the selection of Maggart & Associates, P.C., as the Company's
independent auditors for the year ending December 31, 2002; and
- - any other matter properly brought before the Annual Meeting.
-1-
WHO IS ENTITLED TO VOTE?
You may vote if you owned shares of our common stock as of the close of business
on March 1, 2002. Each share of stock is entitled to one vote. As of March 1,
2002, there were 520,898 shares of First McMinnville Corporation's common stock
outstanding.
HOW DO I VOTE?
You may vote in person at the meeting or you may complete, sign and return the
enclosed proxy card. Votes submitted by proxy will be voted by the individuals
named on the proxy card in the manner you indicate. You may vote in favor of all
nominees, withhold your votes as to all nominees or withhold your votes as to
specific nominees. You may also vote for or against, or abstain, with respect to
the ratification of the independent accountants chosen by the board of directors
of First McMinnville Corporation ("our Company").
Unless otherwise required by law, all other matters, including the ratification
of auditors, shall be determined by a majority of votes cast affirmatively or
negatively without regard to (a) broker non-votes, or (b) proxies marked
"abstain" as to that matter.
CAN I REVOKE MY PROXY?
Yes, by following one of the correct procedures. To revoke a proxy given
pursuant to this solicitation, you must do one of the following before the proxy
is voted for Directors at the Annual Meeting:
- - sign another proxy with a later date and deliver it to us before your
proxy is voted;
- - deliver a written notice of revocation to us that is dated later than the
date of the proxy either before the Annual Meeting or before your proxy is
voted at the Annual Meeting; or
- - attend the Annual Meeting and vote in person. BUT IT IS VERY IMPORTANT FOR
YOU TO NOTE: Your attendance at the Annual Meeting, by itself, will not
revoke a proxy if you do not vote personally or by delivering a later
dated proxy to us, of if you don't openly and expressly revoke your proxy,
at the Annual Meeting before you proxy is voted.
WHAT IF I RETURN MY PROXY CARD BUT DO NOT PROVIDE VOTING INSTRUCTIONS?
Proxies that are signed and returned but do not contain instructions will be
voted FOR the election of all nominees as Directors and FOR the ratification of
the selection of Maggart & Associates, P.C. as First McMinnville Corporation's
independent auditors for fiscal year 2002. (The Company's "fiscal year" is the
calendar year, which ends on December 31st.)
HOW DOES DISCRETIONARY AUTHORITY APPLY?
If you sign your proxy but do not make any selections, you give discretionary
authority to the proxy holders to vote on the proposals (the election of
Directors and the ratification of auditors) and other matters described in this
document. In addition, every proxy gives the holder discretionary authority to
vote on ministerial matters (like approving the minutes of the last meeting) and
other matters that arise at the meeting of which management is presently not
aware. However, the proxy holders selected by the Company will not vote any
proxy that withholds authority or that is voted against the full slate of
Directors in favor of any postponement or adjournment of the meeting.
-2-
WHAT SHOULD I DO NOW?
Indicate on your proxy card how you want to vote, and sign and mail the proxy
card in the enclosed postage prepaid envelope as soon as possible, so that your
shares will be represented at the Annual Meeting.
If you sign and send in your proxy and do not indicate how you want to vote,
your proxy will be voted in favor of the Director-nominees and for the
ratification of the named independent auditors, as well as in the discretion of
the proxy with respect to any other business that may properly come before the
Annual Meeting.
HOW WILL ABSTENTIONS AND BROKER NON-VOTES BE TREATED?
Abstentions and broker non-votes will be treated as shares that are present and
entitled to vote for purposes of determining whether a quorum is present, but
will not be counted as votes either in favor of or against a particular
proposal. If a broker or nominee holding shares in "street" name indicates on
the proxy that it does not have discretionary authority to vote on a particular
matter, those shares will not be voted with respect to that matter and will be
disregarded for the purpose of determining the total number of votes cast with
respect to a proposal.
HOW MANY VOTES MUST BE PRESENT TO HOLD THE ANNUAL MEETING?
A quorum of Shareholders is necessary to hold a valid meeting. If the holders of
at least a majority of our shares (that is, 260,450 shares) are present in
person or by proxy, a quorum will exist. Once a Shareholder is present for any
purpose, then her or his vote will be counted towards the quorum requirement
(unless the Annual Meeting is adjourned and a new record date is set for the
adjourned meeting), even if the holder of the shares abstains from voting with
respect to any matter brought before the Annual Meeting.
HOW MANY VOTES ARE NEEDED TO ELECT DIRECTORS?
Directors are elected by a plurality of the votes cast by the holders of shares
entitled to vote at the Annual Meeting. This means that the Director nominee
with the most affirmative votes for a particular slot is elected for that slot.
DO I HAVE THE RIGHT TO CUMULATE MY VOTES?
No. The Company's charter does not provide for cumulative voting.
ARE NOMINATIONS MADE AT THE MEETING?
No. Nominations must be made before the meeting and must contain information
that the other Shareholders would need to make an informed decision about the
nominees. These procedures are set forth in the Company's bylaws and a copy of
the procedures can be obtained by Shareholders in the same manner as provided
for obtaining a copy of the Annual Report on Form 10-K, which is described at
the end of this document.
-3-
FIRST PROPOSAL
ELECTION OF DIRECTORS
HOW IS OUR COMPANY'S BOARD STRUCTURED?
Under the Company's charter, the Company's Board of Directors is divided into
three groups (called "Classes") of Directors. Directors are standing for
election for three-year terms, with one "Class" standing for election every
year. This year, all of the Directors in "Class III" are being elected. In
addition, our new President, John W. Perdue, is standing for election. He has
been assigned to "Class I." Accordingly, he will, if elected, serve until Class
I Directors stand for election in 2003 for three year terms.
WHO ARE THE NOMINEES THIS YEAR?
The "Class III" Directors being elected are all incumbents, which means that
they are already serving as Directors and that they are standing for
re-election. Each Class III nominee would hold office until the 2005 Annual
Meeting of Shareholders and until his successor has been elected and duly
qualified. The Class III nominees are:
Charles C. Jacobs,
J. Douglas Milner,
John J. Savage, and
Carl M. Stanley.
In addition, Mr. John W. Perdue was elected by the Board of Directors effective
October 1, 2001, and is standing for election by the Shareholders as a "Class I"
Director. If elected, Mr. Perdue will serve until Class I Directors stand for
election, which will occur in 2003.
Each of these individuals was nominated by the Company's Board of Directors.
WHAT IS THE BACKGROUND OF THIS YEAR'S NOMINEES?
NAME [CLASS](1) AGE PRINCIPAL OCCUPATION
Charles C. Jacobs [Class III] 63 Chief Executive Officer, First McMinnville
Corporation, January 1994 - present; Chairman,
First McMinnville Corporation, 2000 - present;
President of First McMinnville Corporation 1994
- 2001; and Chairman and Chief Executive
Officer, First National Bank, January 1994 -
present; President, First National Bank, 1988 -
2001. Mr. Jacobs has served as a Director of
First McMinnville Corporation and First
National Bank since 1985.
J. Douglas Milner [Class III] 49 General Manager and Vice President, Middle
Tennessee Dr. Pepper Bottling Company. Mr.
Milner has served as a Director since 1995.
-4-
NAME [CLASS](1) AGE PRINCIPAL OCCUPATION
John W. Perdue [Class I] 57 President and Director, First McMinnville
Corporation and First National Bank, October,
2001 - present; President, First National Bank
& Trust Company, Athens, Tennessee, 1997- 2001;
Area Executive, Branch Bank & Trust Co.,
Athens, Tennessee, 2001.
John J. Savage, Jr. [Class III] 80 Retired; Executive Vice President and Trust
Officer, First National Bank through September
1986. Mr. Savage has served as a Director since
1984.
Carl M. Stanley [Class III] 66 Mr. Stanley is the Chief Manager of
Burroughs-Ross-Colville Company, LLC, and he
was the president of the predecessor of that
company. Mr. Stanley has served as a Director
since 1984.
WHO ARE THE DIRECTORS WHO ARE CONTINUING IN OFFICE WITHOUT RE-ELECTION THIS
YEAR?
NAME [CLASS](1) AGE PRINCIPAL OCCUPATION
Paul O. Barnes [Class I] 68 Chairman, B & P Lamp Supply Co., Inc. Mr.
Barnes has served as a Director since 1984.
John Gregory Brock [Class II] 46 Major shareholder, Apex Construction Company.
Mr. Brock has served as a Director since 1993.
Arthur J. Dyer [Class II] 50 President, Metal Products Company. Mr. Dyer
has served as a Director since 1999.
D. I. Gillespie [Class I] 68 President, Bridge Builders, Inc. Mr. Gillespie
has served as a Director since 1984.
Rufus W. Gonder [Class II] 47 Certified Public Accountant. Mr. Gonder has
served as a Director since 1999.
G. B. Greene [Class II] 62 Printing business, President of Womack Printing
Co. Mr. Greene has served as a Director since
1984.
Robert W. Jones [Class II] 73 Retired, Former Chairman of First McMinnville
Corporation. Mr. Jones has served as a Director
since 1984.
C. Levoy Knowles [Class I] 48 Chief Executive Officer, Ben Lomand Rural
Telephone Cooperative. Mr. Knowles has served
as a Director since 1999.
-5-
WHAT IF A NOMINEE IS UNWILLING OR UNABLE TO SERVE?
That is not expected to occur. If it does, proxies will be voted for a
substitute designated by the Board, if the Board decides to designate a
substitute. Otherwise, the slot will be left vacant and may be filled by the
Board of Directors at a later date.
WHAT DOES THE BOARD OF DIRECTORS RECOMMEND?
The Board unanimously recommends that you vote FOR the election of these
nominees.
THE COMPANY'S BOARD OF DIRECTORS AND COMMITTEES
WHAT IS THE STRUCTURE OF THE BOARD OF DIRECTORS?
Our Board must consist of five to twenty-five Directors, but the exact number is
set by the Board. Our current Board consists of thirteen Directors. Four of
these Directors, who are in "Class III," are standing for re-election this year.
One Class I Director is standing for election. Every year, one of the three
"Classes" of Directors stands for election by our Shareholders to serve for
three year terms and until each such person's successor has been elected and
duly qualified.
HOW ARE DIRECTORS COMPENSATED?
In 2001, Directors of the Company received $800 for each meeting of the full
Board of Directors attended plus $200 for each committee meeting attended.
However, attendance at the December meeting is not required for a Director to
receive Board fees related to that meeting. Board fees have been increased to
$1,000 commencing in 2002.
HOW OFTEN DID THE BOARD OF DIRECTORS MEET IN FISCAL YEAR 2001?
The Board met five times during fiscal year 2001. Each Director attended more
than 75% of the meetings of the Board and of committees of which they were
members. In fact, there was 100% attendance at the Board meetings and near
perfect attendance at committee meetings.
WHAT ARE THE COMMITTEES OF THE BOARD?
Our Board has three standing committees, joint with First National Bank, which
are the Executive, Loan and Investment Committee, the Compensation Committee,
and the Audit, CRA, Compliance, and Trust Audit Committee. The following table
contains information concerning the Board's executive, compensation, and audit
committees.
-6-
Name of Committee and Members Function of the Committee
Executive, Loan, and Investment Exercises the powers of the full Board between Board
Committee meetings. This Committee has the authority to:
2002 Membership: 1. Approve new lines of credit above $100,000
unsecured and $250,000 secured and extensions of
G. B. Greene credit that exceed officer lending limits.
Charles C. Jacobs 2. Approve Investment decisions above limits
J. Douglas Milner authorized for management.
John W. Perdue 3. Recommend to the board administrative procedures
Carl M. Stanley and practices.
However, this Committee may not:
1. Authorize or declare dividends.
2. Submit matters to a vote of Shareholders.
3. Fill vacancies on the Board or any of its
committees.
4. Amend the charter or adopt, amend or repeal the
bylaws.
5. Authorize a plan of merger, share exchange,
liquidation, dissolution, etc.
6. Authorize or approve the issuance or sale Company
stock.
This committee met 20 times in the year 2001.
Compensation Committee Makes recommendations to the full Board of Directors on
executive and other compensation issues. Although a
2002 Membership: voting member of the committee, Mr. Jacobs does not vote
or otherwise participate in the consideration of his own
G. B. Greene compensation, although he provides information to the
Charles C. Jacobs committee with respect to compensation matters generally.
Robert W. Jones
J. Douglas Milner The predecessor to this committee (the compensation
Carl M. Stanley subcommittee of the Executive-Loan Committee) met once in
2001.
Audit, Compliance, and Trust 1. Ensure Company and Bank compliance with regulatory
Audit Committee requirements.
2. Review the internal and external audit program for
2002 Membership: the Company and the Bank, including the trust
department, to ensure risks are being properly
Arthur J. Dyer monitored.
Rufus W. Gonder 3. Review on an annual basis all Company and Bank
Robert W. Jones policies and recommend changes to the Board.
4. Monitor functions of data processing department.
5. Engage independent auditors.
6. Review audit fees.
7. Supervise matters relating to internal and external
audit functions.
8. Review and set internal policies and procedures
regarding audits, accounting and other financial
controls.
9. Review related party transactions.
This committee met eight times in the year 2001.
-7-
First National Bank has other committees, including the Loan Review Committee,
the Asset-Liability Committee, the Trust Investment Committee, the Building
Committee, the Bank Information System Committee, and the Policy Review
Committee.
EXECUTIVE OFFICERS
The following are the Executive Officers of the Company and/or First
National Bank (the "Bank"). Unless otherwise indicated, these officers have
served in the indicated capacities during the last five years through the date
hereof, except that Mr. Jacobs was elected to serve as Chairman of the Company
and the Bank in January of 2000, and Mr. Perdue was elected to the Board and to
serve as President of the Bank and the Company in October of 2001.
Name Age Office and Business Experience
- -------------- ------- --------------------------------------------------------------------
Charles C. Jacobs 63 Chief Executive Officer, First McMinnville Corporation, January 1994
- present; Chairman, First McMinnville Corporation, 2000 - present;
President of First McMinnville Corporation 1994 - 2001; and Chairman
and Chief Executive Officer, First National Bank, January 1994 -
present; President, First National Bank, 1988 - 2001.
John W. Perdue 57 President, First McMinnville Corporation and First National Bank,
October, 2001 - present; President, First National Bank & Trust
Company, Athens, Tennessee, 1997-2001; Area Executive, Branch
Bank & Trust Co., Athens, Tennessee, 2001. Mr. Perdue is also the
Bank's Chief Lending Officer.
P. Diane Bogle 55 Senior Vice President, First McMinnville Corporation and First
National Bank.
Larry B. Foster 42 Senior Vice President, First McMinnville Corporation and First
National Bank.
David W. Marttala 40 Senior Vice President, General Counsel, First McMinnville
Corporation and First National Bank.
Kenny D. Neal 51 Senior Vice President, Chief Accounting and Chief Financial Officer,
First McMinnville Corporation and First National Bank.
C. P. Whisenhunt 57 Senior Vice President, First McMinnville Corporation and First
National Bank.
Officers are generally elected annually by, and serve at the pleasure of, the
Board of Directors. However, as discussed below under "Executive Compensation,"
the Company has an employment contract with Mr. Jacobs.
*****
The Audit, Compliance, and Trust Audit Committee, is comprised of Directors
Dyer, Gonder, and Jones. The Board of Directors has determined that all of the
members of the Audit Committee are independent in accordance with the
requirements of the Nasdaq Stock Market. (Although the Company is not listed on
the Nasdaq, the Company has used the Nasdaq's independence criteria in making
this judgment.) The Audit Committee annually selects the independent auditors
and meets with the auditors to discuss the
-8-
annual audit. The Audit Committee is further responsible for internal controls
for financial reporting. The Audit, Compliance and Trust Audit Committee, which
was a subcommittee of the Audit, CRA, Compliance, and Data Processing Committee
of the Company and First National Bank in 2001, met eight times during fiscal
year 2001.
The Board of Directors has not adopted a formal written charter for the Audit
Committee.
Report of the Audit Committee
For the fiscal year ended December 31, 2001, the Audit Committee (i) reviewed
and discussed the Company's audited financial statements with management, (ii)
discussed with the Company's independent auditor, Maggart & Associates, P. C.,
all matters required to be discussed under Statement on Auditing Standards No.
61, and (iii) received from Maggart & Associates, P. C., disclosures regarding
Maggart & Associates, P. C.'s independence as required by Independence Standards
Board Standard No. 1 and discussed with Maggart & Associates, P. C. their
independence. Based on the foregoing review and discussions, the Audit Committee
recommended to the Board of Directors that the audited financial statements be
included in the Company's Annual Report on Form 10-K for the fiscal year ended
December 31, 2001.
Audit Committee:
Arthur J. Dyer
Rufus W. Gonder
Robert W. Jones.
EXECUTIVE COMPENSATION
REMUNERATION OF DIRECTORS AND OFFICERS
There were no changes in the Company's chief executive during the last fiscal
year. The following table sets forth the compensation of the Company's Chief
Executive Officer for 2001 and the other four most highly compensated executive
officers as of December 31, 2001 (if their total annual salary and bonus equaled
or exceeded $100,000) for the fiscal years ended December 31, 2001, 2000, and
1999 respectively. The figures below include all compensation paid for all
services to the Company for that fiscal year.
SUMMARY COMPENSATION TABLE
Annual Compensation Long-Term Compensation
------------------------------------------------------------------------------------------------------
Awards Payouts
----------------------------- -------------------------
Other Securities
Annual Restricted Underlying All Other
Name and Principal Compensation Stock Award(s) Options/SARs LTIP Compensation
Position Year Salary($) Bonus($) ($)(1)(2) ($) (#)(3) Payouts($) ($)(4)
- ---------------------------------------------------------------------------------------------------------------------------
Charles C. Jacobs, 2001 $153,920 $23,088 $10,600 N/A -0- $ -0- $19,470
Chairman/CEO 2000 147,992 22,199 10,400 N/A -0- $ -0- 15,486
1999 140,704 21,106 10,738 N/A -0- -0- 17,809
NOTES TO PRECEDING TABLE
(1) Pursuant to the instructions to Item 402 of Regulation S-K, the Company has
emitted information regarding group life, health, hospitalization, medical
reimbursement or relocation plans that do not discriminate in scope, terms
or operation, in favor of executive officers or directors of the Company and
that are available generally to all salaried employees. In accordance with
the instructions to Item 402(b)(2)(iii)(c), perquisites and other personal
benefits, securities, or property, if any, are not reported unless the
aggregate amount of such compensation is the lesser of either $50,000 or 10%
of the total of annual salary and bonus reported for the named executive in
this table. Mr. Jacobs reimburses the Company for any personal use of this
car.
(2) This amount includes director's fees.
-9-
(3) The amounts in this column reflect the number of unexercised options granted
to the named executive(s) in the year(s) indicated.
(4) This amount represents the Bank's contribution to the Bank's defined benefit
plan and 401(k) plans on behalf of the named executive(s).
***
STOCK OPTION GRANTS
Our Company granted no stock options in 2001 to any executive officer(s) named
in the Summary Compensation Table in 2001. Our Company grants no stock
appreciation rights.
2001 STOCK OPTION EXERCISES
The table below provides information as to exercises of options under our
Company's stock option plan by the named executive officer(s) reflected in the
Summary Compensation Table and the year-end value of unexercised options held by
such officer(s). (Our Company grants no stock appreciation rights.)
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL
YEAR AND FISCAL YEAR END OPTION/SAR VALUES
Securities Value of
Underlying Unexercised
Unexercised in-the-Money
Options/SARs Options/SARs
At Fiscal Year At Fiscal Year
End (#) End ($)
------------------ ------------------
Shares Acquired Value Realized Exercisable/ Exercisable/
Name and Title on Exercise (#) on Exercise ($) Nonexerciseable(1) Nonexerciseable(1)
- -----------------------------------------------------------------------------------------------------------
Charles C. Jacobs -0- $-0- 2,300/1,200 $51,980/$27,120
President/CEO
NOTES TO PRECEDING TABLE
(1) This amount represents the difference between the estimated book value on
January 31, 2002, of approximately $80.75 per share and the respective
exercise price(s) of the options at the date(s) of grant ($58.15). Such
amounts may not necessarily be realized.
***
DOES THE COMPANY HAVE ANY EMPLOYMENT CONTRACTS WITH ITS EXECUTIVE OFFICERS? IF
SO, WHAT ARE THE MATERIAL TERMS OF THOSE AGREEMENTS?
Yes. Mr. Jacobs signed an employment agreement with the Company in June of 1999.
He agreed to serve the Company and First National Bank as President and Chief
Executive Officer. That agreement was for a term of approximately four years. By
its terms, the agreement expires on December 31, 2003, subject to automatic
extensions for one year periods on each annual anniversary date hereof (i)
unless the Board of Directors delivers Jacobs a copy of its resolution revoking
such automatic renewal on or before any such anniversary date or (ii) unless
Jacobs notifies the Board of Directors in writing on or before any such
anniversary date that he is revoking such automatic renewal.
Pursuant to this agreement, Mr. Jacobs's base salary is determined by the Board
of Directors. However, prior to a change in control (as defined below), so long
as First National Bank's return on average assets is not less than one percent,
Mr. Jacob's salary may not be lowered, and, after the commencement of a change
in control, his salary shall not be lower than his annual salary for the year in
which any Change of
-10-
Control Transaction commences. Mr. Jacobs is also entitled to receive an annual
salary adjustment. This shall occur on January 1 of each year (or part of a
year) during the term of the agreement, commencing January 1st of the year in
which any Change of Control is deemed to occur pursuant to this agreement.
Beginning with any change in control, Mr. Jacobs's salary shall be increased
annually by not less than an amount equal to a percentage equal to 100% of the
amount reasonably determined by the Company to be the increase (if any) in the
consumer price index for the preceding year. There would be no increase (or
decrease) in the event that such consumer price index were determined by the
Company not to have increased (or to have declined).
Under Mr. Jacobs' contract, a "change in control" is deemed to occur when:
(1) There is any "change in control" of the Company or the Bank as such term is
defined on the date hereof in the Federal Change in Bank Control Act and any
comparable laws, rules, and regulations currently in effect
(2) Any merger, reorganization, consolidation, substantial disposition of
assets, liquidation or comparable transaction affecting the Bank, the
Company, or any material affiliate of either the Bank or the Company.
In addition, a "change in control" shall be deemed to have occurred in the event
that a Distribution Date occurs under the Shareholders Rights Agreement of the
Company dated June 10, 1997, as the term "Distribution Date" is defined in such
Shareholders Rights Agreement, or would have been deemed to have occurred but
for an amendment or termination of such Shareholders Rights Agreement at some
future time.
Mr. Jacobs shall have the right to receive a bonus, before a change in control,
as determined by the Company's Board of Directors. After a change in control he
is to receive a bonus for any year in which a change in control occurs, and for
each year thereafter, equal to the highest amount awarded by any affiliate of
the Company and/or First National Bank to any officer of any financial
institution owned or otherwise controlled, directly or indirectly, by such
affiliate or, if the company then controlling First National Bank or the Company
does not at any time own another financial institution other than First National
Bank, then the bonus shall be equal to the highest bonus paid to any officer,
director, or employee of such company or any affiliate thereof, who acts in the
capacity of a regional and/or multi-bank administrator.
Mr. Jacobs is subject to the Company's employment, personnel, and all other
policies as in effect on the date of his agreement and in effect from time to
time as long as no changes in such policies alter or diminish his rights under
his employment agreement. Mr. Jacobs can be terminated for cause, which is
defined to mean any one or more acts of theft, embezzlement, fraud or
dishonesty; any material uncured breach or violation of his employment
agreement; any order issued by any federal banking agency requiring his
termination; any willful, uncured failure by Mr. Jacobs to perform his duties
under the agreement; and/or any deliberate and knowing act by him that was
intended to harm, and did, harm the Company and/or First National Bank in a
materially demonstrable financial manner.
Mr. Jacobs can terminate the contract for cause if the Company persists in a
willful breach of the agreement. If Mr. Jacobs is terminated for cause, of if he
resigns without cause, he will be subject to a non-competition agreement for one
year after the date of his termination. If Mr. Jacobs's employment is terminated
without cause, he will receive a lump sum severance payment equal to five times
his compensation. Here, the term "compensation" means the sum of Jacobs' salary
and bonus for the immediately preceding calendar year (or, if greater, the sum
of his salary and bonus for the then current calendar year).
Mr. Jacobs's employment agreement terminates upon his death or disability and he
is entitled to certain benefits in the event of his termination resulting from
disability. The agreement also contains a covenant by Mr. Jacobs not to disclose
any of the Company's confidential information or trade secrets.
-11-
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The Board of Directors has appointed a "Compensation Committee," which in 2001
was a subcommittee of the Executive-Loan Committee, comprised of Directors
Greene, Jones, Milner, Stanley, and Jacobs. The Compensation Committee makes
recommendations to the full Board of Directors as to the compensation for
executive officers, including the Chief Executive Officer, as well as to
compensation for other officers and employees. (Mr. Jacobs, who is a member of
the Compensation Committee, is excused from the meeting during such time as his
compensation is being discussed.) The principal component of executive officer
compensation is salary, with secondary reliance on bonuses, stock option
incentives, and other types of long-term benefits such as participation in the
Company's 401(k) plan and in the Company's defined benefit ("pension") plan. The
Committee utilizes information concerning the performance of the Company as
compared to its peer group and in achieving its established goals in evaluating
the overall performance of its employees, including the Chief Executive Officer.
The Committee takes a long-term, as opposed to a short-term, view of
compensation and overall results of operations. The Company compares, among
other factors, the Company's performance compared to other similarly situated
commercial banks, with primary emphasis given to comparable community banks
located in Tennessee. Important factors include return on average assets, return
on equity, asset quality, comparisons of executive compensation at other
comparable institutions, and similar objective criteria. Both overall
profitability and increased earnings per share figured into, but were not the
exclusive criteria, in the Committee's recommendation. Other factors important
to the Committee are length and quality of service to the Company, to the Bank
and to the Community, demonstrated leadership ability, the apparent trends
evident in the Company's and the Bank's results of operations, and a variety of
other subjective and objective factors. The Committee was generally pleased with
the performance of the Company compared both to its peer group and to its goals.
Accordingly the Committee recommended, and the Board of Directors approved in
all material respects, the levels of compensation recommended by the Committee.
In addition, the Committee considered the historical profitability,
competitiveness, and perceived prospects in arriving at this recommendation. The
Company granted no stock options in 2001.
As noted above, the members of the Company's Compensation Committee during the
last completed fiscal year were Directors Greene, Milner, Jones, Stanley and
Jacobs. None of these individuals was, during the last fiscal year, an officer
or employee of the Company or any of its subsidiaries, was formerly an officer
of the registrant or any of its subsidiaries, or had any relationship requiring
disclosure by the Company under any paragraph of Item 404 of the SEC's
Regulation S-K except that Director Jacobs is Chairman, President and Chief
Executive Officer of the Company and First National Bank and Director Jones
served as a consultant to the Company and, as such consultant, as Chairman of
the Company, until January of 2000. (In addition, Director Jones retired in 1993
as chief executive officer of the Company). During the last completed fiscal
year, no executive officer of the Company served as a member of the compensation
committee (or other board committee performing equivalent functions or, in the
absence of any such committee, the entire board of directors) of another entity,
one of whose executive officers served on the compensation committee (or other
board committee performing equivalent functions or, in the absence of any such
committee, the entire board of directors) of the Company; or served as a
director of another entity, one of whose executive officers served on the
compensation committee (or other board committee performing equivalent functions
or, in the absence of any such committee, the entire board of directors) of the
Company; or served as a member of the compensation committee (or other board
committee performing equivalent functions or, in the absence of any such
committee, the entire board of directors) of another entity, one of whose
executive officers served as a Director of the Company.
2001 Report of the Compensation Committee on Executive Compensation
The Company's Compensation Committee reviews compensation paid to the chief
executive officer. The Committee reviews various published surveys of
compensation paid to employees performing similar duties for depository
institutions and their holding companies, with a particular focus on the level
of compensation paid by comparable stockholder institutions in and around the
Company's market areas, including institutions with total assets of between $150
million and $500 million. Although the Committee does not specifically set
compensation levels for the chief executive officer based on whether particular
financial goals have been achieved by the Company, the Committee does consider
the overall profitability
-12-
of the Company when making these decisions. The Compensation Committee has the
following goals for compensation programs impacting the chief executive officer
of the Company:
- to provide motivation for the chief executive officer to enhance
stockholder value by linking compensation to the future value of the
Company's stock;
- to retain the chief executive officer who has led the Company and
the Bank to build its existing market franchise
- to attract other high quality executive officers, such as John W.
Perdue, the new President of the Bank and the Company, in the future
by providing total compensation opportunities which are consistent
with competitive norms of the industry and the Company's level of
performance; and
- to maintain reasonable fixed compensation costs by targeting the
base salary at a competitive average.
During the year ended December 31, 2001, Charles C. Jacobs, Chairman, President
and Chief Executive Officer, received a base salary of $153,920 in recognition
of his continued leadership in the management of the Company, as well as a bonus
of $23,088. The Compensation Committee will consider the annual compensation
paid to the chairmen, presidents, and chief executive officers of publicly owned
financial institutions nationally, in the State of Tennessee and surrounding
states with assets of between $150 million and $500 million and the individual
job performance of such individuals in consideration of its specific salary
increase decision with respect to compensation to be paid to the president and
chief executive officers in the future.
HOW IS THE COMPANY AFFECTED BY THE LIMITATIONS ON DEDUCTIBILITY OF COMPENSATION?
Section 162(m) of the Internal Revenue Code limits the deductibility of
executive compensation paid by publicly held corporations to $1 million per
employee. Based on the amounts earned by the employees of the Company, the
Company does not believe that the $1 million limitation will affect the Company.
In addition, this limitation generally does not apply to compensation based on
performance goals if certain requirements are met. The Company believes our
stock incentive plans and payments of target incentive payments are
"performance-based" and satisfy Section 162(m). The committee intends for all
compensation paid to our executives to be fully deductible under federal tax
laws and intends to take such steps as are necessary to ensure continuing
deductibility.
This report on executive compensation for the 2001 fiscal year has been
furnished by the members of the Compensation Committee, without the
participation of Director Jacobs:
- - Carl M. Stanley (Chairperson)
- - G. B. Greene
- - J. Douglas Milner
- - Robert W. Jones.
SHAREHOLDER RETURN PERFORMANCE GRAPH
Stock Performance Graph. Set forth below is a stock performance graph comparing
the cumulative total shareholder return on the Common Stock with (a) the
cumulative total shareholder return on stocks included in the Russell 2000 index
and (b) the cumulative total shareholder return on stocks included in the NASDAQ
Bank Index, as prepared for the Company by Research Data Group, Inc. All
investment comparisons assume the investment of $100 as of December 31, 1996,
and the reinvestment of dividends, as specified in Section 402(l) of Regulation
S-K for companies (like the Company) which registered under Section 12 of the
Exchange Act in fiscal 2001.
-13-
There can be no assurance that the Company's future stock performance will be
the same or similar to the historical stock performance shown in the graph
below. The Company neither makes nor endorses any predictions as to stock
performance. The Company notes, however, that the comparisons are to companies
with publicly traded stocks which may be trading at a multiple of book value
greater than the multiple (if any) at which the Company's stock is trading.
(GRAPHIC OMITTED)
12-31-96 12-31-97 12-31-98 12-31-99 12-31-00 12-31-01
First McMinnville Corporation* 100 111.50 124.84 140.55 156.66 171.26
Russell 2000 Index* 100 122.36 119.25 144.60 140.23 143.71
NASDAQ Bank Index* 100 167.41 166.33 159.89 182.38 197.44
The information set forth above under the subheadings "Compensation Committee
Report on Executive Compensation" and "Stock Performance Graph" (i) shall not be
deemed to be "soliciting material" or to be "filed" with the Commission or
subject to Regulation 14A or the liabilities of Section 18 of the Exchange Act,
and (ii) notwithstanding anything to the contrary that may be contained in any
filing by the Company under such Act or the Securities Act of 1933, as amended
("Securities Act"), shall not be deemed to be incorporated by reference in any
such filing.
[*Note: Return is measured by dividing (i) the sum of (A) the cumulative amount
of dividends for the measurement period, assuming dividend reinvestment, and (B)
the difference between the Share price at the end and beginning of the
measurement period; by (ii) the Share price at the beginning of the measurement
period. The measurement period in the graph set forth above begins on the last
trading day of December 31, 1996. The closing price on that date is the base
amount, with cumulative returns for each subsequent twelve-month period measured
as a change from that base. The cumulative return for each twelve-month period
is calculated in relation to the base amount as of the last trading day of the
Company's fiscal year.]
-14-
Benefits
In April 1997, the stockholders of the Company approved the 1997 First
McMinnville Corporation Stock Option Plan (the "Stock Option Plan"). The Stock
Option Plan provides for the granting of stock options, and authorizes the
issuance of common stock upon the exercise of such options, for up to 57,500
shares of common stock, to employees, nonemployee Directors and advisors of the
Company, of which 1,500 were specified in the Stock Option Plan to be granted to
each then-current Director of the Company.
Under the Stock Option Plan, stock option awards may be granted in the form of
incentive stock options or nonstatutory stock options, and are generally
exercisable for up to ten years following the date such option awards are
granted. Exercise prices of incentive stock options must be equal to or greater
than 100% of the fair market value of common stock on the grant date.
The Stock Option Committee designated by the Board administers the Stock Option
Plan. The Stock Option Plan may be terminated at any time by the Board of
Directors. Options granted under the Stock Option Plan are exercisable as
determined by the Board of Directors and generally are expected to vest
approximately 10% per year over a ten year period and expire after ten years,
although this period may be shortened by the Board of Directors. According to
the plan, however, the options granted to the Directors in 1997 vested one-third
per year commencing on May 13, 1997. The Stock Option Plan provides that options
must be exercised no later than ten years after being granted (five years in the
case of incentive Stock Options granted to an employee who owns more than 10% of
the voting power of all stock).
The Stock Option Plan provides that the Board of Directors shall approve the
exercise price of options on the date of grant, which for incentive stock
options cannot be less than the fair market value of the Common Stock on that
date (110% of the fair market value for Incentive Stock Options granted to any
employee who owns more than 10% of the voting stock). The number of shares which
may be issued under the Stock Option Plan and the exercise prices for
outstanding options are subject to adjustment in the event that the number of
outstanding shares of Common Stock are changed by reason of stock splits, stock
dividends, reclassifications or recapitalizations. In addition, upon a merger or
consolidation involving the Company, participants may be entitled to shares in
the surviving corporation upon the terms set forth in the Stock Option Plan.
Options granted under the Stock Option Plan are nontransferable, other than by
will, the laws of descent and distribution or, for nonstatutory stock options,
pursuant to certain domestic relations orders. Payment for shares of Common
Stock to be issued upon exercise of an Option may, if permitted in the option
agreement, be made in cash, by delivery of Common Stock valued at its fair
market value on the date of exercise or delivery of a promissory note as
specified in the option agreement. Note 18 to the Consolidated Financial
Statements of the Company for the year ended December 31, 2001 contains
additional information concerning the Stock Option Plan.
Pension Plan. The Bank has a noncontributory pension plan for all eligible
employees. In order to be eligible, an employee must perform at least 1,000 or
more hours of service within six (6) months of his or her date of employment.
The employee shall become eligible on the first day of May first following the
completion of one year of service and the attainment of age 21, provided such
person was hired prior to his or her 60th birthday.
The following table sets forth the estimated annual retirement benefits on a
straight life annuity basis to participating employees, including the Named
Executive Officer, for designated years of service and remuneration levels.
-15-
Years of Service
REMUNERATION 15 20 25 30 35
$ 25,000 $ 4,651 $ 6,202 $ 7,752 9,302 $ 10,853
50,000 10,276 13,702 17,127 20,552 23,978
75,000 15,901 21,202 26,502 31,802 37,103
100,000 21,525 28,700 35,875 43,051 50,225
125,000 27,150 36,200 45,250 54,301 63,350
150,000 32,775 43,700 54,625 65,551 76,475
175,000 38,400 51,200 64,000 76,801 89,600
200,000 44,025 58,700 73,375 88,051 102,725
225,000 49,650 66,200 82,750 99,301 115,850
300,000 66,525 88,700 110,875 133,051 155,226
400,000 89,025 118,700 148,375 178,051 207,726
450,000 100,275 133,700 167,125 200,551 233,976
500,000 111,525 148,700 185,875 223,051 260,226
The amount of a participant's monthly normal retirement annuity is equal to .85%
of the first $833 of the participant's average monthly compensation plus 1.50%
of the compensation in excess of the first $833, multiplied by the number of
years of credited service to the participant's normal retirement date which is
attainment of age 65. The basis on which benefits under the plan are computed
are straight-life annuity amounts. The number of years of credited service used
in the formula will be limited to a maximum of 35. Average monthly compensation
is defined as the sum of the participant's reported basic earnings in the five
consecutive plan years that produce the highest amount divided by 60. Early
retirement, postponed retirement and disability retirement are also provided for
in the plan.
A plan participant has a vested benefit equal to a percentage of his or her
accrued benefit based on the length of his or her service, beginning at 20%
after three years of service and increasing 20% per year for the next four
years, with a participant fully vested at the end of year seven. Mr. Jacobs has
33 years of credited service under the Plan with current compensation covered by
the Plan of $177,008 and the estimated amount of the Company's 2001 contribution
for Mr. Jacobs was $10,501, as is reflected in the Summary Compensation Table
appearing elsewhere in these proxy materials. Mr. Jacobs' anticipated monthly
benefit at retirement at age 65 is currently estimated at $7,160. The benefits
from this plan are not subject to deduction for Social Security or other offset
amounts.
Effective March 24, 1986, the Plan was amended by including, for purposes of
calculating a participant's compensation under the Plan, any and all bonuses
paid to the participant during the plan year. Please refer to Note 10 to the
Consolidated Financial Statements for additional information.
The Company also offers a 401(k) profit-sharing plan for eligible employees,
which was adopted in 1988. To be eligible, an employee must have obtained the
age of 21 and she or he must have completed one year of service. The provisions
of this plan provide for both employer and employee contributions. In 2001, the
Company contributed approximately $51,000 to the plan, as compared to $52,000 in
2000 and $50,000 in 1999. Please refer to Note 10 of the Consolidated Financial
Statements for additional information.
-16-
STOCK OWNERSHIP OF MANAGEMENT AND CERTAIN BENEFICIAL OWNERS
The Company is authorized to issue 5,000,000 shares of its Common Stock. (Please
refer to Item 5 of the Company's Annual Report on Form 10-K for the year ending
December 31, 2001, for additional discussion of the Company's authorized classes
of securities.) As of January 31, 2002, there were 520,898 shares of the
Company's Common Stock issued and outstanding.
The following table provides information, as of January 31, 2002, with respect
to the following beneficial owners of the Company's common stock:
- - Each director of the Company, all of whom are directors of the Bank;
- - Each nominee for director;
- - All Company executive officers and directors as a group.
No shareholder known to management owns as much as or more than 5% of the
Company's outstanding common stock, either on the Company's records or
indirectly as a "beneficial" owner.
We determined beneficial ownership by applying the General Rules and Regulations
of the SEC, particularly Rule 13d-3 under the Securities Exchange Act, which
state that a person may be credited with the ownership of common stock:
- - Owned by or for the person's spouse, minor children or any other relative
sharing the person's home;
- - Of which the person shares voting power, which includes the power to vote
or to direct the voting of the stock; and
- - Of which the person has investment power, which includes the power to
dispose or direct the disposition of the stock.
- - Also, a person who has the right to acquire beneficial ownership of shares
within 60 days after January 31, 2002, will be considered to own the
shares. Unless otherwise indicated, the persons listed own their shares
directly as individuals or in conjunction with their spouses.
PRO FORMA
PERCENT OF
NUMBER OF RIGHT TO OUTSTANDING
NAME (1)(2) SHARES OWNED ACQUIRE SHARES
(A) Name of Each Director and Nominee
Paul O. Barnes 10,000 -0- 1.92
J. G. Brock(2) 951 1,500 *
Arthur J. Dyer 206 1,500 *
Dean I. Gillespie(3) 2,144 400 *
Rufus W. Gonder 206 1,500 *
G.B. Greene(4) 8,240 1,500 1.86
Charles C. Jacobs 4,246 2,300 1.25
-17-
PRO FORMA
PERCENT OF
NUMBER OF RIGHT TO OUTSTANDING
NAME (1)(2) SHARES OWNED ACQUIRE SHARES
Robert W. Jones(5) 8,894 1,500 1.99
C. Levoy Knowles 450 1,500 *
J. Douglas Milner 200 1,500 *
John W. Perdue 200 -0- *
John J. Savage, Jr. 1,132 1,500 *
C. M. Stanley(6) 16,604 1,500 3.47
(B) Directors and Executive Officers of 55,035(1) 18,600(1) 13.65%(1)
the Bank (18 persons as a group)
*Represents beneficial ownership of less than 1% of the Company's common
stock.
NOTES TO PRECEDING TABLE
(1) The percentages are based on 520,898 shares of the Common Stock actually
outstanding at January 31, 2002, plus that number of shares obtainable by
each person named within the next 60 days pursuant to the exercise of
stock options. Such shares are deemed to be outstanding for the purpose of
computing the percentage of outstanding shares owned by such person and
the entire group, but are not deemed to be outstanding for the purpose of
computing the percentage owned by any other person. All Directors hold
1,500 options pursuant to the Stock Option Plan except that Mr. Barnes has
exercised all of his 1,500 options, and Mr. Gillespie has exercised 1,100
of his 1,500 options. This information is based in part on information
supplied to the Company by the persons named in the Table. The other
options held by executive officers and exercisable within 60 days are Mr.
Jacobs (800), Mrs. Bogle (480), Mr. Foster (480), Mr. Marttala (480), Mr.
Neal (480), and Mr. Whisenhunt (480).
(2) Includes 184 shares held on behalf of Mr. Brock's spouse.
(3) Includes 396 shares held by Mr. Gillespie's spouse, as to which Mr.
Gillespie disclaims beneficial ownership.
(4) Includes 2,244 shares held by F.C. Boyd Jr. & Thelma Boyd Trust, Susie
Boyd Greene - Trustee, Mr. Greene's spouse, as to which Mr. Greene
disclaims beneficial ownership.
(5) This total includes 4,446 shares held by Mr. Jones' spouse, as to which
Mr. Jones disclaims beneficial ownership.
(6) Includes 10,354 shares of an estate as to which Mr. Stanley is executor
and 4,438 shares of a trust as to which Mr. Stanley is a trustee.
***
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 requires our Directors and
executive officers and persons who own more than 10% of a registered class of
our equity securities to file with the SEC reports of ownership and changes in
ownership of our common stock. Directors, executive officers and greater than
10% Shareholders are required by SEC regulations to furnish us with copies of
all Section 16(a) forms they file. Based solely on a review of the copies of
these reports furnished to us or written representations that no other reports
were required, we believe that during fiscal year 2001 all of our Directors and
executive officers complied with these requirements except that Mr. Perdue filed
a Form 3 late, Mr. Gillespie filed late as to three transactions reportable on
Form 4, and Messrs. Barnes, Brock and Marttala each filed one Form 4 late. (The
Company knows of no 10% or greater beneficial owner.)
-18-
CERTAIN TRANSACTIONS
Certain Directors and officers of the Company, businesses with which they are
associated, and members of their immediate families are customers of First
National Bank and have had transactions with First National Bank in the ordinary
course of First National Bank's business. All material transactions involving
loans and commitments to such persons and businesses have been made on
substantially the same terms, including interest rates and collateral, as those
prevailing at the time for comparable transactions with other borrowers. The
indebtedness of management (including the Directors and their respective
interests) and these related parties to First National Bank was approximately
$6,348,000 at December 31, 2001 and thus equal to an estimated 15.3% of the
Company's total Shareholders' equity at December 31, 2001. This indebtedness
comprised 4.57% of the total currently outstanding First National Bank loans
(net of loan loss reserve) as of December 31, 2001. In the opinion of the Board
of Directors, such transactions have not involved more than a normal risk of
collectibility nor presented other unfavorable features, nor were any of these
related-party loans restructured or charged off in such year.
There is no family relationship between any of the above officers or between any
officer, Director or nominee for Director, except that Mr. G. B. Greene is the
brother of Bank Assistant Vice President Fred Greene.
Except as disclosed under "Executive Compensation," and except as set forth
below, our executive officers, Directors and Director nominees did not have
business relationships with us which would require individual disclosure under
applicable SEC regulations and no such transactions are anticipated during the
2001 fiscal year.
SECOND PROPOSAL
RATIFICATION OF
INDEPENDENT AUDITORS
The Board of Directors of the Company has selected Maggart & Associates, P.C. to
serve as independent auditors for the current fiscal year upon the
recommendation of the Company's Audit Committee and considers it desirable that
the selection of Maggart & Associates, P.C. be ratified by the Shareholders.
Maggart & Associates, P.C. has served in this capacity for the Company since
1984. A representative of Maggart & Associates is expected to be present at the
Annual Meeting, will have an opportunity to make a statement if he or she so
desires, and is expected to be available to respond to appropriate questions.
Fees Billed or to be Billed to the Company by Maggart & Associates, P.C. for
2001 are as follows:
Audit Fees. The aggregate audit fees billed or to be billed to the Company by
Maggart & Associates, P.C. during 2001 for professional services rendered for
the audit of the Company's annual financial statements and for the reviews of
the financial statements included in the Company's quarterly reports on Form
10-Q totaled $47,500.
Financial Information Systems Designed and Implementation Fees. Maggart &
Associates, P.C. provided no professional services to the Company regarding
financial information systems design and implementation during 2001.
All Other Fees. The aggregate fees billed or to be billed to the Company by
Maggart & Associates, P.C. for 2001 for all services rendered to the Company,
including tax related services, loan review, work on the Company's Annual Report
on Form 10-K, preparation of Company reports to the Federal Reserve Board,
controls assessment of in-house IT/EDP department, but excluding audit fees and
financial information systems design and implementation fees, totaled $37,430.
The Board has considered whether the provision of non-audit services is
compatible with maintaining the external accountant's independence. After
discussing this matter among themselves, with management,
-19-
and with the independent auditors, the Board believes that the provision of the
specified non-audit services is compatible with maintaining the external
auditor's independence.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT YOU VOTE FOR THE RATIFICATION
OF MAGGART & ASSOCIATES, P.C., AS THE COMPANY'S INDEPENDENT AUDITORS FOR THE
FISCAL YEAR ENDING DECEMBER 31, 2002.
PROXY SOLICITATION
Proxies are being solicited by and on behalf of the Board of Directors of First
McMinnville Corporation. All expenses of this solicitation, including the cost
of preparing and mailing this Proxy Statement, will be borne by us. In addition
to solicitation by use of the mails, proxies may be solicited by our Directors,
officers and employees in person or by telephone, telegram or other means of
communication. Our Directors, officers and employees will not be additionally
compensated, but may be reimbursed for out-of- pocket expenses in connection
with any solicitation. Arrangements also will be made with custodians, nominees
and fiduciaries for forwarding of proxy solicitation material to beneficial
owners of shares held of record by such persons, and we may reimburse those
custodians, nominees and fiduciaries for reasonable expenses incurred in
connection therewith.
SHAREHOLDER PROPOSALS FOR 2003 ANNUAL MEETING
Except as noted below, to be considered for inclusion in our proxy materials
relating to the 2003 Annual Meeting of Shareholders, Shareholder proposals must
be submitted by eligible Shareholders who have complied with the relevant
regulations of the SEC and must be physically received by the Company no later
than February 21, 2003. For business to be properly brought before an annual
meeting by a Shareholder, the Shareholder must have delivered timely notice
thereof in writing to the chief executive officer of the Company. To be timely,
unless otherwise provided pursuant to applicable law (including, without
limitation, federal securities laws), a Shareholder's notice must be delivered
to or mailed and received by the chief executive officer or the corporate
secretary at the principal executive offices of the Company, not less than sixty
days nor more than ninety days prior to the meeting; provided, however, that in
the event that less than sixty days' notice or prior public disclosure of the
date of the meeting is given or made to Shareholders, notice by the Shareholder
to be timely must be so received not later than the close of business on the
tenth day following the date on which such notice of the date of the annual
meeting was mailed or such public disclosure was made. A Shareholder's notice to
the Company must include a detailed list of information. A copy of the
Shareholder proposal procedure is available from the Company in the same manner
as requesting a copy of the Annual Report on Form 10-K, as specified elsewhere
in this document. Shareholder proposals should be mailed to Charles C. Jacobs,
Chairman and Chief Executive Officer, First McMinnville Corporation, 200 East
Main Street, McMinnville, Tennessee 37110.
OTHER BUSINESS
Our management is not aware of any matters to be brought before the Annual
Meeting other than such ministerial matters as the consideration of minutes of
the last meeting of Shareholders. However, if any other matters are properly
brought before the Annual Meeting, the persons named in the enclosed form of
proxy will have discretionary authority to vote all proxies with respect to such
matters in accordance with their best judgment.
AVAILABILITY OF FORM 10-K
UPON THE WRITTEN REQUEST OF ANY RECORD HOLDER OR BENEFICIAL OWNER OF THE SHARES
OF OUR COMMON STOCK ENTITLED TO VOTE AT THE ANNUAL MEETING, WE WILL PROVIDE,
WITHOUT CHARGE, A COPY OF OUR ANNUAL REPORT ON FORM 10-K FOR THE FISCAL YEAR
ENDED DECEMBER 31, 2001, TOGETHER WITH FINANCIAL STATEMENTS AND SCHEDULES, AS
AND WHEN FILED WITH THE SEC. REQUESTS SHOULD BE MAILED TO CHARLES C. JACOBS,
CHAIRMAN, 200 EAST MAIN STREET, MCMINNVILLE, TENNESSEE 37110.
The Annual Report to Shareholders that accompanied the proxy materials does not
constitute "soliciting material." Copies of the Annual Report to Shareholders
have been mailed to the Securities and Exchange Commission pursuant to Rule
14a-3(c) as promulgated under the Securities Exchange Act, as amended.
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PROXY
FIRST MCMINNVILLE CORPORATION
FOR USE AT THE ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON APRIL 9, 2002
THIS PROXY IS SOLICITED BY AND ON BEHALF OF THE BOARD OF DIRECTORS OF THE
COMPANY.
The undersigned holder of Common Stock, $2.50 par value per share ("Common
Stock") of FIRST MCMINNVILLE CORPORATION (the "Company") hereby appoints Greg
Brock Art Dyer, and Bob Jones, each with full power to appoint his substitute,
as proxy for the undersigned to attend, vote and act for and on behalf of the
undersigned at the Annual Meeting of Shareholders of the Company to be held at
the Board Room of First National Bank of McMinnville, 200 East Main Street,
McMinnville, Tennessee 37110, on Tuesday, April 9, 2002 (the "Meeting") at 2:30
p.m. (Local Time), and at any adjournments and postponements thereof, and hereby
revokes any proxy previously given by the undersigned. The record date for the
Annual Meeting is March 1, 2002.
The Common Stock represented by this proxy will be voted in accordance with any
choice specified in this proxy. IF NO SPECIFICATION IS MADE, THE PERSONS NAMED
BELOW WILL VOTE SUCH COMMON STOCK FOR THE ELECTION OF THE DIRECTORS NAMED IN
THIS PROXY AND FOR THE RATIFICATION OF THE SPECIFIED AUDITORS, AND IN THE
DISCRETION OF THE PROXY AS TO ANY OTHER MATTER TO PROPERLY COME BEFORE THE
ANNUAL MEETING. If this proxy is not dated, it shall be deemed to be dated on
the date on which this proxy was mailed by the Company.
1. To elect as Directors the Nominees listed below:
[ ] FOR all Nominees listed below [ ] WITHHOLD AUTHORITY to vote
(except as marked to the contrary for all Nominees listed below
below)
(INSTRUCTIONS: TO WITHHOLD AUTHORITY FOR ANY INDIVIDUAL NOMINEE, STRIKE A
LINE THROUGH THE NOMINEE'S NAME IN THE LIST BELOW.)
CLASS III - Charles C. Jacobs, J. Douglas Milner, John J. Savage, Jr.,
Carl M. Stanley (3-year terms.)
CLASS I - John W. Perdue (One year term until the election of Class I
Directors in 2003.)
2. To ratify the appointment of Maggart & Associates, P.C., as independent
auditors for the Company for the fiscal year ending December 31, 2002.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
3. In their discretion, the Proxies are authorized to vote upon such other
business as properly may come before the meeting.
The following rules apply to this proxy: When shares are held by
joint tenants, both should sign. If you are signing as attorney, executor,
administrator, trustee, or guardian, you must give your full title as
such. If you are signing on behalf of a corporation or limited liability
company, you must sign in full corporate name by the president, chief
manager or other authorized officer. If you are signing on behalf of a
partnership, you must sign in partnership name by an authorized person.
Date: ______________________, 2002 ______________________________________
Signature
[ ] PLAN TO ATTEND
[ ] DO NOT PLAN TO ATTEND
______________________________________
Signature, if held jointly
If you don't mind, please provide us with your e-mail address:
________________________________________________________________________________