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:
<Table>
[ ] 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 Rule 14a-12
</Table>
CUMBERLAND BANCORP, INCORPORATED
- --------------------------------------------------------------------------------
(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:
[CUMBERLAND BANCORP, INCORPORATED LETTERHEAD]
April 4, 2002
TO THE SHAREHOLDERS OF CUMBERLAND BANCORP, INCORPORATED:
In connection with the Annual Meeting of Shareholders of your Company
to be held April 25, 2002, we enclose a Notice of Annual Meeting of
Shareholders, a proxy statement, and a form of proxy.
You are being asked to (1) approve an amendment to the Company's
Amended and Restated Charter to provide for staggered terms for the members of
the Company's Board of Directors and (2) to elect the members of each of the
three classes of the Company's Board of Directors created as a result of the
amendment to serve for various terms of one to three years or until their
successors are duly elected and qualified if the Amendment is approved or to
serve until the next Annual Meeting of Shareholders in 2003 or until their
successors are duly elected and qualified, if the amendment is not approved.
Information about these matters is contained in the attached proxy statement.
You are invited to attend the Annual Meeting of Shareholders in person.
We would appreciate your completing the enclosed form of proxy so that your
shares can be voted in the event that you are unable to attend the meeting. We
will also offer telephone or internet voting this year, as more particularly
described in the attached proxy statement. If you are present at the meeting and
desire to vote your shares personally, your form of proxy may be revoked and you
may vote in person. We urge you to return your proxy card in the enclosed
envelope as soon as possible.
Sincerely,
/s/ Joel Porter /s/ Tom Paschal
Joel Porter Tom Paschal
President Chief Operating Officer and Secretary
CUMBERLAND BANCORP, INCORPORATED
4205 HILLSBORO ROAD, SUITE 204
NASHVILLE, TENNESSEE 37215
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
To the Shareholders of Cumberland Bancorp, Incorporated:
The Annual Meeting of Shareholders (the "Annual Meeting") of Cumberland
Bancorp, Incorporated (the "Company") will be held on Thursday, April 25, 2002
at 4:30 p.m., (CDT), at Cumberland Bank's Gallatin office at 250 West Broadway,
Gallatin, Tennessee 37066, for the following purposes:
(1) To consider and act upon a proposal to amend the Company's
Amended and Restated Charter to classify the Company's Board of Directors into
three classes of directors with staggered three year terms of office;
(2) To elect four (4) Class I directors, four (4) Class II
directors and five (5) Class III directors to serve for one year, two years and
three years, respectively, and until their successors are duly elected and
qualified, if the shareholders of the Company approve the amendment to the
Company's Amended and Restated Charter to classify the Company's Board of
Directors into three classes, or to elect those same thirteen (13) directors to
serve until the next Annual Meeting and until their successors are duly elected
and qualified, if the Company's shareholders do not approve the amendment to the
Company's Amended and Restated Charter; and
(3) To transact such other business as may properly come before
the Annual Meeting or any adjournment(s) thereof.
Only shareholders of record at the close of business on February 28,
2002 will be entitled to vote at the Annual Meeting or any adjournment(s)
thereof.
Your attention is directed to the Proxy Statement accompanying this
Notice for a more complete statement regarding the matters proposed to be acted
upon at the Annual Meeting.
By Order of the Board of Directors,
/s/ Tom E. Paschal
Tom E. Paschal, Chief Operating Officer and Secretary
April 4, 2002
YOUR REPRESENTATION AT THE ANNUAL MEETING IS IMPORTANT. TO ENSURE YOUR
REPRESENTATION, WHETHER OR NOT YOU PLAN TO ATTEND THE ANNUAL MEETING, PLEASE
COMPLETE, DATE, SIGN, INDICATE IF YOU PLAN TO ATTEND THE ANNUAL MEETING AND
RETURN THE ENCLOSED PROXY. SHOULD YOU SUBSEQUENTLY DESIRE TO REVOKE YOUR PROXY,
YOU MAY DO SO AS PROVIDED IN THE ACCOMPANYING PROXY STATEMENT AT ANY TIME BEFORE
IT IS VOTED.
CUMBERLAND BANCORP, INCORPORATED
NASHVILLE, TENNESSEE
PROXY STATEMENT FOR ANNUAL MEETING OF SHAREHOLDERS
This Proxy Statement is furnished in connection with the solicitation
by the Board of Directors of Cumberland Bancorp, Incorporated (the "Company") of
proxies for the Annual Meeting of Shareholders of the Company to be held on
Thursday, April 25, 2002, at 4:30 p.m. (CDT), at Cumberland Bank's Gallatin
office at 250 West Broadway, Gallatin, Tennessee 37066. This proxy material was
first mailed to shareholders on or about April 4, 2002.
All valid proxies which are received will be voted in accordance with
the recommendations of the Board of Directors unless otherwise specified
thereon. A proxy may be revoked by a shareholder at any time prior to its use by
filing with the Secretary of the Company a written revocation or a duly executed
proxy bearing a later date, or by attending the Annual Meeting and voting in
person.
If you are a registered shareholder you may vote by telephone, or
electronically through the internet, by following the instructions included with
your proxy card. If your shares are held by your broker, often referred to as in
"street name," please check your proxy card or contact your broker or nominee to
determine whether you will be able to vote by telephone or electronically.
Only holders of record of the Company's common stock, par value $0.50
per share (the "Common Stock"), at the close of business on February 28, 2002
(the "Record Date") are entitled to notice of and to vote at the Annual Meeting.
As of the Record Date, the Company had 13,808,236 shares of Common Stock issued
and outstanding, the holders of which are entitled to one vote for each share
held on each of the matters to be voted upon at the Annual Meeting. The
representation in person or by proxy of at least a majority of the outstanding
shares entitled to vote is necessary to provide a quorum at the meeting.
Abstentions and "non-votes" are counted as present in determining whether the
quorum requirement is satisfied. Because directors are elected by a plurality of
the votes cast by the holders of the Common Stock represented and entitled to
vote at the Annual Meeting, abstentions are not considered in the election. The
Proposed Amendment requires the approval of a majority of the shares of Company
Common Stock outstanding and entitled to vote at the Annual Meeting as of the
Record Date. As such, abstentions and non-votes will have the practical effect
of a vote against the Proposed Amendment. Any other matters that may properly
come before the meeting or any adjournment thereof shall be approved by the
affirmative vote of a majority of the votes cast by the holders of Common Stock
represented and entitled to vote at the Annual Meeting, and abstentions and
"non-votes" will have no effect on the outcome of the vote. A "non-vote" occurs
when a nominee holding shares for a beneficial owner votes on one proposal, but
does not vote on another proposal because the nominee does not have
discretionary voting power and has not received instructions from the beneficial
owner.
The cost of solicitation of proxies will be borne by the Company,
including expenses in connection with preparing, assembling, and mailing this
Proxy Statement. Such solicitation will be made by mail, and may also be made by
the Company's regular officers or employees personally or by telephone or
telegram. Arrangements may also be made with brokerage houses and other
custodians, nominees and fiduciaries to forward solicitation materials to the
beneficial owners of shares held of record by such persons. The Company may
reimburse brokers, custodians and nominees for their expenses in sending proxies
and proxy materials to beneficial owners.
STOCK OWNERSHIP
The following table sets forth information regarding the beneficial ownership of
the Company's Common Stock as of February 28, 2002 (unless otherwise noted),
for:
- each person who is known to the Company to beneficially own
more than 5% of the outstanding shares of the Company's Common
Stock;
- each of the Company's directors and nominees;
- each of the Company's executive officers named in the Summary
Compensation Table; and
- all of the Company's directors and executive officers as a
group.
1
The number of shares held and the percentages of shares outstanding
provided in the tables are based on 13,808,236 voting shares outstanding as of
February 28, 2002. Beneficial ownership is determined in accordance with the
rules of the Securities and Exchange Commission and generally includes voting or
investment power with respect to securities. Shares issuable upon exercise of
options that are exercisable within sixty days of February 28, 2002 are
considered outstanding for the purpose of calculating the percentage of
outstanding shares of Company Common Stock held by the individual, but not for
the purpose of calculating the percentage of outstanding shares held by any
other individual.
Number of Shares
Beneficially
Owned as a
Result of Options
Currently
Number of Exercisable or
Shares Exercisable Percentage of
Beneficially Within 60 Days of Shares
Name of Beneficial Owner (1) Owned (2) February 28, 2002 Outstanding
- ---------------------------- ---------------------- ------------------ --------------
Directors
Tom Brooks 407,038 22,000 3.10%
Ronald Gibson 16,666 0 .12%
Frank Inman 305,314 (3) 13,200 2.30%
Paul Pratt 0 0 0%
Paul Priddy 0 12,500 .09%
Alex Richmond 156,200 (4) 13,200 1.23%
James Rout 142,380 0 1.03%
John Shepherd 516,806 13,200 3.83%
R. Todd Vanderpool 7,000 5,000 .08%
John S. Wilder, Sr. 1,425,510 (5) 13,200 10.40%
Named Executive Officers
Jack Everett (6) 476,022 (7) 22,000 3.60%
Danny Herron (8) 82,500 22,000 .76%
Tom Paschal (8) 214,432 22,000 1.71%
Joel Porter (8) 1,777,510 13,200 13.00%
Wayne Rodgers (9) 137,356 22,000 1.15%
William Smallwood (10) 342,608 (11) 0 2.48%
All executive officers and
directors as a group ( 18 persons) 6,112,278 201,500 45.07%
- -----------------
(1) The address for each of the directors and executive officers set forth
in the table above is 4205 Hillsboro Road, Suite 204, Nashville,
Tennessee 37215.
(2) Each person has sole voting and investment power with respect to the
shares listed unless otherwise indicated.
(3) Includes 86,794 shares held by Mr. Inman's spouse.
(4) Includes 69,180 shares held by Mr. Richmond's spouse and 11,000 shares
held by Mr. Richmond as custodian for his son.
(5) Includes 791,992 shares held by Mr. Wilder's spouse.
(6) Mr. Everett resigned from all positions he held with the Company and
its subsidiaries except his position on the board of directors of The
Murray Bank on March 13, 2002.
(7) Includes 284,372 shares held by Mr. Everett's spouse and 3,200 shares
held by Mr. Everett as custodian for his daughters.
(8) The named executive officer is also a director of the Company.
(9) Mr. Rodgers resigned from all positions he held with the Company except
for his position on the BankTennessee board of directors on March 13,
2002.
(10) Mr. Smallwood resigned from all positions he held with the Company and
its subsidiaries on December 7, 2001.
(11) Represents shares beneficially owned by Mr. Smallwood as of his date of
resignation. The Company does not know if Mr. Smallwood has disposed of
any shares of Company Common Stock or acquired any shares of Company
Common Stock since his date of resignation.
2
ITEM 1 - AMENDMENT OF
AMENDED AND RESTATED CHARTER
The Company's Board of Directors has approved and recommended that the
shareholders approve an amendment to the Company's Amended and Restated Charter
(the "Amended and Restated Charter") to provide for the classification of the
Company's Board of Directors into three classes of directors with staggered
three-year terms of office (the "Proposed Amendment"). The description of the
Proposed Amendment set forth below is qualified in its entirety by reference to
the text of the Proposed Amendment as set forth in Appendix A, attached hereto.
The Company's bylaws currently provide that all of the Company's
directors are to be elected annually to serve until their successors have been
elected and qualified. Tennessee law provides that a Company's charter may
provide for the staggering of the terms of its directors. The Proposed
Amendment, along with a proposed related amendment to the Company's bylaws,
provides that the Company's directors will be classified into three classes, as
nearly equal in number as possible with each class to serve for staggered three
year terms. The Company intends for the three classes to initially be broken up
as follows:
Class I Directors (Term to Expire at 2003 Annual Meeting)
- Paul Pratt
- Paul Priddy
- Tom Brooks
- Ronald Gibson
Class II Directors (Term to Expire at 2004 Annual Meeting)
- Danny Herron
- James Rout
- Alex Richmond
- R. Todd Vanderpool
Class III Directors (Term to Expire at 2005 Annual Meeting)
- Frank Inman, Jr.
- Tom Paschal
- Joel Porter
- John S. Shepherd
- John S. Wilder, Sr.
At each annual meeting of the Company's shareholders following this
initial classification and election, the successors to the class of directors
whose terms expire at that meeting would be elected for a term of office to
expire at the third succeeding annual meeting of shareholders of the Company
after their election and until their successors are duly elected and have
qualified. By way of example, the Class I directors, Messrs. Pratt, Priddy,
Brooks and Gibson would serve until the 2003 annual meeting at which time their
successors would be elected for a term of three years. Similarly, the Class II
and Class III directors would serve until the 2004 and 2005 annual meetings,
respectively, at which time their successors would be elected for three year
terms ending in 2007 and 2008, respectively.
The Proposed Amendment also includes a provision which would require
the affirmative vote of the holders of at least two-thirds of the voting power
of the shares of Company Common Stock entitled to vote on the election of
directors to amend, alter, change or repeal, or to adopt any provisions as part
of the Amended and Restated Charter or bylaws that is inconsistent with the
purpose and intent of the Proposed Amendment. This portion of the Proposed
Amendment, if adopted, would require a shareholder to acquire two-thirds of the
voting power of the shares of Company Common Stock in order to amend the Amended
and Restated Charter to remove the article establishing the classified board.
This super majority requirement will make it difficult for a shareholder,
including a shareholder that acquires more than a majority of the Company's
Common Stock, to abolish the Company's staggered board through the amendment of
the Amended and Restated Charter and as such would work to protect the members
of the Company's Board of Directors from removal.
The Proposed Amendment will significantly extend the time required to
effect a change in control of the Company's Board of Directors and may
discourage takeover bids for the Company. Currently, the Company's entire board
of directors can be replaced at a single meeting by the shareholders holding a
majority of the Company's outstanding shares. If the Proposed Amendment is
approved by the shareholders, it would take at least two annual meetings for
shareholders holding a majority of the Company's outstanding shares to effect a
change in control of the Company's Board of Directors.
3
Other than the protections afforded by Tennessee corporate law and laws
and regulations applicable to banks and bank holding companies, the Company does
not have in place any anti-takeover measures. The Proposed Amendment is designed
to assure continuity and stability in the Company's Board of Directors and in
the Company's management and policies since a majority of the Company's
directors at any given time will have prior experience with the Company. The
Board of Directors further believes that this continuity and stability will
facilitate long-range planning. Generally, as a result of the ownership by the
executive officers and directors of the Company of approximately 45.1% of the
outstanding shares of the Company's Common Stock, management has not experienced
any problems with continuity of ownership in the past. As the ownership of the
Company becomes more broad based, however, the Company wishes to ensure that
this experience will continue.
The Board of Directors also believes that its classification will
enhance the Company's ability to attract and retain well-qualified individuals
who are able to commit the time and resources to understand the Company, its
business affairs and operations. The continuity and quality of leadership that
results from a classified Board of Directors should, in the opinion of the Board
of Directors, promote the long-term value of the Company.
The Board of Directors also believes that the Proposed Amendment will
assist the Board of Directors in protecting the interests of the Company's
shareholders in the event of an unsolicited offer for the Company. Because of
the additional time required to change control of the Board of Directors, the
Proposed Amendment will tend to perpetuate present management. Without the
ability to obtain immediate control of the Board of Directors, a takeover bidder
will not be able to take action to remove other impediments to an acquisition of
the Company.
Because the classified board proposal will increase the amount of time
required for a takeover bidder to obtain control of the Company without the
cooperation of the Board of Directors, even if the takeover bidder were to
acquire a majority of the Company's outstanding stock, it will tend to
discourage certain tender offers, perhaps including some tender offers that
shareholders may feel would be in their best interests. The Proposed Amendment
is not being recommended in response to any pending or threatened attempt to
acquire control of the Company.
If the number of directors is increased by the Board of Directors and
the resultant vacancies are filled by the Board of Directors, those additional
directors will serve only until the next annual meeting of shareholders, at
which time they will be subject to election and classification by the
shareholders. If any director is elected by the Board of Directors to fill a
vacancy that occurs as a result of the death, resignation or removal of another
director, that director shall hold office until the annual meeting of the
Company's shareholders at which the director who died, resigned or was removed,
would have been required, in the regular order of business, to stand for
re-election, even though that term may extend beyond the next annual meeting of
shareholders.
THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE "FOR" APPROVAL OF THE
PROPOSED AMENDMENT.
ITEM 2 - ELECTION OF DIRECTORS
The Board of Directors of the Company currently consists of thirteen
(13) members. The Company's bylaws provide for a minimum of three (3) and a
maximum of fifteen (15) directors, the exact number to be set by the Company's
Board of Directors. The Company's Board of Directors has nominated thirteen (13)
individuals to stand for election at the 2002 Annual Meeting. Proxies may not be
voted for a greater number of directors than thirteen.
Unless contrary instructions are received, the enclosed proxy will be
voted in favor of the election as directors of the nominees listed below. Each
nominee has consented to be a candidate and to serve, if elected. All the
nominees currently are serving as directors of the Company. While the Company's
Board of Directors has no reason to believe that any nominee will be unable to
accept nomination or election as a director, if such event should occur, proxies
will be voted with discretionary authority for a substitute or substitutes who
will be designated by the Company's current Board of Directors.
In the event that the Proposed Amendment is approved by the Company's
shareholders, the directors will be divided into three classes and the shares
represented by the proxy will be voted for the election as directors of the
thirteen (13) nominees named below for the class and for the terms identified or
until their successors are duly elected and qualified. If the Proposed Amendment
is not approved by the Company's shareholders, the shares represented by the
enclosed proxy will be voted for the election of the thirteen (13) nominees
listed below to serve until the 2003 annual meeting of shareholders or until
their successors are duly elected and qualified. The thirteen (13) nominees
receiving the highest number of votes cast will be elected.
4
INFORMATION CONCERNING NOMINEES
Class I Directors (Term to Expire at 2003 Annual Meeting of Shareholders)
Tom Brooks, age 73, has served on the Company's Board of Directors
since July 1997. Mr. Brooks retired from work as a pharmacist at Brooks
Pharmacy, a Super D franchise he owned in Collierville until 1996. Mr. Brooks
served as Vice-Mayor and Alderman of Collierville from 1975 to 1999, and was a
member of its planning commission from 1959 to 1999. Mr. Brooks also serves as a
director of BankTennessee where he has served since 1992.
Ronald Gibson, age 42, has served as President of The Murray Bank since
June 1999 when the bank opened for business and he has served as a member of its
board since that date. Mr. Gibson has served on the Company's Board of Directors
since September 1999. Prior to June 1999, Mr. Gibson served as the Senior
Lending Vice President for Peoples First National Bank and Trust.
Paul Pratt, age 58, has been a member of the Company's Board of
Directors since March 2002. Mr. Pratt worked in sales and service with John
Hancock, as an assistant sales manager for 9 years prior to his formation of
Full Service Insurance, Inc. in 1975. Full Service Insurance is a property,
casualty and financial services company and Mr. Pratt serves as its President.
He is a past board member of the Chamber of Commerce of Williamson County and is
currently a board member of the Williamson County Crime Stoppers. Mr. Pratt has
served as a director of The Community Bank since January 1999.
Paul Priddy, age 46, joined the Company in January 2002 as President
and Chief Executive Officer of The Bank of Dyer. He was appointed to the Board
of Directors in March 2002. Mr. Priddy brings to the Company more than twenty
years of bank management experience most recently serving as Senior Vice
President of Personal Trust Services for Amsouth Bank, Jackson, Tennessee.
Class II Directors (Term to Expire at 2004 Annual Meeting of Shareholders)
Danny Herron, age 43, has served as president of The Community Bank
since 1993. Mr. Herron has served as a director of The Community Bank since
1993, and as one of the Company's directors since 1997. Mr. Herron currently
serves on the Company's Executive Committee and its Management Committee.
Alex Richmond, age 52, has served as a director on the Company's Board
of Directors since 1990. Mr. Richmond has been a grocer for thirty years having
been a partner in several stores during his career. He currently has interests
in G&R, Inc., D.A.G. Foods and Xerxes Foods. Mr. Richmond serves as president of
Consolidated Investors, a small business investment firm. Mr. Richmond is a
partner in Richmond & Franklin, a real estate investment company, and is a
member of Richco, LLC, a Tennessee company that operates primarily in middle
Tennessee. He has served as a director of Cumberland Bank since 1990. Mr.
Richmond currently serves on the Company's Audit Committee.
James Rout, age 59, has served as the Mayor of Shelby County since
1994. He has been a four-term member of the Shelby County Board of Commissioners
from 1978 to 1994. Mr. Rout was a founder of Behavioral Health Group, a
psychiatric case management service, and served as its President from 1988 to
1994. He worked in sales and management with Xerox for 10 years. He previously
served as a bank board member with First Federal Bank from 1992 to 1995. Mr.
Rout has served as a director of BankTennessee since July 1999 and as a Company
director since April 2001.
R. Todd Vanderpool, age 45, has served as the President and Chief
Operating Officer of BankTennessee since October 2001 and he has been a member
of the Company's Board of Directors since November 2001. He also serves on the
Company's Executive Committee and its Management Committee. Mr. Vanderpool has
23 years of banking experience. His most recent banking experience includes
serving three years as a Metropolitan Division Head with National Bank of
Commerce and eleven years as President of two banks in the Deposit Guaranty
system.
Class III Directors (Term to Expire at 2005 Annual Meeting of Shareholders)
Frank Inman, Jr., age 65, has served on the Company's Board of
Directors since 1986. Mr. Inman is Chairman of the Board of Directors of Inman
Construction Corp., a general contractor, a position he has held since 1970. Mr.
Inman has also served as a director of Cumberland Bank since 1986, as a director
of The Community Bank since April 1999 and as a director of the Bank of Dyer
since 2001. Mr. Inman currently serves on the Company's Executive Committee.
5
Tom Paschal, age 56, has served as the Company's Chief Operating
Officer since January 2002 and as the Chairman of Cumberland Bank since 2001.
Mr. Paschal served as the chief executive officer of Cumberland Bank from 1986
to January 2002. He has also served as the Company's secretary since 1991. Mr.
Paschal has served as a director of Cumberland Bank since 1977, a director of
Cumberland Finance since 1995, a director of CBC Financial Services since 1995,
a director of The Community Bank since 1999, a director of Insurors Bank of
Tennessee since 2000 and as one of the Company's directors since 1986. Mr.
Paschal currently serves on the Company's Executive Committee and its Management
Committee.
Joel Porter, age 61, has served as the Company's president since its
formation, although he does not devote his full time to that position and is not
compensated for his services as president. Mr. Porter is a named partner of the
law firm of Burch, Porter & Johnson, PLLC, located in Memphis, where he has
practiced since 1964. Mr. Porter is also the president of two finance and
investment firms, Porter Development and Porter Investment. Mr. Porter has
served as a member of the Company's Board of Directors since 1986 and currently
serves on the Company's Executive Committee and its Management Committee. He has
also served as a director and board chairman of BankTennessee since 1992, a
director of Cumberland Bank since 1986, a director of The Community Bank since
1993, and a director of The Murray Bank since June 1999.
John S. Shepherd, age 64, has been a member of the Company's board of
directors since July 1997. Since 1993, Mr. Shepherd has been self-employed
engaged principally in investing and as a merchant in Collierville, Tennessee.
Mr. Shepherd has been a member of the Memphis/Shelby County Board of Adjustment
since 1972 and its chairman since 1996. Mr. Shepherd has served as a director of
BankTennessee since 1992 and The Murray Bank since June 1999.
John S. Wilder, Sr., age 80, has served as a member of the Company's
Board of Directors since 1986 and is currently its Chairman of the Board. He
also serves on the Company's Executive Committee. Mr. Wilder has served as the
Lieutenant Governor of the State of Tennessee since 1971, and is the longest
sitting Lieutenant Governor of any state in United States' history. Mr. Wilder
also serves as a director of Cumberland Bank, The Community Bank, The Murray
Bank and of BankTennessee. Mr. Wilder is also a partner of Longtown Farms, a
farming business in Mason, Tennessee, and a Vice President and part owner of
Longtown Supply, Inc., a service station and farming supply business in Mason,
Tennessee.
MEETING AND COMMITTEES OF THE BOARD OF DIRECTORS
The Company's Board of Directors and the Boards of Directors of the
Company's banks operate through several standing committees. Below is a
description of each relevant committee indicating members of each committee and
the frequency with which each committee meets. The Company does not have a
standing compensation or nominations committee. The Board of Directors performs
the functions of these committees.
Executive Committee. The Executive Committee is charged with the review
of corporate matters presented, or to be presented, to the Company's Board of
Directors, making recommendations to the Board of Directors on policy matters
and making executive decisions on matters that do not require a meeting of the
full Board of Directors. Review of expansion possibilities and corporate
opportunities as well as oversight of general corporate governance matters are
the chief functions of the Company's Executive Committee. The Executive
Committee held five meetings during 2001. R. Todd Vanderpool, Frank Inman, Danny
Herron, Tom Paschal, Joel Porter and John S. Wilder currently serve as members
of the Executive Committee.
Management Committee. The Management Committee is charged with the
review of banking matters presented, or to be presented, to the Company's Board
of Directors, making recommendations to the Company's Board of Directors on
policy matters at the Company's bank subsidiaries level and making executive
decisions on matters that do not require a meeting of the full Board of
Directors. The Company's Management Committee focuses on its bank and non-bank
subsidiaries' operations, including management of personnel matters and
financial results. The Management Committee held three meetings during the year
ended December 31, 2001. The Company's Management Committee is composed of
members of the Company's Board of Directors as well as each of the President's
of the Company's bank subsidiaries, including certain individuals that are not
members of the Company's Board of Directors. The current members of the
Management Committee include the following members of the Company's Board of
Directors: Joel Porter, Danny Herron, Tom Paschal, R. Todd Vanderpool, Ronald
Gibson and Paul Priddy. The other members of the Management Committee include
Mike Cook, the Chief Executive Officer and President of Cumberland Bank, Mike
Qualls, the President of Insurors Bank of Tennessee and Sam Long, the President
of Bank of Mason.
6
Audit Committee of Company. The Audit Committee reviews annual and
interim reports of the Company's independent auditors and reviews the Company's
accounting practices and procedures, as well as the scope of the Company's
audit. Additionally, the committee assists in the recommendation of the
appointment of the Company's independent auditors. The Audit Committee has a
written charter. Dr. Eugene Smith, Tom Price, and Alex Richmond currently serve
as Audit Committee members. Mr. Richmond is a member of the Company's Board of
Directors and is independent within the definition of the New York Stock
Exchange. The other two members of the Audit Committee, Dr. Eugene Smith and Mr.
Tom Price, are not members of the Company's Board of Directors but would be
considered independent under the definition of the New York Stock Exchange if
they were members of the Company's Board of Directors. The Audit Committee held
six meetings during the year ended December 31, 2001.
During the fiscal year ended December 31, 2001, the board of directors
of the Company held eight (8) meetings. All incumbent directors attended more
than 90% of the aggregate number of meetings of the Company's board of directors
and the committees on which such member served with the exception of Mr.
Vanderpool, who was appointed to the Board of Directors in November, 2002 and
Messers, Pratt and Priddy who were not members of the Board of Directors in
2001. Mr. Vanderpool attended 100% of the meetings of the Board of Directors and
the committees on which he served that were held in 2001 following his
appointment to the Board of Directors. Mr. Pratt and Mr. Priddy were not members
of the Board of Directors in 2001.
DIRECTORS' COMPENSATION
All of the Company's directors receive a director fee of $700 for each
board meeting attended and $700 for each committee meeting attended. Persons
serving as directors for any of the Company's banks, who are not also employees
of that bank, receive additional compensation for each bank board and committee
meeting attended. In addition, each person who serves as chairman of a bank
board of directors, committee, or the Company's board receives twice the
compensation of other members for each meeting attended. Directors are
reimbursed for their expenses incurred in connection with their activities as
the Company's directors. In addition the Company has in the past, and may in
the future, grant options to members of the Company's Board of Directors.
COMPLIANCE WITH SECTION 16(A) OF THE SECURITIES EXCHANGE ACT OF 1934
Section 16(a) of the Exchange Act requires the Company's officers and
directors, and persons who beneficially own more than ten percent of the Common
Stock, to file reports of ownership and changes in ownership with the SEC.
Officers, directors, and greater than ten percent shareholders are required by
federal securities regulations to furnish the Company with copies of all Section
16(a) forms they file.
Based solely on the Company's review of the copies of such forms, or
written representations from certain reporting persons furnished to the Company,
the Company believes that its officers, directors and greater than ten percent
beneficial owners were in compliance with all applicable filing requirements,
except that Mr. LoCascio and Mr. Vanderpool did not timely file Forms 3 upon
their appointments to their respective positions.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR EACH OF THE NOMINEES
LISTED ABOVE.
ITEM 3 -- OTHER MATTERS
The Board of Directors is not aware of any other matters which may be
brought before the Annual Meeting. However, if any matter other than the
proposed matters properly comes before the meeting for action, proxies will be
voted for such matters in accordance with the best judgment of the persons named
as proxies.
INDEPENDENT PUBLIC ACCOUNTANT INFORMATION
Heathcott & Mullaly, P.C. served as the Company's independent public
accountants for the fiscal year ended December 31, 2001. The Audit Committee has
recommended, and the Board of Directors has appointed, Heathcott & Mullaly, P.C.
as the Company's independent public accountants for 2002. It is anticipated that
representatives of Heathcott & Mullaly, P.C. will be present at the Annual
Meeting to respond to appropriate questions from shareholders and to make a
statement if they so desire. Heathcott & Mullaly, P.C. has entered into an
agreement with Crowe, Chizek and Company, LLP pursuant to which Heathcott &
Mullaly, P.C. will be merged with Crowe, Chizek and Company, LLP. The merger is
expected to be consummated on April 1, 2002, at which time Crowe, Chizek and
Company, LLP will succeed to the position of the Company's independent public
accountants.
7
AUDIT FEES
The aggregate audit fees billed or to be billed to the Company by
Heathcott & Mullaly, P.C. 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
$127,000.
FINANCIAL INFORMATION SYSTEMS DESIGN AND IMPLEMENTATION FEES
Heathcott & Mullaly, 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 to the Company by Heathcott & Mullaly, P.C.
for all other services rendered to the Company, including tax related services,
and the audit of the Company's 401(k) plan, but excluding audit fees and
financial information systems design and implementation fees, totaled $69,000
including $35,000 in connection with assisting the Company in its evaluation of
a proposed acquisition which the Company has determined not to pursue at this
time.
EXECUTIVE COMPENSATION
SUMMARY COMPENSATION TABLE
The following table sets forth summary information concerning the
compensation the Company paid for services rendered to it during 1999, 2000 and
2001 by its President and its other four most highly compensated executive
officers who were serving as executive officers at the end of 2001 and whose
salaries were in excess of $100,000 in 2001. The table also sets forth such
information for one of the Company's executive officers for whom disclosure
would have been required had the person been employed at December 31, 2001. The
Company does not have a designated Chief Executive Officer. Joel Porter is the
Company's President and is considered its principal executive officer. However,
Mr. Porter receives no compensation as President and receives compensation only
for his service as a director or committee member.
LONG-TERM
COMPENSATION
AWARDS
NUMBER OF
SECURITIES
ANNUAL COMPENSATION UNDERLYING ALL OTHER
NAME AND PRINCIPAL POSITION YEAR SALARY BONUS(1) OPTIONS COMPENSATION(2)
- --------------------------- ---- ------------------- -------- ------------ ---------------
John S. (Jack) Everett, 2001 $170,000 $ 0 -- $ 30,382
President of BankTennessee(3) 2000 170,217 25,000 -- 48,500
1999 161,000 28,000 -- 44,000
Tom Paschal, 2001 $170,000 $ 8,844 -- $ 31,420
Chief Operating Officer 2000 150,000 0 -- 37,450
and Secretary of the Company 1999 135,000 42,000 -- 29,000
and Chairman of Cumberland Bank
Danny Herron, 2001 $130,000 $ 6,500 -- $ 19,993
President of The Community Bank 2000 110,217 14,000 -- 17,500
1999 100,000 0 -- 15,000
Wayne Rodgers, 2001 $121,000 $ 0 -- $ 16,100
Executive Vice President of 2000 121,217 15,000 -- 15,975
BankTennessee(4) 1999 115,000 10,000 -- 6,000
William Smallwood, 2001 $145,635 $ 0 -- $ 11,016
President of Bank of Dyer (5) 2000 140,033 3,500 -- 15,800
1999 142,000 3,000 -- 2,000
- -----------------
8
(1) Perquisites and other personal benefits did not exceed the lesser of
either $50,000 or 10% of the total of annual salary and bonus for the
named executive officer.
(2) Represents Company matching contributions to the Company's 401(k) plan,
the amount of premiums paid for term life insurance, and director fees
as set forth in the following table:
TERM LIFE
401(K) PLAN INSURANCE DIRECTOR FEES
----------- --------- -------------
Jack Everett $10,500 $8,682 $11,200
Tom Paschal 10,500 9,720 11,200
Danny Herron 6,750 2,043 11,200
Wayne Rodgers 10,500 0 5,600
William Smallwood 6,816 0 4,200
(3) Mr. Everett resigned from all positions he held with the Company and
its subsidiaries except his position on the board of The Murray Bank on
March 13, 2002.
(4) Mr. Rodgers resigned from all positions he held with the Company and
its subsidiaries except his position as a member of BankTennessee's
board of directors on March 13, 2002.
(5) Compensation reported for 1999 was paid to Mr. Smallwood by Bank of
Dyer prior to the Company's acquisition of Bancshares of Dyer on
December 31, 1999. Mr. Smallwood resigned from all positions he held
with the Company and its subsidiaries on December 7, 2001.
OPTION GRANTS DURING 2001
The Company granted no options to the named executive officers during
2001.
AGGREGATE OPTION EXERCISES DURING 2001 AND FISCAL YEAR END OPTION VALUES
The following table provides information related to options exercised
by the named executive officers during the 2000 fiscal year and the number and
value of options held at fiscal year end. The Company has not issued stock
appreciation rights or warrants to its executive officers.
NUMBER OF SECURITIES VALUE OF UNEXERCISED IN-
UNDERLYING UNEXERCISED THE-MONEY OPTIONS AT
SHARES VALUE OPTIONS (#) (1) FISCAL YEAR END ($)(2)
ACQUIRED ON REALIZED ----------------------------- -----------------------------
NAME EXERCISE (#)(3) ($)(3) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
---- --------------- -------- ----------- ------------- ----------- -------------
Joel Porter 9,900 6,600 $ 10,890 $ 7,260
John S. (Jack) Everett 16,500 11,000 $ 18,150 $ 12,100
Tom Paschal 16,500 11,000 $ 18,150 $ 12,100
Danny Herron 16,500 11,000 $ 18,150 $ 12,100
Wayne Rodgers 16,500 11,000 $ 18,150 $ 12,100
William Smallwood 16,500 11,000 $ 0 $ 0
- ---------------
(1) Share amounts and option exercise prices have been adjusted to reflect
the 2 for 1 stock split paid on April 22, 2001.
(2) The closing price for the common stock as of December 31, 2001 was
$3.375. Value is calculated on the basis of the difference between the
option exercise price and $3.375 multiplied by the number of shares of
common stock underlying the option.
(3) The named executive officers did not exercise any stock options during
2001.
EMPLOYMENT CONTRACTS, TERMINATION OF EMPLOYMENT AND CHANGE IN CONTROL
ARRANGEMENTS
None of the Company's named executive officers has any employment
agreement or severance agreement with the Company.
REPORT OF BOARD OF DIRECTORS ON EXECUTIVE COMPENSATION
The Company does not have a compensation committee. Mr. Porter, the
Company's president and principal executive officer, receives no compensation
other than as a director and for his services as a member of the Company's or
subsidiary banks'
9
committees on which he serves. Decisions with respect to compensation of the
Company's and each of the Banks' executive officers, including the President and
the other named executive officers, for fiscal 2001 were made by the board of
directors of each of the Banks. Compensation of executive officers consists of a
base salary, an annual bonus, matching contributions under the Company's 401(k)
plan, and payments for term life insurance (as well as health and disability
insurance and other non-cash benefits similar to those of all employees of the
Banks or Company).
The overarching policy of each of the boards of directors in
determining executive compensation is to attract and retain the highest quality
talent to lead the Banks and the Company and to reward key executives based upon
their individual performance and the performance of the Banks and the Company.
Each of the boards of directors believes that providing incentives to, and
rewarding the performance of, officers enhances the profitability of the Banks
and the Company.
In recommending the 2001 base salary of each Bank's presidents and the
other named executive officers, the Company and each of the boards of directors
reviewed the 2000 financial performance of each Bank compared to past
performance. Each Bank president's salary was tied to the specific performance
of his Bank during 2000.
Executive officers were eligible for, and received, a cash bonus as
determined by the board of directors based upon the Company and each Bank's
overall financial performance. No specific quantitative performance measure (of
the Company, and of the Banks or any individual) was used to determine the
amount of bonus awarded. Instead, bonuses for executive officers were given in a
manner similar to the bonuses granted to all full-time employees of the banks or
the Company, with the amount awarded being most closely tied to the employee's
monthly salary.
Joel Porter John S. Wilder, Sr., Chairman John S. Shepherd
Danny Herron Tom Brooks R. Todd Vanderpool
Tom Paschal Frank Inman, Jr. James Rout
Ronald Gibson Alex Richmond Paul Priddy
Paul Pratt
The foregoing report of the board of directors shall not be deemed
incorporated by reference by any general statement incorporating by reference
the Proxy Statement into any filing under the Securities Act of 1933 or the
Securities Exchange Act of 1934, except to the extent that the Company
specifically incorporates this information by reference, and shall not otherwise
be deemed filed under such acts.
AUDIT COMMITTEE REPORT FOR 2001
The Audit Committee reviews the Company's financial reporting process
on behalf of the Board of Directors. Management has the primary responsibility
for the financial statements and the reporting process. The Company's
independent auditors are responsible for expressing an opinion on the conformity
of the Company's audited financial statements to generally accepted accounting
principles.
In this context, the Audit Committee has reviewed and discussed with
management and the independent auditors the audited financial statements. The
Audit Committee has discussed with the independent auditors the matters required
to be discussed by Statement on Auditing Standards No. 61. In addition, the
Audit Committee has received from the independent auditors the written
disclosures and letter required by Independence Standards Board Standard No. 1
(Independence Discussions with Audit Committees) and discussed with them their
independence from the Company and its management. The Audit Committee has
considered whether the independent auditors provision of non-audit services to
the Company is compatible with the auditor's independence. The audit committee
determined this issue in the affirmative.
In reliance on the reviews and discussions referred to above, the Audit
Committee recommended to the Board of Directors, and the Board of Directors has
approved, that the audited financial statements be included in the Company's
Annual Report on Form 10-K for the year ended December 31, 2001, for filing with
the Securities and Exchange Commission.
Dr. Eugene Smith, Chairman
Tom Price
Alex Richmond
The foregoing report of the Audit Committee shall not be deemed
incorporated by reference by any general statement incorporating by reference
the Proxy Statement into any filing under the Securities Act of 1933 or the
Securities
10
Exchange Act of 1934, except to the extent that the Company specifically
incorporates this information by reference, and shall not otherwise be deemed
filed under such acts.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The Board of Directors serves as the Company's compensation committee.
Compensation decisions are made by the full Board of Directors based upon
recommendations of the management of each of the Company's banks. The Board of
Directors determines independently compensation decisions for the Company's bank
presidents. No interlocking relationship exists between any member of the
Company's Board of Directors (or management) and the Board of Directors or
compensation committee of any other company, nor has any interlocking
relationship existed in the past.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Some directors and principal officers of the Company and its Banks at
present, as in the past, are customers of the Bank and have had and expect to
have loan transactions with the Bank in the ordinary course of business. In
addition, some of the directors and officers of the Company and its Banks are at
present, as in the past, affiliated with businesses which are customers of the
Bank and which have had and expect to have loan transactions with the Bank in
the ordinary course of business. These loans were made in the ordinary course of
business and were made on substantially the same terms, including interest rates
and collateral, as those prevailing at the time for comparable transactions with
other parties. In the opinion of the board of directors, these loans do not
involve more than a normal risk of collectability or present other unfavorable
features. At December 31, 2001, the outstanding principal amount of indebtedness
of these loans, including amounts available under lines of credit to the
Company's affiliates, aggregated $5,207,000.
We have employed Mr. Joel Porter's law firm, Burch, Porter & Johnson,
PLLC, from time to time. Fees and expenses arose out of general corporate and
other ordinary course of business services provided by Burch Porter, and account
for significantly less than one percent (1%) of the law firm's 2001 gross
revenue.
We believe that the above transactions were made on terms as favorable
to us as we would have received from unaffiliated third parties.
SHAREHOLDER RETURN PERFORMANCE GRAPH
The following graph compares the percentage change in the unaudited
total return on the Company's Common Stock against the cumulative total return
of the NASDAQ Index and the SNL Securities $500,000,000 to $1,000,000,000 bank
index between October 14, 1999 (inception) and December 31, 2001. The graph
assumes the value of the investment in the Company's Common Stock and each index
was $100 at October 14, 1999 and that all dividends were reinvested.
The following Performance Graph shall not be deemed incorporated by
reference by any general statement incorporating by reference the proxy
statement into any filing under the Securities Act of 1933 or the Securities
Exchange Act of 1934, except to the extent that the Company specifically
incorporates this information by reference, and shall not otherwise be deemed
filed under such acts.
PERIOD ENDING
------------------------------------------------------------------------------------
INDEX 10/14/99 12/31/99 06/30/00 12/31/00 06/30/01 12/31/01
- ----------------------------------------------------------------------------------------------------------------------------------
Cumberland Bancorp, Inc. 100.00 100.00 91.27 85.58 67.80 55.84
NASDAQ - Total US* 100.00 144.92 141.46 87.17 76.69 69.17
SNL $500M-$1B Bank Index 100.00 96.30 86.28 92.18 114.13 119.58
11
SHAREHOLDERS' PROPOSALS AND OTHER MATTERS
Shareholders intending to submit proposals for presentation at the next
Annual Meeting and inclusion in the Proxy Statement and form of proxy for such
meeting should forward such proposals to Anna McNiell, Cumberland Bancorp,
Incorporated, 4205 Hillsboro Road, Suite 204, Nashville, Tennessee 37215.
Proposals must be in writing and must be received by the Company prior to
December 2, 2002 in order to be included in the Company's Proxy Statement and
form of proxy relating to the 2003 Annual Meeting of Shareholders. Proposals
should be sent to the Company by certified mail, return receipt requested, and
must comply with Rule 14a-8 of Regulation 14A of the proxy rules of the SEC.
If a shareholder wants to bring business before the 2003 annual meeting
which is not the subject of a proposal submitted for inclusion in the proxy
statement, the Company's bylaws require that the shareholder comply with
Regulation 14A of the Securities Exchange Act and have given written notice to
the Company not later than December 2, 2002. If the date of the 2003 annual
meeting has been changed by more than thirty (30) days from April 25, 2003, then
in order to be timely a shareholder's notice must be received by the Company not
less than one hundred and twenty (120) days from the date of the 2003 annual
meeting or the tenth day following the date on which public announcement of the
2003 annual meeting is first made. Notice should be sent to Ms. McNiell at the
address above.
GENERAL
In addition to solicitation by mail, certain directors, officers and
regular employees of the Company and the Bank may solicit proxies by telephone,
telegram or personal interview for which they will receive no compensation other
than their regular salaries. The Company may request brokerage houses and
custodians, nominees and fiduciaries to forward soliciting material to the
beneficial owners of the Company's Common Stock held of record by such persons
and may reimburse them for their reasonable out-of-pocket expenses in connection
therewith.
The Company's 2001 Annual Report is mailed herewith. A copy of the
Company's Annual Report to the SEC on Form 10-K for the year ended December 31,
2001 has been included with the 2001 Annual Report. An additional copy is
available for shareholders, without charge, by writing to Anna McNeill,
Cumberland Bancorp, Incorporated, 4205 Hillsboro Road, Suite 204, Nashville,
Tennessee 37215, telephone number (866) 495-8461.
By order of the Board of Directors,
/s/ Tom Paschal
Tom Paschal
Secretary
Nashville, Tennessee
April 4, 2002
12
APPENDIX A
ARTICLES OF AMENDMENT TO THE AMENDED AND RESTATED
CHARTER
OF
CUMBERLAND BANCORP, INCORPORATED
In accordance with the provisions of Section 48-20-106 of the Tennessee
Business Corporation Act, the undersigned corporation adopts the following
Articles of Amendment (the "Articles of Amendment") to its Amended and Restated
Charter (the "Amended and Restated Charter"):
1. Name of Corporation. The name of the Corporation is Cumberland
Bancorp, Incorporated.
2. Section 9 of the Amended and Restated Charter is hereby
deleted in its entirety and replaced with the following:
"9. All corporate powers shall be exercised by
or under the authority of, and the business and
affairs of the corporation shall be managed under the
direction of, a Board of Directors. The directors
shall be divided into three classes, designated Class
I, Class II, and Class III. Each class shall consist,
as nearly as may be possible, of one-third of the
total number of directors constituting the entire
Board of Directors. Class I directors shall be
initially elected for a term expiring at the first
annual meeting of shareholders following the
Corporation's annual meeting of shareholders held
April 25, 2002. Class II directors shall be initially
elected for a term expiring at the second annual
meeting of shareholders following the Corporation's
annual meeting of shareholders held April 25, 2002.
Class III directors shall be initially elected for a
term expiring at the third annual meeting of
shareholders following the Corporation's annual
meeting of shareholders held April 25, 2002. Each
class of directors shall thereafter be elected for a
three year term. If the number of directors is
changed, any increase or decrease shall be
apportioned among the classes so as to maintain the
number of directors in each class as nearly equal as
possible, but in no case will a decrease in the
number of directors shorten the term of any incumbent
director. A director shall hold office until the
annual meeting of shareholders for the year in which
his or her term expires and until his or her
successor shall be elected and shall qualify;
subject, however, to prior death, resignation,
retirement, disqualification, or removal from office.
Any vacancy on the Board of Directors, including a
vacancy that results from an increase in the number
of directors or a vacancy that results from the
removal of a director with cause, may be filled only
by the Board of Directors. Any director elected to
fill a vacancy created as a result in the increase in
the size of the Board of Directors shall hold office
until the next annual meeting following his or her
election to the Board of Directors at which time such
person will be
A-1
subject to election and classification. If any
director is elected to fill a vacancy that occurs as
a result of the death, resignation or removal of
another director, that director shall hold office
until the annual meeting of the Corporation's
shareholders at which the director who died, resigned
or was removed, would have been required, in the
regular order of business, to stand for re-election,
even though that term may extend beyond the next
annual meeting of shareholders.
Whenever the Board of Directors of the
Corporation is required or permitted to take action
by vote, such action may be taken without a meeting
on written consent, setting forth the action so taken
signed by all of the members of the board of
directors entitled to vote thereon, and any such
action shall be as valid and effective as any
resolution duly adopted at a regular or special
meeting of the board of directors.
Notwithstanding any other provisions of this
Charter, the affirmative vote of holders of
two-thirds of the voting power of the shares entitled
to vote at an election of directors shall be required
to amend, alter, change or repeal, or to adopt any
provisions as part of this Charter or as part of the
Corporation's Bylaws inconsistent with the purpose
and intent of this Article 9.
There shall be no cumulative voting for
directors."
3. Except as amended by these Articles of Amendment, the Amended
and Restated Charter of the Corporation shall remain in full force and effect.
4. Adoption. These Articles of Amendment were duly adopted by the
Board of Directors on March 13, 2002, and by the Shareholders of the Corporation
on April __, 2002.
5. Effective Date. These Articles of Amendment will be effective
when filed with the Secretary of State.
Date: April __, 2002
CUMBERLAND BANCORP, INCORPORATED
By:
-------------------------------------
FORM OF PROXY
CUMBERLAND BANCORP, INC.
4205 HILLSBORO ROAD, SUITE 204
NASHVILLE, TENNESSEE 37215
REVOCABLE PROXY FOR THE
ANNUAL MEETING OF SHAREHOLDERS
APRIL 25, 2002
You can vote in one of three ways: 1) By Mail, 2) By Phone, 3) By Internet,
See the reverse side of this sheet for instructions.
IF YOU ARE NOT VOTING BY TELEPHONE OR BY INTERNET, COMPLETE BOTH SIDES
OF PROXY CARD, DETACH AND RETURN IN THE ENCLOSED ENVELOPE TO:
Illinois Stock Transfer Co.
209 West Jackson Boulevard, Suite 903
Chicago, Illinois 60606
The undersigned hereby constitutes and appoints Tom E. Paschal and Joel
Porter, and each of them, the proxies of the undersigned, with full power of
substitution, to attend the Annual Meeting of Shareholders of Cumberland
Bancorp, Inc. (the "Company") to be held at Cumberland Bank, 250 West Broadway,
Gallatin, Tennessee 37066 on Thursday, April 25, 2002 at 4:30 p.m., local time,
and any adjournment(s) thereof, and to vote all the shares of stock of the
Company that the undersigned may be entitled to vote, upon the following.
THIS PROXY IS SOLICITED UPON BEHALF OF THE BOARD OF DIRECTORS FOR THE
ANNUAL MEETING TO BE HELD ON APRIL 25, 2002.
1. PROPOSAL TO AMEND THE COMPANY'S AMENDED AND RESTATED CHARTER, to divide
the Board of Directors into three classes and to require a
supermajority vote to amend the provision in the Amended and Restated
Charter establishing a classified board.
____ FOR ____ AGAINST ____ ABSTAIN
2. THE ELECTION OF DIRECTORS
____ FOR all nominees listed below ____ WITHHOLD AUTHORITY to vote for
(Except as marked to the contrary below) all nominees listed below
INSTRUCTION: To withhold authority to vote for any individual nominee, strike a
line through the nominee's name on the list below.
CLASS I (term expiring in 2003): Paul Pratt, Paul Priddy, Tom Brooks, Ronald
Gibson
CLASS II (term expiring in 2004): Danny Herron, James Rout, Alex Richmond, R.
Todd Vanderpool
CLASS III (term expiring in 2005): Frank Inman, Jr., Tom Paschal, Joel Porter,
John S. Shepherd, John S. Wilder, Sr.
3. In their discretion, the proxies are authorized to vote upon such
business as may properly come before this meeting.
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS OF THE COMPANY AND WILL BE
VOTED IN ACCORDANCE WITH THE INSTRUCTIONS MARKED HEREIN, AND WILL BE VOTED FOR
PROPOSALS 1 AND 2 AND AS DETERMINED BY A MAJORITY OF THE BOARD OF DIRECTORS AS
TO OTHER MATTERS IF NO INSTRUCTIONS TO THE CONTRARY ARE MARKED HEREIN AND TO THE
EXTENT THIS PROXY CONFERS DISCRETIONARY AUTHORITY.
Date:
-------------------------------------
Signature:
--------------------------------
Signature:
--------------------------------
Please mark, date and sign as your name appears herein and return in the
enclosed envelope. If acting as executor, administrator, trustee, guardian, etc
you should so indicate with signing. If the signer is a corporation, please sign
the full name by duly appointed officer. If a partnership or limited liability
company, please sign in partnership or limited liability company name by
authorized person. If shares are held jointly, each shareholder named should
sign.
TO VOTE BY MAIL
To vote by mail, complete both sides, sign and date the proxy card above. Detach
the card and return it in the envelope provided.
TO VOTE BY TELEPHONE
Your telephone vote is quick, confidential and immediate. Just follow these easy
steps:
1. Read the accompanying Proxy Statement.
2. Using a Touch-Tone telephone, call Toll Free 1-800-555-8140 and
follow the instructions.
3. When asked for your Voter Control Number, enter the number printed
just above your name on the proxy card.
Please note that all votes cast by telephone must be submitted prior to Tuesday,
April 23, 2002 at 11:59 P.M. Central Time.
Your Telephone vote authorizes the named proxies to vote your shares to the same
extent as if you marked, signed, dated and returned the proxy card.
IF YOU VOTE BY TELEPHONE, PLEASE DO NOT RETURN YOUR PROXY CARD BY MAIL.
TO VOTE BY INTERNET
Your Internet vote is quick, confidential and your vote is immediately
submitted. Just follow these easy steps:
1. Read the accompanying Proxy Statement.
2. Visit our Internet voting site at
http://www.eproxyvote.com/ist-cmlcm/ and follow the instructions
on the screen.
3. When prompted for your Voter Control Number, enter the number
printed just above your name on the proxy card.
Please note that all votes cast by internet must be submitted prior to Tuesday,
April 23, 2002 at 11:59 P.M. Central Time.
Your internet vote authorizes the named proxies to vote your shares to the same
extent as if you marked, signed, dated and returned the proxy card.
THIS IS A "SECURED" WEB PAGE SITE. YOUR SOFTWARE AND/OR INTERNET PROVIDER MUST
BE "ENABLED" TO ACCESS THIS SITE. PLEASE CALL YOUR SOFTWARE OR INTERNET PROVIDER
FOR FURTHER INFORMATION.
IF YOU VOTE BY INTERNET, PLEASE DO NOT RETURN YOUR PROXY CARD BY MAIL