UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-K/A
(Amendment No. 1)
(Mark One)
x
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934 for the fiscal year ended December 31,
2007
Or
o
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934 for the transition period from to
Commission
File Number 000-24203
GB&T Bancshares, Inc.
(Exact name of registrant as specified in its charter
)
Georgia
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58-2400756
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(State
or other jurisdiction of
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(IRS
Employer Identification No.)
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incorporation or organization)
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500 Jesse Jewell Parkway, S.E.
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Gainesville, Georgia
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30501
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(Address
of principal executive offices)
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(Zip
Code)
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(770) 532-1212
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Registrants
telephone number, including area code
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Securities registered pursuant to Section 12(b) of the Act
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Common Stock, no par value
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Nasdaq Global Select Market
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(Title
of class)
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(Name of
exchange on which registered)
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Securities registered pursuant to Section 12(g) of
the Act:
None
Indicate
by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405
of the Securities Act.
Yes
o
No
x
Indicate
by check mark if the registrant is not required to file reports pursuant to Section 13
or Section 15(d) of the Exchange Act.
Yes
o
No
x
Indicate
by check mark whether the registrant: (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days:
Yes
x
No
o
Indicate
by check mark if disclosure of delinquent filers pursuant to Item 405 of
Regulation S-K is not contained herein and will not be contained, to the best
of registrants knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K.
o
Indicate
by check mark whether the registrant is a large accelerated filer, an
accelerated filer, a non-accelerated filer or a smaller reporting company. See definitions of large accelerated filer, accelerated filer and smaller reporting
company in Rule 12b-2 of the Exchange Act.
Large
accelerated filer
o
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Accelerated
filer
x
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Non-accelerated
filer
o
(Do
not check if a smaller reporting company)
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Smaller
reporting company
o
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Indicate
by check mark whether the registrant is a shell company (as defined in Rule 12b-2
of the Exchange Act). Yes
o
No
x
The aggregate
market value of the registrants common stock held by nonaffiliates as of June 30,
2007 was approximately $218,098,009 based on the closing price of the common stock
on the Nasdaq Global Select Market of $16.70 per share on that date. For this purpose, directors and executive
officers have been assumed to be affiliates.
As
of February 28, 2008
, the Company had
issued and outstanding 14,230,796 shares of the 20,000,000 authorized shares of
its no par value common stock.
DOCUMENTS
INCORPORATED BY REFERENCE
None.
EXPLANATORY NOTE
GB&T Bancshares, Inc. (the Company) is filing this Amendment
No. 1 on Form 10-K/A (this Amendment) to its Annual Report on Form 10-K
for the fiscal year ended December 31, 2007, originally filed on March 5,
2008, for the purpose of including certain information required by Item 5 of Part II
and the information required by Part III of Form 10-K. In addition, the registrant is also including
as exhibits to this Amendment the certifications required pursuant to Section 302
of the Sarbanes-Oxley Act of 2002.
Because no financial statements are contained within this Amendment, the
registrant is not including certifications pursuant to Section 906 of the
Sarbanes-Oxley Act. Except as set forth
herein, the registrant is making no other changes to its Annual Report on Form 10-K
for the fiscal year ended December 31, 2007.
2
PART II
ITEM 5.
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MARKET FOR REGISTRANTS COMMON EQUITY, RELATED STOCKHOLDER MATTERS
AND ISSUER PURCHASES OF EQUITY SECURITIES
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The following graph compares the Companys yearly percentage change in
cumulative, five-year shareholder return with the Nasdaq Market (U.S.) Index
and the SNL Nasdaq Bank Index. The graph assumes that the value of the
investment in the Companys common stock and in each index was $100 on December 31,
2002 and that all dividends were reinvested. The change in cumulative total
return is measured by dividing (i) the sum of (a) the cumulative
amount of dividends for the period, and (b) the change in share price
between the beginning and end of the period, by (ii) the share price at
the beginning of the period.
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Period Ending
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Index
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12/31/02
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12/31/03
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12/31/04
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12/31/05
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12/31/06
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12/31/07
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GB&T Bancshares, Inc.
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100.00
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133.53
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172.81
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155.74
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163.92
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70.98
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NASDAQ Composite
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100.00
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150.01
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162.89
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165.13
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180.85
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198.60
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SNL Bank NASDAQ Index
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100.00
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129.08
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147.94
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143.43
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161.02
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126.42
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*
Source: SNL Financial LC,
Charlottesville, Virginia, 2008.
Used with permission. All rights reserved. www.snl.com (434) 977-1600
3
The foregoing Total Return Performance Graph
shall not be deemed to be soliciting material or to be filed with the
Securities
and Exchange
Commission (SEC)
, nor shall such information be incorporated
by reference into any future filing under the Securities Act of 1933, as
amended, or the Securities Exchange Act of 1934 ,as amended (the Exchange Act), except to the extent the Company specifically
incorporates it by reference into such filing.
PART III
ITEM 10.
DIRECTORS,
EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
Directors
The following
are the names and ages of the directors, the year each individual began
continuous service as a director of the Company and the business experience of
each, including principal occupations, at present and for at least the past
five years:
Name, Age and Term as Director
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Principal Occupation for Last Five Years and Other Directorships
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Lowell
S. (Casey) Cagle
, age 42
Director since 2004
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Mr. Cagle is the owner and
President of Casey Cagle Properties, LLC and is the Lieutenant Governor of
Georgia. He served as Chairman of the Board of Southern Heritage Bancorp and
Southern Heritage Bank from Southern Heritages inception in 1998 until the
Companys acquisition of Southern Heritage in 2004.
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Dr. John W.
Darden
, age
62
Director since 1987
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Dr. Darden is a retired medical doctor, having practiced surgery
in Gainesville, Georgia for 25 years. In addition to serving on the Companys
board, Dr. Darden also serves as a director of Gainesville
Bank & Trust.
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William A.
Foster, III
, age 63
Director since 2001
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Since 1992, Mr. Foster has served as Superior Court Judge for
the Paulding Circuit, State of Georgia. On February 1, 2005,
Mr. Foster became a Senior Judge of the Superior Courts of Georgia.
Mr. Foster was a director of Community Trust Financial Services
Corporation until that company was acquired by the Company on June 30,
2001. Mr. Foster is Chairman of the Board of Directors of Community
Trust Bank, which became a subsidiary of the Company in connection with its
acquisition of Community Trust Financial Services Corporation.
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Bennie E. Hewett
, age 69
Director since 1987
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Prior to 2002, Mr. Hewett was President of Capital Loan Company
of Gainesville, Inc. In addition, from 1987 until 2002, Mr. Hewett
served as Chairman of the Board of Delta Management Company, a sole
proprietorship, which operated a chain of consumer finance companies located
in Georgia, South Carolina, Texas and Louisiana. Presently, he is president
and owner of Capital Assets, Inc., which invests in real estate, media
and various other ventures. In addition to serving on the Companys board,
Mr. Hewett also serves as a director of Gainesville Bank &
Trust.
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Richard A. Hunt
, age 63
Director since 1987
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Mr. Hunt is President and Chief Executive Officer of the
Company, a position he has held since July 1987. Mr. Hunt also
serves on the Boards of United Bank & Trust, Community Trust Bank,
Gainesville Bank & Trust, HomeTown Bank of Villa Rica and Mountain
State Bank.
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James L. Lester
, age 62
Director since 2000
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Mr. Lester is President of J. L. Lester &
Son, Inc., an investment company,
and has been
Vice President of Sales for EBY-Brown,
a food distributorship, located in Rockmart, Georgia, since 1998. In
addition to serving on the Companys board, Mr. Lester also serves as
Chairman of the Board of United Bank & Trust.
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4
John E. Mansour,
age 55
Director since 2005
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Mr. Mansour was the Chairman of FNBG Bancshares until its merger
with the Company in March of 2005. Mr. Mansour currently operates a
Chevrolet dealership in Canton, Georgia. He is also the President of Berkeley
Enterprises, Inc., a real estate investment company, and is an investor
or partner in several other business ventures. Mr. Mansour is a
registered pharmacist with a degree from the University of Georgia.
In
addition to serving on the Companys board, Mr. Mansour also serves as
Chairman of the Board of Directors of First National Bank of Gwinnett.
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Dr. T. Alan Maxwell
, age 59
Director since 2003
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Dr. Maxwell is the owner and President of T. Alan Maxwell,
D.D.S., P.C., a general dentistry practice in Milledgeville, Georgia. He was
an organizer in 1989 of First National Bank of Baldwin County, which changed
its name to First National Bank of the South, and has served as a director
since 1989. Dr. Maxwell became a director of the Company in connection
with its acquisition of First National Bank of the South in August 2003.
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Samuel L. Oliver
, age 65
Director since 1987
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Mr. Oliver is Vice Chairman of the Company and a director and
the Vice Chairman of Gainesville
Bank & Trust. He is a practicing attorney and partner in the
law firm of Hulsey, Oliver & Mahar, LLP, which has served as legal counsel to the Company since
its organization. Mr. Oliver has been a member of Hulsey,
Oliver & Mahar, LLP since 1969.
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Alan A. Wayne
, age 65
Director since 1992
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Mr. Wayne
is Secretary of the Company and a director and the Secretary of Gainesville
Bank & Trust. Mr. Wayne is a partner in Wayne Co. Development,
the President of Wayne Brothers, Inc. and the President of Chattahoochee
Parks, Inc. All are commercial real estate development companies.
Mr. Wayne has held positions with these businesses or their predecessors
for more than five years.
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Anna B. Williams
, age 65
Director since 2006
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Ms. Williams was an Organizing director of Mountain State Bank
and has served as Vice Chair of the Board of Directors of that bank since
2002. Ms. Williams is a certified public accountant and is founder of
Anna B. Williams, P.C., a business and tax-consulting firm specializing in
estate planning and tax-advisory services. Ms. Williams is a member of
The Maverick Group, LLC, a residential builder in metro Atlanta, and also a
member of the Atlanta Estate Planning Council.
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Philip A. Wilheit
, age 63
Director since 1987
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Mr. Wilheit is Chairman of the Board of Directors of the Company
and of Gainesville Bank & Trust. Mr. Wilheit has served as
President of Wilheit Packaging, LLC, a distributor of packaging material and
paper-related products since 1999.
Mr. Wilheit
also serves as President of Marketing Images, a corrugated paper products
company.
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5
Executive Officers
The executive
officers of the Company are elected annually and serve at the pleasure of the
Board of Directors. The following sets
forth each executive officer of the Company by name, age, the year first
elected as an officer of the Company, position with the Company, and business
experience for the past five years.
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Year First
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Name
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Age
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Elected
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Business Experience
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Richard A. Hunt
President and
Chief Executive Officer
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63
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1987
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A
dditional biographical
information regarding Mr. Hunt, who is also a director, can be found
under the heading of this Report entitled Directors.
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Gregory L. Hamby
Executive Vice President
and Chief Financial
Officer
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53
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1996
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Mr. Hamby has been the Executive Vice President and Chief
Financial Officer of the Company and Gainesville Bank & Trust since
2001. From 1996 to 2001, he served as Senior Vice President of the Company
and Gainesville Bank & Trust, and from 1995 to 1996, he served as
Vice President and Accounting Manager of Gainesville Bank & Trust.
Mr. Hamby has served on the Boards of First National Bank of the South since
October 2003 and First National Bank of Gwinnett since March 2005.
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Family Relationships
The following
family relationships exist between certain directors and executive officers of
the Company or any of its subsidiaries:
·
Alan Wayne is
the first cousin of Scott Wayne, who is Senior Vice President of Gainesville
Bank & Trust and President of the Bank of Athens division of
Gainesville Bank & Trust.
Section 16(a) Beneficial Ownership
Reporting Compliance
Section 16(a) of
the Securities Exchange Act of 1934, as amended (the Exchange Act), requires
the Companys officers and directors, and persons who own 10% or more of the
registered class of the Companys equity securities, to file with the
Securities and Exchange Commission (SEC) initial reports of ownership and
reports of changes in ownership of common stock and other equity securities of
the Company. Officers, directors and 10%
shareholders are required by regulations of the SEC to furnish the Company with
copies of all of the forms they file under Section 16(a) of the
Exchange Act. To the Companys
knowledge, based solely on a review of the copies of such reports furnished to
the Company during the fiscal year ended December 31, 2007, all directors,
officers and 10% shareholders complied with all filing requirements under Section 16(a) of
the Exchange Act with the exception that a Form 4 relating to the exercise
of options by Mr. Hamby was inadvertently filed late in February 2007,
and a Form 4 relating to the exercise of options by Mr. Hewett was
also inadvertently filed late in March 2007.
Code of Ethics
The Companys Code of Ethics, as amended on April 17, 2004,
applies to all of our directors, executive officers and employees. The Code of Ethics is available on our
website at www.gbtbancshares.com under the heading Investor Relations, Corporate
Information and Governance Documents.
We intend to disclose any amendments to our Code of Ethics, and any
waiver from a provision the Code of Ethics granted to our principal executive
officer, principal financial and accounting officer or persons performing
similar functions on our website at www.gbtbancshares.com under the heading Investor
Relations and Corporate Information within four business days following such
amendment or waiver.
Audit
Committee
The
Board of Directors has a
standing Audit Committee, composed of Messrs. Darden, Hewett, Mansour, Wilheit and Ms. Williams. The Audit Committee held 13 meetings during the fiscal year ended December 31, 2007. The Audit
6
Committee, among other things, recommends to the Board of Directors the
engagement of the independent accountants of the Company and reviews the scope
and results of the audits and the internal accounting controls of the Company and its subsidiary banks.
The Audit
Committee acts under an amended and restated written charter, which is
available on the Companys website at www.gbtbancshares.com under the heading Investor
Relations, Corporate Information and Governance Documents.
The Board of
Directors has determined that Messrs. Darden, Hewett, Mansour, Wilheit and Ms. Williams
are independent as required by applicable listing standards of the Nasdaq
Stock Market and Rule 10A-3(b)(1) of the Exchange Act. The Board of Directors has examined the SECs
definition of audit committee financial expert and has determined that Ms. Williams
meets these standards. Accordingly, Ms. Williams
has been designated by the Board as an audit committee financial expert.
Shareholder Recommendations for
Director Nominees
No material
changes have been made to the procedures by which the Companys shareholders
may recommend nominees to the Companys Board of Directors since we last
described these procedures in our definitive proxy statement issued in
connection with our 2007 Annual Meeting of Shareholders and filed with the SEC
on April 18, 2007.
ITEM 11.
EXECUTIVE
COMPENSATION
Compensation Discussion and Analysis
The Compensation Committee, appointed by the Board of Directors, sets
and administers the policies that govern the Companys executive compensation
programs, director compensation and various incentive and stock option
programs. Voting members of the
Compensation Committee must meet SEC and Nasdaq independence requirements,
although the Board of Directors may appoint non-independent directors to serve
on the committee as ex-officio, non-voting members.
To assist with
understanding the executive compensation tables included in this Report, the
following discussion provides an overview and analysis of our compensation
program and policies with respect to our named executive officers.
Objectives of
our Compensation Program
The objectives
of our compensation program are as follows:
·
Attract
a sufficient number of qualified executives to meet the needs of the Company as
defined by its strategic plans,
·
Retain
and motivate executives whose performance supports the achievement of our
objectives,
·
Provide
total compensation that the individual believes is fair and equitable in the
marketplace and has the highest perceived value to the Companys shareholders,
·
Provide
opportunities that integrate pay with the Companys annual and long-term
performance goals,
·
Encourage
achievement of strategic objectives and creation of shareholder value,
·
Recognize
and reward individual initiative and achievements, and
·
Maintain
an appropriate balance between base salary and short- and long-term incentive
opportunity.
Market Data
and Use of Consultants
We compete for executive talent with national and regional banks of
similar scope and shareholder returns.
While emphasis is placed on the internal equity of executive
compensation relative to other managers and staff of the Company, the
Compensation Committee strives to ensure that our executive officer
compensation is competitive in the marketplace.
To assist in making its compensation decisions, the Compensation
Committee retained Matthews, Young - Management Consulting (Matthews Young)
to review all forms of compensation to identify strengths, weaknesses and areas
to improve upon. The Compensation
Committee reviews market data from surveys and has relied on reports provided
by Matthews Young. In January 2007,
at the request of the Compensation Committee, Matthews Young conducted a review
of total compensation provided to the named executive officers and to the
presidents of each subsidiary Bank (collectively, the Management Team)
compared with banks in the following categories:
·
13
financial institutions in southeastern United States with average assets of
$1.872 billion,
·
213
United States banks with assets of $1 billion to $4 billion,
7
·
29 United States
financial institutions with average assets of greater than $1.0 billion and
assets at the 75
th
percentile of $2 billion, and
·
16 United States
financial institutions with assets of greater than $1.0 billion and assets at
the 75
th
percentile of $1.964 billion.
Specifically, Matthews Young has: (i) provided market data
regarding compensation practices of the peer group described above; (ii) provided
suggestions regarding various types and levels of base salaries, executive
benefits, perquisites, long-term and short-term incentive compensation; and (iii) calculated
the potential effects of various equity based compensation plans. References to our peer group throughout
this CD&A reflect the group described above.
After considering this data, the Compensation Committee determined that
base salaries are generally somewhat below the median in the marketplace, with
which the Compensation Committee is comfortable given that it intends to offer
significant incentives. The Compensation
Committee targeted annual cash incentive awards and long-term incentive awards
for our Management Team above the median of a peer group of similar community
banking companies.
Allocation
of Compensation Components
Under the Companys compensation structure, the targeted allocation of
base salary, bonus and equity compensation varies depending on the officers
level within the organization. The
Compensation Committee has not established a defined range of potential
compensation components as a percentage of total cash and equity, but in
allocating compensation among these elements, the Compensation Committee aims
to structure the compensation of the Companys Management Team (including the
Companys named executive officers) in a way that will have the greatest
ability to influence the Companys performance.
Accordingly, a higher weighting of performance-based incentives are
available to those officers having greater influence as compared to lower
levels of management who receive a greater portion of their compensation in
base salary.
Certain perquisites and other employee benefits are also provided to
the Companys named executive officers.
Additional information regarding each element of executive compensation
is provided below.
Elements of Compensation
Our
compensation program consists of the following elements: (i) base salary, (ii) annual
cash incentive awards, (iii) long-term incentive awards, (iv) perquisites
and other executive benefits, and (v) change-in-control severance
benefits.
Base Salary
The
Compensation Committee views base salaries as necessary to recruit and retain
executives, but recognizes that base salaries do not focus the Management Team
on achieving strong performance. The
salaries of our Management Team are designed to provide a competitive level of
compensation that is affordable to the Company and fair to the executive. Salaries are reviewed annually and
adjustments, if any, are made based on the review of competitive salaries at
our peer companies, as well as an evaluation of the individual officers
responsibilities, job scope, and individual performance. For example, we assess each officers
performance with reference to his performance toward meeting objectives such as
earnings, achievement of core deposit growth, successful execution of our
capital plan, business conduct and integrity, and leadership and team building.
Matthews Young and the Compensation Committee reviewed salaries of
positions similar to those held by the named executives within the peer
groups. Based on this review, Matthews
Young and the Compensation Committee determined that our named executive
officers salaries were below the median relative to comparable positions
within the peer group. The Compensation
Committee also reviewed the multiple of executives base salaries relative to
the next levels of management positions and all Company staff. The Compensation Committee believes that base
salaries can be somewhat below peer base salaries, as long as the gap is not so
big as to make it difficult to attract and retain qualified executives. However, some current base salaries are too
far below peers and a smaller part of the mix than is appropriate given the
Compensation Committees strategy.
Therefore, the Compensation Committee increased base salaries of certain
officers during 2007 in amounts to catch up with our growth from prior
years. The 2007 base salaries for each
of our named executive officers are reflected in the Summary Compensation Table
included in this Report.
The Compensation Committee
approved 2007 base salaries for our named executive officers in the following
amounts: Mr. Hunt: $352,500, and Mr. Hamby: $202,000. In arriving at these amounts, the
Compensation Committee took into consideration the factors discussed
above. However, the Compensation
Committee also considered that, in February 2007, after bonuses had been
paid to our named executive officers, the Company revised its results for the
fourth quarter of 2006 by increasing the Companys allowance for loan losses by
approximately $9.7 million, resulting in a reduction in net income of $5.9
million for the fourth quarter and year ended December 31, 2006. Notwithstanding the fact that the revision
8
related primarily to several loan relationships originated by the
president of HomeTown Bank of Villa Rica in which numerous bank loan policies
and procedures were not followed, the Compensation Committee deemed the most
prudent course of action was to keep Mr. Hunts base pay the same as it
was in 2006 and to provide a modest increase in Mr. Hambys base pay. In anticipation of the Companys pending
merger with SunTrust Banks, Inc. (SunTrust), no further increases in the
base salaries of our named executive officers are contemplated.
Annual Cash Incentive Awards
We believe that annual cash incentive awards
focus our Management Team on the achievement of short-term objectives that are
critical to achievement of our strategic plan.
Our continued success is derived from sustaining a balance between our
short-term and our long-term objectives.
As a result, as we reach our short-term milestones, we believe our
Management Team should be rewarded.
Our Management
Team receives annual cash incentive awards under annual Executive Incentive
Plans, which provide for target cash awards to certain members of our
Management Team upon achievement of certain financial objectives. We seek to ensure that annual cash incentive
awards constitute a significant portion (35% to 55%) of each executive officers
annual base salary based on the attainment of the annual performance objectives
under the annual plans.
In December 2006, the Compensation Committee approved the 2007
performance objectives for the executive incentive plans for 2007. These objectives came from line items in the
proposed budget for 2007. Awards for Messrs. Hunt
and Hamby were based on budgeted net income, loan growth, deposit growth, net
charge-offs, efficiency ratio and safety and soundness ratings established by
the Compensation Committee.
These performance objectives represent those metrics that we believe
are of utmost importance for the long term growth of a high performing
community bank. The annual budgets from
which many of the performance objectives tend to be practical but ambitious and
aggressive, shaping our goals for maximum performance and efficiency. As such, achieving 100% of the targeted cash
bonus level is relatively difficult but not unrealistic. Notwithstanding the budgeted targets and
other performance objectives communicated to each member of the Management Team
in each annual plan, the Compensation Committee ultimately has discretion to
determine what, if any, cash bonus awards are granted, regardless of which
performance objectives are or are not met.
The table below summarizes the financial measures (along with their
respective weighting factors) for the executive officers to receive cash bonus
awards in 2007:
Financial Measure
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Weighting
Factor
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Net Income
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50
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%
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Loan Growth
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10
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%
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Non Interest DDA
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10
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%
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Other Core Deposits
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10
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%
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Net Charge-offs
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10
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%
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Efficiency Ratio
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5
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%
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Safety and Soundness
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5
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%
|
If the above performance criteria were
satisfied, Messrs. Hunt and Hamby were eligible to receive a cash award
equal to a percentage of their base salary as set forth below.
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Hunt
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Hamby
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Maximum Percent of Base Salary for Superior
Level of Performance
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55
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%
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50
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%
|
In early 2008 and after reviewing the year-end financial reports, the
Compensation Committee determined that the level of performance warranted Mr. Hunt
and Mr. Hamby earning cash awards which approximated 75% and 83%,
respectively, of their individually targeted awards. Awards earned in 2007 by each of our named
executive officers are reflected in the Bonus column of the Summary Compensation
Table included in this Report.
9
Long-Term Incentive Awards
The Company believes that while short-term
incentives are important, the value of our franchise is a long-term issue.
Therefore, we offer a set of incentives that balance executives motivations
between achieving annual strategic objectives and building long-term value.
Toward that end, the Company offers long-term incentives in the form of stock
options. In order to retain flexibility, the Compensation Committee has not
established rigid, periodic dates upon which awards will be made, and typically
grants options on random dates throughout the year or as needed. The
Compensation Committee does not time the grant of options to take advantage of
material non-public information, nor does the Compensation Committee take into
account the prevailing trading prices of the Companys common stock in the
timing of awards in any way. The option exercise price, or strike price, for
any award is always set at the fair market value on the date of the grant. Fair
market value is defined as the closing price on the date of the grant. No new
stock options were granted to our named executive officers during 2007.
In January 2007, Matthews Young compared
historical stock option grants with peer companies, normal guidelines, and our
philosophy and strategy. They found that we have been conservative with our
long term incentive grants relative to all comparables. Matthews Young also
recommended that we consider alternatives to stock options, such as performance
and restricted stock. In May 2007, our shareholders approved the 2007
Omnibus Long-Term Incentive Plan which provided for such awards. No awards
under this new plan were granted to the named executive officers in 2007.
Perquisites and Other Executive Benefits.
Perquisites
.
We provide the following perquisites to our named executive officers: (i) personal
use of company automobile or a car allowance; (ii) country club
memberships and dues; and (iii) cell phones.
We believe these perquisites serve a dual purpose. They are competitive
with companies in our peer group, and they also facilitate the officers
ability to work outside our corporate headquarters by assisting with travel and
providing an external location to conduct business.
For information on the incremental cost of these perquisites, see
footnotes 5 through 8 to the Summary Compensation Table included in this
Report.
The
Compensation Committee believes that the primary purpose of providing perks is
to assist an employee to execute their responsibilities effectively. Since most
perks also provide some personal facility, we recognize the cost of the perks
as compensation. Philosophically, we see no need to be a leader in offering
perks to our executives, but we will evaluate the value to both the Company and
executive when they become common in our industry. Currently, we have no
program for controlling the nature and cost of perks other than the
Compensation Committees discretion.
Retirement
Benefits
. We maintain supplemental executive
retirement agreements (SERPs) under an Executive Salary Continuation Plan
with Messrs. Hunt and Hamby. The Compensation
Committee provides SERPs to address the issues of internal and external
equity in terms of retirement benefits offered to all employees at the Company
as a percentage of final average pay and executives in our peer group. It is
the Compensation Committees
desire to fairly compensate executives and provide competitive retirement
benefits given the restrictions on executives within tax qualified plans.
Some of our current SERP plans are not
performing as desired which has resulted in inequities, and we asked Matthews
Young to study alternative approaches during 2007.
We also offer a 401(k) plan to eligible
employees (including the Management Team). The 401(k) plan allows
participants to defer a portion of their compensation and provides that the
Company may match a portion of the participants deferred compensation. In
2007, the Company matched 32.96% of eligible contributions up to an annual
threshold equal to 6% of a participants total compensation.
Our executives are also eligible to
participate in the Companys other benefit plans on the same terms as other
employees. These plans include paid vacation leave, medical and dental
insurance, annual physical examinations, employee assistance programs, employee
and dependent group term life insurance, and employee and spousal disability
insurance.
Potential Payments Upon
Termination or Change in Control
The Company has employment agreements with Mr. Hunt
and Mr. Hamby that begin on the effective date of any change in control
of the Company. The terms of these agreements regarding potential payments upon
termination after a change in control of the Company are essentially the same.
These executives have helped to build the Company into the successful franchise
that it is today, and the Compensation Committee believes that it is important
to protect these officers in
10
the event of a change in control. Further, it is the Compensation Committees
belief that the interests of shareholders will be best served if the interests
of executive management are aligned with them, and providing change in control
benefits should eliminate, or at least reduce, the reluctance of executive
management to pursue potential change in control transactions that may be in
the best interests of shareholders.
For purposes of these benefits, a change in
control is deemed to occur, in general, upon (a) the closing of any
transaction, whether by merger, consolidation, asset sale, tender offer,
reverse stock split or otherwise, which results in the acquisition of
beneficial ownership (as such term is defined under the Exchange Act rules) by
any person or entity or any group (except the Board of Directors of the Company
as it exists on the date of execution of the agreement) or other persons or
entities acting in concert, of 50% or more of the outstanding shares of common
stock of the Company; or (b) the closing of any sale of all or
substantially all of the assets of the Company. The pending merger with
SunTrust will be deemed a change in control when it is completed.
In the
event of a change in control of the Company, the terms of the employment
agreements become in effect for a period of 36 months for Mr. Hunt and 24
months for Mr. Hamby. Compensation under the agreements includes:
·
a
total annual salary and bonus at least equal to the average of the compensation
(base salary and incentive bonus) the officer has received for the three
calendar years preceding the effective date, payable in semi-monthly
installments payable on the 15th and last day of each month;
·
health
insurance and health benefits under the same terms and conditions as all other
employees of the Company during the term of the agreement;
·
eligibility
to participate in the 401(k) Plan on the same terms and conditions as
provided for all employees at the senior vice-president level or higher at the
Company;
·
the
same number of weeks paid vacation as the officer was entitled to under the
terms and conditions of his employment immediately preceding the event
constituting the change in control of the Company; and
·
other
fringe benefits that the officer was receiving under the terms and conditions
of his employment immediately prior to the event constituting change in control
of the Company.
Under the agreement, the officers employment may be terminated:
·
by the Company
for cause (such as a material breach of the employment agreement, gross
negligence or willful misconduct by the officer or conviction of a felony,
misdemeanor involving moral turpitude, or fraud), without further obligation
and for monies already paid;
·
by the Company
for any reason other than cause, in which case the Company will have to pay
to the officer a sum equal to the compensation above for the period remaining
in the agreement, which payment shall be made in a lump sum due not later than
15 days after the last to occur of the date of any closing in which change in
control takes place and the date upon which the officer is given notice by the
Company that his employment is terminated; and
·
by the officer
upon two weeks notice to the Company which, if terminated within 90 days of
the effective date of the change in control, will entitle the officer to the
compensation above, to be paid in a lump sum. In the event the officer
elects to terminate more than 90 days after the effective date of a change in
control, he will receive no further salary or other benefits.
The following table summarizes in tabular
form the potential post-employment payments due to the executive officers if
the employment agreements discussed above become effective upon a change in
control of the Company, assuming the change of control and the events occurred
on the last business day of the last fiscal year.
11
|
|
Termination by the
Company for
cause
|
|
Termination
by the
Company for
any reason
during the
term other
than for
cause
|
|
Termination
by the officer
within 90
days of the
change in
control
|
|
Termination
by the
officer past
90 days of
the change
in control
|
|
Death or
Disability
|
|
Name
|
|
($)
|
|
($)
|
|
($)
|
|
($)
|
|
($)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Richard A. Hunt
|
|
0
|
|
1,736,462
|
|
1,736,462
|
|
0
|
|
0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gregory L. Hamby
|
|
0
|
|
633,451
|
|
633,451
|
|
0
|
|
0
|
|
Stock Trading
Policies
Executives and other employees may not engage
in any transaction in which they may profit from short-term speculative swings
in the value of the companys securities. This includes short sales (selling
borrowed securities which the seller hopes can be purchased at a lower price in
the future) or short sales against the box (selling owned, but not delivered
securities), put and call options (publicly available rights to sell or buy
securities within a certain period of time at a specified price or the like)
and hedging transactions, such as zero-cost collars and forward sale contracts.
In addition, this policy is designed to ensure compliance with all
insider-trading rules.
Tax Deductibility of Executive Compensation
Section 162(m) of the Internal
Revenue Code places a limit of $1,000,000 on the amount of compensation that
the Company may deduct in any one year with respect to each of it five most
highly paid executive officers. There is an exception to the $1,000,000 limitation
for performance-based compensation meeting certain requirements. Annual cash
incentive awards, long-term incentive awards and stock option awards are
performance-based compensation meting these requirements and are fully
deductible. Thus far, none of our Management Team has received compensation in
excess of the Section 162(m) limitation and therefore, all
compensation has been fully deductible.
Summary Compensation Table
The following table sets forth certain
information for the 2006 and 2007 fiscal years concerning compensation paid by
the Company to its President and Chief Executive Officer and Chief Financial
Officer.
Name and Principal
|
|
Salary(1)
|
|
Bonus(2)
|
|
Option
Awards
|
|
Change in
Pension Value
|
|
All Other
Compensation
|
|
Total
|
|
Position
|
|
($)
|
|
($)
|
|
($)(3)
|
|
($)(4)
|
|
($)
|
|
($)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Richard A. Hunt
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
President and Chief Executive
|
|
2007
|
352,500
|
|
88,000
|
|
22,373
|
|
40,239
|
|
71,350
|
(5)
|
574,462
|
|
Officer
|
|
2006
|
352,500
|
|
146,499
|
|
31,419
|
|
40,404
|
|
64,039
|
(6)
|
634,861
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gregory L. Hamby
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Executive Vice President and Chief
|
|
2007
|
202,000
|
|
50,500
|
|
8,815
|
|
4,733
|
|
22,446
|
(7)
|
288,494
|
|
Financial Officer
|
|
2006
|
190,000
|
|
78,964
|
|
17,158
|
|
3,795
|
|
21,810
|
(8)
|
311,727
|
|
12
(1)
Each of the named executives contributed
a portion of his salary to the Companys 401(k) plan, which amounts are
not deducted from the salary amounts indicated.
(2) These annual cash bonuses were paid in the
first quarter of 2007 and the second quarter of 2008 for performance in 2006
and 2007, respectively.
(3) This column represents the dollar amount
recognized for financial statement reporting purposes with respect to the 2006
fiscal year for the fair value of stock options granted to each of the named
executive officers, in such year as well as prior fiscal years, in accordance
with SFAS 123R. For additional information on the valuation assumptions with
respect to the grants, refer to Note 12 of the Companys financial statements
in the Form 10-K for the year ended December 31, 2007, as filed with
the SEC. For information on the valuation assumptions with respect to grants
made prior to 2007, refer to the note on Stock-Based Compensation for the Companys
financial statements in the Form 10-K for the respective year-end. These
amounts reflect the Companys accounting expense for these awards, and do not
correspond to the actual value that will be recognized by the named executive
officers.
(4) This column represents the sum of the change
in pension value and non-qualified deferred compensation earnings in 2006 and
2007 for each of the named executive officers. See the Pension Benefits Table
included in this Report, including the present value assumptions used in this
calculation.
(5) Includes $51,050 in director fees; $6750 in
401(k) plan match; $132 in automobile allowance; $1750 in contributions to
the stock purchase plan; $5420 in social club dues; and $6248 in life
insurance premiums.
(6) Includes $44,800 in director fees; $6,600 in
401(k) plan match; $493 in automobile allowance; $1,750 in contributions
to the stock purchase plan; $4,596 in social club dues; and $5,800 in life
insurance premiums.
(7) Includes $12,000 in director fees; $6,750 in
401(k) plan match; $1,750 in contributions to the stock purchase plan; and
$1,946 in life
insurance premiums.
(8) Includes $12,000 in director fees; $6,600 in
401(k) plan match; $1,750 in contributions to the stock purchase plan; and
$1,460 in life
insurance premiums.
Grants of Plan-Based Awards
The following sets forth information about
grants of plan-based awards granted to the named executive officers in 2007. No
plan-based awards were granted to the named executive officers in 2007.
Outstanding Equity Awards at December 31,
2007
The following table includes certain
information with respect to the unexercised options held by the named executive
officers at December 31, 2007. The listed stock option grants were
approved by the Board of Directors under the Companys 1997 Incentive Plan to
each of the named executive officers listed. The option exercise prices are
based on the closing price of the Companys common stock listed on the Nasdaq
Global Select Market on the grant date. All options in the table vest at a rate
of 20% per year, in each case beginning on the first anniversary of the option
grant date.
|
|
Option Awards
|
|
Name
|
|
Option Grant
Date
|
|
Number of
Securities
Underlying
Unexercised
Options
Exercisable
(#)
|
|
Number of
Securities
Underlying
Unexercised
Options
Unexercisable
(#)
|
|
Option
Exercise
Price
($)
|
|
Option
Expiration
Date
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Richard A. Hunt
|
|
|
|
|
|
|
|
|
|
|
|
President and Chief
|
|
10/28/02
|
|
25,000
|
|
0
|
|
13.72
|
|
10/28/2012
|
|
Executive Officer
|
|
2/20/06
|
|
2000
|
|
8,000
|
|
21.66
|
|
02/20/2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gregory L. Hamby
|
|
|
|
|
|
|
|
|
|
|
|
Executive Vice President
|
|
7/16/01
|
|
6,250
|
|
|
|
10.92
|
|
07/16/2011
|
|
and Chief Financial
|
|
2/21/05
|
|
2,000
|
|
3,000
|
|
23.50
|
|
02/21/2015
|
|
Officer
|
|
2/20/06
|
|
600
|
|
2400
|
|
21.66
|
|
02/20/2016
|
|
13
Option
Exercises and Stock Vested Table
The following table sets forth certain
information regarding the exercise of stock options during 2007 by the persons
named in the Summary Compensation Table and the value realized on the exercise
of such options.
|
|
Option Awards
|
|
Name
|
|
Number of
Shares
Acquired
on Exercise
#
|
|
Value Realized
On Exercise(1)
($)
|
|
Richard A. Hunt
President and Chief Executive Officer
|
|
6,250
|
|
28,312
|
|
|
|
|
|
|
|
Gregory L. Hamby
Executive Vice President and Chief Financial Officer
|
|
2,100
|
|
241,542
|
|
(1) Value Realized is based on the difference
between the market price of our common stock on the date of exercise and the
exercise price multiplied by the number of shares. On September 14, 2007, Mr. Hunt
exercised 6,250 options with an exercise price of $8.64. On January 31,
2007, Mr. Hamby exercised 17,875 options, and on September 18, 2007, Mr. Hamby
exercised 3,125 options, all with an exercise price of $8.64. The closing
prices of our common stock as reported by the Nasdaq Stock Market (Nasdaq
Global Select Market) on September 14, 2007, January 31, 2007, and September 18,
2007
were
$13.17 $21.31, and
$13.69, respectively.
Pension Benefits Table
The following table sets forth certain
information regarding plans that provide for payments or other benefits at,
following or in connection with retirement.
|
|
|
|
Number of
Years of
Credited
Service(1)
|
|
Present Value of
Accumulated
Benefit(2)
|
|
Payments
During 2007
|
|
Name
|
|
Plan Name
|
|
(#)
|
|
($)
|
|
($)
|
|
|
|
|
|
|
|
|
|
|
|
Richard A. Hunt
|
|
|
|
19
|
|
388,333
|
|
|
|
President and Chief Executive Officer
|
|
Executive Salary
Continuation Plan
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gregory L. Hamby
|
|
|
|
9
|
|
62,915
|
|
|
|
Executive Vice President and Chief Financial Officer
|
|
Executive Salary
Continuation Plan
|
|
|
|
|
|
|
|
(1) Computed as of the same pension plan
measurement date as used for 2007 financial statement reporting purposes.
(2) The Present Value of Accumulated Benefit was
calculated using the assumptions that were used for 2007 financial statement
reporting purposes, including a 6.75% discount rate.
14
Director
Compensation
The following table summarizes in tabular
form the compensation awarded to, earned by, or paid to the Companys directors
other than Mr. Hunt, whose compensation for services rendered as a
director is reported in the Summary Compensation Table above, for 2007.
Name
|
|
Fees Earned or
Paid in
Cash(1)
($)
|
|
All Other
Compensation(2)
($)
|
|
Total
($)
|
|
Lowell S. (Casey) Cagle
|
|
19,200
|
|
|
|
19,200
|
|
Dr. John W. Darden
|
|
31,900
|
|
|
|
31,900
|
|
William A. Foster, III
|
|
26,850
|
|
1,750
|
|
28,600
|
|
Bennie E. Hewett
|
|
33,900
|
|
1,750
|
|
35,650
|
|
James L. Lester
|
|
25,500
|
|
1,750
|
|
27,250
|
|
John E. Mansour
|
|
32,700
|
|
1750
|
|
34,450
|
|
Dr. T. Alan Maxwell
|
|
22,100
|
|
1,750
|
|
23,850
|
|
James H. Moore(3)
|
|
40,350
|
|
1750
|
|
42,100
|
|
Samuel L. Oliver
|
|
39,650
|
|
1,750
|
|
41,400
|
|
Alan A. Wayne
|
|
43,600
|
|
1,740
|
|
45,340
|
|
Philip A. Wilheit
|
|
48,250
|
|
1,750
|
|
50,000
|
|
Anna B. Williams
|
|
36,600
|
|
|
|
36,600
|
|
(1)
Includes cash payment for service on the Companys Board and subsidiary Bank
Boards, if any.
(2) Consists of
matching contributions to the stock purchase plan. Under that plan, all
full-time employees and directors of the Company or a Bank are eligible to
participate in the plan. The Company matches payroll deductions (for employees)
and direct contributions at a rate of 50% of the amount contributed.
(3) Mr. Moore
resigned as a director effective December 31, 2007.
Compensation Committee Report
We have reviewed and discussed with
management certain Compensation Discussion and Analysis contained in this
Report and, based on such review and discussion, the Compensation Committee has
recommended to the Board of Directors that the Compensation Discussion and
Analysis be included in this Report.
|
Compensation Committee
|
|
|
|
Philip A. Wilheit
Alan A. Wayne
William A. Foster III
|
The foregoing report of the Compensation
Committee does not constitute soliciting material and shall not be deemed to be incorporated by
reference in any previous or future documents filed by the Company with the SEC
under the Securities Act of 1933, as amended, or the Exchange Act, except to
the extent that the Company specifically incorporates the report by reference
in any such document.
Compensation
Committee Interlocks and Insider Participation
None of the members of the Compensation
Committee has ever been an officer of the Company or was an officer or employee
of the Company or any of the Banks during 2007. In addition, none of these
individuals had any or have any relationship requiring disclosure under Item
404 of Regulation S-K. During 2007, (i) no executive officer of the
Company served as a member of the compensation committee (or other board
committee performing equivalent functions or, in the absence of any such
committee, the entire board of directors) of another entity, one of whose
executive officers served on the Compensation Committee of the Company; (ii) no
executive officer of the Company served as a director of another entity, one of
whose executive officers served on the Compensation Committee of the Company;
and (iii) no executive officer of the Company served as a member of the
compensation committee (or other board committee performing equivalent
functions or, in the absence of any such committee, the entire board of
directors) of another entity, one of whose executive officers served as a
director of the Company.
15
ITEM 12.
|
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL
OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS
|
Security
Ownership of Certain Beneficial Owners and Management
The following
table sets forth certain information regarding the shares of the Companys
common stock owned as of March 5, 2008, (i) by each person known to
the Company who beneficially owned more than 5% of the shares of the Companys
common stock, (ii) by each of the Companys directors and the executive
officers named in the Summary Compensation Table included in this Report, and (iii) by
all of the Companys directors and executive officers as a group.
Name of Beneficial Owner
|
|
Amount and
Nature of
Beneficial
Ownership(1)
|
|
Percent
of Class(2)
|
|
Lowell S. (Casey) Cagle
|
|
18,632
|
(3)
|
*
|
|
Dr. John W. Darden
|
|
149,009
|
(4)
|
1.05
|
|
William A. Foster, III
|
|
86,713
|
(5)
|
*
|
|
Bennie E. Hewett
|
|
178,666
|
(6)
|
1.26
|
|
Richard A. Hunt
|
|
154,859
|
(7)
|
1.09
|
|
James L. Lester
|
|
55,780
|
(8)
|
*
|
|
John E. Mansour
|
|
51,751
|
(9)
|
*
|
|
Dr. T. Alan Maxwell
|
|
76,239
|
(10)
|
*
|
|
Samuel L. Oliver
|
|
93,589
|
(11)
|
*
|
|
Alan A. Wayne
|
|
35,986
|
(12)
|
*
|
|
Philip A. Wilheit
|
|
222,452
|
(13)
|
1.56
|
|
Anna B. Williams
|
|
49,310
|
(14)
|
*
|
|
Gregory L. Hamby
|
|
36,585
|
(15)
|
*
|
|
Dimensional Fund Advisors LP
|
|
1,035,716
|
(16)
|
7.28
|
|
|
|
|
|
|
|
SunTrust Banks, Inc.
|
|
1,122,581
|
(17)
|
7.89
|
|
|
|
|
|
|
|
All directors and executive officers as a
group (13 persons)
|
|
1,209,571
|
|
8.50
|
|
*Represents
less than 1% of the Companys outstanding shares.
|
(1)
|
Under the rules of the U.S. Securities
and Exchange Commission (the SEC), a person is deemed to be a beneficial
owner of a security if he or she has or shares the power to vote or to direct
the voting of such security, or the power to dispose or to direct the
disposition of such security. Accordingly, more than one person may be deemed
to be a beneficial owner of the same securities. A person is also deemed to
be a beneficial owner of any securities that such person has the right to
acquire beneficial ownership of within 60 days. Except as otherwise
indicated, the persons named in the above table have sole voting and
investment power with respect to all shares shown as beneficially owned by
them. The information as to beneficial ownership has been furnished by the
respective persons listed in the above table.
|
|
|
|
|
(2)
|
Based on 14,230,796 shares outstanding as
of March 5, 2008. Shares underlying outstanding stock options or
warrants exercisable within 60 days of such date are deemed to be outstanding
for purposes of calculating the percentage owned by such holder.
|
|
|
|
|
(3)
|
Includes currently exercisable options to
purchase 9,800 shares.
|
|
|
|
|
(4)
|
Includes 14,357 shares owned by
Dr. Dardens wife, 1,064 shares held in the Companys stock purchase
plan and an aggregate of 57,524 shares which are held in two individual retirement
accounts for Dr. Dardens benefit.
|
|
|
|
|
(5)
|
Includes 28,120 shares held in an
individual retirement account for Mr. Fosters benefit and 1,440 shares
held in the Companys stock purchase plan. Also includes currently
exercisable options to purchase 7,860 shares. 32,890 shares have been pledged
by Mr. Foster as security for a $500,000 loan from Community Trust Bank.
3,325 shares have been pledged as security for a $50,000 loan to an
individual on which Mr. Foster is guarantor.
|
|
|
|
|
(6)
|
Includes 1,820 shares held by
Mr. Hewetts children, an aggregate of 12,172 shares held in individual
retirement accounts for Mr. Hewetts benefit, 1,320 shares held in the
Companys stock purchase plan, 50,340 shares held by Citizens Family
Partnership, 7,532 shares held by Life of Georgia Credit Reinsurance, and
40,289 shares held by Citizen Reinsurance. Mr. Hewett shares voting
power over the shares held by his children. Mr. Hewett shares investment
and voting power over the shares held by Citizens Family Partnership.
|
|
|
|
|
(7)
|
Includes 28,805 shares held in an
individual retirement account for Mr. Hunts benefit. Also includes
currently exercisable options to purchase 27,000 shares, 2,543 shares held by
his spouse and 781 shares owned jointly with his mother.
|
16
|
(8)
|
Includes 25,698 shares owned by J.L.
Lester & Son and 163 shares owned by Mr. Lester and his spouse
as joint tenants. Includes 11,746 shares held in an individual retirement
account for Mr. Lesters benefit. Also includes 2,816 shares held in the
Companys deferred compensation plan, and 1,440 shares held in the Companys
stock purchase plan.
|
|
|
|
|
(9)
|
Includes 2,807 shares owned jointly by
Mr. Mansour and his wife, 542 shares held by his wife in an individual
retirement account, and 20,069 shares held in an individual retirement
account for Mr. Mansours benefit.
|
|
|
|
|
(10)
|
Includes 38,363 shares held in an
individual retirement account for Dr. Maxwells benefit, 1,122 shares
held in the Companys deferred compensation plan, 1,078 shares held in the
Companys stock purchase plan, and 2,672 shares held in an individual
retirement account for his wifes benefit. Also includes 2,351 shares held by
Dr. Maxwells mother, for whom he serves as co-legal guardian.
|
|
|
|
|
(11)
|
Includes 15,718 shares owned by
Mr. Olivers wife, 58,315 shares held by the Hulsey, Oliver &
Mahar 401(k) Plan for the benefit of Mr. Oliver, 312 shares held by
the Hulsey & Oliver Building Company, for which Mr. Oliver is a
50% partner, and 1395 shares in held in the Companys stock purchase plan.
|
|
|
|
|
(12)
|
Includes 2,080 shares owned by
Mr. Waynes wife. Also, includes 531 shares held in an individual
retirement account for Mr. Waynes benefit, 62 shares held in an
individual retirement account for Mr. Waynes wifes benefit, 17,545
held in a joint brokerage account with his Mr. Waynes wife, and 1,367
shares held in the Companys stock purchase plan.
|
|
(13)
|
Includes 15,569 shares owned by
Mr. Wilheits wife, 7,390 shares held in an investment account, 1,321
shares held in the Companys stock purchase plan, and 7,911 shares held by
the Wilheit Family Properties. Mr. Wilheit shares investment and voting
power over the shares held by Wilheit Family Properties.
|
|
|
|
|
(14)
|
Includes
17,485 shares held in an individual retirement account for
Ms. Williamss benefit, and 31,825 shares held in Ms. Williams
husbands name.
|
|
|
|
|
(15)
|
Includes
currently exercisable options to purchase 8,850 shares, 312 shares which are
held in an individual retirement account for Mr. Hambys benefit, and
1,373 shares held in the Companys stock purchase plan.
|
|
|
|
|
(16)
|
Dimensional
Fund Advisors LP (formerly, Dimensional Fund Advisors Inc.) reported on its
Schedule 13G filed with the SEC on February 6, 2008, that (a) it is
an investment advisor registered under Section 203 of the Investment
Advisors Act of 1940, furnishing investment advice to four investment
companies registered under the Investment Company Act of 1940, and serves as
investment manager to certain other commingled group trusts and separate
accounts, possessing investment and/or voting power over the securities of
our common stock owned by those investment companies, trusts and accounts
(although it disclaims beneficial ownership of such securities); and (b) its
address is 1299 Ocean Avenue, Santa Monica, California 90401.
|
|
|
|
|
(17)
|
SunTrust
Banks, Inc., a Georgia corporation, reported on its Schedule 13D filed
with the SEC filed on November 9, 2007 that on November 2, 2007,
the Company entered into an Agreement and Plan of Merger (the Merger
Agreement) with SunTrust. Under the terms of the Merger Agreement, the
Company will merge with and into SunTrust or one of SunTrusts subsidiaries,
with SunTrust or its subsidiary continuing as the surviving entity (the
Merger). Certain shareholders of the Company (each a Shareholder, and
collectively, the Shareholders) and SunTrust have entered into Voting
Agreements, each dated November 2, 2007, which are attached to the
Schedule 13D as Exhibits 2 through 14 (each a Voting Agreement, and
collectively, the Voting Agreements) with respect to certain Shares
beneficially owned by the Shareholders. Pursuant to the Voting Agreements,
the Shareholders agreed to vote an aggregate of 1,122,581 Shares owned by
them, as well as any Shares acquired by them after November 2, 2007 (the
Committed Shares), in favor of the Merger Agreement and for approval of the
Merger. As of November 9, 2007, SunTrust owned no Shares. For purposes
of Rule 13d-3 under the Act, however, as a result of entering into the
Voting Agreements, SunTrust may be deemed to possess beneficial ownership of
the Committed Shares. SunTrust, however, disclaims beneficial ownership of
such securities, and the filing of Schedule 13D is not to be construed as an
admission that SunTrust is the beneficial owner for any purpose of the
securities subject to the Voting Agreements. SunTrusts principal place of
business and principal office is at 303 Peachtree Street NE, Atlanta, Georgia
30308.
|
17
ITEM 13. CERTAIN
RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE
Transactions with Related Persons, Promoters
and Certain Control Persons
Certain of the officers, directors and
shareholders of the Company named in this Report and the Banks, and affiliates
of such persons, have from time to time engaged in banking transactions with
the Banks. Such persons are expected to continue these transactions in the
future. Any loans or other extensions of credit made by the Bank to such
individuals were made in the ordinary course of business on substantially the
same terms, including interest rates and collateral, as those prevailing at the
time for comparable transactions with unaffiliated third parties and did not involve
more than the normal risk of collectibility or present other unfavorable
features. At December 31, 2007, loans to officers, directors, and
shareholders of the Company named in this Report and the Bank amounted to an
aggregate of approximately $38,263,000.
Samuel L. Oliver, a director of the Company,
is a partner in the law firm of Hulsey, Oliver & Mahar, LLP,
Gainesville, Georgia, (Hulsey Oliver) which firm served as legal counsel to
the Company in 2007. During 2007, the Company paid an aggregate of $563,205 in
legal fees to Hulsey Oliver. It is anticipated that this firm will also provide
legal services to the Company and the Banks during 2008.
Alan Wayne is the first cousin of Scott
Wayne, who is Senior Vice President of Gainesville Bank & Trust and
President of the Bank of Athens division of Gainesville Bank & Trust.
All related party transactions are subject to
review by the full Board of Directors. We believe that the terms for all
related party transactions are at least as favorable as those that could be
obtained from a third party. Nasdaq Listing Standards Rule 4350(h) requires
the Company to conduct an appropriate review of all related party transactions
for potential conflict of interest situations on an ongoing basis and further
requires all such transactions to be approved by the Companys Audit Committee
or another independent body of the Board of Directors. The term related
party transaction is generally defined as any transaction (or series of
related transactions) in which the Company is a participant and the amount
involved exceeds $120,000, and in which any director, director nominee, or
executive officer of the Company, any holder of more than 5% of the outstanding
voting securities of the Company, or any immediate family member of the
foregoing persons will have a direct or indirect interest. The term includes
most financial transactions and arrangements, such as loans, guarantees and
sales of property, and remuneration for services rendered (as an employee,
consultant or otherwise) to the Company.
Director Independence
The business and affairs of the Company are
under the direction of the Companys Board of Directors. The Board of Directors
has affirmatively determined that the majority of the Board (10 of 12) is
comprised of independent directors within the meaning of the Nasdaq Stock
Market rules governing director independence. The independent directors
are: Mr. Cagle, Dr. Darden, Mr. Foster,
Mr. Hewett, Mr. Lester, Dr. Maxwell, Mr. Mansour, Mr. Wayne,
Ms. Williams, and Mr. Wilheit.
To be considered independent, the director
(or a family member of the director) cannot:
|
·
|
have been employed by the Company or a
subsidiary in the last three years;
|
|
|
|
|
·
|
have accepted, in the last three years, any
payments from the Company or a subsidiary in excess of $100,000 during any
twelve-month period, other than the following:
|
|
|
|
|
|
|
·
|
compensation for board or board committee
service;
|
|
|
|
|
|
|
|
|
·
|
payments arising solely from investments in
the Companys securities;
|
|
|
|
|
|
|
|
|
·
|
compensation paid to a family member who is
a non-executive employee of the company or a subsidiary of the company;
|
|
|
|
|
|
|
|
|
·
|
benefits under a tax-qualified retirement
plan, or non-discretionary compensation;
|
|
|
|
|
|
|
|
|
·
|
loans from a financial institution where
the loans were made in the ordinary course of business, on substantially the
same terms, including interest rates and collateral, as those prevailing at
the time for comparable transactions with the general public, and did not
involve more than a normal degree of risk or other unfavorable factors; or
|
18
|
|
|
·
|
payments from a financial institution in
connection with the deposit of funds or the financial institution acting in
an agency capacity, provided such payments were made in the ordinary course
of business and on substantially the same terms as those prevailing at the
time for comparable transactions with the general public;
|
|
|
|
|
|
|
·
|
be a partner in, or a controlling
shareholder or an executive officer of, any organization to which the Company
made or received payments for property or services in the current or any of
the past three fiscal years exceeding 5% of the recipients consolidated
gross revenues for that year, or $200,000, whichever is more, other than the
following:
|
|
|
|
|
|
|
|
|
·
|
payments arising solely from investments in
the companys securities; or
|
|
|
|
|
|
|
|
|
·
|
payments under non-discretionary charitable
contribution matching programs.
|
|
|
|
|
|
|
·
|
have a relationship that, in the opinion of
our Board of Directors, would interfere with the exercise of independent
judgment in carrying out the responsibilities of a director;
|
|
|
|
|
·
|
be an executive officer of another entity
where at any time during the past three years any of the executive officers
of the Company serve on the Compensation Committee of the other entity; or
|
|
|
|
|
·
|
be a partner of the Companys outside
auditor, or was a partner or employee of the Companys outside auditor who
worked on the Companys audit at any time during any of the past three years.
|
In addition, each member of the Audit
Committee, Compensation Committee and Nominating Committee of the Companys
Board of Directors is independent under the rules of Nasdaq, and each
member of the Audit Committee also meets the independence requirements set
forth in Rule 10A-3(b)(1) of the Securities Exchange Act of 1934.
ITEM 14.
|
PRINCIPAL ACCOUNTING FEES AND SERVICES
|
Independent Accountants
Fees
The fees billed by M&J for fiscal years
ended December 31, 2006 and 2007 were as follows
:
|
|
2006
|
|
2007
|
|
Audit fees(1)
|
|
$
|
363,034
|
|
$
|
398,615
|
|
Audit related fees(2)
|
|
$
|
20,671
|
|
$
|
22,000
|
|
Tax fees(3)
|
|
$
|
30,719
|
|
$
|
26,000
|
|
All other fees(4)
|
|
|
|
|
|
(1)
|
Includes professional services rendered for
the audit of the Companys financial statements for the fiscal year and the
reviews of the Companys financial statements included in the Companys Forms
10-Q filed during such fiscal year. Audit fees include attendance at Audit
Committee meetings related to the audit or review, and consultation on audit
and accounting matters arising during the course of such services, audit
committee and management letter communications related to the audit or
reviews. Audit fees also include fees for services provided in connection
with regulatory filings, consents, and assistance with and review of
documents filed with the SEC, as well as review and assistance with Form S-4
filings.
|
|
|
(2)
|
Audit-related fees were in connection with
consultations concerning financial accounting and reporting standards, audits
of employee benefit plans, and services performed in connection with mergers
or acquisitions.
|
|
|
(3)
|
Tax fees included fees for tax
compliance, tax planning, tax advice, preparation of original and amended tax
returns, claims for refunds, tax advice related to mergers and acquisitions,
benefit plan tax preparation, requests for rulings or technical advice from
taxing authorities, and
preparation of short-period tax returns
related to Mountain Bancshares, Inc.
|
|
|
(4)
|
No fees were paid for services provided by
M&J during 2006 and 2007 other than those described above.
|
Audit Committee Pre-Approval Policy
Pursuant to the terms of the Companys Audit
Committee charter, the Audit Committee is responsible for the appointment,
compensation and oversight of the work performed by the Companys independent
accountants. The Audit Committee, or a designated member of the Audit
Committee, must pre-approve all audit (including audit-related) and
19
non-audit services performed by the independent accountants in order to
assure that the provisions of such services does not impair the accountants
independence.
20
PART IV
ITEM 15. EXHIBITS
AND FINANCIAL STATEMENT SCHEDULES
(a)(1)
Financial Statements
None.
(a)(2)
Financial Statement Schedules
None.
(a)(3) Exhibits
The
following exhibits are filed as part of this Report:
31.1
Rule 13a-14(a) Certification
of Principal Executive Officer.
31.2
Rule 13a-14(a) Certification
of Principal Financial Officer.
21
SIGNATURES
|
Pursuant to
the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, as amended, the registrant has
|
duly caused
this Report to be signed on its behalf by the undersigned, thereunto duly
authorized.
|
|
GB&T BANCSHARES, INC.
|
|
|
Dated: April 28, 2008
|
By:
|
/s/ Richard A. Hunt
|
|
|
Richard A. Hunt, President and CEO
|
|
Pursuant to
the requirements of the Securities Exchange Act of 1934, as amended, this
Report has been signed below by the
|
following
persons on behalf of the registrant, in the capacities and on the dates
indicated.
|
By:
|
/s/ Richard A. Hunt
|
|
DATE:
|
April 28, 2008
|
|
Richard A. Hunt, President, Chief
Executive Officer and Director
(Principal Executive Officer)
|
|
|
|
|
|
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|
|
By:
|
*
|
|
DATE:
|
April 28, 2008
|
|
Gregory L. Hamby, Executive Vice President
and Chief Financial Officer
(Principal Financial and Accounting Officer)
|
|
|
|
|
|
|
|
|
By:
|
*
|
|
DATE:
|
April 28, 2008
|
|
Philip A. Wilheit,
Chairman and Director
|
|
|
|
|
|
|
|
|
By:
|
*
|
|
DATE:
|
April 28, 2008
|
|
Samuel L. Oliver, Vice
Chairman and
|
|
|
|
|
Director
|
|
|
|
|
|
|
|
|
By:
|
*
|
|
DATE:
|
April 28, 2008
|
|
Alan A. Wayne,
Secretary and Director
|
|
|
|
|
|
|
|
|
By:
|
*
|
|
DATE:
|
April 28, 2008
|
|
Anna B. Williams,
Director
|
|
|
|
|
|
|
|
|
By:
|
*
|
|
DATE:
|
April 28, 2008
|
|
Dr. John W.
Darden, Director
|
|
|
|
|
|
|
|
|
By:
|
*
|
|
DATE:
|
April 28, 2008
|
|
William A.
Foster, III, Director
|
|
|
|
|
|
|
|
|
By:
|
*
|
|
DATE:
|
April 28, 2008
|
|
Bennie E. Hewett,
Director
|
|
|
|
|
|
|
|
|
By:
|
*
|
|
DATE:
|
April 28, 2008
|
|
James L. Lester,
Director
|
|
|
|
|
|
|
|
|
By:
|
*
|
|
DATE:
|
April 28, 2008
|
|
T. Alan Maxwell,
Director
|
|
|
|
|
|
|
|
|
By:
|
*
|
|
DATE:
|
April 28, 2008
|
|
Lowell S. (Casey)
Cagle, Director
|
|
|
|
|
|
|
|
|
By:
|
*
|
|
DATE:
|
April 28, 2008
|
|
John E. Mansour,
Director
|
|
|
|
|
|
|
|
|
*By:
|
/s/ Richard A. Hunt
|
|
|
|
|
Attorney-in-Fact
|
|
|
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22
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