Exhibit 99.1 Proxy statement
BOURBON BANCSHARES, INC.
P.O. Box 157
Fourth and Main Street
Paris, Kentucky 40362-0157
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD MAY 3, 1999
March 25, 1999
To our Shareholders:
The Annual Meeting of Shareholders ("Annual
Meeting") of Bourbon Bancshares, Inc. (the
"Corporation") will be held at the Corporation's
main office at Kentucky Bank, Fourth and Main
Street, Paris, Kentucky, at 9:00 a.m. (Easter
Daylight Time) on May 3, 1999, for the following
purposes:
1. Election of Directors. To elect three Class III directors.
2. Amendments to Articles of Incorporation.
To act upon proposals to amend the
Corporation's Articles of Incorporation
to (a) increase the number of authorized
shares of common stock from 3,000,000 to
10,000,000, and (b) to change the
number of members of the
Corporation's Board of Directors from a
minimum of nine (9) to a minimum of five
(5).
3. 1999 Employee Stock Option Plan. To
act upon a proposal to adopt the 1999
Employee Stock Option Plan.
4. Ratification of Independent Auditors. To
act upon a proposal to ratify the
appointment of Crowe, Chizek and Company LLP
as the Corporation's independent auditors
for the fiscal year ending December 31,
1999.
5. Other Business. To act upon such other
matters as may properly be brought before
the Annual Meeting or any adjournment
thereof. The Board of Directors does not
know of any other matter to come before
the Annual Meeting.
Information regarding the matters to be acted
upon at the Annual Meeting is contained in the
Proxy Statement accompanying this Notice. Only
those holders of record of the Corporation's common
stock at the close of business on March 22, 1999,
are entitled to notice of and to vote at the Annual
Meeting and any adjournment thereof.
All Shareholders are cordially invited to
attend the Annual Meeting, but whether or not you
expect to attend the Annual Meeting in person,
please sign and date the enclosed Proxy and return
it promptly so your stock may be voted.
Thank you for your time and consideration.
Please feel free to contact my office should you have
any questions.
BY ORDER OF THE BOARD OF
DIRECTORS
Buckner Woodford
President, Bourbon
Bancshares, Inc
Paris, Kentucky
March 25, 1999
YOUR VOTE IS IMPORTANT
PLEASE MARK, SIGN, DATE AND RETURN THE ACCOMPANYING
PROXY IMMEDI ATELY EVEN IF YOU PLAN TO ATTEND THE
ANNUAL MEETING.
PROXY STATEMENT
FOR THE ANNUAL MEETING OF SHAREHOLDERS OF
BOURBON BANCSHARES, INC.
TO BE HELD ON MAY 3, 1999
The accompanying proxy form is solicited by
the Board of Directors of Bourbon Bancshares, Inc.
(the "Corporation") for use at the 1999 Annual
Meeting of Shareholders (the "Annual Meeting") to be
held at 9:00 a.m. (local time), on Monday, May 3,
1999, at the Corporation's main office at Kentucky
Bank, Fourth and Main Streets, Paris, Kentucky.
Only holders of record of the Corporation's
Common Shares ("Common Shares") at the close of
business on March 22, 1999 (the "Record Date"), are
entitled to notice of and to vote at the Annual
Meeting. There are 1,399,628 Common Shares issued
and
outstanding and entitled to vote at the Annual
Meeting.
On all matters coming before the Annual Meeting
except the election of directors, each holder of
Common Shares has one vote per share. In the
election of directors, each shareholder may vote
the number of shares held on the Record Date for
each vacancy to be filled, or may cumulate his or her
votes by casting the number of votes equal to the
number of shares held multiplied by the total
number of vacancies to be filled. Such cumulated
votes may be cast for one nominee or distributed
among as many nominees and in any manner that the
shareholder chooses. The
Board of Directors is soliciting discretionary
authority to cumulate votes. A shareholder may
revoke a proxy form by
delivering written notice of revocation to the
Secretary of the Corporation at any time before
the taking of the vote at the Annual Meeting.
The mailing address of the Corporation's
principal offices is P.O. Box 157, Fourth and Main
Street, Paris, Kentucky 40362.
All expenses of preparing, printing, mailing
and delivering the Proxy Statement and all materials
used in the solicitation of proxy forms will be borne
by the Corporation. In addition to the use of the
mail, proxy forms may be solicited by personal inter
view, telephone, and telegraph by directors,
officers, and other employees of the Corporation,
none of whom will receive additional
compensation for such services. The Corporation
will also request brokerage houses, custodians,
and nominees to forward soliciting materials to
the beneficial owners of the Common Shares held
of record by them and will pay reasonable expenses
of such persons for forwarding these materials.
The approximate date on which this Proxy
Statement and the accompanying proxy are first
being sent or given to shareholders is March 25,
1999.
ELECTION OF DIRECTORS
Under the Corporation's Articles of
Incorporation, the Board of Directors consists of
three different classes, Class I, Class II and Class
III, each to serve, subject to the provisions of the
Articles of Incorporation and Bylaws, for a three
year term and until his successor is duly
elected and qualified. The
Corporation will elect three Class III directors at
the Annual Meeting. Henry Hinkle, Theodore Kuster
and Robert G. Thompson have been nominated for
election as Class III directors for terms expiring
at the 2002 annual meeting of shareholders. The
following information is furnished as of March 22,
1999, with respect to each person nominated for
election as a Class III director at the Annual
Meeting:
Name, Age, Principal Director
Occupation or Position, Since
Other Directorships
Henry Hinkle, 47 1989
President, Hinkle Construction
Company
Theodore Kuster, 55 1979
Farmer and thoroughbred horse
breeder
Robert G. Thompson, 49 1991
Farmer and thoroughbred horse
breeder
The Corporation's Articles of Incorporation
provide that the number of its directors will be
fixed from time to time by the Board of
Directors. Between meetings of shareholders held
for the election of directors, the Board of Directors
may increase or decrease the number of
directors last approved by the
shareholders by thirty percent (30%) or less.
Any vacant directorship, whether resulting from an
increase in the number of directors or otherwise, may
be filled by the affirmative vote of the majority
of the directors then in office, whether or not a
quorum of the Board of Directors exists at the time
of the vote, for a term expiring at the annual
meeting of shareholders at which the term of
office of the class to which they were elected
expires or, in the case of newly created
directorships, until such time as determined by
the directors electing such new director. A
decrease in the number of directors, however, will
not have the effect of shortening the term of
any incumbent director. During 1998, two
vacancies occurred in the
Corporation's Board of Directors which the Board of
Directors has declined to fill, pending
consideration by the Corporation's shareholders of
an amendment to the Corporation's Articles of
Incorporation as described in this proxy statement
to permit fewer than nine members of the Board of
Directors. Assuming passage of the amendment to
the Articles of Incorporation, the Board does not
expect to take any action to fill these two
vacancies.
If any named nominee should refuse or be
unable to serve, the Board of Directors believes the
persons designated as proxies will vote the shares
represented by the enclosed proxy form for the
substitute nominee, if any, proposed by the
Board of Directors. No circumstances are
now known, however, that would
prevent any of the nominees from serving. In the
election of
directors, the designated proxies may cumulatively
cast the votes authorized by each proxy form received
if such action is deemed by them to be
appropriate. Proxy forms cannot be voted for a
greater number of persons than the number of nominees
named.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT
SHAREHOLDERS VOTE "FOR" THE ELECTION OF THE BOARD'S
NOMINEES OF CLASS III DIRECTORS.
PROPOSED AMENDMENTS TO
ARTICLES OF INCORPORATION
INCREASE IN AUTHORIZED SHARES
The Board of Directors has unanimously adopted
a proposed amendment to the first sentence of
Article IV of the
Corporation's Articles of Incorporation so that it
will read in its entirety as follows:
The total number of shares that the
Corporation shall have the
authority to issue is 10,300,000
shares, which shall be divided into
two classes as follows: 10,000,000
Common Shares; and 300,000
Preferred Shares.
The amendment would have the effect of
increasing from 3,000,000 to 10,000,000 the number
of authorized Common Shares.
The Corporation's Board of Directors reserved
a total of 70,000 Common Shares for issuance
under the Corporation's 1993 Employee Stock
Ownership Incentive Plan and 1993 Non-Employee
Directors Stock Ownership Incentive Plan. In
addition, if the proposed 1999 Employee Stock
Option Plan (the "1999 Plan") is approved by the
Corporation's shareholders at the Annual Meeting, the
Corporation will reserve an additional 50,000 Common
Shares for issuance under the 1999 Plan. See
PROPOSED 1999 EMPLOYEE STOCK OPTION PLAN.
Reasons For and Intended Effect of the Proposed
Amendment
The Board of Directors believes that the
ability to issue additional Common Shares will
provide the Corporation with valuable flexibility
in connection with future acquisitions,
combinations, equity financings, stock
distributions, stock splits, stock dividends,
employee benefit plans and other corporate
purposes. Although the Board of Directors has not
yet declared a stock split and there can be no
assurance that one will be declared, the Board of
Directors anticipates that it will declare a two-for-
one stock split in the form of a stock dividend
promptly following shareholder approval of the
amendment to the Articles of Incorporation. Any
future cash sales or other issuances of Common
Shares would be made only on terms the Board
believes to be in the best interest of the
Corporation and its shareholders.
The additional authorized Common Shares would be
issuable by the Corporation without further
authorization by shareholders on such terms as the
Corporation's Board of Directors may lawfully
determine. The effect of authorization and
issuance of additional Common Shares (other than
on a pro rata basis among holders of Common
Shares) will be to dilute the present voting power
of some or all holders of Common Shares. In some
circumstances, issuance of additional Common Shares
could result
in the dilution of the net income per share, net
book value per share, and voting rights of Common
Shares currently outstanding. Holders of Common
Shares have no preemptive rights.
Effect of the Proposed Amendment as to Takeovers
The Board of Directors considers that its
evaluation of any takeover bid should be based
primarily on a determination of what is in the
best interests of the Corporation and all of its
shareholders. Factors influencing that determination
may include the resultant effect of the takeover
upon the Corporation's then remaining minority
shareholders, its employees, its customers, and
the communities that it serves. The proposed
amendment is not being recommended in response to
any effort of which the Board of Directors is
aware to obtain control of the Corporation, but
rather is being recommended for the corporate
reasons outlined above. The proposed amendment
will not prevent a takeover that is approved by
members of the Board of Directors unaffiliated
with the shareholder attempting to acquire control
of the Corporation.
If adopted, the proposed amendment could have
the effect of discouraging a third party from
making a tender offer or otherwise attempting to
obtain control of the Corporation, even though such
an attempt might, in some cases, be beneficial to the
Corporation and its shareholders. Issuance of
additional Common Shares could serve to discourage
the accumulation of substantial Common Shares
positions as a prelude to an attempted takeover or
significant corporate restructuring, proxy fights
and partial tender offers with the use of "two-
tiered pricing." This would serve to increase
management's stability, and thereby give it the
necessary security to make long range corporate
plans, as well as to respond to attempted
acquisitions. It could also serve to prevent
acquisitions resulting in dissimilar and possibly
unfair treatment of the Corporation's shareholders.
Although the Board of Directors currently has
no intention of doing so, shares of authorized,
unissued and unreserved Common Shares could (within
the limits imposed by applicable law) be issued to
a holder who might thereby obtain sufficient voting
power to ensure that any proposal to remove
directors, or any alteration, amendment or repeal
of certain provisions to the Articles of
Incorporation, would not receive the shareholder vote
required therefor. Accordingly, the power to issue
new Common Shares could enable the Board of
Directors to make it more difficult to replace
incumbent directors or accomplish certain business
combinations opposed by the incumbent Board of
Directors.
Vote Required
Adoption of the proposed amendment requires that
more votes be cast in favor of the amendment than
against it at a duly called meeting of
shareholders at which a quorum is represented.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT
SHAREHOLDERS VOTE "FOR" ADOPTION OF THE AMENDMENT TO
INCREASE THE NUMBER OF AUTHORIZED COMMON SHARES.
* * * * *
CHANGE IN MINIMUM NUMBER OF MEMBERS OF THE BOARD OF
DIRECTORS
The Board of Directors has unanimously adopted a
proposed
amendment to Section A. of Article V of the
Corporation's Articles of Incorporation so that it
will read in its entirety as follows:
A. Number. The business and affairs of the
Corporation shall
be managed and conducted by or under the direction of
a Board of Directors. The number of directors
(exclusive of directors to be elected by the holders
of one or more series of Preferred Shares of the
Corporation that may be outstanding, voting
separately as a series or class) shall be fixed from
time to time by the Board of Directors of the
Corporation by resolution adopted by a majority of
the entire Board of Directors, but in no event shall
be less than five (5) nor more than fifteen (15).
The amendment would have the effect of changing the number
of members of the Board of Directors from a minimum of nine to a
minimum of five. The Board of Directors currently
consists of seven members and the Board does not
believe that a minimum on nine members of the Board
of Directors is necessary to manage the business and
affairs of the Corporation.
Vote Required
Adoption of the proposed amendment requires the
affirmative vote of no fewer than 67% of the
Common Shares issued and outstanding.
THE BOARD OF DIRECTORS HAS APPROVED THE PROPOSED
AMENDMENT TO THE ARTICLES OF INCORPORATION AND
RECOMMENDS A VOTE "FOR" THE DECREASE IN THE
MINIMUM NUMBER OF MEMBERS OF THE BOARD OF
DIRECTORS TO FIVE.
PROPOSED 1999 EMPLOYEE STOCK OPTION PLAN
On March 9, 1999, the Board of Directors
adopted the 1999 Employee Stock Option Plan, subject
to approval by holders of a majority of Common
Shares. The following summary of the material
provisions of the 1999 Plan does not purport to be
complete and is qualified in its entirety by
reference to the 1999 Plan. For purposes of this
summary, any reference to the Corporation
includes the Corporation and its Subsidiaries (as
defined in the 1999 Plan). A copy of the 1999 Plan
is attached as Annex A.
Purpose of the 1999 Plan
The purpose of the 1999 Plan is to advance the
interest of the Corporation by encouraging
employees who will largely be responsible for
the long-term success and development of the
Corporation to acquire and retain an ownership
interest in the Corporation. The 1999 Plan is
also intended to provide
flexibility to the Corporation in attracting and
retaining such employees and stimulating their
efforts on behalf of the Corporation.
Administration
The 1999 Plan will be administered by a
committee (the "Committee") appointed by the Board
of Directors. The members of the Committee will
serve at the discretion of the Board of
Directors. Subject to the provisions of the 1999
Plan, the Committee will have full authority to
administer the 1999 Plan, including without
limitation, the authority to (i) select
Participants (as defined below) to whom options
("Options") to purchase Common Shares of the
Corporation ("Shares") are granted (each grant an
"Award"); (ii) determine the size and frequency of
Awards granted under the 1999 Plan; (iii) determine
the terms and conditions of Awards, including any
restrictions or conditions to the Award, which need
not be identical; (v) cancel or modify,
with the consent of the Participant, outstanding
Awards and to grant new Awards in
substitution; (vi) accelerate the
exerciseability of, and accelerate or waive any
or all the restrictions and conditions applicable
to, any Award, for any reason; (vii) extend the
duration of an Option exercise period or term of an
Award; (viii) construe and interpret the 1999 Plan
and any agreement or instrument entered into under
the 1999 Plan; (ix) establish, amend and rescind
rules and regulations for the 1999 Plan's
administration; and (x) amend the terms and
conditions of any outstanding Award to the extent
such terms and conditions are within the discretion
of the Committee as provided in the 1999 Plan. All
determinations and decisions made by the Committee
pursuant to the provisions of the 1999 Plan, and
all related orders or resolutions of the Board of
Directors, will be final, conclusive and binding on
all persons.
Number of Shares
In general, the number of Shares reserved for
issuance under the 1999 Plan is 50,000 Shares,
with such number subject to adjustment in the event
of certain events, including the possible stock
split described above. If and to the extent Awards
expire or terminate for any reason without having
been exercised in full (including a cancellation
and regrant of an Option), or are forfeited,
without, in either case, the Participant having
realized any of the economic benefits of a
shareholder, the Shares associated with such
Awards (to the extent not fully exercised,
forfeited or as to which no economic benefit was
realized) will again become available for Awards
under the 1999 Plan.
Adjustments in Authorized Shares and Outstanding
Awards
In the event of a merger, reorganization,
consolidation, recapitalization, reclassification,
split-up, spin-off, separation, liquidation,
share dividend, stock split, reverse stock split,
cash dividend, property dividend, share repurchase,
share combination, share exchange, issuance of
warrants, rights or debentures, or other change in
the corporate structure of the Corporation affecting
the Shares, the Committee may substitute or adjust
the total number and class of Shares or other stock
or securities that may be issued under the 1999
Plan, and the number, class and/or price of Shares
or other stock or securities subject to outstanding
Awards, as it determines to be appropriate and
equitable to prevent dilution or enlargement of the
rights of Participants and to preserve, without
exceeding, the value of any outstanding Awards.
Eligibility and Participation
Individuals who are full-time employees of the
Corporation ("Employees") are eligible to receive
Awards under the 1999 Plan. In selecting Employees
to receive Awards under the 1999 Plan, as well as
in determining the number of Shares subject to and
the other terms and conditions applicable to,
each Award, the Committee will take into
consideration such factors as it deems relevant in
promoting the purposes of the 1999 Plan, including
the duties of the Employees, their present
and potential contribution to the success of
the Corporation and their anticipated number of
years of active service remaining with the
Corporation.
Stock Options
Subject to the terms and provisions of the 1999
Plan, the Committee may grant Options to
Participants at any time and from
time to time in the form of options that are
intended to qualify as incentive stock options
within the meaning of Section 422 of the Internal
Revenue Code of 1986, as amended ("ISOs"), Options
that are not intended to so qualify ("NQSOs"), or a
combination of the two.
Option Agreements
Each Award is required to be evidenced by
an option agreement between the optionee and the
Corporation (the "Option Agreement"). The Option
Agreement must specify the purchase price per
share subject to an Option (the "Option Exercise
Price"), the duration of the Option, the number of
Shares to which the Option relates and such
other provisions as the Committee may determine
or that are required by the 1999 Plan. The Option
Agreement must also specify whether the Option is
intended to be an ISO or a NQSO and must include
such provisions applicable to the particular type of
Option granted.
Duration of Option
In general, each Option will expire at such
time as is determined by the Committee at the
time of grant; provided, however, that no Option
may be exercised later than the tenth (10th)
anniversary of its grant.
Exercise of Options
Options must be exercisable at such times and be
subject to such restrictions and conditions as the
Committee approves at the time of grant, which need
not be the same for each grant or for each
Participant. Options must be exercised by delivery
to the Corporation of a written notice of exercise,
setting forth the number of Shares with respect
to which the Option is to be exercised and
accompanied by full payment of the Option Exercise
Price and all applicable withholding taxes.
Payment of Option Exercise Price
The Option Exercise Price for Shares as to
which an Option is exercised must be paid to the
Corporation in full at the time of exercise, at the
discretion of the Committee, either (a) in cash in
the form of currency or other cash equivalent
acceptable to the Corporation, (b) by tendering
Shares having a fair market value at the time of
exercise equal to the Option Exercise Price, (c) any
other reasonable consideration that the Committee
deems appropriate or (d) by a combination of the
forms of consideration described in (a) , (b) and
(c). The Committee may permit the cashless
exercise of Options as described in Regulation
T promulgated by the Federal Reserve Board, subject
to applicable securities law restrictions, or by
any other means that the Committee determines
to be consistent with the 1999 Plan's purpose
and applicable law; provided that for an ISO, the
right to a cashless exercise must be granted at the
time the Option is granted and may not be added in
any modification of the Option Agreement.
Vesting Upon Change in Control
In the event of a "change in control" of the
Corporation, all outstanding Options held by a
Participant will become fully vested and
immediately exercisable. In general, the 1999 Plan
provides that a "change in control" occurs
when: (a) a shareholder or group acquires 25% of
the combined voting power of the Corporation's then
outstanding voting securities, (b) there is a
substantial turnover among the members of the
Board of
Directors, (c) the shareholders approve a merger,
consolidation or reorganization of
the Corporation, except in certain
circumstances as set forth in the 1999 Plan, (d) the
shareholders approve the complete dissolution of the
Corporation, or (e) the shareholders approve an
agreement for the sale or other disposition
of all or substantially all of the assets of the
Corporation.
Effect of Termination of Employment, Death or
Disability
If the employment of a Participant is terminated
for "cause" (as defined in the 1999 Plan), all then
outstanding Options of such Participant, whether
or not exercisable, will terminate immediately.
If the employment of a Participant is terminated
for any reason other than for "cause", death,
disability or retirement, to the extent the
outstanding Options of such Participant are
exercisable, such options may be exercised by such
Participant or his personal representative at any
time prior to the earlier of the expiration date of
the options or the date that is ninety (90) days
after the date of such termination of employment.
In the event of the death or disability of a
Participant while employed by the Corporation, all
then outstanding Options of such Participant will
become fully vested and immediately exercisable,
and may be exercised at any time within one (1) year
after the date of death or determination of
disability; provided, however, that no such
options may be exercised on a date subsequent to
their expiration.
Termination Date
The 1999 will terminate on the earlier to occur
of (a) the date when all Shares available under
the 1999 Plan have been acquired pursuant to the
exercise of Awards or (b) such other date as the
Board of Directors determines. In no event may any
Awards be granted later than the tenth anniversary
date of the day the 1999 Plan was adopted by
the Corporation's Board of Directors.
Amendment, Modification and Termination
The Board of Directors may, at any time,
amend, modify or terminate the 1999 Plan.
However, without the approval of shareholders of
the Corporation no such amendment, modification or
termination may:
(a) materially increase the benefits
accruing to Participants under the 1999 Plan;
(b) materially increase the total amount
of Shares that may be issued under the 1999 Plan,
except in the event of an adjustment in authorized
shares pursuant to Section 4.2 of the 1999 Plan; or
(c) materially modify the class of
Employees eligible to participate in the 1999 Plan.
The Committee may amend the terms of
any Award, prospectively or retroactively, but no
such amendment will impair the rights of any
Participant without such Participant's consent.
Awards Previously Granted
No amendment, modification or termination of
the 1999 Plan will in any manner adversely affect
any outstanding Award without
the written consent of the Participant holding such
Award.
Non-Transferability
Except as may be determined by the Committee
in its sole discretion with respect to NQSOs, a
Participant's rights under the 1999 Plan may
not be assigned, pledged or otherwise
transferred other than by will or the laws of
descent and distribution.
No Granting of Employment Rights
Neither the 1999 Plan, nor any action taken
under the 1999 Plan, may be construed as giving any
employee the right to become a Participant, nor may
any Award under the 1999 Plan be construed as giving
a Participant any right with respect to continuance
of employment by the Corporation. The
Corporation expressly
reserves the right to terminate, whether by
dismissal, discharge or otherwise, a Participant's
employment at any time, with or without "cause",
except as may otherwise be provided by any
written agreement between the Corporation and the
Participant.
Tax Withholding
A Participant must remit to the Corporation
an amount sufficient to satisfy Federal and state
taxes (including the Participant's FICA
obligation) required by law to be withheld with
respect to any grant or exercise made under or as a
result of the 1999 Plan.
Shares Withholding
With respect to withholding required upon the
exercise of options or upon any other taxable
event under the 1999 Plan pursuant to which Shares
are to be received by the Participant, a Participant
may, subject to the discretion of the Committee, make
an election to satisfy the withholding requirement
with respect to such Shares, in whole or in part,
by having the Corporation withhold Shares having a
fair market value on the date the withholding
tax is to be determined equal to the amount required
to be withheld under applicable law.
Indemnification
No member of the Board of Directors or the
Committee, nor any officer or Employee acting on
behalf of the Board of Directors or the
Committee, will be personally liable for any
action, determination or interpretation taken or
made with respect to the 1999 Plan, and all
members of the Board of Directors, the Committee
and each and any officer or Employee of the
Corporation acting on their behalf will, to the
extent permitted by law, be fully indemnified and
protected by the Corporation with respect to any
such action, determination or interpretation.
Vote Required
Adoption of the proposed 1999 Plan requires that
more votes be cast in favor of the 1999 Plan than
against it at a duly called meeting of
shareholders at which a quorum is represented.
THE BOARD OF DIRECTORS HAS APPROVED THE PROPOSED
1999 PLAN AND RECOMMENDS A VOTE "FOR" THE PROPOSED
1999 PLAN.
RATIFICATION OF INDEPENDENT AUDITORS
The Board of Directors has selected, subject to
ratification by the shareholders of the Corporation
at the Annual Meeting, the firm of Crowe, Chizek and
Company LLP as the independent accountants for the
Corporation to audit the Corporation's financial
statements for its year ending December 31,
1999. Eskew & Gresham, P.S.C. has served as
the Corporation's independent auditors since 1982.
In January 1998, Eskew & Gresham was merged into
Crowe, Chizek and Company LLP.
Ratification of the proposal to appoint Crowe,
Chizek and Company LLP as the independent accountants
for the Corporation requires that more votes be cast
in favor of the proposal than against it at a duly
called meeting of shareholders at which a quorum is
represented.
THE BOARD OF DIRECTORS RECOMMENDS THAT SHAREHOLDERS
VOTE "FOR" RATIFICATION OF THE APPOINTMENT OF CROWE
CHIZEK AND CO. LLP AS THE CORPORATION'S
INDEPENDENT AUDITORS.
OTHER MATTERS
The directors and officers of the Corporation do
not know of any matters to be presented for
shareholder approval at the Annual Meeting other
than those described in the Proxy Statement. If any
other matters should come before the Annual Meeting,
the Board of Directors intends that the persons
designated on the enclosed proxy form, or their
substitutes, will vote the shares represented by
the proxy form in accordance with their best
judgment on such matters.
By Order of the Board of Directors
Buckner Woodford
President, Bourbon Bancshares, Inc.
This Proxy Form is Solicited by the Board of
Directors
BOURBON BANCSHARES, INC.
Paris, Kentucky
The undersigned hereby appoints Buckner Woodford
and William Reynolds, or either one of them (with
full power to act alone), my proxy, each with the
power to appoint his substitute, to represent me
to vote all of the Corporation's Common Stock which
I held of record or am otherwise entitled to vote,
at the close of business on March 22, 1999, at
the 1999 Annual Meeting of Shareholders to be held
on May 3, 1999, at 9:00 a.m., and at any
adjournments thereof, with all powers the
undersigned would possess if personally present, as
follows:
I. ELECTION OF DIRECTORS.
___ FOR all nominees listed below (except
as otherwise indicated below)
___ AGAINST all nominees listed below
Henry Hinkle, Theodore Kuster, Robert G. Thompson
(INSTRUCTION: To withhold authority to vote for any
individual nominee, write the
nominee's name on the line.)
_____________________________________________________
___
II. AMENDMENT TO ARTICLES OF INCORPORATION TO
INCREASE NUMBER OF AUTHORIZED SHARES OF COMMON
STOCK.
_____ FOR _____ AGAINST _____ ABSTAIN
III. AMENDMENT TO ARTICLES OF INCORPORATION TO
CHANGE NUMBER OF MEMBERS OF THE CORPORATION'S
BOARD OF DIRECTORS.
_____ FOR _____ AGAINST _____ ABSTAIN
IV. ADOPTION OF 1999 EMPLOYEE STOCK OPTION PLAN.
_____ FOR _____ AGAINST _____ ABSTAIN
V. RATIFICATION OF CROWE CHIZEK AND CO. LLP AS
INDEPENDENT
AUDITORS.
_____ FOR _____ AGAINST _____ ABSTAIN
VI. OTHER BUSINESS. In their discretion, the
Proxies are authorized to act upon such other
matters as may properly be brought before the
Annual Meeting or any adjournment thereof.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR"
ALL OF THE NOMINEES LISTED IN ITEM 1 AND "FOR"
ITEMS 2, 3, 4 AND 5.
[PLEASE DATE, MARK, SIGN AND RETURN IMMEDIATELY]
This proxy form relates to ALL shares
owned by the undersigned.
This proxy form is solicited by the Board of
Directors and will be voted as specified and
in accordance with the accompanying proxy
statement. If no instruction is indicated, this
proxy form will be voted "FOR" all of the nominees
listed in Item 1 and "FOR" Items 2, 3, 4 and 5.
Please sign exactly as name appears. When
shares are held by joint tenants, both should sign.
When signing as attorney, as executor,
administrator, trustee or guardian, please give
full title as such. If a corporation, please sign
full corporate name by President or other
authorized officer. If a partnership, please sign
partnership name by authorized person.
Date _______________, 1999
_______________________________
Signature
_______________________________
Signature if held jointly