PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES EXCHANGE ACT OF 1934
Filed by the registrant [x]
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Check the appropriate box:
[ ] Preliminary proxy statement
[x] Definitive proxy statement
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CAVALRY BANCORP, INC.
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(Name of Registrant as Specified in Its Charter)
CAVALRY BANCORP, INC.
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(Name of Person(s) Filing Proxy Statement)
Payment of filing fee (Check the appropriate box):
[x] No fee required.
[ ] $500 per each party to the controversy pursuant to Exchange
Act Rule 14a-6(i)(3).
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
N/A
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(2) Aggregate number of securities to which transactions applies:
N/A
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(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11:
N/A
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(4) Proposed maximum aggregate value of transaction:
N/A
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[ ] 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:
N/A
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(2) Form, schedule or registration statement no.:
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(3) Filing party:
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(4) Date filed:
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March 23, 2002
Dear Shareholder:
You are cordially invited to attend the Annual Meeting of Shareholders of
Cavalry Bancorp, Inc., the holding company for Cavalry Banking. The meeting will
be held at the Bank's main office located at 114 West College Street,
Murfreesboro, Tennessee, on Thursday, April 25, 2002 at 10:00 a.m., local time.
The Notice of Annual Meeting of Shareholders and Proxy Statement appearing
on the following pages describe the formal business to be transacted at the
meeting. During the meeting, we will also report on the operations of the
Company. Directors and officers of the Company, as well as a representative of
Rayburn, Betts & Bates, P.C., the Company's independent auditors, will be
present to respond to appropriate questions of shareholders.
IT IS IMPORTANT THAT YOUR SHARES ARE REPRESENTED AT THIS MEETING, WHETHER
OR NOT YOU ATTEND THE MEETING IN PERSON AND REGARDLESS OF THE NUMBER OF SHARES
YOU OWN. TO MAKE SURE YOUR SHARES ARE REPRESENTED, WE URGE YOU TO COMPLETE AND
MAIL THE ENCLOSED PROXY CARD. IF YOU ATTEND THE MEETING, YOU MAY VOTE IN PERSON
EVEN IF YOU HAVE PREVIOUSLY MAILED A PROXY CARD.
We look forward to seeing you at the meeting.
Sincerely,
/s/ Ed C. Loughry, Jr.
Ed C. Loughry, Jr.
Chairman of the Board and Chief Executive Officer
CAVALRY BANCORP, INC.
114 WEST COLLEGE STREET
MURFREESBORO, TENNESSEE 37130
(615) 893-1234
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON APRIL 25, 2002
NOTICE IS HEREBY GIVEN that the Annual Meeting of Shareholders of Cavalry
Bancorp, Inc. ("Company") will be held at the main office of Cavalry Banking
located at 114 West College Street, Murfreesboro, Tennessee, on Thursday, April
25, 2002 at 10:00 a.m., local time, for the following purposes:
(1) To elect three directors of the Company to serve for a term of three
years;
(2) To consider and act upon such other matters as may properly come
before the meeting or any adjournments thereof.
NOTE: The Board of Directors is not aware of any other business to come
before the meeting.
Any action may be taken on the foregoing proposals at the meeting on the
date specified above or on any date or dates to which, by original or later
adjournment, the meeting may be adjourned. Only shareholders of record at the
close of business on March 1, 2002 are entitled to notice of and to vote at the
meeting and any adjournments or postponements thereof.
You are requested to complete and sign the enclosed form of proxy, which is
solicited by the Board of Directors, and to mail it promptly in the enclosed
envelope. If you attend the meeting and wish to vote in person, you may revoke
your proxy at that time and vote by ballot.
BY ORDER OF THE BOARD OF DIRECTORS
/s/ Ira B. Lewis, Jr.
IRA B. LEWIS, JR.
CORPORATE SECRETARY
Murfreesboro, Tennessee
March 23, 2002
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IMPORTANT: THE PROMPT RETURN OF PROXIES WILL SAVE THE COMPANY THE EXPENSE OF
FURTHER REQUESTS FOR PROXIES IN ORDER TO ENSURE A QUORUM. A SELF-ADDRESSED
ENVELOPE IS ENCLOSED FOR YOUR CONVENIENCE. NO POSTAGE IS REQUIRED IF MAILED IN
THE UNITED STATES.
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PROXY STATEMENT
OF
CAVALRY BANCORP, INC.
114 WEST COLLEGE STREET
MURFREESBORO, TENNESSEE 37130
(615) 893-1234
ANNUAL MEETING OF SHAREHOLDERS
APRIL 25, 2002
This Proxy Statement is furnished in connection with the solicitation of
proxies by the Board of Directors of Cavalry Bancorp, Inc. ("Company") to be
used at the Annual Meeting of Shareholders of the Company ("Meeting"). The
Company is the holding company for Cavalry Banking ("Bank"). The Meeting will
be held at the main office of the Bank located at 114 West College Street,
Murfreesboro, Tennessee, on Thursday, April 25, 2002 at 10:00 a.m., local time.
This Proxy Statement and the enclosed proxy card are being first mailed to
shareholders on or about March 23, 2002.
VOTING AND PROXY PROCEDURE
--------------------------
Shareholders Entitled to Vote. Only shareholders of record as of the close
of business on March 1, 2002 ("Voting Record Date") are entitled to vote at the
Meeting and are entitled to one vote for each share of common stock ("Common
Stock") of the Company then held. At the close of business on the Voting Record
Date the Company had 7,059,201 shares of Common Stock issued and outstanding.
The Common Stock is the only class of outstanding securities of the Company.
The Company's Charter provides that, subject to certain exceptions, record
holders of the Company's Common Stock who beneficially own, either directly or
indirectly, in excess of 10% of the Company's outstanding shares are not
entitled to any vote in respect of the shares held in excess of the 10% limit.
As of the date of this proxy statement, there are no record holders subject to
this limitation.
If you are a beneficial owner of Company Common Stock held by a broker,
bank or other nominee (i.e., in "street name"), you will need proof of ownership
to be admitted to the Meeting. A recent brokerage statement or letter from a
bank or broker are examples of proof of ownership. If you want to vote your
shares of Company Common Stock held in street name in person at the Meeting, you
will have to get a written proxy in your name from the broker, bank or other
nominee who holds your shares.
Quorum. The presence, in person or by proxy, of at least a majority of the
total number of outstanding shares of Common Stock entitled to vote is necessary
to constitute a quorum at the Meeting. Abstentions and broker non-votes will be
counted as shares present and entitled to vote at the Meeting for purposes of
determining the existence of a quorum.
Voting. The Board of Directors solicits proxies so that each shareholder
has the opportunity to vote on the proposal to be considered at the Meeting.
When a proxy card is returned properly signed and dated, the shares represented
thereby will be voted in accordance with the instructions on the proxy card.
Where no instructions are indicated, proxies will be voted FOR the nominees for
directors set forth below. If a shareholder attends the Meeting, he or she may
vote by ballot.
Revocation of a Proxy. Shareholders who execute proxies retain the right
to revoke them at any time. Proxies may be revoked by written notice delivered
in person or mailed to the Secretary of the Company or by filing a later proxy
prior to a vote being taken on a particular proposal at the Meeting. Attendance
at the Meeting will not automatically revoke a proxy, but a shareholder in
attendance may request a ballot and vote in person, thereby revoking a prior
granted proxy.
Participants in the Cavalry Banking ESOP. If a shareholder is a participant
in the Cavalry Banking Employee Stock Ownership Plan ("ESOP"), the proxy card
represents a voting instruction to the trustees of the ESOP as to the number of
shares in the participant's plan account. Each participant may direct the
trustees as to the manner in which shares of Common Stock allocated to the
participant's plan account are to be voted. Unallocated shares of Common Stock
held by the ESOP, and allocated shares for which no voting instructions are
received from participants, will be voted by the trustees in the same proportion
as shares for which the trustees have received voting instructions. The deadline
for returning your voting instructions to the trustees is April 23, 2002.
Vote Required. The directors to be elected at the Meeting will be elected
by a plurality of the votes cast by shareholders present in person or by proxy
and entitled to vote. Pursuant to the Company's Charter, shareholders are not
permitted to cumulate their votes for the election of directors. Votes may be
cast for or withheld from each nominee. Votes that are withheld and broker
non-votes will have no effect on the outcome of the election because directors
will be elected by a plurality of the votes cast.
If your Company Common Stock is held in street name, you will receive
instructions from your broker, bank or other nominee that you must follow in
order to have your shares voted. Your broker or bank may allow you to deliver
your voting instructions via the telephone or the Internet. Please see the
instruction form that accompanies this proxy statement. If you wish to change
your voting instructions after you have returned your voting instruction form to
your broker or bank, you must contact your broker or bank.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
--------------------------------------------------------------
Persons and groups who beneficially own in excess of 5% of the Company's
Common Stock are required to file certain reports with the Securities and
Exchange Commission ("SEC"), and provide a copy to the Company, disclosing such
ownership pursuant to the Securities Exchange Act of 1934, as amended ("Exchange
Act"). Based on such reports, the following table sets forth, at the close of
business on the Voting Record Date, certain information as to those persons who
were beneficial owners of more than 5% of the outstanding shares of Common
Stock. Management knows of no persons other than those set forth below who
beneficially owned more than 5% of the outstanding shares of Common Stock at the
close of business on the Voting Record Date. The table also sets forth, as of
the close of business on the Voting Record Date, certain information as to
shares of Common Stock beneficially owned by the Company's directors and "named
executive officers" and all directors and executive officers as a group. Shares
issuable upon exercise of options that are exercisable within 60 days of the
Voting Record Date 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. The address of each of the Company's directors,
executive officers and benefit plans listed below is 114 West College Street,
Murfreesboro, Tennessee 37130.
Number of
Shares Percent
Beneficially of Shares
Name Owned (1) Outstanding
- ---- ------------ -----------
BENEFICIAL OWNERS OF MORE THAN 5%
Cavalry Banking Employee Stock Ownership Plan Trust 896,693(2) 12.7%
(table continued on following page)
2
Number of Shares
That May Be Acquired
Number of Shares Within 60 Days by Percent of Shares
Name Beneficially Owned (1) Exercising Options Outstanding (5)
- ---- ----------------------- ------------------ ----------------
DIRECTORS
William Kent Coleman. . . . . . . 13,300 808 0.2%
James C. Cope . . . . . . . . . . 47,021 1,616 0.7
Terry G. Haynes . . . . . . . . . 104,171 1,616 1.5
William H. Huddleston, IV . . . . 41,401 808 0.6
Gary Brown. . . . . . . . . . . . 101,026 1,616 1.5
Tim J. Durham . . . . . . . . . . 90,751 1,616 1.3
Ed Elam . . . . . . . . . . . . . 44,919 1,616 0.7
Named Executive Officers (3)(4)
Ed C. Loughry, Jr.. . . . . . . . 105,937 9,048 1.6
Ronald F. Knight. . . . . . . . . 100,000 7,164 1.5
William S. Jones. . . . . . . . . 54,868 1,193 0.8
Hillard C. Gardner. . . . . . . . 7,500 1,193 0.1
R. Dale Floyd . . . . . . . . . . 21,619 942 0.3
All Executive Officers and. . . . 891,997 33,250 13.1
Directors as a Group (16 persons)
<FN>
(1) In accordance with Rule 13d-3 under the Exchange Act, a person is deemed to
be the beneficial owner, for purposes of this table, of any shares of
Common Stock if he or she has sole or shared voting and/or investment power
with respect to such security. The table includes shares owned by spouses,
other immediate family members in trust, shares held in retirement accounts
or funds for the benefit of the named individuals, and other forms of
ownership, over which shares the persons named in the table may possess
sole or shared voting and/or investment power.
(2) Under the terms of the ESOP, the trustees will vote unallocated shares and
allocated shares for which no voting instructions are received in the same
proportion as shares for which the trustees have received voting
instructions from participants. As of the Voting Record Date, 325,848
shares have been allocated to participants' accounts. The trustees of the
ESOP are Messrs. Loughry, Brown, Knight and Jones.
(3) Messrs. Loughry and Knight are also directors of the Company.
(4) SEC regulations define the term "named executive officers" to include all
individuals serving as chief executive officer during the most recently
completed fiscal year, regardless of compensation level, and the four most
highly compensated executive officers, other than the chief executive
officer, whose total annual salary and bonus for the last completed fiscal
year exceeded $100,000. Messrs. Loughry, Knight, Jones Gardner and Floyd
were the Company's only "named executive officers" for the fiscal year
ended December 31, 2001.
(5) Percentages with respect to each person or group of persons have been
calculated on the basis of 7,059,201 shares of Cavalry's common stock, the
number of shares of the Company's common stock outstanding and entitled to
vote as of March 1, 2002, plus the number of shares of the Company's common
stock which such person or group of persons has the right to acquire within
60 days after March 1, 2002 by the exercise of stock options.
3
PROPOSAL I - ELECTION OF DIRECTORS
----------------------------------
The Company's Board of Directors consists of nine members. In accordance
with the Company's Charter, the Board is divided into three classes with
three-year staggered terms, with one-third of the directors elected each year.
Three directors will be elected at the Meeting to serve for the respective term
set forth in the following table, or until their respective successors have been
elected and qualified. The nominees for election this year are Terry G. Haynes,
William H. Huddleston, IV and Gary Brown, each of whom is a current member of
the Board of Directors of the Company and of the Bank.
It is intended that the proxies solicited by the Board of Directors will be
voted FOR the election of the nominees named in the table below. If any nominee
is unable to serve, the shares represented by all valid proxies will be voted
for the election of such substitute as the Board of Directors may recommend or
the Board of Directors may adopt a resolution to amend the Bylaws and reduce the
size of the Board. At this time the Board of Directors knows of no reason why
any nominee might be unavailable to serve.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE ELECTION OF MESSRS.
HAYNES, HUDDLESTON, IV AND BROWN.
The following table sets forth certain information regarding the nominees
for election at the Meeting as well as information regarding those directors
continuing in office after the Meeting.
Year First Elected or Term to
Name Age(1) Appointed Director(2) Expire
- ---- ------ --------------------- ------
BOARD NOMINEES
Terry G. Haynes . . . . . . . . 44 1997 2005(3)
William H. Huddleston, IV . . . 38 1999 2005(3)
Gary Brown. . . . . . . . . . . 59 1984 2005(3)
DIRECTORS WHOSE TERMS CONTINUE
Ed C. Loughry, Jr.. . . . . . . 59 1982 2004
William Kent Coleman. . . . . . 47 2000 2004
James C. Cope . . . . . . . . . 52 1992 2004
Ronald F. Knight. . . . . . . . 51 1990 2003
Tim J. Durham . . . . . . . . . 48 1986 2003
Ed Elam . . . . . . . . . . . . 61 1977 2003
<FN>
(1) As of December 31, 2001.
(2) Includes prior service on the Board of Directors of the Bank before March
1998.
(3) Assuming the individual is elected.
The present principal occupation and other business experience during the
last five years of each nominee for election and each director continuing in
office is set forth below:
Ed C. Loughry, Jr. joined the Bank in 1968 and currently serves as Chairman
of the Board and Chief Executive Officer of the Bank and the Company. Mr.
Loughry has served on the Boards of Directors of the Rutherford County Chamber
of Commerce, United Way, Heart Fund, the Federal Home Loan Bank of Cincinnati
and the Tennessee Bankers Association where he is currently serving as
Chairman-Elect. He currently serves on the HealthSpring Board, ABA BankPac
Board, and the Christy-Houston Foundation. He was selected Business Person of
the Year in 1993 and Business Legend in 2000 by the Rutherford County Chamber of
Commerce.
4
William Kent Coleman is an associate in the law office of Rucker, Rucker &
Coleman, an Association of Attorneys, in Murfreesboro, Tennessee. Mr. Coleman is
a board member of the Rutherford County Chamber of Commerce, Tennessee Cystic
Fibrosis Foundation and the Volunteer Behavioral Health Care System.
James C. Cope is a partner in the law firm Murfree, Cope, Hudson & Scarlett
in Murfreesboro, Tennessee. Mr. Cope serves as attorney for Rutherford County,
Tennessee, Middle Tennessee Electric Membership Corporation, the Murfreesboro
Housing Authority, the Smyrna/Rutherford County Airport Authority and otherwise
engages in a general practice of civil law. He is past President of the Middle
Tennessee State University Foundation and the Murfreesboro Rotary Club.
Terry G. Haynes is the Chief Executive Officer, General Manager and Chief
Operating Officer of Haynes Bros. Lumber Co., a retail building supply dealer
located in Murfreesboro, Tennessee. Mr. Haynes is a past Chairman of the
Rutherford County Chamber of Commerce.
William H. Huddleston, IV, a professional engineer and registered land
surveyor licensed in the State of Tennessee, is the President of
Huddleston-Steele Engineering, Inc. in Murfreesboro, Tennessee. Mr. Huddleston
currently serves on the City of Murfreesboro Construction Board of Adjustments
and Appeals, the First United Methodist Church Council of Stewards, and is
President of The Webb School Alumni Board.
Gary Brown is the owner and President of Roscoe Brown, Inc., a heating and
air conditioning company, located in Murfreesboro, Tennessee. Mr. Brown is a
member of the Murfreesboro Water & Sewer Department Board, the Electrical
Examining Board, and the Middle Tennessee State University Foundation Board.
Ronald F. Knight joined the Bank in 1972 and currently serves as President
and Chief Operating Officer of the Bank and the Company. Mr. Knight currently
serves on the Board of Directors of the Tennessee Housing Development Agency,
the Rutherford County Economic Development Council, is the past Chairman of the
Board of the Rutherford County Chamber of Commerce and a past member of the
Board of Directors of the Tennessee Bankers Association. Mr. Knight actively
supports various charitable organizations and is the Co-Founder of a local
charity "Christmas For The Children" which benefits children with special needs.
Tim J. Durham is the owner of Durham Realty & Auction, Inc., a real estate
and auction service company in Murfreesboro, Tennessee. Mr. Durham is also a
partner in D & H Development Co., a commercial and residential developer. Mr.
Durham currently serves on the Board of the Rutherford County Chamber of
Commerce, the Middle Tennessee Medical Foundation Board and the Murfreesboro
Water & Sewer Department Board. He also served on the Murfreesboro Planning
Commission for eight years and is a former member of the Murfreesboro Board of
Zoning Appeals. Mr. Durham is past President and Director of the Rutherford
County Board of Realtors.
Ed Elam is the Rutherford County Clerk in Murfreesboro, Tennessee, a
position he has held since 1974. Mr. Elam is a member of the Christy-Houston
Foundation Board and the Evergreen Cemetery Board. He is also active in the
American Cancer Society as a Relay for Life Volunteer.
MEETINGS AND COMMITTEES OF THE BOARD OF DIRECTORS
-------------------------------------------------
The Boards of Directors of the Company and the Bank conduct their business
through meetings of both of the Boards and through each Board's committees.
During the fiscal year ended December 31, 2001, the Board of Directors of the
Company held 12 meetings, and the Board of Directors of the Bank held 12
meetings. No director of the Company or the Bank attended fewer than 75% of the
total meetings of the Boards and committees on which such person served during
this period.
Committees of the Company's Board. The Company's Board of Directors has
established Audit, Compensation and Nominating Committees.
The Audit Committee of the Company also serves as the Audit Committee of
the Bank and consists of Directors Durham (Chairman), Huddleston, Coleman and
Haynes. The Committee receives and reviews all reports prepared by the Company
and Bank's external and internal auditors. The Committee meets at least three
times
5
during the year to review the reports issued by the internal auditor and the
external auditor. The Board of Directors has adopted a written Charter for the
Audit Committee which specifies its obligations. See "Audit Committee Charter
and Report Concerning Financial Matters" below. The Audit Committee met four
times during the year ended December 31, 2001.
The Compensation Committee of the Company also serves as the Compensation
Committee of the Bank and consists of Directors Brown (Chairman), Durham, and
Cope. The Compensation Committee makes recommendations to the full Board of
Directors concerning employee compensation. The Compensation Committee met five
times during the year ended December 31, 2001.
The full Board of Directors acts as a Nominating Committee for the annual
selection of management's nominees for election as directors of the Company.
The full Board of Directors met on December 20, 2001 to nominate the candidates
for election as directors at the Meeting. The Board will consider shareholder
nominations which comply with the Company's Charter, which requires that
shareholders who intend to nominate a director provide written notice to the
Secretary of the Company no later than 120 days prior to the month and day the
proxy statement for the preceding annual meeting was mailed (November 23, 2002
for next year) and provide specified information.
DIRECTORS' COMPENSATION
-----------------------
All directors of the Company receive a monthly fee of $500. All directors
of the Bank, other than the Vice-Chairman of the Board, receive a monthly fee of
$1,300. The Vice-Chairman of the Board receives a monthly fee of $1,350.
Outside directors receive an additional fee of $300 per Executive Committee,
Audit Committee, Compensation Committee and Trust Committee meeting attended.
Directors' fees totaled $216,000 for the year ended December 31, 2001.
Under the Management Recognition Plan (MRP), which was adopted by the
Company's shareholders on April 22, 1999, non-employee directors Brown, Cope,
Durham, Elam and Haynes each received stock awards of 12,922 shares of
restricted stock. Each award initially vested over a five-year period in 20%
annual increments, with the first increment having vested on April 22, 2000, and
the second increment having vested on April 22, 2001. On October 16, 2001 the
Compensation Committee, as allowed by the plan, accelerated the vesting for
years 2002, 2003, and 2004 of all shares of restricted stock outstanding under
the MRP Plan and thereby eliminated ongoing MRP expense which would have been
otherwise incurred for those years. The value of the restricted shares which
vested in 2001 for each of such directors was $110,513.
The 1999 Stock Option Plan (SOP), which was adopted by the Company's
shareholders on April 22, 1999, authorized the Compensation Committee to grant
options to directors, directors emeritus, and key employees. During 2001 the
committee granted options to directors Brown, Cope, Durham, Haynes and Elam
totaling 32,306 shares and directors Coleman and Huddleston totaling 16,153
shares. The options were granted on January 2, 2001, July 26, 2001 and September
17, 2001 in amounts of 8,077 shares; 8,077 shares; and 16,152 shares
respectively for directors Brown, Cope, Durham, Haynes and Elam and on the same
dates to directors Coleman and Huddleston in amounts of 4,038 shares; 4,038
shares and 8,077 shares respectively.
Certain directors participate in the Company's Supplemental Retirement Plan
for Directors and Executive Officers described below.
6
EXECUTIVE COMPENSATION
----------------------
SUMMARY COMPENSATION TABLE
The following information is furnished for the Chief Executive Officer of
the Company and for the executive officers of the Company who received salary
and bonus in excess of $100,000 for the year ended December 31, 2001 ("Named
Executive Officers").
Long-term
Compensation Awards
----------------------
Number of
Restricted Securities All
Annual Compensation(1) Stock Underlying Other Annual
Name and ----------------------- Awards Options Compensation
Position Year Salary($) Bonus ($)(2) Awarded (3)
- -------- ---- --------- ----- --------- --------- ------------
Ed C. Loughry, Jr. . . . . . 2001 $168,000 $31,382 -- 180,957 $54,004
Chairman of the Board. . . . 2000 168,000 35,246 -- -- 59,055
and Chief Executive Officer. 1999 168,000 29,064 1,686,672 -- 43,184
of the Company and the Bank
Ronald F. Knight . . . . . . 2001 140,000 27,273 -- 143,266 54,004
President and Chief. . . . . 2000 140,000 29,372 -- -- 58,887
Operating Officer of the . . 1999 140,000 24,220 1,349,526 -- 43,184
Company and the Bank
William S. Jones . . . . . . 2001 110,000 20,548 -- 23,846 38,369
Executive Vice President . . 2000 97,000 30,350 -- -- 32,288
and Chief Administrative . . 1999 89,760 7,764 168,625 -- 36,997
Officer of the Company
and the Bank
Hillard C. Gardner, CPA. . . 2001 94,500 8,826 -- 23,846 38,079
Senior Vice President. . . . 2000 91,500 9,598 -- -- 28,805
and Chief Financial Officer. 1999 87,210 7,543 168,625 -- 36,970
of the Company and the Bank
R. Dale Floyd 2001 92,500 8,640 --- 18,846 37,619
Senior Vice President 2000 89,500 9,389 --- -- 28,594
Mortgage Lending . . . . . . 1999 85,680 7,411 168,625 -- 35,792
<FN>
_______________
(1) The aggregate amount of perquisites and other personal benefits was less
than 10% of the total annual salary and bonus reported.
(2) Represents the value as of April 22, 1999 (the date of award) of 75,382
shares, 60,314 shares, 7,538 shares, 7,538 shares and 7,538 shares awarded
to Messrs. Loughry, Knight, Jones, Gardner and Floyd, respectively,
pursuant to the terms of the Company's MRP. These shares vest over a
five-year period at the rate of 20% per year. The first 40% of the
restricted shares vested on April 22, 2000, and April 22, 2001,
respectively. Dividends are paid on such awards if and when declared and
paid by the Company on the Common Stock. On October 16, 2001, the
Compensation Committee, as allowed by the plan, accelerated the vesting of
the remaining MRP shares. The value of the vested restricted stock awards
during 2001 was $644,671 (60,306 shares at $10.69 average per share),
$515,814 (48,252 shares at $10.69 average per share), $64,471 (6,031 shares
at $10.69 average per share), $64,471 (6,031 shares at $10.69 average per
share), and $64,471 (6,031 shares at $10.69 average per share) for Messrs.
Loughry, Knight, Jones, Gardner and Floyd, respectively.
(3) For fiscal 2001, includes director fees, market value of stock allocated
under the ESOP, employer paid 401(k) matching contributions, employer paid
medical, dental, group term life and disability insurance premiums.
7
OPTION GRANTS IN LAST FISCAL YEAR
The following table sets forth information about options granted to the
Named Executive Officers of the company in 2001.
Potential Realizable Value
% of at Assumed Annual Rates
Total of Stock Price Appreciation
Number of Options for 10-year Option Term(4)
Securities Granted -----------------------------
Underlying to Exercise
Name Options Employees(5) Price Expiration 5% 10%
- ---- --------- ------------ ------- ---------- ------- ---------
Ed C. Loughry, Jr. 45,239 (1) 8.6% $10.625 01/02/2011 $302,287 $ 766,055
45,239 (2) 8.6% $ 10.00 07/26/2011 284,506 720,993
90,479 (3) 17.1% $ 9.75 09/17/2011 554,792 1,405,952
Ronald F. Knight . 35,817 (1) 6.8% $10.625 01/02/2011 239,329 606,508
35,817 (2) 6.8% $ 10.00 07/26/2011 225,251 570,831
71,632 (3) 13.6% $ 9.75 09/17/2011 439,228 1,113,089
William S. Jones . 5,962 (1) 1.1% $10.625 01/02/2011 39,838 100,958
5,962 (2) 1.1% $ 10.00 07/26/2011 37,495 95,019
11,922 (3) 2.3% $ 9.75 09/17/2011 73,102 185,256
Hillard C. Gardner 5,962 (1) 1.1% $10.625 01/02/2011 39,838 100,958
5,962 (2) 1.1% $ 10.00 07/26/2011 37,495 95,019
11,922 (3) 2.3% $ 9.75 09/17/2011 73,102 185,256
R. Dale Floyd. . . 4,712 (1) 0.9% $10.625 01/02/2011 31,486 79,791
4,712 (2) 0.9% $ 10.00 07/26/2011 29,634 75,097
9,422 (3) 1.8% $ 9.75 09/17/2011 57,773 146,408
<FN>
(1) These options were granted on January 2, 2001 and vest in annual 20%
increments beginning on January 2, 2002.
(2) These options were granted on July 26, 2001 and vest in annual 20%
increments beginning on July 26, 2002.
(3) These options were granted on September 17, 2001 and vest in annual 20%
increments beginning on September 17, 2002.
(4) The amounts in these columns are the result of calculation based on the
assumption that the market price of the Common Stock will appreciate in
value from the date of grant to the end of the ten-year option term at
rates of 5% and 10% per year. The 5% and 10% annual appreciation
assumptions are required by the Securities and Exchange Commission; they
are not intended to forecast possible future appreciation, if any, of the
Company's stock price.
(5) Computation does not include aggregate of 226,142 options granted to
directors in 2001.
EMPLOYMENT AGREEMENTS. The Company and the Bank (collectively, the
"Employers") have entered into three-year employment agreements ("Employment
Agreements") with Messrs. Loughry and Knight (individually, the "Executive").
Under the Employment Agreements, the current salary levels for Messrs. Loughry
and Knight are $168,000 and $140,000, respectively, which amounts are paid by
the Bank and may be increased at the discretion of the Board of Directors or an
authorized committee of the Board. On each anniversary of the commencement date
of the Employment Agreements, the term of each agreement may be extended for an
additional year at the discretion of the Board of Directors. The agreements are
terminable by the Employers at any time, by the Executive if the Executive is
assigned duties inconsistent with his initial position, duties, responsibilities
and status, or upon the occurrence of certain events specified by federal
regulations. In the event that an Executive's employment is
8
terminated without cause or upon the Executive's voluntary termination following
the occurrence of an event described in the preceding sentence, the Bank would
be required to honor the terms of the agreement through the expiration of the
current term, including payment of current cash compensation and continuation of
employee benefits.
The Employment Agreements provide for severance payments and other benefits
in the event of involuntary termination of employment in connection with any
change in control of the Employers. Severance payments also will be provided on
a similar basis in connection with a voluntary termination of employment where,
subsequent to a change in control, the Executive is assigned duties inconsistent
with his position, duties, responsibilities and status immediately prior to such
change in control. The term "change in control" is defined in the agreement as
having occurred when, among other things, (a) a person other than the Company
purchases shares of Common Stock pursuant to a tender or exchange offer for such
shares, (b) any person (as such term is used in Sections 13(d) and 14(d)(2) of
the Exchange Act) is or becomes the beneficial owner, directly or indirectly, of
securities of the Company representing 25% or more of the combined voting power
of the Company's then outstanding securities, (c) the membership of the Board of
Directors changes as the result of a contested election, or (d) shareholders of
the Company approve a merger, consolidation, sale or disposition of all or
substantially all of the Company's assets, or a plan of partial or complete
liquidation.
The maximum value of the severance benefits under the Employment Agreements
is 2.99 times the Executive's average annual compensation during the five-year
period preceding the effective date of the change in control (the "base
amount"). Such amounts will be paid in a lump sum within ten business days
following the termination of employment. Had a change in control of the
Employers occurred in 2001, Messrs. Loughry and Knight would be entitled to
payments of approximately $1,096,074 and $920,832, respectively. Section 280G
of the Internal Revenue Code of 1986, as amended ("Code"), provides that
severance payments that equal or exceed three times the individual's base amount
are deemed to be "excess parachute payments" if they are contingent upon a
change in control. Individuals receiving excess parachute payments are subject
to a 20% excise tax on the amount of such excess payments, and the Employers
would not be entitled to deduct the amount of such excess payments.
The Employment Agreements restrict each Executive's right to compete
against the Employers for a period of one year from the date of termination of
the agreement if an Executive voluntarily terminates employment, except in the
event of a change in control.
SEVERANCE AGREEMENTS. The Company and the Bank (collectively, the
"Employers") have entered into two-year severance agreements ("Severance
Agreements") with Messrs. Jones, Gardner and Floyd ("Executives"). On each
anniversary of the commencement date of the Severance Agreements, the term of
each agreement may be extended for an additional year at the discretion of the
Board.
The Severance Agreements provide for severance payments and continuation of
insured employee welfare benefits in the event of involuntary termination of
employment in connection with any change in control of the Employers in the same
manner as provided for in the Employment Agreements. Severance payments and
benefits also will be provided on a similar basis in connection with a voluntary
termination of employment where, subsequent to a change in control, an officer
is assigned duties inconsistent with his position, duties, responsibilities and
status immediately prior to such change in control. The term "change in
control" is defined in the Severance Agreements as having occurred when, among
other things, (a) a person other than the Company purchases shares of Common
Stock pursuant to a tender or exchange offer for such shares, (b) any person (as
such term is used in Sections 13(d) and 14(d)(2) of the Exchange Act) is or
becomes the beneficial owner, directly or indirectly, of securities of the
Company representing 25% or more of the combined voting power of the Company's
then outstanding securities, (c) the membership of the Board of Directors
changes as the result of a contested election, or (d) shareholders of the
Company approve a merger, consolidation, sale or disposition of all or
substantially all of the Company's assets, or a plan of partial or complete
liquidation.
Assuming that a change in control of the Employers had occurred in 2001,
Messrs. Jones, Gardner and Floyd would be entitled to payments of approximately
$169,822, $237,183 and $162,941, respectively.
9
SUPPLEMENTAL REVENUE NEUTRAL RETIREMENT PLAN. During the first quarter of
2002, the Company adopted a nonqualified, noncontributory Supplemental
Retirement Plan (the "Retirement Plan") for certain of the directors and
executive officers of the Company and the Bank. The Retirement Plan is designed
to provide for supplemental retirement and death benefits for participants
without material impact on the Company's earnings. Generally, the Retirement
Plan provides benefits to the participants in the following manner. The Company
invests in and is the owner of a single premium life insurance policy on the
life of each participant and is the beneficiary of the policy value of the
policy (the amount equal to the premiums paid by the Company plus the compound
interest accrued on such premiums). When a participant retires, the accumulated
gains on the policy allocated to such participant, if any, will be distributed
to the participant in equal installments for 15 years (the "Primary Benefit").
In addition, any annual gains after the retirement date of the participant will
be distributed on an annual basis for the lifetime of the participant (the
"Secondary Benefit"). The Primary Benefit and Secondary Benefit payments are
taxable to the participant.
The Retirement Plan also provides the participants with life insurance
coverage, which is a percentage of the net death proceeds for the policy, if
any, applicable to the participant. Net death proceeds are equal to the amount
of death proceeds in excess of the policy value. The participant's beneficiary
receives the net death proceeds, and the Company receives the policy value
(which is equal to the premiums paid plus the compound interest on such
premiums). The life insurance proceeds are not taxable to the Company or the
participant's beneficiary.
The Retirement Plan contains provisions that provide for certain
accelerated payments upon a change of control of the Company. If a participant
ceases to be an employee or director of the Bank prior to his normal retirement
date but after a change of control, the Company will be obligated to pay the
retirement benefits accrued under the Retirement Plan for the participants
calculated as if the participant has reached his or her normal retirement age
with the Company. It is anticipated that the plan will have no material impact
on the Company's future earnings.
COMPENSATION COMMITTEE MATTERS
------------------------------
Notwithstanding anything to the contrary set forth in any of the Company's
previous filings under the Securities Act of 1933, as amended, or the Exchange
Act that might incorporate future filings, including this Proxy Statement, in
whole or in part, the following Report of the Compensation Committee and
Performance Graph shall not be incorporated by reference into any such filings.
REPORT OF THE COMPENSATION COMMITTEE. Under rules established by the SEC,
the Company is required to provide certain data and information in regard to the
compensation and benefits provided to the Company's and the Bank's Chief
Executive Officer and Named Executive Officers. Insofar as no separate
compensation is currently paid by the Company, the Personnel/Compensation
Committee of the Bank (the "Committee"), at the direction of the Board of
Directors of the Company, has prepared the following report for inclusion in
this proxy statement.
The Personnel/Compensation Committee of the Bank's Board of Directors is
responsible for establishing and implementing all compensation policies of the
Bank and its subsidiaries. The Committee is also responsible for evaluating the
performance of the Chairman and the President of the Company and the Bank and
approving an appropriate compensation level. The President evaluates the
performance of the Executive Vice President and certain Senior Vice Presidents
of the Company and the Bank and recommends to the Committee individual
compensation levels for approval by the Committee.
The Committee believes that a compensation plan for executive officers
should take into account management skills, long-term performance results and
shareholders' returns. The principals underlying compensation policies are: (1)
to attract and retain key executives who are highly qualified and are vital to
the long-term success of the Bank and its subsidiaries; (2) to provide levels of
compensation competitive with those offered throughout the banking industry; (3)
to motivate executives to enhance long-term shareholder value by helping them
build their ownership in the Company; and (4) to integrate the compensation
program with the Bank's long-term strategic planning and management process.
10
The Bank's current compensation plan involves a combination of salary and
bonuses to reward short-term performance, and restricted stock under the MRP and
stock options under the Stock Option Plan to encourage long-term performance.
The salary levels of executive officers are designed to be competitive within
the banking and financial services industries. Independent compensation surveys,
such as The SNL Executive Compensation Review, are used to review the
compensation levels of management as compared with peers with comparable
responsibilities in other financial institutions.
The Annual Incentive Plan is based on annual performance of the Bank. The
Plan is designed to provide for bonuses based upon a multiple derived from a
formula that combines the return on equity and a return on assets as a
percentage of salary for corporate officers. The multiple for Chairman Loughry,
President Knight and Executive Vice President Jones is 18.68 and the multiple
for all other corporate officers is 9.34. In addition, the Committee will
sometimes award an additional cash bonus to individuals who provided exemplary
service that was beneficial to the long-term goals of the Bank.
During the fiscal year ended December 31, 2001, the base salary of Ed C.
Loughry, Jr., Chairman and Chief Executive Officer of the Company and the Bank,
was $168,000, which represented no increase from the previous fiscal year, plus
an incentive bonus of $31,382. During the fiscal year ended December 31, 2001,
the base salary of Ronald F. Knight, President and Chief Operating Officer of
the Company and the Bank, was $140,000, which represented no increase from the
previous fiscal year, plus an incentive bonus of $27,273. In determining not to
increase the salaries of Messrs. Loughry and Knight, the Compensation Committee
took into account the directors fees, which such executives receive from the
Company, and the MRP awards and stock options received by them. In 1999, the
Board of Directors and shareholders approved the MRP and Stock Option Plan. In
the case of the MRP, in fiscal 1999 the Committee awarded 75,382 restricted
shares to Mr. Loughry and 60,314 restricted shares to Mr. Knight in recognition
of their significant contribution to the Company's financial performance and the
substantial role such executives are expected to play in the Company's future
performance. The Committee believes the current compensation of Messrs. Loughry
and Knight is appropriate based on competitive salary surveys and the
performance of the Company and the Bank.
On the recommendation of the Compensation Committee the Board of Directors
approved a one-year extension of the Employment Agreements and Severance
Agreements previously noted in this document.
Personnel/Compensation Committee
Gary Brown, Chairman
Tim J. Durham
James C. Cope
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION. No executive
officer of the Company or the Bank has served as a member of the compensation
committee of another entity, one of whose executive officers served on the
Personnel Committee. No executive officer of the Company or the Bank has served
as a director of another entity, one of whose executive officers served on the
Personnel Committee. No executive officer of the Company or the Bank has served
as a member of the compensation committee of another entity, one of whose
executive officers served as a director of the Company or the Bank.
11
PERFORMANCE GRAPH. The following graph compares the cumulative total
shareholder return on the Company's Common Stock with the cumulative total
return on the NASDAQ Index (U.S. Companies) and with the SNL Thrift Index.
[GRAPHIC OMITED]
PERIOD ENDING
- --------------------------------------------------------------------------------
INDEX. . . . 03/31/98 12/31/98 12/31/99 12/31/00 12/31/01
- ------------------------ -------- -------- -------- -------- --------
Cavalry Bancorp, Inc. 100.00 91.58 104.48 68.45 75.19
NASDAQ - Total US* . . . 100.00 120.47 223.87 134.65 106.84
SNL Thrift Index . . . . 100.00 82.03 67.01 107.00 114.37
<FN>
* Source: CRSP, Center for Research in Security Prices, Graduate School of
Business, The University of Chicago 2002. Used with permission. All rights
reserved. crsp.com
12
AUDIT COMMITTEE REPORT AND INDEPENDENT AUDITOR MATTERS
--------------------------------------------------------
The Audit Committee operates pursuant to a written Charter approved by the
Company's Board of Directors. The Audit Committee reports to the Board of
Directors and is responsible for overseeing and monitoring financial accounting
and reporting, the system of internal controls established by management and the
audit process of the Company. The Audit Committee Charter sets out the
responsibilities, authority and specific duties of the Audit Committee. The
Charter specifies, among other things, the structure and membership requirements
of the Committee, as well as the relationship of the Audit Committee to the
independent accountants, the internal audit department, and management of the
Company. The Company's independent auditors, Rayburn, Betts and Bates, P.C., are
responsible for performing an independent audit of the consolidated financial
statements and expressing an opinion on the conformity of those financial
statements with generally accepted accounting principles.
REPORT OF THE AUDIT COMMITTEE. In connection with the specific activities
performed by the Committee in its oversight role, it has issued the following
report as of March 4, 2002:
(1) The Audit Committee has reviewed and discussed the audited financial
statements as of and for the year ended December 31, 2001 with
management of the Company.
(2) The Audit Committee has discussed with the independent auditors the
matters required to be discussed by SAS 61 and SAS 90.
(3) The Audit Committee has received from the independent accountants, as
required by Independence Standards Board Standard No. 1, Independence
Discussions with Audit Committee, (i) a written disclosure, indicating
all relationships, if any, between the independent auditor and its
related entities and the Company and its related entities which, in
the auditor's professional judgment, reasonably may be thought to bear
on the auditor's independence, and (ii) a letter from the independent
auditor confirming that, in its professional judgment, it is
independent of the Company; and the Audit Committee has discussed with
the auditor the auditor's independence from the Company.
Based on the review and discussions referred to in paragraphs (1) through
(3) above, the Audit Committee recommended to the Board of Directors that the
audited financial statements should be included in the Company's Annual Report
on Form 10-K for the fiscal year ended December 31, 2001, for filing with the
Securities and Exchange Commission.
The Audit Committee:
Tim J. Durham (Chairman)
William H. Huddleston, IV
Terry G. Haynes
William Kent Coleman
AUDIT FEES. The aggregate fees billed to the Company by Rayburn, Betts &
Bates, P.C. for professional services rendered for the audit of the Company's
financial statements for fiscal 2001 and the reviews of the financial statements
included in the Company Forms 10-Q for that year were $62,450.
FINANCIAL INFORMATION SYSTEMS DESIGN AND IMPLEMENTATION FEES. Rayburn,
Betts & Bates, P.C. performed no financial information system design or
implementation work for the Company during the fiscal year ended December 31,
2001.
ALL OTHER FEES. Other than audit fees, the aggregate fees billed to the
Company by Rayburn, Betts & Bates, P.C. for fiscal 2001, none of which were
financial information systems design and implementation fees, were $36,633.
13
The Audit Committee of the Board of Directors determined that the services
performed by Rayburn, Betts & Bates, P.C. other than audit services are not
incompatible with Rayburn, Betts & Bates, P.C. maintaining its independence.
INDEPENDENCE AND OTHER MATTERS. Each member of the Audit Committee is
"independent," as defined, under the NASDAQ Stock Market Rules. The Audit
Committee members do not have any relationship to the Company that may interfere
with their independence from management and the Company. None of the Audit
Committee members are current officers or employees of the Company or its
affiliates.
COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT
-------------------------------------------------
Section 16(a) of the Exchange Act requires the Company's executive officers
and directors, and persons who own more than 10% of any registered class of the
Company's equity securities, to file reports of ownership and changes in
ownership with the SEC. Executive officers, directors and greater than 10%
shareholders are required by regulation to furnish the Company with copies of
all Section 16(a) forms they file.
Based solely on its review of the copies of such forms it has received and
written representations provided to the Company by the above referenced persons,
the Company believes that during the fiscal year ended December 31, 2001 all
filing requirements applicable to its reporting officers, directors and greater
than 10% shareholders were properly and timely complied with.
TRANSACTION WITH MANAGEMENT
---------------------------
At December 31, 2001, loans to directors and executive officers, any member
of the immediate family of a director or executive officer, any corporation or
organization of which any director and executive officer is an executive officer
of partner of or is directly or indirectly the beneficial owner of 10% or more
of any class of equity securities or any trust or other estate in which a
director or executive officer has a substantial beneficial interest or serves as
a trustee to totaled approximately $4.6 million. All loans or extensions of
credit to those persons or entities above were made on substantially the same
terms, including interest rates and collateral, as those prevailing at the time
for comparable transactions with other persons or entities, except for loans
made pursuant to programs generally available to all employees, and do not
involve more than the normal risk of repayment or present other unfavorable
features.
Chairman and Chief Executive Officer Ed C. Loughry, Jr.'s wife is 30% owner
in Miller & Loughry Insurance and Services, Inc. ("M&L Agency") from which the
Bank purchases some of its insurance coverage. Mr. Loughry has no ownership
interest in M&L Agency and does not participate in its business affairs. Mrs.
Loughry is not paid any direct commissions on sales to the Bank. Premiums paid
to M&L Agency by the Bank amounted to approximately $160,728 for the year ended
December 31, 2001. In 2001, the Bank agreed in principle to purchase the M&L
Agency for a net purchase price of approximately $2.0 million, subject to
certain post-closing adjustments. The purchase contract was executed and the
transaction consummated in early January 2002. Mrs. Loughry received
approximately $498,000 in connection with the sale (which amount is subject to
certain post-closing adjustments) and entered into an employment and non-compete
agreement with the Bank. Mrs. Loughry's employment agreement runs for three
years and automatically renews annually absent notice. It provides for a
specified salary and potential bonus and contains non-competition and
non-solicitation provisions consistent with those of the other owners of M&L
Agency.
OTHER MATTERS
-------------
The Board of Directors is not aware of any business to come before the
Meeting other than those matters described above in this Proxy Statement.
However, if any other matters should properly come before the Meeting, it
14
is intended that proxies in the accompanying form will be voted in respect
thereof in accordance with the judgment of the person or persons voting the
proxies.
MISCELLANEOUS
-------------
The cost of solicitation of proxies will be borne by the Company. In
addition to solicitations by mail, directors, officers and regular employees of
the Company may solicit proxies personally or by telephone without additional
compensation. The Company has retained Corporate Communications, Nashville,
Tennessee, to assist in soliciting proxies for a fee of $2,500, plus
reimbursable expenses. The Company may reimburse brokers, custodians and
nominees for their expenses in sending proxies and proxy materials to beneficial
owners.
The Company's Annual Report to Shareholders has been mailed to shareholders
of record as of the close of business on the Voting Record Date. Any
shareholder who has not received a copy of such Annual Report may obtain a copy
by writing to the Secretary of the Company. The Annual Report is not to be
treated as part of the proxy solicitation material or as having been
incorporated herein by reference.
SHAREHOLDER PROPOSALS
---------------------
In order to be eligible for inclusion in the Company's proxy solicitation
materials for next year's Meeting of Shareholders, and to be voted on by
shareholders, any shareholder proposal to take action at such meeting must be
received at the Company's main office at 114 West College Street, Murfreesboro,
Tennessee 37130, no later than November 23, 2002. Any such proposals shall be
subject to the requirements of the proxy solicitation rules adopted under the
Exchange Act.
The Company's Charter generally provides that shareholders will have the
opportunity to nominate directors of the Company if such nominations are made in
writing and are delivered to the Secretary of the Company 120 calendar days in
advance of the month and day the Company's proxy statement to shareholders was
mailed to shareholders the preceding year; provided however, that if notice is
given fewer than 40 calendar days before the meeting, such written notice shall
be delivered to the secretary of the Company not later than the close of the
tenth calendar day following the day on which notice of the meeting was mailed
to shareholders. The notice must set forth (i) the name, age, business address
and, if known, residence address of each nominee proposed in such notice, (ii)
the principal occupation or employment of each nominee, (iii) the number of
shares of stock of the Company which are beneficially owned by each such
nominee, (iv) such other information as would be required to be included in a
proxy statement soliciting proxies for the election of the proposed nominee
pursuant to the Exchange Act, including, without limitation, such person's
written consent to being named in the proxy statement as a nominee and to
serving as a director, if elected, and (v) as to the shareholder giving such
notice (a) his name and address as they appear on the Company's books and (b)
the class and number of shares of the Company which are beneficially owned by
such shareholder.
BY ORDER OF THE BOARD OF DIRECTORS
/s/ Ira B. Lewis, Jr.
IRA B. LEWIS, JR.
SECRETARY
Murfreesboro, Tennessee
March 23, 2002
- --------------------------------------------------------------------------------
FORM 10-K
- --------------------------------------------------------------------------------
A COPY OF THE COMPANY'S FORM 10-K FOR THE FISCAL YEAR ENDED DECEMBER 31, 2001,
AS FILED WITH THE SEC WILL BE FURNISHED WITHOUT CHARGE TO PERSONS WHO WERE
SHAREHOLDERS AS OF THE CLOSE OF BUSINESS ON THE VOTING RECORD DATE UPON WRITTEN
REQUEST TO IRA B. LEWIS, JR., SECRETARY, CAVALRY BANCORP, INC., 114 WEST COLLEGE
STREET, MURFREESBORO, TENNESSEE 37130.
- --------------------------------------------------------------------------------
15
- --------------------------------------------------------------------------------
REVOCABLE PROXY
CAVALRY BANCORP, INC.
- --------------------------------------------------------------------------------
ANNUAL MEETING OF SHAREHOLDERS
APRIL 25, 2002
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS
- --------------------------------------------------------------------------------
The undersigned hereby appoints the official Proxy Committee of the Board
of Directors of Cavalry Bancorp, Inc. with full powers of substitution, as
attorneys and proxies for the undersigned, to vote all shares of common stock of
Cavalry Bancorp, Inc. ("Company") which the undersigned is entitled to vote at
the Annual Meeting of Shareholders ("Meeting"), to be held at the main office of
Cavalry Banking located at 114 West College Street, Murfreesboro, Tennessee, on
Thursday, April 25, 2002, at 10:00 a.m., local time, and at any and all
adjournments thereof, as indicated.
THIS PROXY WILL BE VOTED AS DIRECTED, BUT IF NO INSTRUCTIONS ARE SPECIFIED, THIS
PROXY WILL BE VOTED FOR THE PROPOSITIONS STATED. IF ANY OTHER BUSINESS IS
PRESENTED AT SUCH MEETING, THIS PROXY WILL BE VOTED BY THOSE NAMED IN THIS PROXY
IN THEIR BEST JUDGMENT. AT THE PRESENT TIME, THE BOARD OF DIRECTORS KNOWS OF NO
OTHER BUSINESS TO BE PRESENTED AT THE MEETING. THIS PROXY ALSO CONFERS
DISCRETIONARY AUTHORITY ON THE BOARD OF DIRECTORS TO VOTE WITH RESPECT TO THE
ELECTION OF ANY PERSON AS DIRECTOR WHERE THE NOMINEES ARE UNABLE TO SERVE OR FOR
GOOD CAUSE WILL NOT SERVE AND MATTERS INCIDENT TO THE CONDUCT OF THE MEETING.
- --------------------------------------------------------------------------------
^ FOLD AND DETACH HERE ^
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE FOLLOWING PROPOSAL.
Proposal 1. The election as director of the nominees listed below (except as
marked to the contrary below).
[ ] FOR all nominees listed (except as [ ] WITHHOLD AUTHORITY to vote
marked to the contrary) for all nominees listed
01 Terry G. Haynes, 02 William H. Huddleston, IV, 03 Gary Brown
INSTRUCTIONS: To withhold your vote for any individual nominee, write the
nominee's name on the line below.
- ---------------------------------
Proposal 2. In their discretion, upon such other matters as may properly come
before the meeting.
Should the undersigned be present and elect to vote at the Meeting or at
any adjournment thereof and after notification to the Secretary of the Company
at the Meeting of the shareholder's decision to terminate this proxy, then the
power of said attorneys and proxies shall be deemed terminated and of no further
force and effect.
The undersigned acknowledges receipt from the Company prior to the
execution of this proxy of the Notice of Annual Meeting of Shareholders, a Proxy
Statement for the Annual Meeting of Shareholders, and the 2001 Annual Report to
Shareholders.
Please sign exactly as your name appears on the enclosed card. When signing as
attorney, executor, administrator, trustee or guardian, please give your full
title. If shares are held jointly, only one signature is required, but each
holder should sign, if possible.
Dated: ,2002
--------------------
- -------------------------------
PRINT NAME OF SHAREHOLDER
- -------------------------------
SIGNATURE OF SHAREHOLDER
PLEASE COMPLETE, DATE, SIGN AND MAIL THIS PROXY PROMPTLY IN THE ENCLOSED
POSTAGE- PREPAID ENVELOPE.
- --------------------------------------------------------------------------------
^ FOLD AND DETACH HERE ^